Q2 2024 Caledonia Mining Corp PLC Earnings Call

Speaker Change: Chester Goodman, Dana Roets, Camilla Horsfall, Dana Roets, Camilla Horsfall, Dana Roets, Camilla Horsfall,

Speaker Change: Dr.

Unknown Executive: Sorry, but what are we stopping at?

Speaker Change: Sorry, what are we stopping at?

Unknown Executive: Yes, it's stopping. Yeah.

Speaker Change: Yes, it's nothing, yes.

Unknown Executive: You have joined the meeting as an attendee and will be muted throughout the meeting. Sorry, what are we stopping at? Yes, it's stopping. Yeah. Okay. Well, good afternoon or good morning, depending on where you are.

Martin Learmonth: Well, good afternoon or good morning, depending on where you are. Thank you for joining us. This presentation is to review Caledonia's results for the second quarter of 2024. I'm Martin Learmonth, Caledonia's Chief Executive. I'm joined by Chester Goodburn, our CFO, and also Victor Gapare, who is another Executive Director. James should have joined us, but he's traveling somewhere in Zimbabwe and I suspect he's got communication difficulties.

Speaker Change: Okay.

Speaker Change: Well, good afternoon or good morning, depending on where you are. Thank you for joining.

Speaker Change: This presentation to review Caledonia's results for the second quarter of 2024.

Mark Learmonth: Thank you for joining this presentation to review Caledonia's results for the second quarter of 2024. I'm Mark Learmonth, Caledonia's Chief Executive. I'm joined by Chester Goodburn, our CFO, and also Victor Gapare, who is another Executive Director. James should have joined us, but he's traveling somewhere in Zimbabwe and I suspect he's got communication difficulties.

Speaker Change: I'm Mark Learmonth, Caledonia's Chief Executive.

Speaker Change: I'm joined by Chester Goodburn, our CFO , and also Victor Gapare, who is another Executive Director. James should have joined us, but he's travelling somewhere in Zimbabwe, and I suspect he's got communication difficulties.

Martin Learmonth: Okay, so we've got a relatively short presentation to run through. So Chester's driving it. Chester, could you... could you move through the...

Mark Learmonth: Okay, so we've got a relatively short presentation to run through. So Chester's driving it. Chester, could you... could you move through the, right, so the overview?

Speaker Change: Okay, we're going to run through a short presentation to run through. So Chester's driving it. Chester, could you move through the... Right, so overview. It was an excellent quarter.

Martin Learmonth: Right, so an overview. It was an excellent quarter. Production up, gold price up, costs down, and that all flowed through, as you'll see, into a very strong financial, very strong financial performance. In terms of production, we produced just under 21,000 ounces of gold in the quarter, comfortably up from the 17,500 that we achieved in the second quarter of 2023. So a very substantial improvement there. Also, during the quarter, although not a focus for this presentation, because we've already discussed it at some length, we published a preliminary economic assessment of the Bilbo Sulphide Project, which reiterated the fact that it has a very strong underlying economics. It'll produce one and a half million ounces over a 10-year mine life, all at sustaining costs of below $1,000 an ounce, so it is highly cash-generative. Nutrition

Mark Learmonth: It was an excellent quarter, production up, the gold price up, costs down, and that all flowed through, as you'll see, into a very strong financial, very strong financial performance. In terms of production, we produced just under 21,000 ounces of gold in the quarter, comfortably up from the 17,500 that we achieved in the second quarter of 2023. So a very substantial improvement there. Also, during the quarter, although not a focus for this presentation, because we've already discussed it at some length, we published a preliminary economic assessment of the Bilbo Sulphide Project, which reiterated the fact that it has a very strong underlying economics. It'll produce one and a half million ounces over a 10-year mine life, all at a sustaining cost of below $1,000 an ounce, so highly cash-generative and Leticia.

Chester Goodman: Production Up

Chester Goodman: The gold price up, costs down, and that all flowed through, as you'll see, into a very strong financial performance.

Chester Goodman: In terms of production, we produced just under 21,000 ounces of gold in the quarter, comfortably up from the 17,500 that we achieved in the second quarter of the year.

Chester Goodman: 2023, so a very substantial improvement there.

Chester Goodman: Also during the quarter, although not a focus for this presentation because we've already discussed it.

Chester Goodman: At some length, we published a preliminary economic assessment of the Bilbo Sulfide Project, which reiterated the fact that it has a very strong underlying economics. It will produce one and a half million ounces over a ten-year mine life.

Chester Goodman: All in sustaining cost of below $1,000 an ounce, so highly cash generative.

Mark Learmonth: We also published a revised mineral and resource estimate for Blanket Mine, which effectively doubled our resource base, our reserves, it doubled our reserves, and means that now we have a life of mine based on reserves at Blanket out beyond 10 years, which is a very healthy position for a mine of our nature. Based on our internal life of mine plan, which includes some inferred resources as well, we've got a life of mine plan now out to 2041, which significantly underpins the business going forward.

Martin Learmonth: We also published a revised mineral and resource estimate for Blanket Mine, which effectively doubled our resource base, our reserves, it doubled our reserves, and means that now we have a life of mine based on reserves at Blanket out beyond 10 years, which is a very healthy position for a mine of our nature. Based on our internal life of mine plan, which includes some inferred resources as well, we've got a life of mine plan now out to 2041, which significantly underpins the business going forward.

Speaker Change: In addition,

Speaker Change: We also published a revised mineral and resource estimate for...

Speaker Change: for Blanket Mine, which has actually doubled our resource base, our reserves, it doubled our reserves.

Speaker Change: It means that now we have a life of mine based on reserves of blanket out beyond 10 years, which is a very healthy position for a mine of our nature, based on our internal life of mine plan, which includes...

Speaker Change: some in third resource as well. We've got a life of mine plan now out to 2041, which, you know, significantly underpins the business going forwards. It's also worth noting that the increase in in gold ounces was a result of not just more tons, but also higher grade, which is which is very healthy.

Martin Learmonth: It's also worth noting that the increase in gold ounces was a result of not just more tons but also higher grade, which is very healthy. As a matter of administration, some of you may have seen it in the MD&A and the news release that we published this morning. For administrative purposes, we're rescheduling the declaration and hence the payment of our quarterly dividends to bring it in line with the quarterly board processes to approve and review the quarterly financials. It's just purely administration, and nothing else is added apart from that. Okay, so just turning to the results summary. Stable in terms of safety.

Mark Learmonth: It's also worth noting that the increase in gold ounces was a result of not just more tons but also higher grade, which is very healthy. As a matter of administration, some of you may have seen it in the MD&A and the news release that we published this morning. For administrative purposes, we're rescheduling the declaration and hence the payment of our quarterly dividends to bring it in line with the quarterly board processes to approve and review the quarterly financials. It's just purely administration, and nothing else is added apart from that.

Speaker Change: and just as a matter of administration.

Speaker Change: Some of you may have if you've seen it in the

Speaker Change: and the news release that we published this morning. For administrative purposes, we're rescheduling the...

Speaker Change: Declaration and hence the payment of our quarterly dividends to bring it in line with the quarterly board processes to approve and review the quarterly financials. It's just purely administration and nothing else to it apart from that.

Mark Learmonth: Okay, so just turning to the results summary, stable in terms of safety. Clearly, there's always more that we can do. And this continues to be an area of management focus, but it's pretty much the same as it has been in previous quarters. As I mentioned, production is up quite significantly. Clearly, as we all know, the gold price is higher. So we realized exactly $2,300 an ounce, substantially higher than the $1,949 in the comparative quarter.

Speaker Change: Okay, so just turning to the results summary, stable in terms of safety, clearly there's always more that we can do and this continues to be an area of management focus.

Martin Learmonth: Clearly, there's always more that we can do, and this continues to be an area of management focus. But it's pretty much the same as it has been in previous quarters. As I mentioned, production is up quite significantly. Clearly, as we all know, the gold price is higher.

Speaker Change: but it's pretty much the same as it has been in previous quarters.

Speaker Change: As I mentioned, production up quite significantly.

Martin Learmonth: So we realized exactly $2,300 an ounce, substantially higher than the $1,949 in the comparative quarter. All of that flowed through to a significant increase in revenue, just over $50 million for the quarter. And as you'll see in a moment, lower online costs mean that gross profit more than doubled from approximately 11 million dollars to nearly 23 million dollars in the quarter, and that flowed through to a significant increase in net profit attributable to shareholders, which was nearly 8.4 million dollars for the quarter compared to a loss of half a million dollars in the corresponding quarter. Lastly, that then flows through to an increase in earnings per share. I think we'll move forward now and I'll ask, oh, sorry, James was going to join us; unfortunately, he has a communications issue.

Speaker Change: Clearly, as we all know, the gold price is higher, so we realised exactly $2,300 an ounce, substantially higher than the $1,949 in the comparative quarter.

Mark Learmonth: All of that flowed through to a significant increase in revenue, just over $50 million for the quarter. And, as you'll see in a moment, lower online costs meant that gross profit more than doubled, up from approximately $11 million to nearly $23 million in the quarter. And that flowed through to a significant increase in net profit attributable to shareholders, which was nearly $8.4 million for the quarter compared to a loss of half a million dollars in the corresponding quarter. And obviously, that then flows through to an increase in earnings per share. I think we'll move forward now and I'll ask, oh, sorry, James was going to join us; unfortunately, he has a communications issue.

Speaker Change: All of that flowed through to a significant increase in revenue, just over $50 million for the quarter, and as you'll see in a moment, lower online costs.

Speaker Change: means that gross profit more than doubled, up from approximately $11 million to nearly $23 million in the quarter.

Speaker Change: And that flowed through to a significant increase in net profit.

Speaker Change: Attributable to Shareholders, which was nearly $8.4 million for the quarter compared to a loss of half a million dollars in the corresponding quarter. Lastly, that then flows through to an increase in earnings per share.

Speaker Change: I think we'll move forward now, and I'll ask...

Speaker Change: Oh sorry, James was going to join us, unfortunately he has some technical difficulties.

Mark Learmonth: This is a slide that we've used many times; it just shows the long-term development in terms of tonnes milled, grade, ounces produced, and recovery. And during the quarter, pretty much everything went as or slightly better than planned in terms of better tonnes, better grade, and the recovery remains very efficient at the sort of 93, 93.5%, and that then flows through into better ounces. So frankly, there's nothing funny to explain here. It was a good, solid quarter, and hopefully, we can see a repetition of that in future quarters. Shall we move on?

Martin Learmonth: This is a slide that we've used many times; it just shows the long-term development in terms of tonnes milled, grade, ounces produced, and recovery. And during the quarter, pretty much everything went as or slightly better than planned in terms of better tonnes, better grade, and the recovery remains very efficient at the sort of 93, 93.5%, and that then flows through into better ounces. So frankly, there's nothing funny to explain here. It was a good, solid quarter, and hopefully, we can see a repetition of that in future quarters.

Speaker Change: communication issue. This is a slide that we've used many times. It just shows the long-term

Tamsnield: development in terms of Tamsnield

Tamsnield: grade ounces produced and recovery.

Tamsnield: and during the quarter pretty much everything went as or slightly better than planned.

Tamsnield: in terms of better toms, better grade.

Tamsnield: and the recovery remains very efficient at the sort of 93, 93.5% and that then flows through into better ounces. So, frankly, there's nothing funny to explain here. It was a good, solid quarter and hopefully we can see a repetition of that in future quarters.

Mark Learmonth: Okay, I'll ask Chester to run through some of the financials in a bit more detail. Chester, if you could do that for us, please. Yeah, thank you, Mark. Very good quarter, and I'm pleased to share these results with our shareholders. Revenues were up 35.4%, that's on account of additional ounces, as well as high gold prices we've received. The wealth is up, that's due to the higher revenues. However, wealth has remained flat at 5% of revenues.

Tamsnield: Shall we move on?

Tamsnield: Okay I'll ask Chester to run through some of the financials in a bit more detail, Chester, if you could do that for us please. Yeah thank you Mark, very good corner supporter and I'm pleased to share these results with our shareholders.

Chester Goodburn: Thank you, Mark. It was a very good quarter, and I'm pleased to share these results with our shareholders. Revenues were up 35.4%, that's on account of additional ounces, as well as higher gold prices. Wealth is up, that's due to the higher revenues. Wealth has remained flat at 5% of revenues. Production costs, in absolute terms, are down on a consolidated basis, and the online cost at blanket is reduced to $906 from $915 per ounce in the previous quarter.

Chester Goodman: Revenues were up 35.4%, that's on account of additional ounces.

Chester Goodman: as well as high gold prices as we've received quantities up that's due to the higher revenues.

Chester Goodman: Relatives have remained flat at 5% of revenues.

Chester Goodburn: Production costs, in absolute terms, are down on a consolidated basis, and the on-mine costs at blanket are reduced to $906 from $915 per ounce in the previous quarter. Depreciation has increased due to our excess cost base. It was good to see our gross profits increasing by 110%. That's $12 million up from the comparable quarter. Other costs are down by $1.6 million due to lower foreign exchange losses.

Chester Goodman: Production costs, in absolute terms, that is down on a consolidated basis, and the on-mine costs at blanket, it's reduced to $906 from $915 per ounce in the previous quarter.

Chester Goodburn: Depreciation has increased due to our excess cost base. It was good to see our gross profits increasing by 110%. That's $12 million up from the comparable quarter. Other costs are down by $1.6 million due to lower foreign exchange losses. It's good to see that the volatile RTGS was replaced on 5 April this year by the ZIG, which has so far been more stable.

Chester Goodman: Depreciation has increased due to our excess cost base, it was good to see our gross profits increasing by 110%, that's $12 million up from the comparable quarter.

Chester Goodman: Other costs are down by $1.6 million due to lower foreign exchange losses.

Chester Goodburn: It's good to see that the volatile RTGS was replaced on 5 April this year by the ZIG, which has so far been more stable. And should that continue, we should also see lower foreign exchange losses. Our net finance cost is lower, that's due to additional cash in the group, that's reduced the interest charge. And our tax expense is normalized to between 30 to 33% of our effective tax rate, that's due to higher profits and a lower proportion of non-deductible expenditures.

Chester Goodman: It was good to see that the Bonneville RTGS was replaced on 5 April this year by the ZIG that has so far been more stable, and should that continue, we should also see lower foreign exchange losses.

Chester Goodburn: And should that continue, we should also see lower foreign exchange losses. Our net finance cost is lower, that's due to additional cash in the group, that's reduced the interest charge, and our tax expenses normalise to between 30 to 33% of our effective tax rate. That's due to higher profits and a lower proportion of non-deductible expenditures. It was also good to see our EPS up to $0.43 and adjusted EPS of $0.51 for the quarter. That's all produced in the three month space.

Chester Goodman: Our net finance cost is lower. That's due to additional cash in the group. That's reduced the interest charge.

Chester Goodman: And our tax expense is normalized to in between 30 to 33% of our effective tax rate. That's due to higher profits and a less proportion of non-deductible expenditures.

Chester Goodburn: It was also good to see our EPS up to $0.43 and adjusted EPS of $0.51 for the quarter. That's all produced in the three month space. Looking at our production cost balance, that's come down significantly on an on-mine cost basis. Due to the bulbous oxides cost coming down, that's reduced our on-mine cost by 13.7%. Power and labor are up. Power, mostly due to consumption and high and maximum demand charges.

Chester Goodman: It was also good to see our EPS up to $0.43 and adjust the EPS of $0.51 for the quarter. That's all produced in the three-month space.

Chester Goodburn: Looking at our production cost balance, that's come down significantly on an online cost basis. Due to the bulbous oxides cost coming down, that's reduced our online cost by 13.7%. Power and labor are up, though, mostly due to consumption and maximum demand charges.

Speaker Change: Looking at our production cost balance, that's come down significantly on an on-mine cost basis, due to the bulldozer oxide's cost has come down, that's reduced our on-mine cost by 13.7%.

Speaker Change: Power and labour is up, power mostly due to consumption and higher maximum demand charges.

Chester Goodburn: We've seen high and maximum demand charges due to exceeding some of our limits on electricity use at certain times of the day, and we are working on that. We've got some power factor correction equipment that's in the budget that should help with that. And we're also looking to create some efficiencies when it comes to labor overtime and power consumption. I was quite pleased to see the consumables coming down by 3% at a certain time when you see your consumables increasing and you see a lot of inflationary pressures across the globe.

Chester Goodburn: We're seeing maximum demand charges due to exceeding some of our limits on electricity use in certain times of the day, and we are working on that. We've got some power factor correction equipment that's in the budget that should help with that.

Speaker Change: We've seen maximum demand charges due to us exceeding some of our limits on the electricity use in certain times of the day, and we are working on that. We've got some power factor correction equipment that's in the budget that should help with that.

Chester Goodburn: And we're also looking to create some efficiencies when it comes to labor overtime and power consumption. I was quite pleased to see consumables coming down by 3% at the same time when you see your consumables increasing and you see a lot of inflationary pressures across the globe. But at Blanket, we've managed to curb that and actually reduced our consumable costs due to good procurement practices. On all internal costs, that's come down mostly due to the online costs coming down, and what you'll see in that, the other costs would be the wealthiest, and that's due to higher revenues that we've generated over the quarter. We maintain production guidance at $870 pounds to $970 pounds for online costs, and we also maintain our all-intersting cost guidance between $13.70 and $14.70 per ounce.

Speaker Change: We're also looking to create some efficiencies when it comes to labour overtime and the power consumption.

Speaker Change: I was quite pleased to see the consumables coming down by 3% this is a time where you see your consumables increasing and you see a lot of inflationary pressures across the globe but at Blanket we've managed to curb that and actually reduced our consumable costs

Chester Goodburn: But at Blanket, we've managed to curb that and actually reduced our consumable costs due to good procurement practices. On all interstaining costs, that's come down mostly due to the online costs coming down. And what you'll see in that other cost would be the wealthiest, and that's due to higher revenues that we've generated over the quarter. We maintain production guidance at $870 pounds to $970 pounds for online costs.

Speaker Change: and Procurement Practices.

Speaker Change: On our online spending costs, that's come down mostly due to the online costs coming down. And what you'll see in that other costs would be the wealthies, and that's due to higher revenues that we've generated over the quarter.

Speaker Change: We maintain production guidance at $870 pounds to $970 pounds for online costs, and we also maintain our all-in sustaining cost guidance between $13.70 and $14.70 per ounce.

Chester Goodburn: And we also maintain our all-intersting cost guidance between 1370 and $1470 pounds. It's good to see our costs being in check while we are producing more ounces and also at these record gold prices. Administrative expenses are approximately $3 million down. That's due to New Zealand State and Sulfide Steel, that added $3 million, or 3 million ounces of Resource and Resource Star Group. It's good to see us going en route to becoming a multi-asset gold producer. However, employee costs have also increased, and that's by about $500,000 that previously was accounted for as Oxide operating expenditures.

Chester Goodburn: It's good to see our costs being in check while we are producing more ounces and also at these record gold prices. Administrative expenses are approximately $3 million down. That's due to London. Bye!

Speaker Change: It's good to see our costs being in check while we are producing more ounces and also at these record gold prices.

Speaker Change: Administrative expenses are approximately $3 million down. That's due to...

Speaker Change: $3 million of expenditures that we expended last year to complete the finalization and the acquisition of the Borgo's sulfide steel. That added $3 million, or 3 million ounces of

Chester Goodburn: Sulfide Steel, that added $3 million, or 3 million ounces of gold to Resource and Resource Star Group. It's good to see us going en route to becoming a multi-asset gold producer. Employee costs have also increased, and that's by about $500,000 that previously was accounted for as Oxide's operating expenditures. We've moved those employees and those resources over to the feasibility study, and we've also reallocated some of those resources to the Macarpa drilling.

Speaker Change: It's good to see us going en route to becoming a multi-asset gold producer.

Speaker Change: Employee costs has also increased and that's by about $500,000 that previously was accounted for.

Chester Goodburn: We've moved those employees and those resources over to the feasibility study, and we've also reallocated some of those resources to the Macarpa drilling. It's good to see spending some costs on furthering our business and our strategy of becoming a multi-asset coal producer. Our revenue is up, cost being down, and in check. It's good to see our cash generation increasing. We generated just over $20 million in the quarter, and that's more than we've generated in any quarter over the last two years.

Speaker Change: As Oxide's operating expenditures, we've moved those employees and those resources over to

Speaker Change: The Feasibility Study, and we've also reallocated some of those resources to the Macarpa Drilling. It's good to see them spending some costs on furthering our business and our strategy of becoming a multi-asset coal producer.

Chester Goodburn: It's good to see them spending some costs on furthering our business and our strategy of becoming a multi-asset coal producer. Our revenue is up, and costs are down. And in checking, it's good to see our cash generation increasing. We generated just over $20 million in the quarter. And that's more than we've generated in any quarter over the last two years, so really good cash generation. And overall, on a net basis, we've added $12.8 million worth of cash during the last three months. So I'm pleased with these results and the cash generation that comes with them. I have a few more.

Speaker Change: Now with our revenues being up, costs being down and in check, it's good to see our cash generation increasing. We've generated just over $20 million in the quarter, and that's more than we've generated in any quarter over the last two years, so really good cash generation.

Chester Goodburn: So really good cash generation. And overall, on a net basis, we've added $12.8 million worth of cash during the last few months. So I'm really pleased with these results and the cash generation that comes with that. I have a few more.

Speaker Change: and overall an net basis we've had twelve point eight million dollars we have of cash to last few months so 'm ready piece of these these results and the cash generation at that comes with that

Martin Learmonth: Okay, well, look, I mean, this presentation focuses on the financial results for the quarter. We've discussed in separate calls the work of the PEA at Bilboas and also the upgrade in the reserves of resources. So really, these results are very clean, very good, quite easy to talk about.

Mark Learmonth: Okay, well, look, I mean, this presentation focuses on the financial results for the quarter. We've discussed in separate calls the work of the PEA at Bilboas and also the upgrade in the reserves and resources. So really, these results are very clean, very good, quite easy to talk about.

Speaker Change: I would need more.

Speaker Change: Okay, well look, I mean, this presentation focuses on the financial results for the quarter we've discussed.

Speaker Change: In separate calls, the work of the PEA at Bilboes and also the upgrade in the reserves of resources. So really, these results are very clean, very good, quite easy to talk to.

Mark Learmonth: In terms of our immediate strategic focus, we are continuing to run to achieve our targeted production range of between 74,000 and 78,000 ounces for the year, and then thereafter, similar levels from 2025 onwards. We are also making good progress on completing the feasibility study in respect of the Sulphide project. And in parallel with that, we're refining our own internal work that we did on funding structures for that asset. Initially, we're focusing on refining our understanding of the debt capacity of the project.

Martin Learmonth: In terms of our immediate strategic focus, we are continuing to run the blanket to achieve our targeted production range of between 74,000 and 78,000 ounces for the year, and then thereafter, similar levels from 2025 onwards. We are also making good progress on completing the feasibility study in respect of the Sulphide project. And in parallel with that, we're refining our own internal work that we did on funding structures for that asset. Initially, we're focusing on refining our understanding of the debt capacity of the project.

Speaker Change: In terms of our immediate strategic focus, we are continuing to run the blanket to achieve our targeted production range of between 74,000 and 78,000 ounces for the year, and then thereafter similar levels from 2025 onwards.

Speaker Change: Also making good progress on completing the

Speaker Change: Feasibility Study in respect of the Sulphide project and in parallel with that we're refining on our own internal work that we've done on funding structures.

Speaker Change: for that, for that, for that aspect.

Speaker Change: Initially we're focusing on refining our understanding of the debt capacity of the project.

Mark Learmonth: But given the fact that it is so high-margin and has such a quick payback, we are confident that a high proportion of the overall funding requirement will be capable of being funded by debt. And then, in parallel, we're also continuing with our initial exploration of Matarpa. That exploration work started in the second quarter, right at the beginning of the second quarter, will be finished towards the end of the third quarter, and then, subject to the capacity of the assay labs, we'd expect to get those results out before the end of the year. It is fair to say that the work to prove that Matarpa is about five years behind Bilbo's in terms of exploration.

Martin Learmonth: But given the fact that it is so high-margin and has such a quick payback, we are confident that a high proportion of the overall funding requirement will be capable of being funded by debt. And then, in parallel, we're also continuing with our initial exploration of Matarpa. That exploration work started in the second quarter, right at the beginning of the second quarter, will be finished towards the end of the third quarter, and then, subject to the capacity of the assay labs, we'd expect to get those results out before the end of the year.

Speaker Change: but given the fact that it is it is so high margin and has such a quick payback we are confident that a high proportion of the overall funding requirement will be capable of being funded by debt.

Speaker Change: And then in parallel, we're also continuing with our initial exploration of Matarpa.

Speaker Change: That exploration work started in the second quarter, right at the beginning of the second quarter, will be finished towards the end of the third quarter.

Speaker Change: and then subject to the capacity of the assay labs.

Speaker Change: We'd expect to...

Speaker Change: Get those results out before the end of the year. It is fair to say that the work to prove that Metopolis is about five years behind Bilbo's in terms of exploration, so it will take a considerable period of time.

Martin Learmonth: It is fair to say that Matarpa is about five years behind Bilbo's in terms of exploration, so it will take a considerable period of time to do sufficient exploration at Matarpa to prove up a significant resource, but so far, it's all looking very good.

Mark Learmonth: So it will take a considerable period of time to do sufficient exploration at Matarpa to prove up a significant resource, but so far, it's all looking very good. So with that, it's a brief presentation. I think it's on point.

Speaker Change: to do sufficient exploration at Matarpa to prove up a significant resource. But so far, it's all looking very good. So with that, it's a brief presentation. I think it's on point. We'll open it up to questions.

Martin Learmonth: So with that, it's a brief presentation, I think it's on point, and we'll open it up to questions. Typically, we prefer questions that are spoken. If they're typed, the risk with a typed question is that we don't really understand the nuance, and we may answer a slightly different question from that which you actually wanted answered. So please, if you are able, if you could just open the line and ask questions verbally.

Mark Learmonth: We'll open it up to questions. Typically, we prefer questions that are spoken. If they're typed, the risk with a typed question is that, you know, we don't really understand the nuance, and we may answer a slightly different question from that which you actually wanted answered.

Speaker Change: Typically we prefer questions, you know, spoken. If they're typed, the risk with a typed question is that, you know, we don't really understand the nuance and we may answer a slightly different question from that which you actually wanted answering. So please, if you are able,

Mark Learmonth: So please, if you are able, if you could just open the line and ask questions verbally. So I'm gonna, I do see one typed Q&A. Let me, let me just go to that one. Here is your mute.

Speaker Change: If you could just open the line and ask questions verbally.

Unknown Executive: I'm going to start with these two people.

Speaker Change: I'm going to start on you two people.

Unknown Executive: I do see one typed Q&A. Let me just go to that one.

Speaker Change: I do see one typed Q&A. Let me just go to that one.

Unknown Executive: Kathira, you're unmuted.

Unknown Attendee: All right, thank you. Can you hear me? Yeah. Okay, um, I've been noticing over the past few months that there's been an increase in, I think the US asset manager, BlackRock's, shareholding in the company. And I wanted to find out if your company is going to continue with selling a significant stake of the company to BlackRock and what their increased stake in Caledonia will mean in the long term. Thank you.

Kathira: All right, thank you. Can you hear me?

Speaker Change: Catherine, you're muted.

Speaker Change: All right, thank you, can you hear me?

Unknown Executive: Yeah. Okay, um, I've been noticing over the past few months that there's been an increase in, I think the US asset manager, BlackRock,'s shareholding in the company. And I wanted to find out if your company is going to continue with selling, you know, a significant stake of the company to BlackRock and what their increased stake in Caledonia will mean in the long term. Thank you.

Speaker Change: Yeah. Yeah.

Speaker Change: Okay. I've been noticing over the past few months that there's been an increase in, I think, the U.S. asset manager, BlackRock's, shareholding in the company, and I wanted to find out if

Speaker Change: continue with selling, you know, a significant stake of the company to BlackRock and what their increased stake in Caledonia will mean in the long term. Okay, just to clarify something a lot that we're not...

Mark Learmonth: Okay. Just to clarify something a little bit. BlackRock's participation in Caledonia is as a manager of a passive fund. So it's an index tracker investor. So we're in something called the Russell 3000 index in the United States, and that means BlackRock runs a fund which tracks that index. Okay. And so to make sure that the fund mirrors the performance of the index, they have to buy shares in the underlying companies

Martin Learmonth: Well, just to clarify something a little bit. BlackRock's participation in Caledonia is as a manager of a passive fund. So it's an index tracker investor. So we are in something called the Russell 3000 Index in the United States.

Speaker Change: Blackrock's participation in Caledonia.

Mark Learmonth: And because there aren't actually that very many gold companies, if any, other than us in the Russell 3000, BlackRock has to buy and sell our shares from time to time, depending on whether or not our weighting is within the overall index. So that's the first thing. They're not active managers. They're purely passive managers. And typically, you'll see that as our market capitalization goes up, they'll have to buy more shares to increase the weighting of Caledonia in the overall portfolio. Conversely, when our market cap falls, they'll typically sell shares. They're only buying and selling shares in the market. They're not having shares issued to them.

Speaker Change: is a manager of a passive fund, so it's an index tracker.

Unknown Attendee: So I hope that answers the question. Does that answer the question? Yes, yes, thank you.

Speaker Change: Investor.

Speaker Change: So we're in the something called the Russell 3000 Index in the United States.

Martin Learmonth: And that means BlackRock runs a fund which tracks that index. And so to make sure that the fund mirrors the performance of the index, they have to buy shares in the underlying companies. And because there aren't actually that very many gold companies, if any, other than us in the Russell 3000, BlackRock has to buy and sell our shares from time to time, depending on whether or not our weighting is within the overall index. So that's the first thing.

Speaker Change: And that means...

Speaker Change: Blackrock Runner Fund which...

Speaker Change: which tracks

Speaker Change: that index. To make sure that the fund mirrors the performance of the index, they have to buy shares in...

Speaker Change: the underlying companies. And because there actually aren't that very many gold companies,

Speaker Change: If any, other than us, in the Brussels 3000, Blackrock have to buy and sell our shares from time to time, depending on what our weighting is within the overall index.

Martin Learmonth: They're not active managers; they're purely passive managers. And typically, you'll see that as our market capitalization goes up, they'll have to buy more shares to increase the weighting of Caledonia in the overall portfolio. Conversely, when our market cap falls, they'll typically sell shares. They're only buying and selling shares in the market; they're not having shares issued to them. So I hope that answers the question.

Speaker Change: So that's the first thing, they're not active managers, they're purely passive managers. And typically, you'll see that as our market capitalization goes up, they'll have to buy more shares to...

Speaker Change: to increase the weighting of Caledonia in the overall portfolio. Conversely, when a market cap falls, they'll typically sell shares. They're only buying and selling shares in the market. They're not having shares issued to them. So I hope that answers the question.

Mark Learmonth: Okay, so before we move on, I can see a typed question. A modest increase in planned capex spend for 2024. What led to the $700 million upward vision in planned capex for the tailing facility phase 1b against the expected $4.7 billion in Q1 2024? Chester, are you able to, I've got a detailed question, are you able to answer that? I hope so. Yes, I'm in second place, so that means we're planning to implement a blanket just to improve the pneumatics underground.

Unknown Executive: Does that answer the question? Yes, yes, thank you.

Speaker Change: Does that answer the question? Yes. Yes.

Martin Learmonth: Okay, so before we move on, I can see a typed question. A modest increase in planned capex spend for 2024. What led to the $700 million upward vision in planned capex for the tailing facility phase 1b against the expected $4.7 billion in Q1 2024? Chester, I've got a detailed question, are you able to answer that? I hope so. Yes, I am, it's a complete...

Speaker Change: Okay, so before we move on, I can see a typed question.

Speaker Change: Modest increase in planned capex spend for 2024.

Speaker Change: What led to the $700,000 million upward vision in PlanCapex for the...

Speaker Change: Tailing Facility Phase 1B against the expected £4.7 billion in Q1 2024. Chester, are you able to... I've got a detailed question, are you able to answer that? I hope so.

Unknown Executive: If I'm in second place, would that be if you're planning to implement a blanket just to improve the pneumatics underground? Okay.

Speaker Change: It's the assignment. So compared to that, we're planning to implement a blanket just to improve the pneumatics underground.

Mark Learmonth: Okay. Now the second part of this question relates to water at Blanket. For those people who aren't in Zimbabwe, Zimbabwe is suffering from a very poor, very bad drought situation. The rainy season normally is sort of November to February, and the last rainy season was extremely poor, and so there is a big shortage of water.

Martin Learmonth: Now the second part of this question relates to water at Blanket. For those people who aren't in Zimbabwe, Zimbabwe is suffering from a very poor, very bad drought situation. The rainy season normally is sort of November to February, and the last rainy season was extremely poor, so there is a big shortage of water. And the question relates to what the impact of that water shortage has been on Blanket. I'm happy to say that one of the unexpected but very welcome side effects of the new tailings facility is that because it's lined, the water that goes into the tailings facility doesn't escape underground, which means that we can now recycle much more water from the tailings facility than we could from the old one, which was unlined, and therefore the water used to percolate into the ground. That's the first thing I want to say.

Speaker Change: Okay.

Speaker Change: Now the second part of this question relates to water at Lancet. For those people who aren't in Zimbabwe, Zimbabwe is suffering from a very poor, very bad drought.

Martin Learmonth: The second thing is that we have taken measures to reduce our water consumption, but for the time being, water has been released into the Blanket Dam from upstream, and at the moment, we're not seeing, and we don't expect to see over the course of the next... Before we get to the next rainy season, any adverse consequences? Clearly, if the upcoming rainy season is as disappointing as the last rainy season, that may cause difficulties. We do have boreholes, which we've... We've got them going again, and we could look for other boreholes, but it is a risk, and it is one that we recognize.

Speaker Change: The rainy season normally is November to February .

Mark Learmonth: And the question relates to what the impact of that water shortage has been on Blanket. I'm happy to say that one of the unexpected but very welcome side effects of the new tailings facility is that because it's lined, the water that goes into the tailings facility doesn't escape underground, which means that we can now recycle much more water from the tailings facility than we could from the old one, which was unlined, and therefore the water used to percolate into the ground. That's the first thing I want to say.

Speaker Change: and the last rainy season was extremely poor and so there is a big shortage of water.

Speaker Change: And the question relates to what the impact of that water shortage has been on Blanket.

Speaker Change: I'm happy to say that one of the unexpected, the very welcome,

Speaker Change: The main side effects of the new tailings facility is that because it's an aligned tailings facility,

Speaker Change: It means that the water...

Speaker Change: that goes into the tailings facility doesn't escape on the ground.

Speaker Change: Which means that we can now recycle much more water from the tailings facility than we could from the old one, which was unlined, and therefore the water used to percolate into the ground. That's the first thing to say.

Mark Learmonth: The second thing is that we have taken measures to reduce our water consumption, but for the time being, water has been released into the Blanket Dam from upstream, and at the moment, we're not seeing, and we don't expect to see over the course of the next... Before we get to the next rainy season, any adverse consequences? Clearly, if the upcoming rainy season is as disappointing as the last rainy season, that may cause difficulties. We do have boreholes, which we've... We've got them going again, and we could look for other boreholes, but it is a risk, and it is one that we recognize.

Speaker Change: The second thing is that we have taken measures to reduce our water consumption, but for the time being, water has been released into the Blanket Dam from upstream, and at the moment we're not seeing, and we don't expect to see over the course of the next

Speaker Change: Before we get to the next rainy season, any adverse consequences? Clearly, if the upcoming rainy season is as disappointing as the last rainy season, that may cause difficulties. We do have boreholes, which we've...

Speaker Change: We've got them going again and we could look for other boreholes, but it is a risk and it is one that we recognise.

Mark Learmonth: One further question, how's the production grade profile playing out for Blanket? The... Grade profile is lower than it has been in previous years. The grade of blanket is lower than it has been in previous years, but it is improving. I don't see blanket as getting significantly above 80,000 ounces a year. I'm comfortable giving guidance for blanket in the range of 75 to 80.

Martin Learmonth: One further question, how's the production grade profile playing out in Blanket? The production grade profile is lower than it has been in previous years. The grade of blanket is lower than it has been in previous years but is improving. I don't see it as getting significantly above 80,000 ounces a year. I'm comfortable giving guidance for blanket in the range of 75 to 80. The range and the grade will improve as we move forward, but I can't really give guidance that blanket will be producing substantially above 80,000 ounces a year. Any, I can see, sorry, has someone got their hand up, Camilla? There are a few people with their hands up.

Speaker Change: One further question, how's the production grade profile playing out at Blanket?

Speaker Change: The

Speaker Change: Grade profile is lower than it has been in previous years. The grade of blanket is lower than it has been in previous years, but is improving. I don't see blanket as getting significantly above 80,000 ounces a year.

Mark Learmonth: The range, the grade will improve as we move forward, but I think about it, I can't really give guidance that this blanket will be producing substantially above 80,000 ounces a year. Any, I can see, sorry, has someone got their hand up, Camilla? There are a few people with their hands up, so Ian Joslin, you're unmuted.

Speaker Change: I'm comfortable giving guidance for blanket in the range of 75 to 80. The range, the grade will improve as we move forwards, but I think to it, I can't really give guidance that blanket will be producing.

Speaker Change: substantially above 80,000 ounces a year.

Speaker Change: There are a few people with their hands up, so Ian Joslin, you're unmuted.

Unknown Executive: There are a few people with their hands up. So, Ian Joslin, you're unmuted.

Ian Joslin: Foreign Exchange, which you briefly mentioned, Obviously, just the difference between the adjusted earnings and the IAS earnings is a one-off pluses or minuses that work. The comment you made as part of your presentation implied that because of the, Okay, that's a very fair question. Historically, we have actually incurred, let's be clear, the Zimbabwean currency, formerly the RTGS, now the ZIG, has been very volatile. Historically, we have actually incurred very substantial foreign exchange gains.

Unknown Executive: Foreign Exchange, which you briefed me on. Obviously, just, All Expect. Thank you.

Speaker Change: about foreign exchange, which you briefly mentioned.

Speaker Change: and the role it plays in adjusting EPS.

Speaker Change: Obviously, just an EPS is something that says, this is ours.

Speaker Change: These are the earnings you would normally expect, and the difference between the adjusted earnings and the...

Speaker Change: IAS earnings are one-off.

Speaker Change: pluses or minuses that won't reoccur, but a comment you made as part of your presentation implied that because of the volatility of the currency

Martin Learmonth: The comment you made as part of your presentation implied that because of the, Okay, that's a very flat question. Historically, we have actually incurred, let's be clear, the Zimbabwean currency, formerly the RTGS, now the ZIG, has been very volatile. Historically, we have actually incurred very substantial foreign exchange gains. There was one year, the one quarter, I think, Chester; it was like tens of millions of dollars when the deferred tax liability devalued.

Speaker Change: You tend to systematically...

Speaker Change: Lose Money On FX.

Speaker Change: and I just wondered how you can relate that to the Basics.

Speaker Change: Lee, Stripping it out.

Speaker Change: when you purchase.

Speaker Change: Okay, that's a very fair question.

Speaker Change: Historically, we have actually incurred, let's be clear, the Zimbabwe currency, formerly the RTGS, now the ZIG, has been very volatile. Historically, we have actually incurred very substantial foreign exchange gains.

Ian Joslin: There was one year, the one quarter, I think, Chester, was it like tens of millions of dollars when the deferred tax liability devalued. And so as the dollar tax liability, in dollar terms, became much smaller, we had a gain. And so initially, we started, we thought that whilst it would have been great fun to keep that in the adjusted EPS calculation, it was kind of misleading. So initially, we went into adjusted EPS to try and remove things like that which were outside management's control.

Speaker Change: There was one quarter, I think, Chester, was it like tens of millions of dollars when the deferred tax liability...

Martin Learmonth: And so as the dollar tax liability in dollar terms became much smaller, we had a gain. And so initially, we started, we thought that was, whilst it would have been great fun to keep that in the adjusted EPS calculation, it was kind of misleading. So initially, we went into adjusted EPS to try and remove things like that which were outside management's control.

Chester Goodman: devalued. And so as the dollar tax liability in dollar terms became much smaller, we had a gain. And so initially we thought that whilst it would have been great fun to

Chester Goodman: Keep that in the adjusted EPS calculation, it was kind of misleading.

Chester Goodman: So initially we went into, um...

Chester Goodman: Adjusted EPS to try and remove things like that which were outside management's control. You correct within the last...

Ian Joslin: You're correct that in the last two quarters, particularly the first quarter of this year and, to a lesser extent, the second quarter of this year, we have reversed substantial foreign exchange losses. So in the first quarter, the foreign exchange loss was $4 million. In this quarter, the foreign exchange loss was $2 million.

Martin Learmonth: You're correct that in the last two quarters, particularly the first quarter of this year, and to a lesser extent, the second quarter of this year, we have reversed substantial foreign exchange losses. So in the first quarter, our foreign exchange loss was $4 million. In this quarter, the foreign exchange loss was $2 million. Let's be clear, that $2 million loss in the second quarter was incurred in the first five trading days of the year because the RTGS was discontinued on the 5th of April.

Speaker Change: In the first two quarters, particularly the first quarter of this year, and to a lesser extent the second quarter of this year, we have reversed out substantial foreign exchange losses. So in the first quarter, the foreign exchange loss was $4 million. In this quarter, the foreign exchange loss was $2 million. And let's be clear, that $2 million loss was $3.5 million. And that's a lot of foreign exchange losses. And that's a lot of foreign exchange losses.

Mark Learmonth: Let's be clear, that $2 million loss in the second quarter was incurred in the first five trading days of the year because the RTGS was discontinued on the 5th of April. So about $2 million was incurred in the first five days of the year. Since then, with the introduction of the ZIG, the official exchange rate has been very stable.

Speaker Change: in the second quarter was included in the first five trading days of the year because the RTGS was

Martin Learmonth: So about $2 million was incurred in the first five days of the year. Since then, with the introduction of the ZIG, the official exchange rate has been very stable. And if it continues on this basis, the incidence of foreign exchange gains and losses will become, I say immaterial, I don't mean like in an accounting way; it will become a much less noticeable factor. But it is clearly disclosed every quarter and there is a full reconciliation in, I think, note 10.2, is that correct, Chester, note 10.2?

Speaker Change: was discontinued on the 5th of April , so about $2 million was incurred in the first year.

Speaker Change: Since then, with the introduction of the ZIG, the official exchange rate has been very stable and if it continues on this basis, the incidence of foreign exchange gains and losses will become significant.

Mark Learmonth: And if it continues on this basis, the incidence of foreign exchange gains and losses will become, If I say immaterial, I don't mean like in an accounting way; it will become a much less noticeable factor. But it is clearly disclosed every quarter, and there is a full reconciliation in, I think, note 10.2, is that correct, Chester, 10.2? At the end, you'll see a full reconciliation between IFRS EPS and the adjusted

Speaker Change: What if I say your material? I don't mean like an accounting way, it will become not such a, it will become a much, much less noticeable factor. But it is, it is clearly disclosed every quarter and there is a full reconciliation in a thing note. [inaudible]

Unknown Executive: Antonio Flinker

Speaker Change: 10.2 is that correct Chester 10.2? Yeah in the end you know you'll see a full reconciliation between IFRS EPS and the adjusted EPS

Unknown Executive: Yeah, in the end, you'll see a full reconciliation between IFRS EPS and the adjusted EPS. So does that answer your question, Adam?

Mark Learmonth: So I hope that answers your question, Adam Townsend. Clearly you've got, and Bob Wee intends to try to run a firm money policy, or whether it will go back to what it historically has done, is obviously devalued. And this is just an opinion I'm asking of you.

Unknown Executive: I was just wondering, it sounds, clearly you've got different elements on your balance sheet. Does Budbury intend to try to run a firm money policy or whether it will go back to what it historically has done, which is obviously devaluation? This is just an opinion I'm asking you.

Speaker Change: So does that answer your question adequately? I was just wondering, it sounds, clearly you've got different elements on your balance sheet and they will be affected in different ways as you pointed out.

Speaker Change: Foto Tax

Speaker Change: I guess it's it's all about whether the government in Zimbabwe intends to try to run

Speaker Change: A Firm Money Policy, or whether it will go back to what it historically has done, it's obviously...

Unknown Executive: Do you think the government in Zimbabwe is less likely? and Michael Barber, our TGS receivables, which is a relatively small proportion of our revenues, which we sell in local currency, and where we receive the cash sort of a week or so after the date of the transaction. Then the other component is the refund of VAT.

Speaker Change: Devalue the Currency.

Mark Learmonth: Do you think the government in Zimbabwe is less likely today? RTGS receivables, which is a relatively small proportion of our revenues, which we sell in local currency, and where we receive the cash sort of a week or so after the date of the transaction. Then the other component is the refund of VAT. So it's both of those two things that drive foreign exchange loss. All I can repeat to you is the conversations I had with the Deputy Minister of Finance, with the incoming Governor of the Reserve Bank, the Governor of the Reserve Bank changed at the end of March, and with the permanent representative of the IMS in Harare, all three of whom were very confident that, you know, the Zimbabweans having broken the RCGS, there is a clear determination not to That's all I can repeat. You know, I can't give a view as to whether they're going to stand behind that or not. No, no, I understand.

Speaker Change: Thank you, everybody. This is just an opinion I'm asking of you. Do you think the government in Zimbabwe is less likely to...

Speaker Change: Devalue the currency to nothing as it has done in the past. Has it turned over a new leaf at the zig? Let me come to that. I mean, the elements of the balance sheet that crystal, that give rise to foreign exchange losses are the...

Speaker Change: Our TGS receivables, which is the relatively small proportion of our revenues, which we sell in local currency, and where we receive the cash sort of a week or so after the date of the transaction. Then the other component is the refund of VAT.

Martin Learmonth: So it's both of those two things that drive foreign exchange losses. All I can repeat to you is the conversations I had with the Deputy Minister of Finance, with the incoming Governor of the Reserve Bank, the Governor of the Reserve Bank changed at the end of March, and with the permanent representative of the IMS in Harare, all three of whom were very confident that, you know, with Zimbabwe having broken the RCGS, there is a clear determination not to make the same mistake with a new currency.

Speaker Change: So it's both of those two things that drive foreign exchange losses.

Speaker Change: All I can repeat to you is the conversations I had with...

Speaker Change: The Deputy Minister of Finance.

Speaker Change: with the incoming Governor of the Reserve Bank. The Governor of the Reserve Bank changed.

Speaker Change: the end of March.

Speaker Change: and with the permanent representative of the IMS.

Speaker Change: in Karari.

Speaker Change: all three of whom were very confident that the Zimbabwean, having broken the RTGS,

Speaker Change: There is a clear determination.

Martin Learmonth: That's all I can repeat. You know, I can't give a view as to whether they're going to stand behind that or not. No, no, I understand. I understand. Just a view of what you've been doing. Don't forget, nobody. The collapsing of the currency doesn't help anybody, doesn't help us, and the government ends up chasing its tail as well. So it's in everybody's interest to maintain a stable currency, and the government and the various, and the Government Reserve Bank seem absolutely determined to maintain that. That's all I can say.

Speaker Change: Not to make the same mistake with a new currency. That's all I can repeat. I can't give a view as to whether they're going to stand behind that or not. No, no, I understand. I understand. Just a view of what you've been doing. Don't forget, nobody...

Mark Learmonth: Just a view of what you've been talking about. Don't forget, nobody. The collapsing of the currency doesn't help anybody, doesn't help us, and the government ends up chasing its tail as well. So it's in everybody's interest to maintain a stable currency, and the government and the various, and the Government Reserve Bank seem absolutely determined to maintain that. And do you think the timing of those VAT refunds was timed to coincide with the collapse of the Yuan? I don't think so. No. No, we've not seen any blowouts.

Speaker Change: The collapsing of the currency.

Speaker Change: It doesn't help anybody, it doesn't help us, and the government ends up chasing its tail as well. So it's in everybody's interests to maintain a stable currency, and the Government of the Reserve Bank seem absolutely determined to maintain that.

Unknown Executive: And do you think the timing of those VAT refunds was timed to coincide with the collapse of the currency?

Speaker Change: That's all I can say. And do you think the timing of those with the AT refunds was time to coincide with the collapse of the currency?

Unknown Executive: I don't think so, no. No, we've not seen any blowout. We haven't seen any sort of untoward lengthening of credit. No, no, no, we haven't seen that.

Mark Learmonth: We haven't seen any sort of untoward lengthening of credit. No, no, no, we haven't seen that. You don't see it in the timing either. Our timing of our VAT receivables is between 60 and 120 days, and they vary during those days, zero throughout, and it's been doing so for the last couple of years.

Speaker Change: I don't think so, no. No, we've not seen any blowout. We haven't seen any sort of untoward lengthening of credit. No, no. No, we haven't seen that. You don't see it in the timing either.

Unknown Executive: You don't see it in the timing either. Our timing of our VAT receivables is between 60 and 120 days, and they vary during those days throughout, and it's been doing so for the last couple of years. So it's been very constant in terms of how regularly we receive those VAT refunds.

Speaker Change: Our timing of our VAT receivables are between 60 and 120 days and they vary during those days throughout, and it's been doing so for the last couple of years, so it's been very constant in terms of how regularly we receive those VAT refunds.

Unknown Executive: The bigger one, the one that's got more volume, would be the payment of the RTGS components of our revenues, and that's a much shorter... I would hate people to think it's 120 days for that, Chester. That's much shorter, isn't it?

Mark Learmonth: So it's been very constant in terms of how regularly we receive those batteries. The bigger one, the one that's got more volume, would be the payment of the RTGS components of our revenues, and that's a much shorter, I would hate people to think it's 120 days for that, Chester. That's much shorter, isn't it? Yeah, for the bullion receivable, it's always between 14 to 7 days that we receive it from delivery at Fidelity, and that's just for the 25 percent portion of our gold sales and that portion.

Speaker Change: The bigger one, the one that's got more volume, would be the...

Speaker Change: The payment of the RTGS components of our revenues, and that's a much shorter, I would hate people to think it's 120 days for that, Chester, that's much shorter, isn't it?

Unknown Executive: Yeah, for the bullion receivable, it takes between 14 to 7 days for us to receive it from delivery at Fidelity, and that's just for the 25% portion of our gold sales.

Speaker Change: Yeah, for the bullion receivable, it offers between 14 to 7 days that we receive it from delivery at Fidelity, and that's just for the 25 cent portion of our gold sales.

Unknown Executive: Uh-huh. Okay, and that proportion you have to sell, that's a standard requirement for you to do, isn't it? Yes.

Speaker Change: yeah

Speaker Change: Okay, and that portion you have to sell.

Unknown Executive: Yeah, we have to sell 25% to the government. The balance, 75% of it, the remainder, we export ourselves, and we sell that offshore for $2.

Mark Learmonth: Yeah, we have to sell 25% to the government. The balance, 75% of the remainder, we export ourselves, and we sell that offshore for dollars. Gotcha. Okay. That is actually a relatively recent development. The ability to export our gold is only something we started doing in April 2023. So we've been doing that for just over a year now, and that works extremely well. We will deliver a bar of gold or several bars of gold into Dubai on a day, say a Monday morning, and we get sort of 90, 95% of the revenues that day and the balance two days later. It works very nicely.

Speaker Change: That's the standard requirement for you.

Speaker Change: you to do it.

Speaker Change: Yeah, we have to sell 25% to government. The balance, 75% of it, the remainder, we export ourselves and we sell that offshore for dollars.

Unknown Executive: Okay, that actually is a relatively recent development. The ability to export our gold is only something we started doing in April 2023. So we've been doing that for just over a year now, and it works extremely well. We will deliver a bar of gold or several bars of gold into Dubai on a day, say a Monday morning, and we get sort of 90, 95% of the revenues that day and the balance two days later.

Speaker Change: Dodging. Okay. That's me.

Speaker Change: That actually is a relatively recent development. The ability to export our gold is only something we started doing in April .

Speaker Change: 2023, so we've been doing that since.

Speaker Change: just over a year now, and that works extremely well. We will deliver a bar of gold, or several bars of gold, into Dubai on a day, say a Monday morning, and we get sort of 90, 95% of the revenues that day, and the balance two days later. It works very nicely. Thank you.

Unknown Executive: It works very nicely. Thank you. Okay, I have a few questions.

Unknown Executive: Okay, I see a question from Tatira.

Mark Learmonth: Thank you. Okay, I see a question from Tapira. Hand up. Desnick Dillon, and... Hi, Mark.

Speaker Change: That's good. That's been very helpful.

Speaker Change: Thank you. Thank you. Okay. I see a question from Tatira. Okay.

Unknown Executive: There's Nic Dinham, I'm just...

Speaker Change: There's Nic Dinham. I'm just unmuting Nic.

Unknown Executive: Hi Mark. Okay. There was a follow-up question to that earlier question by Ian. It's not really a question, but it's an observation that obviously your suppliers are sceptical about the future of the ZEG and I see that Black Market Zigs are now trading between 20 and 22. Does this signal an early indicator of a robust parallel market starting to develop?

Vic: Hi, Vic. Okay, just there was a follow-up question to that earlier question by Ian. It's not really a question, but it's an observation that obviously your suppliers are sceptical about the future of the ZIG and I see that black market zigs are now trading between 20 and 22, Does this is this an early indicator of a robust parallel market starting to develop? Victor, do you want to talk about that? I mean, I would say that clearly, our visibility of an illegal foreign exchange market is, by definition, zero. I would just say that. So Victor, are you able to help? Thank you, Mark.

Speaker Change: Adma, it's perfect.

Nick Finnan: Okay, just there was a follow-up question to the to the to that earlier question by Ian. It's not only a question but it's an observation that obviously your suppliers are skeptical about the future of the ZIG.

Speaker Change: and I see that...

Speaker Change: Black market zigs are now trading between 2022 .

Ian: Is this an early indicator of a robust parallel market starting to develop?

Unknown Executive: Victor, do you want to talk about that? I mean, I would say that clearly our visibility of an illegal foreign exchange market is, by definition, zero. I would just say that. Victor, are you able to help us?

Speaker Change: Victor, do you want to talk about that? I mean, I would say that, clearly, our visibility of an illegal foreign exchange market, Nic, is...

Speaker Change: By definition, zero. I would just say that. Victor, are you able to help?

Victor Gapare: Nic, I mean, basically, let's just focus on what we as Caledonia do. Number one, we get ZIG from the Zimbabwean government for 25% of our gold production or our sales. So basically, what we do with that ZIG is we match the bulk of it with the payments we have to make to the government because the government is setting place payments to it which are paid in ZIG. So basically, you are matching in terms of the exchange rate. The balance, which is a very small amount, we actually buy local products.

Victor Gapare: Thank you, Mark. Nichole, I mean, basically, let's just focus on what we in Caledonia do. Number one, we get ZIG from the Zimbabwe government for 25% of our gold production or our sales. So basically, what we do with that ZIG is we match the bulk of it with the payments we have to make to government because government is setting place payments to it which are paid in ZIG. So basically, you are matching in terms of the exchange rate. The balance, which is a very small amount, we actually buy local products.

Speaker Change: And the next question?

Nick Finnan: Thank you, Mark.

Speaker Change: I mean, basically, let's just focus on what we as Caledonia do. Number one, we get the ZIG from the Zimbabwe government for 25% of our gold production, or our sales.

Speaker Change: So basically what we do with that ZIG.

Speaker Change: If we match the bulk of it with the payments we have to make to government, because government is set in place.

Speaker Change: payments to it which are paid in ZIG. So basically that you are matching in terms of the exchange rate. The balance, which is a very small amount, we actually buy local products. So in terms of having visibility, what's happening on the parallel market?

Victor Gapare: So in terms of having visibility of what's happening on the parallel market, we don't really feel it that much. We don't

Victor Gapare: So in terms of having visibility of what's happening on the parallel market, we don't really feel it that much. We don't

Speaker Change: We don't really feel it that much, we don't...

Victor Gapare: We don't see that much at this stage, other than maybe when we talk about the exchange losses when the ZIG officially deflagrates or something like that. So I would say we don't have visibility on that. We couldn't comment on that.

Victor Gapare: We don't see that much at this stage, other than maybe when we talk about the exchange losses when the ZIG officially deflagrates or something like that. So I would say we don't have visibility on that. We couldn't comment on that.

Speaker Change: We don't see that much at this stage, other than maybe when we talk about the exchange losses.

Speaker Change: when the Zig officially defalies or something like that. So I would say we don't have visibility on that. We couldn't comment on that. Sorry, Victor, could you just...

Victor Gapare: Sorry, Victor, could you just talk about the measures the government took to put liquidity into the market recently? Yeah, okay. When there was a bit of pressure on the market about two or so weeks ago, we actually did see the government release about US$50 million into the market, right? Because what they basically say is the ZIG is backed by gold and some foreign currency. So all they did is they converted the gold, which they are keeping, which is the golden current, which they have the gold, they get it out of 50% of the royalties we pay them. We pay in gold, and also the other producers give them money so they can have reserves.

Victor Gapare: Sorry, Victor, could you just talk about the measures the government took to put liquidity into the market recently? When there was a bit of pressure on the market, I think it was about two or so weeks ago, we actually did see the government release about US$50 million into the market, right? Because what they basically say is the ZIG is backed by gold and some foreign currency. So all they did was they converted the gold, which they are keeping, which is the golden current, which they have the gold, and they got it out of 50% of the royalties we pay. We pay in, in physical gold, and also the other producers give the money so they can have reserves.

Victor: Talk about the measures the government took to put liquidity into the market recently.

Speaker Change: When there was a bit of pressure on the market, I think it was about two or so weeks ago, we actually did see the government releasing about US$50 million into the market, right? Because what they basically say is the ZIG is made by gold.

Speaker Change #100: and some foreign currency. So all they did is they converted the gold, which they are keeping, which is the golden current, which they have the gold, they get it out of 50% of the royalties we pay. We pay in in

Speaker Change #100: in physical gold, and also the other producers give them money so they can have reserves. So what they're doing is they're trying to manage it in the sense that if they think the ZIG is on the market, is under pressure, they're actually releasing money through the reserve bank onto the market.

Victor Gapare: So what they're doing is they're trying to manage it in the sense that if they think the ZIG is on the market under pressure, they're actually releasing money through the reserve bank onto the market. So you see the currency, the rate is coming down. So, I mean, Nic, I'm not an economist by any means, but if you have a currency that is backed by something gold or US dollars, you should, in theory, when people want to sell your currency, you should, in theory, be able to take those zigs off those people who want to get rid of them and give them the asset backing, give them whatever it is, the gold or the dollars behind it, until you get to And that's the theory.

Victor Gapare: So what they're doing is they're trying to manage it in the sense that if they think the ZIG is on the market is under pressure, they're actually releasing money through the reserve bank onto the market. So you see the currency, the rate coming down naturally. So, I mean, Nic, I'm not an economist by any means, but if you have a currency which is backed by, something gold or US dollars, you should, in theory, when people want to sell your currency, you should, in theory, be able to take those ZIGs off those people who want to get rid of those ZIGs and give them the asset backing, give them whatever it is, the gold or the dollars behind it, until you get to such a point that the supply of the ZIG is so restricted that the ZIG exchange rate has to strengthen.

Speaker Change #100: So you see the currency, the rate coming down naturally. So, I mean, Nic, I'm not an economist by any means, but if you have a currency which is backed by

Speaker Change #101: something, gold or US dollars.

Speaker Change #101: You should, in theory, when people want to sell your currency, you should in theory be able to take those zigs off those people who want to get rid of those zigs.

Speaker Change #101: And give them the asset backing, give them whatever it is, the gold or the dollars behind it until you get to such a point that the money, the supply of the ZIG is so restricted.

Victor Gapare: And that's the theory. Now, I'm not an economist, and I'm certainly not a central banker. So you kind of exhausted my understanding of how currencies work. But I think what we saw in the last couple of weeks, where, in recognition of the movement in the parallel market, the government did release dollars, I think it kind of suggests that they really are running this currency as an asset-backed currency.

Speaker Change #101: The Zig Exchange Rate has to strengthen again, that's the theory.

Victor Gapare: Now, I'm not an economist, and I'm certainly not a central banker. So you kind of exhausted my understanding of how currencies work. But I think what we saw in the last couple of weeks where, in recognition of the movement in the parallel market, the government did release dollars, I think it kind of suggests that they really are running this currency as an asset-backed currency.

Speaker Change #102: I'm not an economist and I'm certainly not a central banker.

Speaker Change #102: So.

Speaker Change #103: You've kind of exhausted my understanding of how...

Speaker Change #104: Our currencies work, but I think what we saw in the last couple of weeks, where in recognition of the movement in the parallel market, government did release dollars, I think it kind of suggests that they really are running this currency as an asset-backed currency.

Unknown Executive: Okay, excellent. One or two other little questions, if I may.

Mark Learmonth: Okay, excellent. One or two other little questions, if I may. So you had a rockfall in Aroika?

Speaker Change #105: Okay, excellent. One or two other little questions, if I may. So, you had a rockfall in Naroika. Is there a read-through into a broader picture?

Unknown Executive: So you had a rockfall in Naroika; is there a read-through into a broader picture of what's happening on the mine, or is this an isolated incident? No, it's an isolated incident.

Mark Learmonth: Is there a read-through into a broader picture of what's happening on the mine? Or is this an isolated incident?

Speaker Change #106: of what's happening on the mine or is this an isolated incident? No, it's an isolated incident. It did have an adverse effect on production in July . As you'll have seen from the MDA, production in July was about 6,000 ounces. We've now got...

Mark Learmonth: No, it's an isolated incident. It did have an adverse effect on production in July, as you'll have seen from the MDA. Production in July was about 6,000 ounces.

Unknown Executive: Some isolated incidents. It did have an adverse effect on production in July. As you'll have seen from the MDA, production in July was about 6,000 ounces. We've now got all the crews back to other areas, and they're now working in productive spaces, and the area that was affected by the fall of the ground will be recovered.

Mark Learmonth: We've now got all the crews back to other areas, and they're now working in productive spaces. And the area that has been affected by the fall of ground will be recovered. So it's not symptomatic or systemic of any broader problem with the company or any broader problem that. Okay, and then last question is that you've obviously got quite a bit of CapEx lined up for H2 that's still going to amount to $31-32 million by year end.

Speaker Change #107: All the crews back to other areas and they're now working in productive spaces.

Speaker Change #108: and the area that has been affected by the fall of ground will be recovered.

Unknown Executive: So it's not symptomatic.

Speaker Change #109: So it's not symptomatic or systemic of any broader problem, Nic.

Unknown Executive: Okay, and then the last question is that you've obviously got quite a bit of CapEx lined up for H2. That's still going to amount to $31-32 million by year end. Yeah.

Speaker Change #110: Okay, and then the last question is that you've obviously got quite a bit of CAPEX lined up for H2. That's still going to amount to $3132 million by year-end. Yep.

Unknown Executive: So to be clear, what we did is we, having seen disappointing production towards the end of last year and a slow start to the beginning of this year, the first six weeks of this year, we put the brakes on CapEx because we've seen this movie before, where production promises an increase that will get back on track in terms of production. In the meantime, could we please carry on spending on the CapEx plans?

Mark Learmonth: Yep. So to be clear, what we did is we, having seen disappointing production towards the end of last year and a slow start to the beginning of this year, the first six weeks of this year, we put the brakes on CapEx because we've seen this movie before, where production promises an increase that will get back on track in terms of production. In the meantime, could we please carry on spending on the CapEx plans? Having been bitten by that before, this year, we said, well, hold on, the production's not there, the cash isn't flowing as it should be, and therefore, we will defer the CapEx.

Speaker Change #110: Okay.

Speaker Change #111: So to be clear, what we did is we, having seen disappointing production towards the end of last year, and a slow start at the beginning of this year, the first six weeks of this year.

Speaker Change #112: We've put the brakes on CapEx because we've seen this movie before where production promises an increase that will get back on track in terms of production and in the meantime could we please carry on spending on the CapEx plans.

Unknown Executive: Having been bitten by that before, this year we said, well, hold on, the production's not there, the cash isn't flowing as it should be, therefore we will defer CapEx. Now, as our cash generation has clearly improved, that planned CapEx will be released in the second half. Sorry, one more question Mark. There's a commentary about additional studies to enhance this solar power panel project, the capacity there, at the same time you're talking about selling. Is this an adjunct too, or will the study disappear once you sell it? No, it's part and parcel of the same thing.

Speaker Change #112: And having been bitten by that before, this year we said, well hold on, the production is not there, the cash isn't flowing as it should be, therefore we will defer CapEx. Now as clearly our cash generation has improved, that planned CapEx will be released in the second half of the year.

Mark Learmonth: Now, as clearly our cash generation has improved, that planned CapEx will be released in the second half. Sorry, one more question mark. There's commentary about additional studies to enhance the southern panel project, the capacity there at the same time you're talking about selling. Is that some edge out to all the studies disappear once you see it?

Speaker Change #113: Sorry, one more question, Mark. There's a commentary about additional studies to enhance this solar power panel project, the capacity there, at the same time you're talking of selling. Is this an adjunct to, or will the study disappear once you've sold it? No, it's part and parcel of the same thing.

Unknown Executive: So the idea is that we will, well not the idea, it's more than an idea, it's happening, is that we will sell the solar plant on terms, and we'll have a long-term power purchase agreement on the same terms as we currently enjoy, and, in addition, the new owner will construct a second phase. The point is that we're selling it to someone whose core business is building, developing, and running solar plants. It's not our core business. We don't need to own them.

Speaker Change #114: So, the idea is that we will...

Speaker Change #115: Well, not the idea. It's more than an idea. It's happening.

Speaker Change #115: is that we will sell the solar plant in terms ris there will have a long-term power purchase agreement on the same terms as we currently enjoy and in addition the new owner will construct a second phase

Speaker Change #115: The point is we're selling it to someone who's core business.

Mark Learmonth: The point is we're selling them to someone whose core business is building, developing, and running solar plants. It's not our core business. We don't need to own them.

Speaker Change #115: is building and developing and running solar plants. It's not our core business, we don't need to own this.

Mark Learmonth: Right, excellent, thank you very much, okay. There's another question from Albright. Is there another question? Yes, sir. All right. Chester Goodburn, Dana Roets, Dan Horsfall, Ian Joslin, Craig Harvey, Camilla Horsfall. Oh, right. You're only a part of it, to the left. Can someone else give me a question because I can't understand what I'm hearing? Local Development Protection.

Unknown Executive: Right, excellent. Thank you very much, Mo. Okay. Thank you very much. Adam Chester, there's another question from Albright. Is there another question?

Speaker Change #115: Right, excellent, thank you very much.

Speaker Change #116: There's another question from Albright.

Speaker Change #116: Dr.

Speaker Change #117: Is there another question? Yes, there is. All right. I'm just trying to unmute.

Unknown Executive: Yes, this morning you got a replay. We'll have a copy to replace it. Well, thank you for inviting me. Thank you for letting me be here. Thank you. Thank you.

Speaker Change #118: Last year, one day in the name, one hour and a half was taken away in the name of David.

Speaker Change #119: Oh, right, you're on the other side, get out of the car.

Speaker Change #119: it left this something that could that that it is not

Unknown Executive: Did someone else give you a question? Because I can't understand or hear something.

Speaker Change #120: Can someone else give me a question, because I can't understand or hear properly.

Unknown Executive: Let's go for the words.

Unknown Executive: We got one that's pushing the A's. Local video production.

Speaker Change #120: well

Unknown Executive: Sorry, I can't hear you.

Mark Learmonth: Sorry, I really can't understand. Like, I don't need to hear the production. Victor, can you can you help me with this because I really can't hear this properly? He's now muted; I think they're having a background conversation among themselves. Yeah, okay, well, when they've decided, when it's not a background conversation, they've decided the question, we'll try and deal with it. But yeah, I couldn't hear that properly.

Speaker Change #121: local development production.

Unknown Executive: I'm sorry; I really can't understand.

Speaker Change #122: Sorry, I really can't understand.

Unknown Executive: Where you are at the meeting

Speaker Change #122: yes

Speaker Change #122: like I'd meet you? Yeah, the production

Unknown Executive: Sorry, Victor, can you can you help me with this? Because I really can't understand.

Speaker Change #122: Sorry, Victor, can you can you help on this because I really can't hear this properly?

Unknown Executive: He's now muted; I think they're having a background conversation among themselves.

Speaker Change #123: All right, it's now muted. I think they're having a background conversation among themselves. Yeah, OK, well, when they've decided when it's not a background conversation and they've decided the question, we'll try and deal with it. But yeah, I couldn't hear that properly. Any further, any further questions? I can see some written questions that there are written questions. OK, hold on. Let me see the question here from Howard.

Unknown Executive: Yeah, okay, well, when they've decided, when they've stopped the background conversation, and they've decided the question, we'll try and deal with it, but um, yeah, I couldn't hear that properly. Any further, any further questions coming? I can see that there are some written questions. Okay, hold on, uh, let me see. So we've got a question here from Maryland.

Mark Learmonth: Any further questions? I can see some written questions. Okay, hold on. Let me see. We've got a question here from Howard. Just a minute. I'm working through them. There's one from Justin Baring.

Unknown Executive: Just a minute, I'm working through them; I'm just working through them. Can you comment on the proposed changes to the FX regime? I think I've dealt with that. The expectation is that for Bilbo's, Bilbo's will operate on a 100% US dollar basis anyway.

Speaker Change #123: Just a minute, I'm working through, I'm just wondering if Justin Bearing has passed the next one.

Mark Learmonth: Can you comment on the proposed changes to the FX regime? I think I've dealt with that already. The expectation is that for Bilbo's, Bilbo's will operate on a 100% US dollar basis anyway. I think we've dealt with that. I hope, Justin, we've dealt with that question. I think we've already dealt with another question about the July production issue. Again, I think we've dealt with that. It was a fall of ground that affected Eroica, which is a high-grade area of the mine.

Unknown Executive: I think we've dealt with that. I hope, Justin, we've dealt with that question. I think we've dealt with another question about the July production issue. Again, I think we've dealt with that.

Unknown Executive: It was a fall of ground, which affected Eroica, which is a high-grade area of the mine. It affected us in July. It's been sorted out, and the mine in the last week has been running within 1% or so of production of Plymouth, so it's not a long-term impact. A question on inflation. I don't know what the monthly inflation rate has been recently.

Mark Learmonth: It affected us in July, but it's been sorted out, and the mine in the last week has been running within 1% or so of production of Planner. So it doesn't, it's not a long-term impact.

Speaker Change #123: A planet so it doesn't it's not a long term impact.

Victor Gapare: A question on inflation. I don't know what the recent monthly inflation rate has been. Victor, do you know what the monthly inflation rate is? Yeah, actually, in the last few months, when the Reserve Bank released something, or rather the Zimbabwe Statistical Office released something, it was actually very minute because the ZIG has been very stable in the last few months since they introduced it. So I think it was almost like 2% or something like that.

Speaker Change #123: Have a question on inflation I don't know what the monthly inflation rates. There's been recently Victor do you know what the monthly inflation rate is.

Victor Gapare: Much less than that much. Annualized, yeah. Annualized, okay. That's better than a lot of other places. Any further questions? Emma, can you see anything? No, I don't think there are any more. Okay, well, that's relatively brief, but I think the numbers speak for themselves.

Unknown Executive: Yeah, actually, in the last few months when the Reserve Bank released something, or rather the Zimbabwe Statistical Office released something, it was actually very minute because the ZIG has been very stable in the last few months since they introduced it. So I think it was...

Speaker Change #124: I'll tell you in the last few months Darwin that Zynga has released something or other Zimbabwe focusing all autoclave has moved is really something that's only very minor because does he have been very stable in the last few months since we introduced it. So I think it was almost like 2% or something like that.

We'll keep the same up one 2%.

Speaker Change #124: Much like them that much okay like annualized yeah. Okay.

Unknown Executive: Understand that Mark? Okay. Are you okay? Are you all right? Yeah.

Speaker Change #125: Annualized annualized Okay, a beach, that's better than better than a lot of other places.

Speaker Change #125: Any any further questions.

Unknown Executive: Camilla, can you see anything? No, I don't think there are any more.

Speaker Change #125: And could you see anything other than our animals.

Unknown Executive: Okay, well, that's relatively brief, but I think the numbers speak for themselves. So thank you for your attendance, and we'll do the same thing again in mid-November after we've released the third quarter results. So thank you all very much for your participation.

Speaker Change #125: Okay, well look come that's relatively brief but I think the numbers speak for themselves. So thank you for your attendance and we'll do the same thing again.

Speaker Change #125: In mid November after we've released the third quarter results I. Thank you all very much for euro your participation.

Mark Learmonth: So it's part and parcel, part of the same thing. So the idea is that we will, well, not the idea, it's more than the idea, it's happening, that we will sell the solar plant at a price risk that we'll have a long power purchase agreement on the same terms as we currently enjoy. And, in addition, the new owner will construct a second phase.