Q4 2024 Caledonia Mining Corp Plc Earnings Call
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Speaker Change: Awesome transfer and welcome to the Caledonia mining Q4 results presentation.
Speaker Change: I'd now like to hand, you across tomorrow clear months she'll mark over to you.
Speaker Change: The holding or good afternoon, depending on Weibo.
Speaker Change: Welcome to this is what they don't see discuss californias.
Speaker Change: For the fourth quarter of 2024 and for the year.
Speaker Change: I'm hearing jazzy enjoying also in jersey by them.
Speaker Change: Sure other cfos, who joined today even in Johannesburg.
Speaker Change: Mafara, our chief operating officer.
Speaker Change: Victor <unk> and executive director, who is based in.
Speaker Change: Zimbabwe.
Speaker Change: <unk> got some accounting support in Johannesburg.
Speaker Change: Blow out.
Speaker Change: Okay. So shall we see we're getting especially if you could move to the next slide please.
Speaker Change: She reports.
Speaker Change: Got the disclaimer next which I think we stick to it.
Speaker Change: Oh.
Speaker Change: Okay.
Speaker Change: And so you may have already dealt with okay, let's let's move off the summer is very well.
Speaker Change: Record record gross profit for the year of nearly $77 million.
Speaker Change: 86% from 2023.
Speaker Change: Slide down to the to the bottom line with net attributable profit of.
Of just under $19 million compared to a loss of $4 million in the previous year.
Speaker Change: It's reflected in stronger operating cash flows setups after tax and interest on working capital.
Speaker Change: Before capex.
Speaker Change: Dividends that was only $42 million compared to just less than $15 million in the previous year.
Speaker Change: Professional blanket was within guidance slightly towards the top end of the.
Speaker Change: But the guidance range and there was also a continuing very small production.
Speaker Change: Builders oxides, which are well over 30 very briefly.
Speaker Change: Last week, we said, there's a lot more information on these results as we go through this presentation.
Speaker Change: Last week, we announced that we're going to extend the period of time, we need to look at the feasibility studies for bill dose that gives us time to assess some some factors some of which of them.
Speaker Change: Materialized within the last months.
Speaker Change: <unk> optimized the project economics, so we have a little bit more of that.
Speaker Change: We have some good exploration success a blanket on massawa.
Speaker Change: Which has encouraged us to do more work in that area. So we have a slide on that.
Speaker Change: Just to say that we have.
Speaker Change: Monday.
Speaker Change: Stay a further dividend of 14 <unk>.
Speaker Change: For the quarter like King <unk> 56 for the year.
Speaker Change: It's fair to say also that we had some fairly significant.
Speaker Change: Changes to the to the board and management over the course of.
Speaker Change: The last year or so with.
Speaker Change: James joining us as CFO in May and Thats, given rise to a very substantial turnaround in the operating performance of the mine, particularly well, particularly at the mine as opposed to the metallurgical plant and you've seen all said it was the fresh the strength of our board.
Ross: Recent board appointments and have a we're joined today by Ross who's taken over from <unk>.
Speaker Change: <unk> ASP.
Speaker Change: <unk> CFO some process right welcome.
Ross: Before.
Ross: It's Scott.
Ross: Before we get into this I just want to touch very briefly on the delay in the publication of the accounts.
Ross: Put out a press release about a week ago, which notified people that.
Ross: We need an extra week to evaluate an accounting issue that had been identified right at the end of the.
Ross: But the audit process, the accounting issue really relates to the calculation of deferred tax.
Ross: For the year to an F.
Ross: 31 December 'twenty 2019, so this is about.
Ross: Five to six years old.
Ross: <unk> two into subsequent years, just perhaps a clear. This that this is this was it relating to the calculation of deferred tax also flows through into the calculation of unrealized foreign exchange gain.
Ross: The losses, and then below that it then flows through into profit after loss once if I could absolutely clear that this this has nothing to do with actual tax payments or any submissions.
Ross: Made to the to the Zimbabwe tax authorities, but also make it very clear that this has nothing to do with cash.
Ross: The accounts that we published this morning for the year to December 2024. They also include restatements of the prior year accounts for 'twenty, two and 'twenty three and at the back of the audited financial statements. I think note 14, youll find full disclosure of the various line items, which have been affected by this restatement.
Ross: But in summary, its deferred tax.
Ross: <unk> profits and.
Ross: <unk> retained earnings so perhaps it clear that's got nothing to do with cash.
Ross: Or with actual income tax calculations.
Ross: Okay. So let me just move on to <unk>.
Ross: On the on the results themselves starting off with safety and production, it's probably best if I.
Ross: And over to James at this stage if you just like to say a few words about safety production. Please.
Ross: Okay.
James: Thank you very much mark.
Ross: Thank you all.
Ross: So on the safety front following the loss of lives you see then that we had on the 20th vessels system or just the previous quarter, which already reported we box one the journey to see.
Ross: Adoption with controls.
Ross: On <unk> to make sure that we actually moved up.
Dave: Dave with regards to our safety.
Ross: We wanted to.
Ross: <unk> embarked on a new colleagues.
Ross: If youll remember joined during the first of May.
Ross: Joe wanted to box and realized that there was quite a lot of six first of all is that we met and we had employees basically that's.
Speaker Change: Following safety protocols, primarily out of obligation and the idea is to want to move the dial employees.
Ross: Not because I have to follow the rules.
Speaker Change: But you need employees, driven daily do that I need to follow groups because I wanted to.
Ross: So over and above the two noteworthy that.
Ross: Is it in that we did we decided to also put in place a number of a number of major sufficient which was to avoid at Gucci manager and experienced books, you moneys are coming from harmony.
Ross: So with this structure in place with regards to our ventilation health incentives with Chipotle.
Ross: Departments due to the appropriate department.
Ross: So look at five areas that we will be back to answer that we cannot.
Ross: Subsea culture on the mine.
Ross: Improve the buckets would be strengthened.
Ross: Strengthening our governance and risk management.
Ross: To strengthen the business strengthened safety practices.
Ross: Additional capability and to move.
Ross: Look at safety culture, and improving so the safety culture <unk> culture are the flywheel started to move.
Ross: We started to say now it's a question of getting the momentum in place that we can already see the massive improvement.
Ross: Our daily with regards to that in the last quarter, which is in the fourth quarter. Our Q4, we actually 88 out of it.
Ross: 100 <unk>.
Ross: Excellent three days, which is a marked improvement or net equity within them.
Ross: This up to history in terms of our production as well, we do a very good.
Ross: <unk> quarter, and we also had a very good.
Ross: And opa.
Ross: <unk> upper 119.
Ross: 19841.
Ross: Sort of danced around this I mean compared to good afternoon, just CG another.
Speaker Change: <unk> hundred 92 ounces, our touch further on production now with regards to the next slide over to you Mark.
Mark: So we'll go back to production in more detail later.
Mark: Fair to say across the board.
Mark: Substantial increase in performance, obviously helped by the higher gold price savvy.
Mark: The average realized gold price in the quarter with just over 2600 compared to just over 1900 in the comparable quarter of the year with just over 2300 <unk>. So for those of you who follow the.
Mark: The gold market that won't come as a great surprise to liquidity that supports the substantial increase in revenue also supports the increase in gross profits of $24 million for the quarter and $77 million for the year compared to clearly lower numbers previously I've already mentioned the increase in <unk>.
Mark: Net profit attributable to shareholders one thing I would just towards your attention we declared a dividend again 14.
Mark: Just to reinforce the fact that previously we used to.
Mark: Declared dividends.
Mark: Metric on a quarterly basis.
Mark: Disclosed for several quarters now.
Mark: Nothing changed slightly so that we.
Mark: Declared the dividend at the same time as the board approves the accounts just sort of streamlined full processes both of those quarters that doesn't really make much of a difference but for this particular for the publication of Q4. It does mean that the <unk>.
Mark: A dividend that we declared we used to declaring them.
Mark: And pay at the end of.
Mark: March was something that does get pushed out a bit. So there was a little bit of a phasing issue.
Mark: For the year, the total dividend 66.
Mark: Haven't changed.
Mark: Can you just kind of a little bit more detail on them.
James Keller: Production, James Keller could I ask you to talk to the slot.
Mark: Thank you very much Mark So is already previously stated we had a very good <unk>.
James Keller: In Q4.
Mark: In particular.
Mark: Ending up 176600 <unk>.
Mark: 56, <unk>, which is a $1 six.
Mark: And improvement compared to 12.
Mark: <unk> 23.
Mark: <unk> gone through 2024, which is seven out of 97000 tons 179 is a record as you can see from the graph just based on that we actually.
Mark: Those sort of numbers, which is at three 5% higher than the 2023 number and this was primarily as a result of three areas that we saw quite a good improvement it was better utilization of our central shop, which is now fully operational after all the work that we've done over the years. It was then separately.
Mark: It is auto a bit.
Mark: Equipment availabilities.
Mark: We have undergone and it was also a bit on it but it was also due to better labor productivity, we've seen our sections.
Mark: You see that.
Mark: Great.
Mark: <unk> almost the same for a number of years almost from 2014 to where we are.
Mark: Jeff.
Speaker Change: Look at.
Speaker Change: What sort of year on year actually we've gone from $3 10 to.
Speaker Change: <unk>, 5% to $3 two.
Speaker Change: From 2004 to 2023.
Speaker Change: Although specifically quarter four was $3 one eight grams.
Speaker Change: <unk> quarter three.
Speaker Change: <unk>, which we have already reported we had a fall of ground.
Speaker Change: One of our iconic stops cold cups.
Speaker Change: Which actually exposed our need for better off.
Speaker Change: Flexibility with regards to mining space.
Speaker Change: And Bob doing better development as you can see our tonnage has been great.
Speaker Change: On year, meaning to say that we actually need to open up more area. So that we can have better flexibility. This year said development, which is.
Speaker Change: Well improved in last years by end of year will naturally help us through the years to come with regards to.
Speaker Change: Flexibility.
Speaker Change: The reserve grade for blanket sitting around two three grams per tonne and we.
Speaker Change: Not mine failure, then the Threep I mean, not much higher three to those redundancies, where we expect to land in this year.
Speaker Change: The mining at an excellent production digital before I mean, you said a month actually some optimism.
Speaker Change: On the K, we ended up with 89727 times a record for the month.
Speaker Change: Never have expected milestone is actually exceeded.
Speaker Change: Our crushing and milling capacity at that language.
Speaker Change: Ended up with the stockpile of 8487 tons, which we created and no. It is good to report that actually desktop only is growing as well if any of this.
Speaker Change: <unk> financial year.
Speaker Change: So if you look at the bottom graph one of the graphs that you would see is them.
Speaker Change: The recovery, which.
Speaker Change: She has been.
Speaker Change: Sort of taking an up and down movement.
Speaker Change: However for the year, we ended up with 93, 6%.
Speaker Change: The recovery, which is still very very high end, which is our plan.
Speaker Change: Last year it was just higher at 93, 8%.
Speaker Change: Higher than our plan, which is not really going to be sustainable but by world class standards were $93. Six is still quite a high recovery, which we have actually managed to keep the because of the work that we've done with regards to the oxygen plant that would be so the notional concentrate is that we have been replenished over the years.
Speaker Change: To make sure that our free gold recovery is on point and it takes that would also have been done historically. So we can see that production has really stabilized. This year. We've started off with a use of 8487 and we expect that these production issues.
Speaker Change: Stabilized and develop going into the future.
Speaker Change: Thanks Mark.
Speaker Change: Thank you Joe difficult, we've always had.
Speaker Change: Over the last.
Speaker Change: <unk> has been.
Speaker Change: The ability to see blasting.
Speaker Change: <unk> and hoisted that we have.
Speaker Change: So the breakdown breakdowns in that process.
Speaker Change: So what changed with many cities investigate this whole operation working much more clean the much more efficiently.
Speaker Change: Okay.
Speaker Change: And growth of the stockpile is very welcome lot something we've talked about before okay. So thank you very much change should we move onto the next page.
Speaker Change: Well this or they chose us for the quarter.
Speaker Change: Breaks down the consolidated results. It shows you altogether, a blanket worsening what's been going on at <unk>, and other which is really sort of intercompany eliminations and head office costs. So you can see quite clearly the blanket level revenue very strong.
Speaker Change: Royalty stays the same government royalty stays the same up some 5% production cost blanket broadly the same about just $19 million.
Speaker Change: We would like to get that down a bit depreciation very slightly down a bit.
Speaker Change: That's the sort of technical reasons, so gross profit is $20 million compared to $11 million in the previous quarter.
Speaker Change: Quarter on quarter Silver has had very little impact.
Speaker Change: The slide coming.
Speaker Change: Later, which shows how we authorized the losses from bill buyers. So the moment, Phil but we're continuing to really.
Speaker Change: Keypads are builders.
Speaker Change: Helped by the slightly higher.
Speaker Change: Slightly higher gold price and we will continue to do that for as long as that.
Speaker Change: Leaching process Cabos the direct costs.
Speaker Change: So it's basically a wash its face.
Speaker Change: In other words.
Speaker Change: That is.
Speaker Change: Corporate and group adjustments, so shall we move on to the excellent.
Speaker Change: Okay. What are you seeing a two graphs left hand side is the online cost right hand side is the all in sustaining cost.
Speaker Change: They chose our costs of developed and progressed from quarter four 2023 to quarter. Four 2024. So looking at the online cost you can see we had a benefit seven odd percent benefit as a result.
Speaker Change: Bill buyers back onto the care and maintenance.
Speaker Change: Negligible movement on power.
Speaker Change: Some increase in labor pulse is up in the quarter would be we had key.
Speaker Change: Like very heavily towards the end of the quarter.
Speaker Change: Over time on a special bonus system that we introduced specifically for December.
Speaker Change: Truth be told the first half the first half of the fourth quarter with very difficult largely because of <unk>.
Speaker Change: A sharp deterioration in the electricity supply.
Speaker Change: Had we not made those interventions I suspect at the end of November I think actually quarter forward look quite sick, but some things we that there's intervention with poor quarter for ramp very nicely and then an increase in consumables, which is largely.
Speaker Change: Costs relating to.
Speaker Change: <unk> underground pumps and HD is that sort of thing so that takes the that walks the cost up from what it was in 2000 2023 to 2024.
Speaker Change: You can see on the right hand side you have got.
Speaker Change: The all in sustaining cost moves.
Speaker Change: Some increased DT online cost.
Speaker Change: Something around with share based expense and sort of accounting.
Speaker Change: Jiggery Pokery.
Speaker Change: Sustaining capex and procurement margin. Okay. It is it is fair to say that.
Speaker Change: Management is very conscious that these costs are higher than we've had historically.
Speaker Change: Exploring ways over the course of the next few years to get down the online cost, particularly focusing on labor and electricity so use on labor more intelligently.
Speaker Change: X gene, which is solar electricity usage and then at the all in sustaining cost level that will help us benefit from any reduction in the online cost.
Speaker Change: So we're looking at what we can do to reduce our sustaining capex sustaining capex does remain very high.
Speaker Change: 2020 for sustaining capex of $19 million, which equates to about $240, an ounce 2025 will be about $30 million a share about $4400 an ounce.
Speaker Change: It really goes in the sustaining capex is getting into things like development with changes explained is important too.
Speaker Change: <unk> mine flexibility, it's gotta go into things like billing and the tailings facility the.
Speaker Change: The work on the new tailings dam continues including we need that because we need somewhat.
Speaker Change: Deposit.
Speaker Change: The waste and we have continued to spend heavily on the engineering.
Speaker Change: Increase the robustness and the resilience of the.
Speaker Change: The equipment.
Speaker Change: Blanket.
Speaker Change: Higher level of <unk>.
Speaker Change: Sustaining capex will continue for 2025 and 2026, we would expect it to begin to fall away from 2020 onwards.
Speaker Change: We hope.
Speaker Change: Well then this really just shows.
Speaker Change: Everything below gross profit so with discuss discuss revenue discussed above.
Speaker Change: Mine costs and low gross profit you've got.
Speaker Change: Foreign exchange losses in the quarter, which were only 600000 and $600000 in the fourth quarter for the year that were much higher so it was very pleasing to see that.
Speaker Change: The local currency the zig stabilized in the fourth quarter and that's continued through into the first quarter. So we're not seeing a recurrence of the substantial FX losses that we incurred in the first.
Speaker Change: The first nine months of the year, although is a write back of staff primarily includes $2 million.
Speaker Change: <unk> costs as you'll recall in the third quarter, we initiated a retirement program, which affected just over 100 people.
Speaker Change: The age of 60, some manual work and 60 fives so.
Speaker Change: Non manual.
Speaker Change: <unk>.
Speaker Change: Sure.
Speaker Change: Production that really should have been taking some time together. So we did the bullets.
Speaker Change: 144 were retired.
Speaker Change: I'm also pleased to say that as part of that retirement program. You would have seen a very significant cultural shift a blanket which has contributed to the very strong performance in the fourth quarter.
Speaker Change: <unk> is a combination of income tax are offering deferred tax, but also a significant component.
Speaker Change: Withholding tax that we incur as we move money around the group.
The NCI that Noncontrolling interest that is the minorities.
Speaker Change: Blanket.
Speaker Change: <unk> adjusted earnings per share.
Speaker Change: For the quarter, which was $44 three compared to <unk> in the fourth quarter of 2023.
Speaker Change: Okay and reports.
Speaker Change: Okay. This is <unk>.
Speaker Change: This looks a bit stock, but all of US trying to do here is to share splits out gross profit a blanket progressed.
Speaker Change: Profit at Bill buyers, so blankets in the top half when you can see the gross profit in 2022 was $17 million down to $11 billion that ended up first half of 2023 like his performance was really not very good largely because of.
Speaker Change: Lower production.
Speaker Change: And you can see now towards the backend of 2024, we now are getting gross profit of $22 million, maybe $20 million and just over $20 million. So the points of this graph is to show that blanket is a cash generative engine is back where it should be okay. And then on the bottom half you can see the bill both incurred losses.
Speaker Change: $3 2 million or $1 million in the first three quarters of 2023, but in 2020 full with now with a quarter wise that was blanket is now on care and maintenance and it's just running so long as it will cover operating costs I just want people to understand that the the cash drain that was coming out of blanket poor performance on the cash strain that was coming out of <unk>.
Speaker Change: <unk> has now been dealt with.
Speaker Change: I can assure you made on cash flow.
Speaker Change: Excellent.
Speaker Change: Quite a dense quantitative slide but frankly.
Speaker Change: I think thats, probably the most relevant slide of the whole whole thing because.
Speaker Change: Really it all comes down to cash at the end of the day.
Cash from operations before working capital that's the first line.
Speaker Change: 20, full it was $65 million, which equates to about one a quarter million dollars a week.
Speaker Change: In quarter, four was $19 million. So that's about one and a half million dollars a week. So a very substantial improvement in the rate of cash generation in the fourth quarter compared to the previous three quarters.
Speaker Change: Below that you've got the movements in working capital.
Speaker Change: If you look at these places youll see that in the in the year, we absorbed $10 million into working capital and in the quarter. It was about three and a half million dollars.
Speaker Change: Working capital quite a substantial amounts of money being absorbed into working capital really are achieved.
Speaker Change: Two main areas one of those is some inventors.
Speaker Change: Prepayments, we are one of the ways, we manage our exposure to possible devaluation of the zig is to make sure that instead.
Speaker Change: Instead of holding cash balances, we used the <unk> to buy inventory risk or to make prepayments as a way to reduce our zinc holdings.
Speaker Change: That has given rise to some increase in the inventories and prepayments and then.
Speaker Change: Receivables increased largely because of the higher gold price was just things as more money flowing through the system.
Speaker Change: So there has been an absorption into into working capital.
Speaker Change: The other area of significant senior as net cash used in investing activities, which was $32 million for the year with nearly $13 million for the quarter.
Speaker Change: That is mainly sustaining capex at <unk>.
Speaker Change: Blanket so of the 32 million spent in the year 27 billion was spent a blanket of that $27 billion of broken down in the paragraph.
Speaker Change: <unk> four for the MD&A, that's broken down as the main components being the work continue to work on the tailings facility and on development.
Speaker Change: Both on the top of also absorbed $3 million a year.
Speaker Change: That was largely on the go work on the feasibility study.
Speaker Change: Exploration up with top which which actually turned out to be rather good.
Speaker Change: And then the final thing would be.
Speaker Change: Cash used in financing activities Thats, a combination of the Caledonia dividend, which is just over just under $11 million dividends paid to the blanket minorities, which is about one six offsets against that will be increases in debt, which includes further modest tissues.
Speaker Change: Almost two institutional holders in Zimbabwe and movements in overdrafts.
Speaker Change: So some improvement in cash.
Speaker Change: But we do intend on our gold price to focus on improving our cash position.
Okay.
Speaker Change: This is again very similar slowed very similar to what I showed you about gross profit is intended to show how the quarter on quarter cash generation in the last sort of three quarters or so has improved after the sort of the dip in the sort of hiatus in late 2022 in early 2023.
Speaker Change: Okay, Let's turn on let's turn to the feasibility study.
Speaker Change: Welcome is progressing well with support from TRA and all the other technical consultants.
Speaker Change: On the feasibility study will supersede the PPA that was.
Speaker Change: Published in June 2024, we put out a press release last.
Speaker Change: Last week.
Speaker Change: Fact that we want to extend the timeline.
Speaker Change: But we want to complete this feasibility study.
Speaker Change: That's for several reasons. The first is to give DRA more time to do the work, but we also want to explore some new.
Speaker Change: Development options.
Speaker Change: Should become apparent one of them will be the potential on our site or potential.
Speaker Change: Export concentrate on the projects.
Speaker Change: Previously we thought that.
Speaker Change: With a very strong indications, but that would not be acceptable to the Zimbabwe government.
Speaker Change: They wanted very strongly to have in country beneficiary Asian, but now we understand that given the complexity of our.
Speaker Change: Assessing complex.
Speaker Change: Gold Battology as such us build those.
Speaker Change: The government may be more flexible on this if we can export concentrate.
Speaker Change: That will mean that we wouldn't want to incur the whether we can get that for a short period of time or for the entire duration of the project remains to be seen if we can achieve.
Significantly reduce the capital expenditure by removing the need to build a bio explained it would de risk the project, particularly in the eyes of both.
Speaker Change: North American investors, who are probably more wary about biologics.
Speaker Change: Thus as elsewhere in the World and EMEA also have implications for the.
Speaker Change: That eventual tailings facility.
Speaker Change: And then just looking at the tightening facility currently the TSA.
Speaker Change: Tendency located on the wrist slap area.
Bill: Bill buyers, we may be able to move it to.
Speaker Change: An area.
Speaker Change: Where we can effectively mean it against the hero and thereby reduce the need for more of the retaining rules, which again would get would reduce capex.
Speaker Change: Capex the tailings facility is the biggest components of.
Speaker Change: The entire cabinet capital of the project is nearly $100 million.
Speaker Change: So if anything we continue to reduce that cost will benefit the project, but also having seen some good results coming out of exploration of the topper, we want to continue to do more work metallophone potentially one day fold into the beat the bill both feasibility study.
Speaker Change: A resource.
Speaker Change: And they bring the total property okay.
Speaker Change: Work.
Speaker Change: Going on a blanket adobe buyers.
Speaker Change: Turning on to the next onto the next page just to just to reiterate I think I've said this before but just to reiterate our approach to funding Bill goes our objective is very simple it is to maximize <unk> NPV per share not.
Speaker Change: And that really includes three elements. The first is to optimize the overall project economics that the best and total rate of return we can get on the project and that's why we're looking at areas things like the potential impact of concentrates to.
Speaker Change: Moving the <unk> facility.
Speaker Change: Next thing I Wonder if there is to maximize the debt funding.
Speaker Change: For the for the project within the constraints of financial Prudence.
Speaker Change: I'll point to the system to minimize equity dilution.
Speaker Change: So as part of that we're also evaluating the potential for near term revenue opportunities elsewhere in the portfolio, but I wouldnt coming.
Speaker Change: Really ching potential for really.
Speaker Change: <unk> <unk> <unk>.
Speaker Change: <unk>, which is in the and the buildup property under the TARP. We also think we may have some near term revenue opportunities.
Speaker Change: A blanket on the oxide resource that we we found late last year.
Speaker Change: In terms of debt funding, we think the project. The <unk> project is a very high capacity for debt.
Speaker Change: We think the non recourse debt is more likely to be limited by overall.
Speaker Change: Lending constraints of about 65% to 70% of the total cost of the project. If it wasn't for that we believe that actually build those carrying more debt.
Speaker Change: Stage three potential funding sources, which are coming into focus.
Speaker Change: That's how that's how that one of them is African <unk>. The other one will be.
Speaker Change: South Africa commercial banks working with Ecsc cover.
Speaker Change: <unk> is a resort specialists.
Speaker Change: But at a private equity outfit it.
Speaker Change: B, one or any permutation of those three.
Speaker Change: Let's say it's.
Speaker Change: It's safe to say what was to have preliminary engagement with all three of these groups, we cant really get get down and get 30 until we have a feasibility study completed okay, but at this stage all the indications that we're receiving as the project is eminently fundable.
Speaker Change: We all focus now is on how do we optimize those projects economics with a view to minimizing downstream okay.
Speaker Change: As we move forward.
Speaker Change: Just a word on exploration at the top the exploration focused on three areas, which have historically been in mind.
Speaker Change: So that's the top of all of the top are central to the top of south very much but we're very excited.
Speaker Change: We got good results from our new area of Cola Pepsi.
Speaker Change: Over the course of the year, we did just over 5000 meters of RC drilling for thousands of of DD drilling I'm not sure. It's widespread mineralization over nine kilometer slight lengths. So this year the program for this year is targeting <unk>.
Speaker Change: Color oxide potential Quincy.
Also the deeper deeper sulfide resource switching costs, if we can find anything with full part and parcel of the build out project. So that's the top out looking very exciting on a blanket as you know in May we did a resource upgrades, we more than doubled our FY 1300 reserves in a very substantial increase in resources this year.
Speaker Change: Focused on increasing the confidence level of those resources to.
Speaker Change: More into reserves.
Speaker Change: And then we're also now beginning to evaluate new new areas. So thats outside the existing mine footprint. So that's only funded onstage formation, which is about 800 meters to the east of the current mining area, but also we believe we've got potential for some shallow oxide resources blanket. So we're beginning to look more.
Speaker Change: Expansively blanket instead of the traditional areas that we currently binding.
Speaker Change: So I think we're pretty much finished in terms of the outlook.
Speaker Change: As you can see with James James is the.
Speaker Change: We're focused on maintaining stable production a blanket wanna get away from the gyrations that we've had over the course of the last two to three years.
Speaker Change: We're investigating near near term growth opportunities.
Speaker Change: Across the portfolio blanket Bilboes Ambato pub.
Speaker Change: We continue to advance the work from home builders and.
Speaker Change: How we can convert that into a producing.
Speaker Change: Producing asset.
Speaker Change: Going further and further exploration of blanket or a top up.
Speaker Change: And the next year or so will continue to invest in blanket with with a V C.
Speaker Change: <unk> longer term cost reductions.
Speaker Change: Improving the reliability and the resilience of the blanket.
Speaker Change: Blanket operations, So I think we finished and.
Speaker Change: In which case, we could openness to questions.
Speaker Change: Thanks, very much for that Mark.
Speaker Change: If I could ask people to please raise their hand, if they would like to ask a question.
Speaker Change: Then we will bring people in to ask the questions if I could just.
Speaker Change: Cause for a second just force people raise their hand, so just give us one moment.
Speaker Change: <unk>.
Speaker Change: Okay.
Speaker Change: Okay. We've got our first question, which is from make it didn't happen.
Speaker Change: Nick if you could please on mute yourself.
Speaker Change: And ask your question.
Speaker Change: Can everyone hear me.
Speaker Change: Okay Hi.
Good afternoon, great. Thank you.
Speaker Change: Just a couple of questions. One is what is the status of solar power project. The sale of that asset that will be the first question.
Speaker Change: Sometime this week, we expect.
Speaker Change: Next year.
Speaker Change: Sorry, the second question is to James.
Speaker Change: A little bit about your sense of reliability of what you can produce out of the mine.
Speaker Change: I know, we have a talk with Goldman related.
Speaker Change: It seems to indicate that you should be able to pull out 800000 tons.
Speaker Change: Out of the out of the shop not necessarily process in the next year is that the right sort of number we should be picking into our models.
Speaker Change: Yes Lee.
Speaker Change: That's the right sort of number we should pull out of the mine, yes excellent okay, well welcome because thats a very stable number.
Speaker Change: The first set of questions relates to bulldoze.
Mark: And it's back to you I think mark.
Speaker Change: The tie in with getting a resource or reserve out of my top of it.
Mark: Is somehow.
Mark: Give me a sense that this could be almost like a year or two years to develop.
Mark: Reliable reserve that you could.
Mark: <unk> back into your feasibility study that's the first question about the Globus.
Mark: Yes look I think we'll take we'll take as long as it takes to get the best project, we can okay.
Mark: So if we if we feel we've got a project that works is fundable based on <unk> right. Now are signed we will run with that and we can entities mature or at a later stage, if we feel that the introduction of <unk>.
Mark: <unk> will materially affect the equity and the debt story, we owe it to ourselves to to consider that okay. So like I say if you go back to what I said, we considered thing is on the basis of.
Mark: The net present value per share.
Mark: And that includes the effect of any delay in the project.
Mark: Time value of money.
Speaker Change: There is competing sorry.
Mark: The various sort of.
Mark: Competing tensions will be optimized the project in terms of maximizing NPV.
Mark: Minimizing dilution.
Mark: <unk> something quickly.
Mark: While slowly.
Mark: Hey.
Mark: Okay No that's.
Mark: That's fine thank you.
Mark: The second thing was you're talking about maybe a change in the tailings dam strategy because youre looking for hill.
Mark: You also mentioned in passing that it could affect what you do know obviously the input. There is if you are able to total schedule concentrates told treated by somebody else the nitrogen designation of the of the.
Mark: Of the TSA, if that's going to change is that what youre thinking about.
Mark: Correct, Yeah, now that really only works if if we can get permanent.
The machines.
Mark: So export concentrate so if we if we only get temporary permission that will still mean that we are going to need to see.
Mark: Set the tailing facility up from it from the outset, so that he can receive material from a <unk> plant, even if that <unk> may.
Mark: May not be in place for two years.
Mark: 100%, Okay. So finally, the top concentrate idea is awesome.
Mark: From an outsider's perspective, but it does seem to be a other side of the coin, which you may be <unk>.
Mark: Emitted in scale and volume of those exports.
Mark: Because.
Mark: One one kind of mentioned that too many people within the economic catchment area of your concentrates are going to be able to accept what you initially proposed to be your production.
Mark: Correct and I would just say this this opportunity.
Mark: Merged very very recently.
Mark: We see any time too.
Mark: To consider it and there were swings around about you're quite right. So it's something we need to consider that this is this is only materialized.
Mark: Within the last four or five weeks.
Speaker Change: That's great. Thanks for that and we're not going to move on to how we slinker, if you'd like to Amit yourself and then.
Mark: Talk to the team.
Mark: Okay.
Mark: Well, Victor Alright, Alright, alright.
Mark: Three short questions.
Mark: Do I read correctly that your bank debt is down to about $2 million.
Mark: Let's start with <unk>.
Mark: We net.
Mark: There is only slight somewhere.
Mark: Our net cash would be disappointed.
Kash: Thank you Kash a salesman.
Mark: Our global cash and debt, yes, but the strategy will always be tip of.
Kash: That in country and cash out of the country that always been the strategy.
Kash: Okay.
Kash: Sure.
Kash: Hey, Matt.
Kash: No.
Speaker Change: Second our your taxes are going to be 42% as they seem to me and in the fourth quarter.
Kash: Pretty much. So if you if you would see look what's the.
Kash: In the MD&A, we breakdown the attacks we break it down into Zimbabwe income tax so the bulk of deferred tax.
Kash: South African income tax.
Kash: Various bits of withholding tax if you if you look at.
Kash: Zimbabwe income tax plus some of the deferred tax.
Kash: Express that as a as a.
Kash: Look at that as a percentage of.
Kash: Gross profits, which equates pretty closely.
Kash: Sure.
Kash: Blend kits PBT.
Kash: You'll actually find that that rate is about 20 odd percent 2024%.
Kash: That's the underlying.
Kash: Sort of ARPA commercial tax related commercial tax rate in.
Kash: 2025%, 24%, 24% on top of that we incur tax leakage I think it's about $1 million.
Kash: Withholding taxes, we move things around.
Kash: New things around the group the management fees that we pay from blanket T South Africa.
Kash: On tax allowable in.
Kash: But they also incur withholding tax and then we have all of the expenses that we pretty much incur.
Kash: Solid blanket so that will be in Johannesburg, corollary adhering jersey onto offsets against profit because either here in Jersey zero tax regime or there is no taxable profit.
Kash: You will find that we.
Kash: We're doing the best we can but you've got to find that.
Kash: Effective tax rate does remain somewhat high because of.
Kash: Structural structural inefficiencies, but not things that we can readily address.
Kash: Okay.
Kash: And then last question is probably.
Kash: Some technical error I kind of weird.
Kash: I also want this morning.
Kash: Okay.
Kash: Sure.
Kash: Sure.
Kash: Hi.
Kash: We are providing a service provider.
Kash: Quite excited about that yes.
As a company called Caledonia investments, which is a.
Kash: The U K investment trusts and somehow they don't happen, but somehow there there were announcements ended up on our website I think has been rectified.
Speaker Change: I wanted to verify.
Kash: Slide you excited about that as well.
Speaker Change: Yeah.
Speaker Change: That's all I have thanks.
Speaker Change: Thank you Eric.
Thank you. Our next question comes from Tate Sullivan tight if you. Please go ahead, Amit yourself and your answer to the team.
Speaker Change: Great. Thank you Hi, Hi, Mark you mentioned retirement expenses in <unk> are you within your cost guidance for 2025 are you planning more.
Speaker Change: Retirement expenses.
Speaker Change: Well, there will be there'll be de Minimis, I mean 104 people.
Speaker Change: Workforce of 2002 hundred reflects the fact that we have really we have groups imposed this policy for very very many years and we have.
Speaker Change: People doing pretty much full on physical exercise physical jobs, I mean, even if you're going to supervisory role going at going on the ground is hard work in the mid seventies and that was clearly inappropriate.
Speaker Change: Retirement policy will continue to be enforced, but it will now only effect a few people year. So it will be nothing like the magnitude that we saw in 2024.
Speaker Change: And then <unk>.
Speaker Change: Sorry, if I missed it I might've missed interpreted but in terms of the <unk> costs or some of the higher labor costs associated with the lower availability of electric electricity.
Speaker Change: So, yes, I think maybe maybe James James <unk> to the first.
Speaker Change: First part of the quarter was terrible because we had some really serious electricity problems.
Speaker Change: It started raining, which meant that the grid collapsed.
Speaker Change: We're getting very poor power from the grid because it was raining it was cloudy, which meant that the cellular cellular plants doesn't work, particularly well when it's when it's not sunny.
Speaker Change: There was also an equipment failure within the within the solar plant, which we managed to rectify but it was a bit of a problem for some time, so I think pretty much.
Speaker Change: I'll hand over to James in a minute, but I think by the time, we got to the end of November things are looking a bit bleak right Jay.
Speaker Change: At the recent <unk> fancy footwork Chief G.
Speaker Change: Get a team together to raise morale and get them focused on delivering in December Jim If you want to talk about what you did at.
Speaker Change: But he worked whatever your daytime.
Speaker Change: Thanks, Mark I mean, we had a very bleak started the quarter than we had like Mark you say.
Speaker Change: <unk> infrastructure is not that we're well equipped.
Speaker Change: Collapsed with the raise we had quite a lot of high rates.
Speaker Change: This last rainy season.
Speaker Change: So the great part of.
Speaker Change: They supply us.
Speaker Change: The way for you it couldnt be done so we actually have to jump in with the lightning strike that actually cause some quarters from us.
Speaker Change: We do run around and get that equipment to start operating again. So now is not the <unk>, but we then regroup.
Speaker Change: The troops to say guys I mean, we need to get what we need to get with we don't spill capacity within the plant, but we also use lines and unfortunately has meant that we had to.
Speaker Change: Ben the midnight can weigh in.
Speaker Change: Sometimes through sand is to try and get.
Speaker Change: Production machine going again.
Speaker Change: So you could work.
Speaker Change: Well I mean.
Speaker Change: I don't like to see.
Speaker Change: People are going to work.
Speaker Change: Over time and work hard, but the work that we're Patriots.
Speaker Change: We're incentivized to do it.
Speaker Change: They left they finished the quarter with the titles up clearly continued into this year.
Speaker Change: And it's a virtuous circle.
Speaker Change: The mine is performing well the getting production bonuses.
Speaker Change: Everyone's happy so it's a virtuous circle.
Speaker Change: And then my last question. Thank you great great context.
Speaker Change: For 2025 cost Smart is your is the greatest variable you mentioned slight impact from higher employee costs, but is it higher cost of consumables.
Speaker Change: Unpredictable electricity or whatnot.
Speaker Change: The one the one that at least predictable is electricity because to be honest, if if the grid collapses and all we have electric the solar plant works very well with the Sino plant work better than we'd expected, but when it's cloudy, but I don't just mean super clarity.
Speaker Change: From a single cloud piece of cloud that will reduce your youll power generation by that too.
Speaker Change: So if we have any interruption to power that means we've got no choice we have to run the diesels and are very expensive. So that for me is the biggest.
Speaker Change: Cost risks.
Speaker Change: Over the course of the next two years.
Speaker Change: The decision of the board that we must look at.
Speaker Change: <unk> try and insulate ourselves further if not completely from the vagaries of the grid because as the situations, but we need to get better and we must fix it.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: Thank you very much for your question just to remind us people who'd like to ask a question. Please raise your hand.
Speaker Change: And I would like to invite Duncan Hey.
Speaker Change: To ask his question.
Duncan Hey: Yes, yes. Thank you.
Speaker Change: Hi, Mark Hi, everyone.
Speaker Change: Just going back to bill both in the concentrate sales scenario I think you mentioned.
Speaker Change: Time value of money, which suggests that.
Speaker Change: You don't want to hang around too long sort of waiting for appraisal, but what is the strategy initially to try and get sort of.
Speaker Change: No.
Speaker Change: An ideal scenario would be that you sell concentrate and there is no commitments to put in the bio ox is that sort of.
Speaker Change: Preferreds.
Speaker Change: You have to compromise and the priority would be to sort of get moving on the project and try not to.
Speaker Change: Hold on too long.
Speaker Change: Yes, so I mean, what the length of the governments typically got as bill.
Speaker Change: Allow you to export concentrate for a period of time say two years during which our after which you didnt supposed to put in.
Speaker Change: Our plan.
Speaker Change: Do the in country D beneficiaries and if you fail to do that then you will be hit with punitive taxes.
Speaker Change: So.
Speaker Change: That could be one option unless unless the government just decides that frankly, we'd rather have a project with lots of a project in which case export concentrate forever.
Speaker Change: Yes.
Speaker Change: Because that's what they've been doing on the platinum side isn't it they've been they've reduced hospital.
Speaker Change: Yes on the passenger side Thats, where they have actually held out.
Speaker Change: Fourth the platform produces to dealer in country beneficiary <unk>.
Speaker Change: I think it seems to be an increasing.
Speaker Change: Pragmatism from government, so we'll export yes.
Speaker Change: Okay alright, thank you.
Speaker Change: Okay.
Speaker Change: Thanks very much.
Speaker Change: We have no further questions at the moment, so mark maybe back to yourself for any closing remarks.
Speaker Change: No look it was up a substantial improvement from the 24 compared to 2023.
Speaker Change: Very pleased to see.
Speaker Change: Stability of the Zig and has continued into 2020 following very pleased to see improvements in cash generation.
Speaker Change: Better.
Speaker Change: Reliability in terms of mine performance and we are genuinely very excited about some of the.
Speaker Change: Some of these near term opportunities, which could make a significant contribution to our cash generation.
Speaker Change: We've come through.
Speaker Change: In a difficult 18 months later and I'm hopeful that.
Speaker Change: So in Q4, and then into Q1 youll begin to see a substantial improvement.
Speaker Change: 40 sharing that with you. Thank you.
Speaker Change: Thanks, very much already that concludes the presentation today and look forward to speaking to you again soon.