Q2 2024 TRX Gold Corp Earnings Call
Operator: It's now my pleasure to introduce Christina Lalli, Vice President, Investor Relations, with TRX Gold. Christina, the floor is yours.
It's now my pleasure to introduce Kristina Lolli, Vice President Investor Relations with T. Rx Kohl's Christiana <unk> the floor is yours.
Christina Lalli: Thank you, Gaylene, and welcome everyone to TRX Gold Corporation's second quarter 2024 results presentation. As a reminder, all participants are in listen-only mode, and the meeting is being recorded. After the presentation, there will be an opportunity to ask questions. If you wish to ask a question, please click the Q&A icon on the left-hand side of the screen. You will see the options, raise your hand, and be able to join the queue and ask your question verbally or write a question to submit your question in writing.
Christina Lalli: Thank you Kathleen and welcome everyone to the Terex Corporation second quarter 2024 results presentation. As a reminder, all participants are in listen only mode and the meeting is being recorded.
Christina Lalli: After the presentation, there will be an opportunity to ask questions. If you wish to ask the question. A question. Please click the Q&A icon on the left hand side of the screen.
Christina Lalli: You will see the options raise your hand and be able to join the queue and ask your question verbally or read a question. Please submit your question in writing.
Christina Lalli: Analysts who have dialed into the conference call may press Star, Ben 1, on your telephone keypad to join the question queue. I would like to now turn the meeting over to Stephen Mullowney, CEO of TRX Gold. Stephen, please go ahead.
Christina Lalli: Unless you have dialed into the conference call May Press Star then one on your telephone keypad to join the question queue.
Christina Maloney: I would like to now turn the meeting over to see the Maloney CEO of Terex called Stevens. Please go ahead, yeah. Thank you Christina and welcome everybody to our Q2 conference call I'm.
Stephen Mullowney: Yeah, thank you, Christina, and welcome everybody to our Q2 conference call. I'm, hopefully, we'll have a good connection here for the remainder of this call. I am in Dar es Salaam; I just landed this morning, so I may be a little bit tired and hand over a large portion of this to Mike. Andrew Cheatle, our COO, is unable to join us today. I believe he may be stuck in the rainstorm in Dubai on his way back to Toronto.
Darice Stevens: Hopefully we'll have a good connection here for the remainder of this call I am in darice alarm I'd just landed this morning, so I.
Speaker Change: It may be a little bit tired and hand over a large portion of this too.
Mike: To Mike.
Mike: And Andrew Peters, our C. O O is unable to join US today I believe he may be stuck in a rainstorm in Dubai.
Mike: I'm honest way back to Toronto, and we also have.
Stephen Mullowney: And we also have Mike Leonard, our CFO, joining me and Christina here this morning for this conference call. So, Q2 2024. Really, as I've mentioned before in the past, this is about the growth phase of the company and getting our expansion online. We've accomplished that in Q2.
Mike: Mike <unk>, our CFO joining myself Cristina.
Speaker Change: Here. This morning for this conference call. So Q2 2024.
Speaker Change: Really as I've mentioned before in the past and this is about the growth phase of the company and getting our expansion online.
Mike: Complex stat and in Q2, the new crushing circuit, which I'll get to see tomorrow as I'll be running the tertiary crushers. The final piece of that have arrived on site are being installed and will come online in mid to late next week.
Stephen Mullowney: The new crushing circuit, which I'll get to see tomorrow, is up and running. The tertiary crushers, the final piece of that, have arrived on site, are being installed, and will come online mid to late next week. The plant is being built and will be poured starting tomorrow. All the steelwork is done, and rings for new tanks are being constructed and welded as we speak. There's a lot of action going on at the site, and we'll be very excited to get there tomorrow to see a lot of it. Without further ado, Christina, can you move into the presentation? First and foremost, I always have a disclaimer.
Mike: The plant has been built.
Mike: And we'll report starting tomorrow.
Mike: All of the steelworks, our dawn and rings for a new tanks are being constructed and well that as we speak so a lot of action going on at site and so it will be very excited to get there tomorrow to see a lot of this.
Mike: So without further Ado Kristina can you move into the presentation first and foremost I'm always habits disclaimer. I mean, you can go to a website to view. This there may be forward looking statements.
Stephen Mullowney: You can go to our website to view this; there may be a forward-looking statement. And go back to the pictures, Christina. We have got a little surprise. We have actually updated our photos, and the reason for the updated photos is that there will be a new website. It's currently in the queue and being put in place, and obviously, to get the new website, we have new photos. And I must say, look how nice Mike looks in that photo. You can tell where he came from before he joined TRX in Barrett; he's got the blue suit, the nice blue tie-on with the white shirt; he's looking very, very good. Aren't you, Mike?
Mike: And go back to the pictures Christina Lake a little surprisingly well.
We have actually updated our photos and the reason for the updated photos is.
Mike: There will be a new website.
Mike: It's currently in the queue and and being put in place and obviously to get.
Mike: It is the.
Mike: They brought a new website, we have new photos and I must say.
Mike: The lookout nice Mike is looking in that photo.
Mike: You can tell where he came from before I joined <unk> and Barrick you've got please do.
Mike: A nice lead time with the white shirt. He took a very very good actually Mike.
Stephen Mullowney: Always. All right. A little bit of kidding around here. So with regard to TRX, the investment thesis really hasn't changed. We are producing gold at a high margin and reinvesting that capital into the business. The capital is currently being reinvested into the third plant expansion. We're forecast to get between 25 and 30,000 ounces for fiscal 2024. We'll probably be a little tight getting there depending on the grade profile that goes through the middle.
Mike: Always.
Mike: Alright.
Mike: A little bit of getting around there so with regards to <unk> the investment thesis really hasn't changed.
Mike: We are producing gold at a high margin reinvesting that capital into the business.
Mike: Capital is currently being reinvested into the third plant expansion were forecast to get between 25 to 30000 ounces for fiscal 2024.
Mike: Probably be a little tight getting there and depending on the grade profile that goes through the milk and we are on time and on budget on plant expansion.
Stephen Mullowney: We are on time and on budget on the plant expansion. We do have a significant gold deposit of 2 million ounces measured in the indicated category in our 2020 resource statement that was done under 2003 rules. We have significant blue sky potential and High Priority Targets that will start to come online in the second half of this calendar year as we get through the expansion and start allocating capital more to the drill bit.
Mike: We do have a significant coal deposit of 2 million ounces measured and indicated category and our 2020 resource statement that was the 120.
Mike: 2000, and REIT rules.
We have significant blue sky potential.
Mike: And high priority targets that will start to come online in the second half of this calendar year.
Mike: As we get through the expansion to start allocating capital more to the drill bit.
Stephen Mullowney: And we have sustained cash flows from operations. As you can see, we did have a dip in Q2, given that we had an undersized crusher for the sulfide portion of the plant, which has now been rectified by the larger crusher.
And we have sustained cash flows from operations as you can tell we didn't have a dip in Q2, given that we havent undersized crusher for the for Ford sulfide portion of the plant, which has now been rectified by the larger crusher.
Stephen Mullowney: But we certainly maintained our liquidity and capital profiles, and we continue to build out the asset. We have around $2 million to spend remaining on the plant expansion. Obviously, a large part of that will go into working capital and then get paid off as the expansion comes online. You have things such as first filling with steel balls, those sort of things that will be in that number that will be put into the working capital numbers.
Mike: But we certainly maintained our liquidity and capital profiles, we continued to build up the asset we ever at $2 million of spend remaining on the <unk>.
Speaker Change: On the plant expansion, obviously, a large part of that will go into working capital and they get paid off its expansion comes online, yes things such as first Phil with steel balls, those sort of things that will won't be in that number that will be put into the working capital numbers I'm, Mike anything to add to that no.
Michael P. Leonard: Mike, anything to add to that? No, I think that's pretty clear, Stephen. Thanks. Yeah, excellent.
Mike: No I think that's pretty clear Stephen thanks.
Stephen Mullowney: Yeah, excellent. So next slide, please, Christina.
Speaker Change: Yeah excellent. So next slide please Christina.
Speaker Change: So in Q2, and like I said, it was a softer quarter relative to the other quarters, which was expected, but even in that environment, we had strong operating cash flow.
Stephen Mullowney: So in Q2, like I said, it was a softer quarter relative to the other quarters, which was expected. But even in that environment, we had strong operating cash flow that continued to fund our operations. The gross margins were still very, very healthy, and robust project economics.
Speaker Change: To fund our operations the.
Speaker Change: Gross margins were still very very healthy.
Speaker Change: Robust project economics, we've maintained our liquidity profile cash in hand are continually debt free and funding the business on an ongoing basis continued to expand our plant expansion again is on time and on budget, we're starting to see the benefits of the larger crushing circuit in.
Stephen Mullowney: We maintained our liquidity profile with cash in hand and are continually debt free and funding the business on an ongoing basis. Our plant expansion again is on time and on budget. We're starting to see the benefits of the larger crushing circuit in higher throughput levels, and we did announce that in our press release as well as higher gold production as a result of that. What I can say is the plant still isn't getting or the crushing circuit isn't getting to its final product size.
Speaker Change: Higher throughput levels, and we didn't release that in our press release as well as higher gold production as a result of that.
Speaker Change: What I can say is the.
Speaker Change: The plant still isn't getting ore crushing circuit isn't getting to its final product size. So we've gone from around two inches to less than an inch and a half consistent product that will get down to six millimeter product that will go into the ball mills.
Stephen Mullowney: So we've gone from around two inches to less than an inch and a half consistent product that will get down to six millimeters that will go into the ball mills, which will then be able to run it at a more consistent rate with consistent feed, which means a more consistent grind size and more consistent recovery rates.
Speaker Change: That will then be able to run it at a more consistent rate with a consistent beat which means a more consistent grind size market system recovery rates. So it's all moving in the right direction as I said the tertiary crushers.
Stephen Mullowney: So it's all moving in the right direction. As I said, the tertiary crushers are on site, they're on their platforms, the electrical works are getting hooked up. That's the final phase to get it down to six millimeters, and the contractors come in mid to late next week from the manufacturer to put it online. So that's going extremely well.
Speaker Change: Our on site there on their platforms electrical works is getting hooked up.
Speaker Change: That's the final phase to get it down to six millimeters and the contractors coming in mid to late next week from from the manufacturer to put it online so that's going extremely well.
Stephen Mullowney: The, And as I mentioned, that circuit even, you know, being a what I'll say two-thirds complete from a crushing perspective, not on a construction basis, but from a crushing perspective, has already shown some dividends. And then as we get through the 2000 ton per day plant expansion, it's the draw high priority targets there in the northeast and southwest of the main deposits, as well as the eastern proffering and field zones, which sit adjacent to the main zone.
Speaker Change: <unk>.
Speaker Change: And as I mentioned that that circuit even been.
Speaker Change: Now what I'll say two thirds complete.
Speaker Change: From a crushing perspective matter on a construction basis, but from a crushing perspective.
Speaker Change: As I already showed there's some dividends.
Speaker Change: And then as we get through 2000 ton per day plant expansion.
Speaker Change: It's the draw our high priority targets there in the northeast South West of the main deposits as well as the eastern appropriate Anfield zones, which sits adjacent to the main zone and we look forward to.
Stephen Mullowney: And we look forward to getting that underway. We, as always, operate a very safe site; we've achieved zero loss time injuries. And again, we've reached another phase of a million hours for that, which is very, very good and continues to ensure that our workers continue to work safely. Our CSR programs and ESG programs are always ongoing in the local community.
Speaker Change: To get that underway, we've day as always operated very safe site. We've had achieved zero lost time injuries and again, we reached another phase of a million hours for that which is very very good in and continues to.
Speaker Change: Our workers continued to work safely our CSR programs and ESG programs are always ongoing.
Speaker Change: In the local community. So we're very pleased with the results of that right now I think.
Stephen Mullowney: So we're very pleased with the results of that. Right now, I think there are almost 600 employees and contractors at Buck Reef. So when I started at this company, there were less than 30. So it is a very good story economically. We do this by hiring a lot of local people. And we still have a very, very high merge in business.
Speaker Change: There's almost with everything going out 600 employees and contractors at bought breach so when when I started this company there was less than 30. So it is a it's a very good story economically.
Speaker Change: We do this in hiring a lot of local people.
Speaker Change: And you still have a very very high margin business.
Stephen Mullowney: Next slide, please. So with regard to the expansion, I've talked a lot about this, you'll see the new crushing circuit here with the old circuit will be able to crush up to we're estimating 4,800 tons per day of availability. So obviously, you're crushing hard rock through metal; it's going to break down, and it needs to be fixed. So you want to have a much higher overall capacity or throughput capacity in order to build up a stockpile for when it does break down.
Speaker Change: Slide please christine.
Christine: So with regards to the expansion I talked a lot about this you'll see the new crushing circuit here.
Christine: With the old circuit will be able to crush up to we're estimating 4800 tons per day of available lethal obviously, you're crushing hard rock through metal, it's going to break out it needs to be fixed. So you want to have a much higher overall capacity or throughput capacity in order to bill.
Christine: A stockpile for when it does break down so right now even with the <unk>.
Stephen Mullowney: So right now, even with the [inaudible] efficient basis, as opposed to having or going to the mill on a just-in-time basis, it will be stockpiled and go through so you can have hiccups and mining, you can have hiccups and crushing. And you can even, you know, put in place a lot more preventative maintenance programs around your milling operation. So we're looking very forward to getting all of this straightened up when we go and, what I'll say, move the pieces around for this expansion. The crushing circuit was really the bottleneck in the whole system. That's why it was done first.
Christine: That we are getting we have a stockpile of I believe six or seven days at a golf stopped and that will go back fairly quickly.
Christine: Our plant manager Fastow believes he can crashed the ROM pad in 20 days.
Christine: I don't know if he could do that but but anyway Acs.
Christine: He is eager to get that stockpile buildup, which then enables us to run the business much more on it.
Christine: Patient basis, as opposed to having or go to the mill on a just in time basis. It will be stockpiled and go through so you can have hiccups in mining you can have hiccups and crashing and you could even.
Christine: Put in place a lot more preventative maintenance program around your milling operations. So we're looking very forward to getting all of this straightened out when we went and what I'll say move the pieces around for this expansion. The crushing circuit was really the bottleneck in the whole system. That's why it was done first.
Stephen Mullowney: Then the milling circuit will come online. Secondly, so with regard to the milling circuit, you see down in the corner. The steelworks have been done. That takes a long time. We want to make sure that the plant that the ball mill goes on top of. It has a lot of vibration in those sort of things.
Christine: Net a milling circuit will come online that secondly, so with regards to the milling circuit you see down in the corner.
Christine: The steel works have been done that takes a long time and we want to make sure that the plant that the ball mill goes on top of it. It has a lot of vibration and those sort of things we do not want that cracking. So it takes a lot of time in the.
Stephen Mullowney: We do not want that cracking. So it takes a lot of time in the steelworks. Before we get to the concrete, there are no cracks in the prior three. So when the concrete work guys start to pour this one, we don't expect any cracks in the future. It will take around a 30-day cure period, but the plinth will be put on, no, sorry, the balm will be put on it a lot sooner than that before we start to roll it.
Christine: We are in the steelworks before we get to the concrete there no cracks in the prior three so when the concrete work guys start too.
Christine: For this one we don't expect any cracks in the future. It will take around a 30 day care period, but the plants will be put out and I was sorry to former we put on it a lot sooner than that before we start to roll out.
Stephen Mullowney: With regard to the tanks, we don't see them in the picture, but the rings are starting to be put up, and the concrete works for those where they're going to sit are also underway there as well. So with the improved grind size, we're anticipating to have higher throughput and a lot more efficient operation. And you know, with that increase in margin, as well as a decrease in cash costs, and those sort of things are all Mike. Next slide, Christina. So Mike, I'm going to hand it over to Mike to go through some of the points that I just made in a little bit more detail. Thank you, Mike. Yeah, thanks.
Christine: With regards to the tanks.
Christine: We don't see them in the picture, but the rings are starting to be put out in the concrete works for those where they're gonna sit is is also underway there as well so it would improve Brian size, where we're anticipating to have higher throughput and a lot more efficient operation and with that.
Christine: Increases in margin as well as a decrease in cash costs and those sort of things are all anticipated.
Speaker Change: Mike next slide Christina please.
Speaker Change: So Mike I'm going to hand, it over to Mike to go through some of the points that I just made.
Speaker Change: A little bit more detail. Thank you Mike.
Michael P. Leonard: Yeah, thanks, Stephen. And good morning, everyone.
Mike: Yeah, Thanks, Steven and good morning, everyone and this is just back to that that last slide it's probably worth pointing out from a from a financing cash flow perspective.
Michael P. Leonard: And, you know, just back to that last slide, it's probably worth pointing out from a finance and cash flow perspective, while we're sort of undergoing wet commissioning of the expanded crushing circuit and ramping up throughput, you know, the rest of the plant build remains ongoing. To Stephen's point, we've incurred about $4 million of the $6 million total capital costs that we guided the market to. So substantially through most of the heavy expenditures, all the long lead items have been procured and are on site, and we expect to fund that remaining two odd million dollars with either cash on hand or cash flow from operations. So, we are certainly well on our way.
We're sort of undergoing wet commissioning of the of the expanded the crushing circuit and ramping up throughput the rest of the plant build remains ongoing to Stephen's point, we've incurred about $4 million of the $6 million total capital costs that we guided the market to so substantially through most of the heavy expenditures all the long lead items have been poor.
Mike: <unk> neuron sites and expect to fund that said that remaining two odd million dollars with the with either cash on hand or cash flow from operations. So.
Mike: Well on our way.
Speaker Change: With respect to the quarterly highlights I'll start maybe on the operation side, a little bit more detail, you'll Steven touched on it it was a bit of a lighter quarter relative to what we had been seeing we produced and sold approximately 4000 ounces again down a little bit relative to what we've been seeing in the last few.
Michael P. Leonard: With respect to the quarterly highlights, I'll start maybe on the operations side in a little bit more detail. As Stephen touched on, it was a bit of a lighter quarter relative to what we had been seeing. We produced and sold approximately 4,000 ounces, again, down a little bit relative to what we've been seeing in the last few quarters. And we touched on the reasons why, the lower throughput and the lower recoveries as a result of us pushing through that harder sulfide rock.
Speaker Change: Orders and we touched on the reasons why the lower throughput and our lower recoveries as a result of us pushing through that harder sulfide rock.
Speaker Change: We processed about 66% sulphide rock this quarter relative to prior quarters, which were primarily oxide and softer and easier on the equipment.
Speaker Change: What what was really happening with that existing crusher and as Steven touched on this it was really at its limit for what it can do in terms of it's hard rock and you were seeing.
Michael P. Leonard: We processed about 66% sulfide rock this quarter relative to prior quarters, which were primarily oxide and softer and easier on the equipment. What was really happening with that existing crusher, and Stephen touched on this, it was really at its limit for what it could do in terms of this hard rock. And you were seeing material in the crushed product that was too large and too heavy.
Speaker Change: Material crushed product that was too large and too inconsistent from what the mill could could process, which led to things like mill downtime.
Speaker Change: Longer milling period, and as a consequence lower throughput.
Speaker Change: Steven again touched on it's Fortunately the new circuit is online it is wet commissioning so its ramping up slowly, but we're doing up over 2000 tonnes a day with a new crusher already.
Speaker Change: You heard about the capacity of the 4800 tons a day. So it certainly sized for a much much larger operation, but yes, we're seeing the benefits are already to date post Q2 already produced almost 2700 ounces.
Michael P. Leonard: The New Circuit is online. It is wet commissioning, so it's ramping up slowly. But we're doing over 2,000 tons a day with the new crusher already. You heard about the capacity of 4,800 tons a day, so it's certainly sized for a much, much larger operation.
Speaker Change: So we're seeing both that improvement things like throughput and recoveries and are well on our way to our expanded production in the second half of the year.
Speaker Change: On the financial side of things the good news for the quarter was that we saw and continue to see record gold prices.
Michael P. Leonard: But we're seeing both an improvement in things like throughput and recoveries, and we are well on our way to expanded production in the second half of the year. On the financial side of things, the good news for the quarter was that we saw and continue to see record gold prices; we achieved a realized gold price of over $2,000 an ounce, $2,026, and I sold gold as recently as yesterday at almost $2,400 an ounce. So, as a company, we are continuing to benefit from these lofty gold prices.
Speaker Change: Our realized gold price of over $2000, an ounce in $2026, an ounce Ah and I sold gold.
Speaker Change: As recently as yesterday at almost $2400 an ounce so.
Speaker Change: As a company continuing to benefit from these lofty logical prices.
Speaker Change: Year to date, we've done almost 9000 ounces and that generated operating cash flow of over $6 billion again I touched on what we're doing.
Speaker Change: The plant build but we continue to reinvest this cash flow into value accretive activities Accra.
Speaker Change: Plant expansion is one that we certainly expect to benefit from in the second half of the year.
Michael P. Leonard: Here today, we've done almost 9000 ounces, and that generated operating cash flow of over $6 million. Again, I touched on what we're doing, you know, with the plant bill, but we continue to reinvest this cash flow into value-added activities at Buck Reef, and this plant expansion is one that we certainly expect to benefit from in the second half of the year. We at Buck Reef continued to be a low cost, high margin operation.
Speaker Change: We at <unk> continue to be a low cost high margin operation, we had revenues of $8 million during the quarter and again gross profit very very strong at over $3 million or 41%, so lots and lots of leverage to these that is rising gold prices that we're seeing.
Speaker Change: We are recorded positive net income of $2 million EBITDA, two and a half million dollars. So so again, despite this being a comparatively low production quarter it demonstrates the profitability.
Speaker Change: Grief.
Speaker Change: Liquidity continues to be a key area of focus for us. It's eurex. Despite currently being in a in a build phase we did maintain a very very strong liquidity profile, we preserved a cash balance of $8 million. That's that's consistent with what we reported at both year end into in Q1, we.
Michael P. Leonard: We had revenues of $8 million during the quarter. And again, gross profit was very, very strong at over $3 million, or 41%. So lots and lots of leverage to these rising gold prices that we're seeing.
Michael P. Leonard: We recorded positive net income of $2 million and EBITDA of $2.5 million. So again, despite this being a comparatively low production quarter, it demonstrates Buck's profitability. Liquidity continues to be a key, key area of focus for us at TRX. Despite currently being in a build phase, we have maintained a very, very strong liquidity profile. We preserved a cash balance of $8 million. That's consistent with what we reported at both year end and Q1. We maintained a positive working capital balance of almost $3 million. We have no debt on our balance sheet.
Speaker Change: We maintained a positive working capital balance of over $3 million, we have no debt on our balance sheet and a and again.
Speaker Change: Despite this being a relatively capital heavy.
Speaker Change: Can't build phase during Q2, we manage things like accounts payable very very closely and actually saw a decrease in in a peak quarter on quarter. So liquidity key area of focus and you know as we move into a higher production.
Speaker Change: Profile in the second half of the year and into next year expect liquidity to improve from here.
Speaker Change: Yes.
Speaker Change: Finally, you can see in the last bullet and we touched on it at the outset of the call with respect to full year guidance. We continue to expect production to be in the range of 25000 to 30000 ounces during the year and while as you can see in the middle of the table cash costs for the first half of the year were just over $1000 an ounce, we expect that to improve in the SEC.
Michael P. Leonard: And again, despite this being a relatively capital-heavy plant build phase during Q2, we managed things like accounts payable very, very closely and actually saw a decrease in AP quarter on quarter. So liquidity is a key area of focus, and as we move into a higher production profile in the second half of the year and into next year, expect liquidity to improve. Finally, you can see in the last bullet we touched on it at the outset of the call. With respect to full year guidance, we continue to expect production to be in the range of 25,000 to 30,000 ounces during the year.
Speaker Change: Half of the year as we benefit from economies of scale from the larger plants and expect the full year cash cost number to land somewhere between 800 and $900 an ounce next slide please Christine.
Speaker Change: We've shown this slide in the past now I'll appoint a our listeners and viewers to the tables on the right to start production.
Speaker Change: Production sales EBITDA and cash flow from operations, what we've tried to demonstrate here with our third successful expansion coming online here. Shortly is three years of consecutive growth year over year over year growth in all categories.
Michael P. Leonard: And while, as you can see in the middle of the table, cash costs for the first half of the year were just over $1,000 an ounce, we expect that to improve in the second half of the year as we benefit from economies of scale from the larger plant and expect the full, Next slide, please, Christina.
Speaker Change: And if you look to the bottom left we've done that successfully well maintaining not reducing G&A and corporate overhead. So again continued to be very prudent in our capital management and investment decisions and the top left box demonstrates how we've taken money thats been raised and reinvested in the business and you're effectively.
Michael P. Leonard: We've shown this slide in the past. Now, I'll point our listeners and viewers to the tables on the right to start production sales, EBITDA, and cash flow from operations. What we've tried to demonstrate here with our third successful expansion coming online here shortly is three years of consecutive growth, year over year over year growth in all categories. And, you know, if you look to the bottom left, we've done that successfully while maintaining, if not reducing, G&A and corporate overhead.
Seeing no one eight time.
Speaker Change: Multiplier on an investment so it's a very very shareholder friendly and the approach. We've taken is we've talked about many times is to use cash flow from operations to fund value accretive activities and do that in a in a shareholder friendly way, which minimises of course dilution.
Speaker Change: And again I think this is just the beginning we expect to see significant growth heading into into next year.
Speaker Change: So so watch this space next slide please.
Stephen: Stephen back to you.
Stephen: Yeah, So drilling Oh my favorite there my favorite subject.
Stephen: Well I like to production of gold as well right on.
Michael P. Leonard: So, again, we continue to be very prudent in our capital management and investment decisions. And, you know, the top left box demonstrates how we've taken money that's been raised and reinvested it in the business. And you're effectively seeing, you know, a 1.8 time multiplier on investment. So it's very, very shareholder friendly. And the approach we've taken, as we've talked about many times, is to use cash flow from operations, you know, to fund value-creating activities and do that in a shareholder-friendly way, which minimizes, of course, dilution. And, again, I think this is just the beginning. We expect to see significant growth heading into next year, so watch this space. Next slide, please.
Stephen: But I also like people finding gold.
Stephen: I like both of them.
Speaker Change: So with regards to what you should expect to see in the second half of the year as I mentioned you'll.
Speaker Change: You'll see the stars on this slide.
Speaker Change: And that's where the drill bit programs will be focused on.
Speaker Change: We saw a good program in the northeast or when we did the extension there we didnt extension in holes and under South pit as well, we've released sells it looks good down there and then we also see that as a trend on the NPL pushes and pulls in there looked really good and we know there's lots of gold up in eastern porphyry as well so.
Speaker Change:
Speaker Change: And as I said the focus on on.
Speaker Change: On the exploration program will be where are the near term ounces to go into a mine plan.
Speaker Change: And while that will mean is doing sections that are.
Speaker Change: Fairly close together and and more shallow than deep.
Stephen Mullowney: Yeah, so drilling, my favorite, my favorite subject. Well, I like the production of gold as well, but I also like people finding gold. I like both of them.
Speaker Change: We think that there's a lot of gold here even at shallow.
Speaker Change: Parts of the deposit and obviously D shares almost go down quite a ways out and the main zone as add the intercepts to 750 meters and we don't expect that to be any different over at Anfield either. So this will be a long life mining asset on got a lot of drilling to prove it out and show everybody exactly what it is so very.
Stephen Mullowney: So with regard to what you should expect to see in the second half of the year, as I mentioned, you'll see the stars on this slide. That's where the drill bit programs will be focused. We saw a good program in the Northeast, or when we did the extension there, we did an extension and holes under the South Pit as well. We released those, and it looks good down there. And then we also see that other trend on Anfield, to put some holes in there and look really good.
Speaker Change: Good for that.
Speaker Change: You'll always see me smile and exploration.
Speaker Change: You know I know in the North American the investors don't understand football or soccer.
Speaker Change: As well as others that last one was named Anfield zone.
Speaker Change: I'll make sure that is named to the next one to arrival of deliverable football club.
Speaker Change: Which will be a little bit testy on site, but Oh, we'll get it through.
Stephen Mullowney: And we know there's lots of gold up in the Eastern Porphyry as well. So, as I said, the focus of the exploration program will be, where are the near-term ounces to go into a mine plant? And what that will mean is doing sections that are fairly close together and more shallow than deep.
Anyway.
Speaker Change: So that's an exploration do we have the next slide please.
Speaker Change: And so with regards to share ownership in.
Speaker Change: We and coverage of them, obviously with the increase in gold price our share price has us react to that as well and I think it's also react to the fact that we continually reinvest in cash flow as well as continually have a strong liquidity profile I think in this market and both Mike and I collect related management team Kristina.
Stephen Mullowney: We think that there's a lot of gold here, even in shallow parts of the deposit. And obviously, these shares go down quite a ways. The main zone has added the intercepts to 750 meters, and we don't expect that to be any different over at Anfield either.
Speaker Change: Andrew Clos leave their liquidity is king maintaining that liquidity is paramount.
Speaker Change: Wallet same time, expanding our operation. So we've successfully done that I don't think we've been as volatile as other stocks from our from our tracking as a result.
Stephen Mullowney: This will be a long-life mining asset. I've got a lot of drilling to prove it out and to show everybody exactly what it is. I'm very excited about that.
Speaker Change: And we continually hopefully kit will create that shareholder value to increase system in.
Stephen Mullowney: You'll always see me smile when it comes to exploration. I know in North America, investors don't understand football or soccer as well as others. The last zone was named the Anfield Zone.
Speaker Change: In the future not just on the back of gold prices that certainly provides a lot of wind in the sales, but also based on operating results. So if he created business. It creates a lot of cash flow that you should get rewarded for it and that's and that's the mantra we are out marketing all the time.
Stephen Mullowney: I'll make sure that it's named the next zone after the arrival of the Liverpool Football Club, which will be a little bit testy on site, but we'll get it through. Anyways, so that's on exploration. Do we have the next slide, please? And so, with regard to share ownership, we've successfully done that. I don't think we've been as volatile as other stocks in our tracking as a result. And, continually, hopefully, we'll create that shareholder value to increase in the future, not just on the back of gold prices, which certainly provides a lot of wind in the sails, but also based on operating results. So if you create a business that creates a lot of cash flow, then you should get rewarded for it.
Speaker Change: We have started to see more and more institutional type of interest in taking meetings and I'm really looking at what we're doing.
Speaker Change: Versus what we've seen a couple of years ago, we're still predominantly a retail based.
Speaker Change: <unk> stock in the United States, but I think you'll start to see that turn a little bit over time as we continue to grow out and continue to de risk this business.
Speaker Change: Yeah.
Speaker Change: Next slide Christine.
Speaker Change: And still just a lot of pictures a lotta you've you seen these pictures are over time.
Speaker Change: It's just a lot going on all the time as I mentioned there are 600.
Speaker Change: People employees and contractors at Buc reef at this point in time. So there is quite a bit of activity when I'm. There tomorrow I'm sure I'm going to see more vehicles and motorcycles in the parking lot and more activity every time my competitors. There's a lot more activity that goes on that site.
Stephen Mullowney: And that's the mantra. We are out marketing all the time. We have started to see more and more institutional types of interest in taking meetings and really looking at what we're doing, versus what we saw a couple of years ago. We're still predominantly a retail-based stock in the United States.
Speaker Change: And I think that is it and we're going to turn it over to questions its pretty straightforward quarter growth.
Speaker Change: On time.
Speaker Change: Do you need to reinvest that cash flow into the business to grow production as well as resources.
Stephen Mullowney: But I think you'll start to see that turn a little bit over time as we continue to grow out and continue to de-risk this business. Next slide, Christina, and still just a lot of pictures. A lot of you have seen these pictures over time. There is just a lot going on all the time. As I mentioned, there are 600 people, employees, and contractors at Buck Reef at this point in time, so there is quite a bit of activity.
Speaker Change: It's getting to be a pretty simple story, which I like.
Speaker Change: If you are ready to take questions Steven.
Steven: He wished.
Steven: Yes.
Speaker Change: We wish to ask a question. Please click the Q&A icon on the left hand side of the screen.
Speaker Change: We will take the question the options to raise your hand to join the question queue.
Speaker Change: And that's your question globally are right a question too.
Stephen Mullowney: When I'm there tomorrow, I'm sure I'm going to see more vehicles and motorcycles in the parking lot and more activity. Every time I come here, there's a lot more activity that goes on at the site. And I think that is it. And we're going to turn it over to questions. It's pretty straightforward quarter growth, plants on time, and continuing to reinvest that cash flow into the business to grow production as well as resources. It's getting to be a pretty simple story, which I like.
Speaker Change: Right.
Speaker Change: When you introduced you will see a prompt on screen and should continue to confirm that you are ready for your lines will be opened.
Speaker Change: And also have dialed into the conference call. Please press Star then one on your telephone keypad to join the question queue.
Speaker Change: We'll pause for a moment as participants Joe Mchugh.
Speaker Change: And there appear to be no questions from the phone line that you want to yes.
Speaker Change: Yeah.
Speaker Change: Morning.
Joe Mchugh: On tech so I'll answer those questions.
Joe Mchugh: One comes from high car analysts at H C Wainwright.
Operator: If you're ready to take questions, Stephen. If you wish to ask a question, please click the Q&A icon on the left-hand side of the screen. You'll see the options to raise your hand to join the question queue and ask your question verbally or write a question to submit your question in writing. When you're introduced, you will see a prompt on screen and should continue to confirm that you're ready for your line to be opened.
Speaker Change: Unfortunately, these boarding a plane. So he just said we spent some money on expanding our site in <unk>.
Speaker Change: Would you be resuming additional and we're going to revisit additional exploration by dollar anti breakdown of these targets.
Speaker Change: Well Heiko, that's exactly why I'm here I'll be gone through that with team over the next couple of days as we start the firmness out over the next couple of weeks and months.
Operator: Analysts who have dialed in to the conference call should press star and then one on your telephone keypad to join the question queue. It will pause for a moment as participants join the queue. Doesn't there appear to be no question?
Speaker Change: In order to provide more guidance on what we're doing there we do know the direction that we're going back we're going to all be sitting down with the team to go through exactly what the what the time period and budgets will be for that.
Stephen Mullowney: Yeah, I will, just a couple of questions on text, so I'll answer those questions. One comes from Heiko, our analyst at H3Wayne, right? Unfortunately, he's boarding a plane.
Speaker Change: A little bit of that goes into our year end planning, that's upcoming and what type of cash flow will be available for <unk>.
Speaker Change: Exploration as well as other development activities such as tailings.
Stephen Mullowney: So he just said that we spent some money expanding our site, and we're going to be resuming additional exploration. Can we provide a dollar and time breakdown of these targets? Well, Heiko, that's exactly why I'm here.
Speaker Change: And stripping obviously, it's an open pit mine. So so we're balancing all of those factors, but it will be a a decently significant program coming up.
Speaker Change: It's where we believe we can unlock the most potential from a shareholder perspective.
Speaker Change: The next question comes from Matt individual well all the gold sold in the future or.
Matt: Well building up of gold holding position his parentage of corporate treasury be considered.
Stephen Mullowney: I'll be going through that with the team over the next couple of days as we start to firm this out over the next couple weeks and months. Obviously, it's an open-pit mine, so we're balancing all those factors, but it will be a decently significant program coming up because that's where we believe we can unlock the most potential from a shareholder perspective. The next question comes from an individual.
Matt: Yes.
Matt: And as everyone is aware, we do have a joint venture with the state mining company.
Speaker Change: Right now there is need for cash.
Speaker Change: To expand the business and to spend on exploration and so obviously the gold sold is being used to fund that which is paid for in Tanzania showings are U S dollars.
Speaker Change: In the future if.
Speaker Change: There is excess cash position it might be one of the.
Stephen Mullowney: Will all the gold be sold in the future, or will building up a gold holding position as part of the corporate treasury be considered? As everyone is aware, we do have a joint venture with the state mining company. Right now, there is a need for cash to expand the business and to spend on exploration. And so, obviously, the gold sold is being used to fund that, which is paid for in Tanzanian shillings or US dollars.
Speaker Change: It could be very much feed that depending on the period of time be one of the options that would be considered but in the short to medium term I think there's so much potential and continuing to expand the operations as well as exploration.
Speaker Change: It won't be something that would be considered into short to medium term, but in the long term, yes. It would be something that may be considered.
Speaker Change: Yes, Steven you May you may want to just touch on what we're doing and as far as insurance are with respect to things like ROM pad inventory in and Crestor inventory.
Stephen Mullowney: In the future, if there is an excess cash position, it might be one of the, it could very much be that, depending on the period of time, be one of the options that would be considered. But in the short to medium term, I think there's so much potential to continually expand the operations as well as exploration that it won't be something that would be considered in the short to medium term. But in the long term, yeah, it would be something that could be considered.
Steven: We've got 11000 ounces on the ROM stockpile in 400 ounces and Crestor, which are certainly in a rising gold price environment becomes more valuable.
Steven: I guess, Mike that's a good that's a great.
Steven: In a theoretical way, we kind of do it anyway in insurance in the business.
Steven: So.
Steven: There is a level of stockpile that I and Mike and the management team like to have a route.
Steven: As a rainy day fund so to a certain degree that we're kind of doing it. It's just in New York as opposed to the actual physical barriers. So it's sitting on the ground. There can go through the plant any day.
Michael P. Leonard: Yeah, Stephen, you may want to just touch on what we're doing as far as insurance with respect to things like ROMPAD inventory and Crestor inventory. You know, get 11,000 ounces on the ROMPAD stockpile and 400 ounces in Crestor, which certainly in a rising gold price environment becomes more
Steven: Have you sold any forward production, if so how much and at what price. So as people have seen and are seeing.
Steven: In our financial statements there is a collar so when we put it at zero cost collar goal I think was trading.
Steven: At around 1950 or something of that nature and had dipped down to $70 50. So one lock in some cash flow to paper plant. So we have 600 ounces a month until the end of May that has a band between $18 50, and $21 50, so a floor and ceiling.
Stephen Mullowney: I guess Mike, that's a great idea, you know, in a theoretical way; we kind of do it anyway in insurance in the business. So there is a level of stockpile that I and Mike and the management team like to have around as a rainy day fund. So to a certain degree, we're kind of doing It's just in the ore, as opposed to actual physical bears. So it's sitting on the ground there can go through the plant any, Have you sold any forward production? So how much and at what price?
Steven: But it's only for 600 ounces for and it ends I believe may 'twenty, one or somewhere around there is the last strike date. So that's all look forward production. That's been sold there is.
Steven: Gold.
Steven: Forward sales that we also did through a in enterprise called OCM and and we have about 12 months remaining on that I believe Mike Thats around 150 ounces a month.
Steven: Alright.
Stephen Mullowney: So, as people have seen in our financial statement series, a collar. So when we put in a zero cost collar, gold, I think, was trading at around 1950 or something of that nature and had dipped down to 1750. So we want to lock in some cash flow to pay for the plant. So we have 600 ounces a month till the end of May, that has a band between 1850 and 2150. So a floor and a ceiling, but it's only for 600 ounces, and it ends, I believe May 21, somewhere around there is the last strike date.
Steven: It's less than a thousand remaining over over the next year. So, yes, very very little impact on our quarter over quarter our revenues.
Steven: So it has minimal impact on.
Steven: Short term revenues and certainly no impact on medium to long term parts of our business. So anything that we do on forward production is always going to be short term in nature and it won't be long term in nature. So it will be used.
We prefer to do that.
When it comes to the shareholders for capitalized we have dips and ups and downs in the capital spending. So it is a financing mechanism, but we don't get too.
Steven: Too heavy on them.
Steven: And we wouldn't do that.
Steven: Yeah.
Speaker Change: And the next question.
No.
Speaker Change: Next question is congratulations on the gala, great things you and the team are doing to build and grow T. Rex. Please explain more about your plan to derisk.
Stephen Mullowney: So that's all the forward production that's been sold. There is some gold forward sales that we also did through an enterprise called Oseum. And we have about 12 months remaining on that. I believe, Mike, that's around 150 ounces a month right now.
Speaker Change: What are the top few things please so.
Speaker Change: To Derisk, a large part of the business has been derisked. So we know we can process all of that.
Speaker Change: <unk> had a very high margin and get decent recovery rates, that's a large part of the derisking.
Michael P. Leonard: Yeah, and it's less than 1000 remaining over the next year. So yeah, very little impact on our quarter over quarter revenues. Yeah, so it has minimal impact on short term revenues, and certainly no impact on medium to long term parts of our business. So anything that we do on forward production is always going to be short term, it won't be long term in nature. So it will be used, We prefer to do that, then to come to the shareholders for capital as we have dips and ups and downs in capital spending. So it is a financing mechanism, but we don't get too too heavy on and we wouldn't do that. And the next question. So.
Speaker Change: Of antibody approach just proving a bit you can actually do that.
Speaker Change: A lot of companies right into.
Speaker Change: Into trouble in that regard now Goldman spend $200 million and all of a sudden now the plant doesn't work.
Speaker Change: So that large part of the de risk has been done.
Speaker Change: We've also derisked.
Speaker Change: Logical models and are very comfortable with them.
Speaker Change: At this point in time in order to solidify that future production.
Speaker Change: Other parts of Derisking is we have strong government relations. So we continually engage with the government and our joint venture partner, we will enter into negotiations with them on a revised joint venture.
Speaker Change: Probably in the short to medium term that is necessary as we move forward.
Speaker Change: Given the growth profile of the business it doesn't work as well as the once.
Speaker Change: Once did.
Speaker Change:
Stephen Mullowney: The next question is, congratulations on all the great things you and the team are doing to build and grow TRX. Please explain more about your plan to de-regulate. What are the top few things, please?
Speaker Change: Also I would say, our tailings and other infrastructure assets.
Speaker Change: A brief we're constantly on top of those so.
I think a large part of the Derisk has happened then continually happens overtime, so David but maybe maybe one point.
David: That I think it would be interesting too to our listeners here.
Stephen Mullowney: So to de-risk, a large part of the business has been de-risked. So we know we can process gold at buck brief at a very high margin and get decent recovery rates. That's a large part of the de-risking of any mining project just proving that you can actually do that. A lot of companies run into trouble in that regard. They'll go spend $200 million, and all of a sudden, no, the plant doesn't. So that large part of the de-risk has been done. We've also de-risked our geological models and are very comfortable with them at this point in time in order to solidify that future production.
We are looking to add equipment to our fleet that we can manage for example to improve things like mining costs, what we can mine.
David: And where without having to rely solely on contractors. So I think if if I was to 0.1 that.
It presents a lot of opportunity for us in doing that.
Speaker Change: Yeah, well that lowers the cost significantly as well Mike. So that's one thing that we're certainly looking at the desktop of mind right now.
David: Yes.
David: Those are a few areas.
Speaker Change: The next question, we have or are we still looking to acquire are there opportunities nearby.
Speaker Change: I think we're getting to a point, where we're the business is maturing and starting to stabilize there's still a lot of work to do.
Speaker Change: As opportunities pop up that have similar type of profile to win my Guy Christina others joined T. Rex.
Stephen Mullowney: Other parts of de-risking are that we have strong government relations. So we continually engage with the government and our joint venture partner. We will enter into negotiations with them on a revised joint venture, probably in the short to medium term. That is necessary as we move forward. Given the growth profile of the business, it doesn't work as well as it once did.
Speaker Change: As you know.
Speaker Change: Get in their beer rollovers sleeves handful dirty and.
Speaker Change: And put an asset into production very quickly and utilize that cash flow.
Speaker Change: Span that asset those opportunities are around and I think we will start to look at those more and more as we move forward here because there's a lot of value creation from doing it this way.
Speaker Change: So yes, we will still look at opportunities in our area, Tanzania, but theres also opportunities up and down the East Africa quarters, what I call. It.
Michael P. Leonard: Stephen, Stephen, maybe one point to touch on that.
Stephen Mullowney: Yeah, well, that lowers the cost significantly as well, Mike. So that's one thing that we're certainly looking at that's top of mind. So those are just a few areas. The next question we have is, are we still looking to acquire other opportunities nearby? Look, I think we're getting to a point where the business is maturing, it has started to stabilize, but there's still a lot of work to do. As opportunities pop up that have a similar type of profile to when my guy, Christina, and others joined TRX, which is, you know, get in there, roll up your sleeves, get your hands a little dirty, and put an asset into production very quickly and utilize that cash flow to expand that asset.
Speaker Change: And through Ethiopia, Kenya down through so.
Speaker Change: Will we will look at those in the future and if it makes sense and they have just as good or better opportunities for shareholder value, but grateful we're looking at those.
Speaker Change: Stephen I had a follow up question.
Stephen: Do you expect it to test it in here and asked how much impact that we've seen on costs from recent spot prices and how sticky do you think our cost base will be if gold prices were to go down from current levels.
Speaker Change: Which I can maybe touch on but.
Stephen Mullowney: Those opportunities are out there, and I think we will start to look at those more and more as we move forward here because there's a lot of value creation from doing it this way. So, yes, we will still look at opportunities in our area of Tanzania, but there are also opportunities up and down the East African corridor, as I call it, and through Ethiopia, Kenya, and down. So we will look at those in the future. And if they make sense, and they have just as good or better opportunities for Gerald O'Valley and Buck Reef, we will look at them.
Speaker Change: Really the only sort of true variable cost that we have is a royalty.
Speaker Change: With the government of seven 3% royalty that varies with that with revenue of course.
Speaker Change: We're not playing with things like cut off grade in the in the short term.
Speaker Change: As and when gold prices increase so truly expect to see significant economies of scale from our operation and and <unk>.
Speaker Change: Benefit from higher coal prices, all things being equal.
Speaker Change: Yeah, So what I would say is.
Michael P. Leonard: Stephen, Heiko had a follow-up question. He texted in here and asked, how much impact have we seen on costs from recent spot prices? And how sticky do we think our cost base would be if gold prices were to go down from current levels? Which I can maybe touch on, but you know, really, the only sort of true variable cost that we have Royalty. [inaudible]
Speaker Change: Is also Mike there's always a positive correlation between oil price and gold price Youre always seems to be that that correlation there.
Speaker Change: And.
Speaker Change: It's been one of the things as we hate and rain in Tanzania into certain degree, but we love the rain in Tanzania to certain degree.
Speaker Change: That helps us get off diesel in that range because the grid is not down.
Speaker Change: And with Juliet narrative power facility coming online too.
Stephen Mullowney: Yeah, so what I would say is also Mike, there's always a positive correlation between oil prices and gold prices. There always seems to be that correlation there. And you know, it's been one of the things we hate the rain in Tanzania to a certain degree, but we love it in Tanzania to a certain degree. That helps us get off diesel when it rains because the grid is not down. And with the Julius Neary Power Facility coming online too, we fully expect to see the benefits of that as well. So you know, I would expect to, You know, it is fairly sticky.
Speaker Change: We fully expect to see the benefits of that as well so.
Speaker Change: I would expect too.
Speaker Change: You know it is fairly sticky and also the Tanzania Schilling has been under a little bit of pressure as well so that helps on the cost side.
Speaker Change: Alright. So another thing is paying the same warn you plan to Derisk what are the top few things what our institutions waiting to see before jumping in.
Speaker Change: Institutions are waiting for a couple things one is they need to have more capital in their institutions.
Stephen Mullowney: And also, the Tanzanian shilling has been under a little bit of pressure as well, so that helps on the cost. Alright, so another thing is, please explain more about your plan to de-risk. What are the top few things?
Speaker Change: For one it first and foremost a lot of our capital to this spaces has been allocated in a re look at names and in order to get into new names they need to.
Speaker Change: They need to exit the position and get into another position so.
Speaker Change: Which of course, it can be difficult.
Stephen Mullowney: What are institutions waiting to see before jumping? Institutions are waiting for a couple of things. One is, they need to have more capital in their institutions. For one, first and foremost, a lot of their capital for this space has been allocated, and they relook at names, and in order to get into new names, they need to exit a position and get into another position. So, which can be difficult.
Speaker Change: So I think the largest part is there needs to be more money going into this space hopefully coal prices.
Speaker Change: There are catalysts for institutional money getting more money.
Speaker Change: As opposed to getting redemption. So a large part of what has happened is theres been a lot of redemptions institution, so thats a large factor.
Speaker Change: Haven't heard anything really negative, but better story from an institutional perspective.
Speaker Change: I think we've moved along we said what we we did what we said we were going to do from day number one we continue to do that.
Stephen Mullowney: So I think the largest part is that there needs to be more money going into this space. Hopefully, gold prices are catalysts for institutional money getting more money, as opposed to getting redemption. So a large part of what has happened is that there's been a lot of redemptions in institutions. So that's a large factor.
Speaker Change: We've derisked this business significantly I think the real catalyst as more money need to enter the space and people need to be comfortable with smaller cap versus larger cap investments.
Speaker Change: So when will the 'twenty 'twenty measured and indicated resources be update it to what current resources or as of 2024 very good question.
Stephen Mullowney: We haven't heard anything really negative about our story from an institutional perspective. I think we've moved along. We did what we did, what we said we were going to do from day number one. We continue to do that. We've de-risked this business significantly.
Well, what I would say there is look we will go through a drill program and then we'll reassess.
Speaker Change: We're we're very comfortable is in the economic ounces of the deposit.
Stephen Mullowney: I think the real catalyst is more money needs to enter the space, and people need to be comfortable with smaller caps versus larger caps. So when will the 2020 measured and indicated for resources be updated to what the current resources are as of 2024? A very good question.
Speaker Change: So really what 2024 rules R. R R.
Speaker Change: I think the world's 2019 rules are around.
Speaker Change: What are your economic ounces measured and indicated now more like proven and probable.
Speaker Change: And we're very comfortable with.
Speaker Change: And the analysis that we did on the <unk>.
Stephen Mullowney: What I would say there is, look, we will go through a drill program, and then we'll reassess. Where we're very comfortable is in the economic ounces of the deposit. So really, what the 2024 rules are, or I think the rules of 2019 rules are around, what your economic analysis is measuring and indicating now more like proven and probable. And we're very comfortable with any analysis that we did on the on the 2020 statements around the economic resources that are at buck. I think that's it for questions. I think there's a follow-up question that just popped up in the text.
Speaker Change: On the 2020 statements around the economic resources that are at Barclays.
Speaker Change: I think that's it for questions.
I think theres a follow up question that just popped up on the text.
Speaker Change: Uh huh.
Speaker Change: So I not quite understand the question. Since this is a powerful breakout and gold when you consider even cutting back more forward production or hopefully.
Speaker Change: None at all so with regards to if you've all prices higher certainly the need to forward sell gold is less in order to do your capital projects because it obviously you have more revenue from what we're doing with regards to scaling back production.
Speaker Change: Look.
Speaker Change: I think.
Stephen Mullowney: I think there's a follow-up question that just popped up in the text.
Speaker Change: And in the value.
Speaker Change: The way to markets currently value companies.
Stephen Mullowney: So I don't quite understand the question, since this is a powerful breakout in gold, would you consider even cutting back more forward production or, hopefully, none at all? So with regard to if your gold price is higher, certainly the need to forward sell gold is less in order to do your capital projects, because obviously you have more revenue from what we're doing. With regard to scaling back production,
Speaker Change: They are still not value four year gold in the ground.
Speaker Change: Fortunately, we did go through that phase.
Speaker Change: But it Hasnt gone back there.
Speaker Change: And in order to get but I fully expect it may get factor at some point in time, who knows.
Speaker Change: So you want to expand that resource base, so utilizing the gold production right now put it into drill but to expand that economic resource.
Stephen Mullowney: Look, I think in the value of the way the markets currently value companies. There's still no value for your gold in the ground. Unfortunately, we did go through that phase.
Speaker Change: It's more important.
Speaker Change: Because you want to have a bigger base for when the market comes back of values and that bad debt that way also the benefit of having more production today versus in.
Speaker Change: The future is.
Stephen Mullowney: But it hasn't gone back there, and in order to get what I fully expected may get back there at some point in time, who knows? So you want to expand that resource base. So utilizing the gold production right now to put in a drill but to expand that economic resource is more important, because you want to have a bigger base for when the market comes back and values you that way.
Speaker Change: Markets are still looking at net.
Speaker Change: Net asset value, which says move up production EV to EBITDA, which says move up production price to cash flow, which says move up production.
Speaker Change: And have it for a very long time so.
Speaker Change: I don't see us trying to decrease production.
Speaker Change: Put it into the future.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Oh, okay.
Speaker Change: Sorry, sorry to catch you off there I think it's really are what they are asking us cutting back on forward production, which.
Stephen Mullowney: Also, the benefit of having more production today versus in the future is that markets are still looking at, you know, net asset value, which says, increase production, EBDVDA, which says, increase production, price to cash flow, which says, increase production, and keep it for a very long time. So I, you know, I don't see us trying to decrease production to the
In our case.
Speaker Change: We're trying to preserve as much AR.
Speaker Change: Upside optionality to gold prices.
Speaker Change: We're not looking to edge.
Speaker Change: Been very very sort of.
Speaker Change: Selective and prudent and around near term cash flow requirements, where and when we've done. It. So I think the idea would be to try and maintain as much upside to gold as we can going forward, yes, that's right.
Michael P. Leonard: I think it's really what they're asking for is cutting back on forward production, which, you know, in our case, we're trying to preserve as much upside optionality on gold prices. Yeah, we're not looking to hedge, you know, it's been very, very sort of selective and prudent and around near-term cash flow requirements where and when we've done it. So I think the idea would be to try and maintain as much upside to gold as we can going forward. Yeah
Speaker Change: Alright, that's a good good level questions.
Speaker Change: Any questions on the line.
Speaker Change: Alright.
Speaker Change: There are no questions on the phone lines.
Speaker Change: Okay very good okay, well thanks, everyone.
Speaker Change: This concludes the meeting you may disconnect. Thank you for participating and have a pleasant day.
Speaker Change: The conference is no longer being recorded.
Speaker Change: [music].
Stephen Mullowney: All right, that's a good level of questions.
Operator: Eileen, any questions on the line?
Operator: There are no questions on the phone line.
Operator: Okay, very good. Okay. Well, thanks, everyone.
Operator: This concludes the meeting. You may disconnect. Thank you for participating and have a pleasant day. The conference is no longer being recorded.
unknown: [inaudible]