Q3 2025 Endeavour Mining PLC Earnings Call
Speaker #1: After management's presentation, there will be a question-and-answer session. For those who wish to ask a question, please dial into the phone line. Please note that due to time constraints, we will be prioritizing questions.
Speaker #1: From covering analyst. If each analyst could limit themselves to two questions before jumping back in the queue. Today's conference call is being recorded, and a transcript of the call will be available on ENDEAVOR's website tomorrow.
Speaker #1: I would now like to hand the call over to ENDEAVOR's Vice President of Investor Relations, Jack Garman.
Speaker #2: Hello, everyone, and welcome to 2025 results webcast. Apologies for the slight delay getting started. ENDEAVOR's third quarter Please note our usual disclaimer. On the call today, I'm joined by Ian Cockerill, Chief Executive Officer; Guy Young, Chief Financial Officer; Jack Traore, Executive Vice President of Operations and Scarcelli, EVP of ESG; and Sonia Exploration.
Speaker #2: Today's call will start with Ian presenting the highlights, followed by Guy walking through the financials, Jack will present our operating results by mine, and Sonia will provide an exploration update for handing back to Ian for his closing remarks.
Speaker #2: We'll then open the line up for questions. With that, I'll now hand over to Ian.
Speaker #3: Thanks very much, Jack. Hello, everybody, and again, as Jack said, apologies. Unfortunately, me and today, and unfortunately, Orange unscheduled maintenance on the line. So hence the delay.
Speaker #3: But glad to say we're back up and running. As I said, we're dialing in today from Dhaka. Having just returned from our the team, we're here in Dhaka the board.
Speaker #3: We had a very productive trip, and it was pleasing to decided to do some see the strong and consistent performance specifically from the BIONZ plant.
Speaker #3: Q3 2025 has marked another quarter of solid operating performance for ENDEAVOR. As previously guided, production was a little lower, with costs a little higher than the prior quarter, with operational performance set to improve going into Q4.
Speaker #3: Our strong year-to-date production leaves us well positioned to achieve the top half of our production guidance, with 82% of the low end of the range already achieved.
Speaker #3: Meanwhile, our year-to-date all-in sustaining costs of 1,365 dollars per ounce is on track to achieve our guidance, accounting for the impact of the higher gold prices on royalty costs.
Speaker #3: Looking ahead, we're focused on our organic growth pipeline. On slide seven, you can see our performance so far this year. We've maintained a low loss-time injury frequency rate significantly below the industry average, and we had no loss-time injuries during the quarter, as we continue to strive for zero harm.
Speaker #3: We've produced 911,000 Q4 outlook, we're well positioned to achieve the top half of our production guidance. Our year-to-date all-in sustaining costs of 1,362 dollars per ounce is on track to achieve the full-year guidance.
Speaker #3: We ounces year-to-date, and with a strong have seen approximately 103 dollars per ounce impact on royalty costs from the higher realized gold prices, compared to our guidance gold prices 2,000 dollars per ounce.
Speaker #3: Accounting for this, our all-in sustaining cost is in the middle of the guidance range, with Q4 performance expected to be an improvement on slide eight, our year-to-date performance has significantly improved this year compared to last year.
Speaker #3: Following Q3. the startup of our two projects in Turning to Q3 2024, we've produced 170,000 ounces or 23% more so far this year and are all-in sustaining margin is 90% higher than last year, aided, of course, by the strong gold price.
Speaker #3: margin has improved significantly While our thanks largely to the gold price, it is important to highlight that our all-in sustaining costs remain firmly in the first cost quartile, despite the gold price driven increases in our royalty costs.
Speaker #3: And amongst the best of our peers year-to-date. While we expect to see all-in sustaining costs increases across the sector in the near term, we will continue to focus on controlling what we can control: delivering productivity initiatives and the development of our low-cost pipeline projects, which will more than offset any cost increases in the medium term.
Speaker #3: Firstly, through our tier one asset proof project, which continues to advance on track with the environmental permit now approved, and the definitive feasibility study expected in early 2026, we're making good progress towards first gold in H2 accelerating our exploration program primarily at our 2028.
Speaker #3: Secondly, we're On the financial side, our solid Q3 performance underpins significantly improved free cash flow, which is expected to increase materially in Q4 and into next year.
Speaker #3: our greenfield programs where we're expanding our pipeline to strengthen our long-term organic growth options. And we'll be announcing our new exploration strategy in the coming weeks.
Speaker #3: Year-to-date, we've generated a record 680 million dollars, and over the past 12 months, we've generated nearly a billion dollars, another record that's equivalent to a 19% free cash flow yield from the start of Q4 last year.
Speaker #3: This cash flow has supported our balance sheet strength, and we've seen improvements in our net debt and leverage, which remains constantly below our target.
Speaker #3: We also significantly reduced our gross debt, paying down the balance of our RCS during the quarter. With solid operational performance and strong cash flow generation, we continue to increase shareholder returns, returning 233 million dollars so far this year, already exceeding our with the announcement of our H2 minimum commitment, and dividend in January, we expect to return the minimum of shareholders for the complete year.
Speaker #3: In January, we'll also announce our updated shareholder returns program. We expect to significantly increase returns and continue to be sector-leading throughout the upcoming asset proof build phase.
Speaker #3: With strong momentum built over the last 12 months and an even stronger outlook, we're well positioned to continue delivering sector-leading organic growth and sector-leading shareholder returns.
Speaker #3: On slide 10, our strong year-to-date operating performance coupled with strong prices translated into 110% increase in adjusted EBITDA compared to the same period last year, to more than 1.6 billion dollars.
Speaker #3: Our adjusted EBITDA margin also increased by 10 percentage points to a very healthy 55%. We translated this performance into stronger free cash flow, as you can see on slide 11.
Speaker #3: For the first three quarters of the year, we generated 680 million dollars of free cash flow, and over the last 12 months, generated 948 million dollars, all the 19% free cash flow yield from the start of Q4 24.
Speaker #3: As we look forward, we expect stronger operational performance in the coming quarter, coupled with reduced seasonal taxes and higher gold prices. This will underpin even stronger free cash flow generation.
Speaker #3: On slide 12, you can see that given our strong operational and financial performance, we've continued to increase our shareholder returns. During the quarter, we paid our record H1 2025 dividend of 150 million dollars, which we've supplemented with 83 million dollars of share buyback so far this year.
Speaker #3: Total returns paid have come to 233 million dollars, exceeding the two 25 million, dollar minimum dividend. And with our H2 25 dividend to be announced in January, which will be a minimum of 112.5 million dollars, we expect to return that minimum 346 million to shareholders this year, and that's before any supplemental dividends for H2 or any buybacks for Q4.
Speaker #3: On slide 13, we've returned over 1.4 billion dollars to our shareholders over the last four and a half years, 83% higher than our minimum commitment over, the period.
Speaker #3: And that's equivalent to 72% of our free cash flow generation over that period. Demonstrating our commitment to returning supplemental cash to our shareholders. Looking ahead, we'll be unveiling our updated shareholder returns program early next year, covering the next growth phase.
Speaker #3: And we expect to outline significantly higher minimum commitments going forward and maintain the sector-leading returns as you all become used to through our upcoming growth phase.
Speaker #3: On the growth side, our outlook compares very favorably against the consensus growth outlooks for our peers, and that does not include some of the brownfields opportunities that we are advancing, which can supplement this outlook possibly even further.
Speaker #3: A significant part of this growth is expected to come from our tier one asset proof project, in Côte te d'Ivoire, which you can see on slide 15.
Speaker #3: The asset proof project continues to advance with a definitive feasibility study tracking for completion in Q1 26. We were very pleased to receive the environmental permit approval in September, which we believe is a significant milestone towards full project approval.
Speaker #3: With the last major approval being the exploitation permit, which we expect towards the end of Q1 next year. On slide 16, you can see we've continued to accelerate exploration, and we've made good progress in sub-Adala Masawa, Hunde, and Asafu.
Speaker #3: We're also looking at other tier one gold provinces to strengthen and diversify our long-term organic growth outlook. Our aim is to have multiple potential development projects, each competing for internal capital, that extend our pipeline even beyond Asafu.
Speaker #3: We completed the first transaction with Kulu Gold in Côte d'Ivoire last year, and just recently, we completed the second Resources in Kazakhstan, a relatively modest 5 million dollar investment over a two-year period to identify potential tier one targets in one of the world's most prolific and underexplored gold provinces.
Speaker #3: Sonia will take you through this in a little bit more detail later on. But before I hand over to Guy to go through the financials, I just wanted to touch on our commitment to ESG and our social licensed operator.
Speaker #3: Sustain analytics has improved our score and reiterated our low score rating. Which again positions us as the best-rated gold producer in the sector, recognizing our long-term work on ESG.
Speaker #3: We're also proud to see recognition for the work we're doing reflected in our host countries. With national honors including best mining company in Senegal and best company committed to local content in Burkina Faso, and congratulations to ETI's general manager, Djaria of manager of the year in Traore, for winning the national award Côte d'Ivoire.
Speaker #3: These recognitions highlight our deep commitment to developing and promoting local talent, boosting local economies, and empowering our host communities. And with that, let me pass you over to Guy to talk you through our financial results.
Speaker #3: Guy, over to you.
Speaker #2: Thanks very much, Ian. Moving straight into our quarterly financial results. Without going through all of the details on slide 19, I'll just pick out some of the key line items that I will come to later on in the slides.
Speaker #2: Our production in Q3 was slightly lower, and our costs slightly higher than Q2. In line with our mine sequence, and as noted at each of our quarterly presentations this year.
Speaker #2: This resulted in slightly lower earnings, whilst operating cash flow before working capital improved by 33%, and free cash flow improved by 59%. Benefiting from seasonally lower withholding and income taxes, as well of course as higher gold prices.
Speaker #2: our operational performance remained Turning to slide 20, solid during Q3, and we are on track to achieve the top half of our production guidance.
Speaker #2: With costs adjusted for the impact of higher gold prices on royalties, also within the guidance range. Production declined during the quarter due to lower grades processed across the portfolio.
Speaker #2: Coupled with the impact of the wet season, which reduced throughput at Hunde and Lafige specifically, and was exacerbated by the acceleration of production in H1 at Hunde to de-risk our annual production targets.
Speaker #2: Our all-in sustaining margin decreased slightly, despite the higher gold prices, due to lower grades processed, lower mining and processing productivity as a result of the wet season, and the impact of higher gold prices on royalties.
Speaker #2: Moving to slide 21, our adjusted EBITDA decreased quarter over quarter due to the lower production at slightly higher costs. While the impact of the higher gold prices was lessened by the realized losses on financial instruments, related to the settlement of the gold collar.
Speaker #2: Our operating cash flow increased by 22% quarter over quarter, as shown on slide 22. Mainly due to the lower withholding and income tax payments, as well as the higher gold prices.
Speaker #2: The majority of our income taxes and all of our withholding taxes have now been paid for the year, with less than 15% of total taxes outstanding and to be paid in Q4.
Speaker #2: With improved production and costs expected, coupled with lower cash taxes and higher gold prices, we're extremely well positioned to deliver stronger operating cash flow in Q4.
Speaker #2: If we turn to slide 23 now and compare Q3's operating cash flow with Q2's, the improvement was driven by, firstly, a $97 per ounce increase in the realized gold price to $3,247 per ounce, inclusive of the impact of the realized losses on gold collars.
Speaker #2: A decrease in cash operating expenses as a result of lower production and a stockpile build. Lower income taxes paid due to the timing of payments in the region, generally being more weighted towards Q2.
Speaker #2: And the timing of withholding taxes, which are typically paid in Q2 and Q3, but were expedited this year. Reflecting an improvement in the efficiency of the upstreaming process internally and with the West African Central Bank.
Speaker #2: These increases were offset by lower gold sales related to lower production, and a working capital outflow related to inventory and receivable buildup that I'd like to walk you through in more detail now.
Speaker #2: Slide 24 shows the two key drivers of the working capital increase of 85 million dollars in the quarter. Being inventory and receivables. The majority of the inventory increase, both in the quarter and year to date, is due to stockpile increases at Sabadal Masawa, Lafige, and ETI.
Speaker #2: Stockpiles have increased at Sabadal Masawa as we have mined and stockpiled the exceptionally high-grade Masawa North Zone deposit, which we expect to start processing in the second half of next year.
Speaker #2: At Lafige and ETI, we've also been accelerating mining activity to build stockpiles. And are expecting to see continued improvement from the plants, which will draw down on these stockpiles starting in Q4 of this receivables is entirely due to higher year.
Speaker #2: VAT receivables, and The increase in exacerbated by a foreign exchange revaluation of more than 20 million dollars year to date. In Burkina Faso, VAT refunds continue to be delayed this year, except for an offset arrangement of 23 million dollars in Q3, that is reflected in financing activities in the cash flow.
Speaker #2: We are actively looking at opportunities to resolve this, through various factoring solutions to help expedite the receipt of these refunds, that should see a reduction from next year.
Speaker #2: In Côte d'Ivoire, VAT refunds are processed quarterly. And at our new Lafige mine, the setup of the administrative process to claim these VAT refunds has been slow.
Speaker #2: We've started to receive VAT reimbursement claims in Q3, and we expect this to now start accelerating into next year. In Senegal, where we have monthly VAT refunds, they continue as usual.
Speaker #2: With a slight buildup related to the startup of the BIOX plant, and additional VAT being paid. We expect this to normalize from early next year.
Speaker #2: While we expect a full year of working capital outflow, we should start seeing progressive improvements in both our inventory and receivables from Q4, and will further accelerate this improvement into 2026.
Speaker #2: In terms of our free cash flow shown on slide 25, we continue to generate strong free cash flow in Q3, delivering $166 million, $61 million higher than the prior quarter, due to the lower cash taxes and higher realized gold prices I've already touched on.
Speaker #2: As mentioned, we expect free cash flow to grow in Q4, with the improved operational performance, lower taxes, and higher gold prices. Moving now to slide 26, the strong free cash flow generation has allowed us to strengthen our balance sheet, and reduce our leverage to 0.21 times net debt to adjusted EBITDA, comfortably below our targets of 0.5 times.
Speaker #2: Given our strong cash flow outlook, our low leverage position, our low leverage positions us well ahead of our upcoming growth phase, to be able to deliver our organic growth project and continue paying sector-leading shareholder returns.
Speaker #2: As I've mentioned in the past, we are not looking to build up a net cash position, as we can comfortably meet our strategic objectives with leverage below 0.5 times.
Speaker #2: On slide 27, we're pleased to have materially reduced our gross debt through the full repayment of our revolving credit facility during Q3. We paid down 472 million dollars quarter on quarter, and reduced gross debt by 38% to 678 million dollars.
Speaker #2: We expect this to be reduced further over the coming years as we progressively pay down our Lafige term loan in line with the amortization schedule.
Speaker #2: Finally, moving on to net earnings on slide 28, and focusing on just the key items impacting the quarter, we incurred 49 million dollars loss on financial instruments.
Speaker #2: Which included 69 million dollars realized loss on gold collars, which was partially offset by an unrealized gain on the outstanding gold collars for Q4.
Speaker #2: The final delivery into our gold collar program will be 50,000 ounces at the end of this quarter. Which, based on providing gold prices, should support improved cash flows in 2026.
Speaker #2: Our income tax expense was significantly low during the quarter, this was due to lower taxable profits and lower withholding taxes recognized. Our deferred tax expense was also higher due to movement in foreign exchange on the opening deferred tax balances and the accrual of FY25 withholding taxes.
Speaker #2: Adjustments were limited during the quarter, as the unrealized gain on gold collars was largely offset by other expenses and foreign exchange on our deferred tax balances.
Speaker #2: We reported another strong quarter of adjusted net earnings per share of 66 cents, albeit slightly below the prior quarter, largely due to the lower earnings from operations, and the higher realized loss on gold collars.
Speaker #2: Thank you, and with that, I'd like to hand over to
Speaker #2: Thank you, and with that, I'd like to hand over to Jario. Thank you,
Speaker #1: Guy. During quarter three, I'm pleased to report that we maintained our industry-leading safety record. With a long-time injury frequency rate of 0.05, unchanged from quarter two 2025 for most importantly, we had no long-time injury.
Speaker #1: While our safety performance position of among the safest mining companies globally, we remain vigilant and we reject complacency. We continue to focus on training to foster the strong safety culture that we have across the business.
Speaker #1: Moving on to slide 31, quarter three marked another fully quarter of operating performance. Which contributed to our strong year-to-year year-to-date production of 911,000 ounces, and put the company on track to achieve the top half of our production guidance range.
Speaker #1: On cost, we're pleased with the year-to-date performance. With all interesting costs of 1,362 dollars per ounce, which has been impacted by 103 dollars per ounce of higher royalty due to higher gold prices than our guidance, set at 2,000 dollars per ounce.
Speaker #1: Adjusting for this impact, our all-in sustaining cost is firmly in the middle of the guidance range. Across the portfolio, all the assets are on track to achieve the production guidance.
Speaker #1: With Hyundai and Sabadella Masawa, expected to achieve the top half of the range. While Lafige is expected to achieve the lower half. On cost, ET Sabadella Masawa Hyundai and Lafige are on track, with Lafige expected to land near the top end and MANA expected to be above the top end of the range.
Speaker #1: Despite this, at the group level, we are well positioned to achieve our guidance range, when accounting for the impact of royalties. I will now run through the mind-by-mind details starting with our mind of ET on slide 32.
Speaker #1: Production decreased quarter on quarter as expected, with processed lower-grade ore from the Le Plaque and ET pits in line with the mine sequencing. All-in sustaining costs increased, driving primarily by lower gold sales volume, gold price and higher sustaining higher royalties due to increased capital.
Speaker #1: ET is on track to achieve its 2025 production and cost guidance. And we are evaluating opportunities to reduce mining costs through development of the ET Donut.
Speaker #1: We should provide us efficiencies by deploying an hybrid fleet mining fleet within an expanded optimized pit over the coming years. Let's now turn our attention to our Hyundai mine on slide 33.
Speaker #1: Hyundai had a very strong start of the year, as we have accelerated high-grade into H1 to de-risk the impact of the wet season. And as expected, production decreased quarter on quarter.
Speaker #1: On cost in quarter three, we saw an all-in sustaining cost decrease. Driving primarily by lower sustaining capital as well as stripping requirement eased. Hyundai is well positioned to deliver production in the top half of the guidance range.
Speaker #1: With costs well in line. As we have highlighted previously, looking ahead to the next year, we expect we will continue stripping at the vendor loan main pit phase three from Carry West and Vendor cutback, and mining lower-grade Loan.
Speaker #1: Which will result in high costs for the first half of the year. We should progressively improve as the stripping concludes giving access to higher-grade ore.
Speaker #1: Moving now on to MANA on slide 34. Production declined slightly in quarter three, as with mine and processed lower-grade from the Warner Underground deposit.
Speaker #1: While the costs increased slightly, due to the lower-grade lower production and sales and higher gold price impacting royalty costs. At MANA, we are pleased with our production performance.
Speaker #1: But there is still work to be done on cost. Importantly, we are not completing the changeover of our underground contractor. And we expect to start realizing some of the productivity benefits.
Speaker #1: Including a significant increase in development rate and total development meters next year. Driven by expected improvement in equipment availability, as well as the operating efficiencies.
Speaker #1: By using one single underground contractor, we expect to drive unit cost improvement into next year. At the same time, we are improving the underground mine power stability.
Speaker #1: Through the installations of a transformer and the automation of our on-site power plant, to smooth switching between the grid and self-generated power. Combined, this initiative should allow us to increase our reliance on the lower-cost grid power for the underground from early next year.
Speaker #1: We should also support cost improvement. For the year, MANA is well on track to achieve the production guidance. But costs are expected to be above the guided range due to the reliance on self-generated power for the underground and higher sustaining capital as we are accelerating development in the Warner deposit to gain access to higher-grade more quickly.
Speaker #1: At Sabadella Masawa on slide 35, production decreased only slightly in quarter three. As lower grades were processed through the CIL plant. Despite higher throughput and recovery through the CIL plant and higher-grade as well as recovery through the BIOX plant.
Speaker #1: On all-in sustaining cost, increased largely due to the impact that the unusually long and heavy rainfall had on mining and processing productivity. As well as higher royalty costs due to higher gold prices.
Speaker #1: It's pleasing to see the technical review at Sabadella Masawa starting to positively impact performance. Following the acceleration of mining activity at Masawa Central Zone, we are now mining consistent higher-grade, which came in at over four grams per ton for quarter three.
Speaker #1: And on recovery in the BIOX plant, we were pleased as well to achieve an average of 82% for the quarter. Which is a significant improvement from where we started last year.
Speaker #1: And well on track to achieving our life of mine target of 85%. Recovery improvement has been driving partly by increased and better quality fresh ore from Masawa Central Zone.
Speaker #1: But also better feed consistency which allows us to optimize flotation control and flotation tail leaching. We expect to drive more improvements as we optimize the gravity circuit later this year.
Speaker #1: Into next year. Looking ahead to quarter four, we expect higher production from the CIL plant due to improved throughput and grades. While our production from the BIOX plant is expected to remain consistent, position loss will achieve the top half of the production guidance.
Speaker #1: With costs in line with guidance. Looking ahead to next year, we are continuing to drive the technical review forward to outline an incrementally improved production outlook.
Speaker #1: As we accelerate underground development to drive further production improvement over the coming years. Lastly, turning to Lafigué on slide 36. Production declined during quarter three as we saw lower throughput, though a 35% higher year-on-year.
Speaker #1: And reduced grid mine and processed from the main pit. As mining activity shifts towards stripping to accelerate access to more higher-grade to support the processing plant.
Speaker #1: Which is now consistently running above design nameplate. All-in sustaining costs increased, mainly due to lower gold sales and higher royalty costs associated with gold prices.
Speaker #1: As we move into quarter four, we are expecting grade and cost to improve and Lafigué is tracking towards the lower half of its four-year production guidance.
Speaker #1: With an all-in sustaining cost near the top end of the range, due to lower level of production. I will now hand over to Sonia, walk through our exploration highlights from the quarter.
Speaker #1: Sonia?
Speaker #2: Thank you, Jadia. I'm pleased to be joining the quarterly webcast to provide you with an update of our exploration activities and some of the key properties.
Speaker #2: This is also a timely update as we expect to announce our new exploration strategy for the next five years later this quarter. The new strategy will underpin our continued sector-leading organic growth.
Speaker #2: At Sabadella Masawa on slide 38, we are advancing two high-priority exploration targets, called MACANA and KAUDARA. And MACANA, we are accelerating resource definition of two high-grade non-refractory mineralized deposits.
Speaker #2: This could potentially support the near-term mine planet Sabadella Masawa and offsetting some lower-grade feed and improving production. KAUDARA is a potentially large non-refractory resource located approximately 35 kilometers south of Sabadella Masawa and can support a significant increase in the endowment and provide increased life of mine optionality made in resources are expected next year.
Speaker #2: Moving to HUNDE on slide 39, we have increased our exploration budget as we continue to drill high-grade intercepts in the LUDIP deposit. The target looks to be very large and very high-grade, and could support a material improvement in the mine plan.
Speaker #2: We expect to have a maiden resource for VINDA LUDIP in Q1 2026. Elsewhere in the operating portfolio, we have completed the drilling depots at MANA to delineate the continuation of the Warner underground deposit.
Speaker #2: ERITI, we are developing several early-stage opportunities along the ET trend and at Lafigué, we expect to start drilling on several near-mine targets early next year.
Speaker #2: Moving now to slide 40 and our Tier 1 ASAFU project. During Q3 2025, we completed a 23,000-meter drill program at the PALA Trend 2 and PALA Trend 3 targets.
Speaker #2: Located a few kilometers to the west of the main ASAFU U deposit. Drilling successfully expanded the mineralization over a three-kilometer strike length along a similar turquoise and beryllium contact to the one at the ASAFU deposit.
Speaker #2: On the southwest side of the ASAFU basin. We expect to complete the definition of maiden resources for the PALA trend targets later in Q4.
Speaker #2: And finally, on slide 41, I want to give you a bit more color on our new joint venture with IFSAR Resources, the Ian mentioned earlier.
Speaker #2: While our new exploration strategy will prioritize existing operation, we will also be increasing our greenfield exploration spend, focus on strengthening and diversifying our exploration pipeline to support our longer-term organic growth.
Speaker #2: While we expect most of this growth to come from our existing West African portfolio, we are also entering into some highly prospective Tier 1 gold provinces with low exploration maturity and where we have an early mover advantage.
Speaker #2: We are taking a low-risk and low-cost venture approach. Giving us the ability to leverage our joint venture partners' technical expertise and their knowledge of the operating environments in this region.
Speaker #2: We signed a joint venture with IFSAR Resources. A Kazakhstan-based gold and base metal explorer. Targeting two highly prospective belts in northern and central Kazakhstan.
Speaker #2: Within the highly prospective Central Asian orogenic belt that offers multiple Tier 1 gold deposits. We will invest 5 million dollars over a two-year period to earn 51% interest in the joint venture company that will be operated by IFSAR.
Speaker #2: We are well integrated in the country, having been operating there for over five years. From day one, we will have control over the exploration program through our board and technical committees.
Speaker #2: We expect to continue to leverage local exploration vehicles in highly prospective Tier 1 gold provinces to expand our exploration pipeline. This will ensure that we have multiple high-quality organic growth projects that will compete for capital with each other and underpin continued portfolio pipeline and production growth.
Speaker #2: With that, Ian, back to
Speaker #2: you. Thank
Speaker #3: you, Sonia. With our strong operating momentum, and the support of gold price environment, we're well positioned to build on our year-to-date performance through the remainder of this year and into 2026.
Speaker #3: The high quality of our portfolio and the resilience of our business ensures that we are well positioned to sustainably deliver both sector-leading organic growth and sector-leading shareholder returns.
Speaker #3: We look forward to talking to you in January when we come back with the Q4 results and we're very, very looking forward to seeing how they turn out.
Speaker #3: It's looking promising. And with that, let me hand you back to the operator for
Speaker #3: Q&A. Thank you.
Speaker #1: Ladies and gentlemen, we'll now begin the question and answer session. As a reminder, if you wish to ask a question, please press star one and one on your telephone and wait for your name to be announced.
Speaker #1: We will be prioritizing questions from covering analysts at this time. If each analyst could limit themselves to two questions before jumping back in the queue.
Speaker #1: If you wish to cancel your request, please press star one and one again. Once again, please press star one and one if you wish to ask a question.
Speaker #1: Please stand by while we compile the Q&A queue. We are now going to proceed with our first question. And the questions come from the line of Wayne Lam from TD Securities.
Speaker #1: Please ask your
Speaker #1: question. Oh,
Speaker #4: thanks. Good morning, everyone. Maybe a $7. Just wondering if you may be able to give us a bit of color on what you're seeing in terms of the stability of the government on the ground there.
Speaker #4: And are you in discussions on any potential renegotiation on the mining code in the
Speaker #4: country? Wayne, thanks.
Speaker #3: Look, in terms of stability of the government, having spent the last week in the country, you get a good sense just being in the streets, in the towns, talking to people.
Speaker #3: I'm not seeing anything abnormal here. There are some current discussions going on at government level around what they're doing. We are not in any negotiations with regard to change in mining codes in the country.
Speaker #3: Would I suspect that there will come? I think we've seen elsewhere in West Africa there is a tendency to want to modify bearing in mind that the mining code in this country goes back to 2013.
Speaker #3: So it probably it's fair to say it's likely to be due for renewal. So if it comes, would I be surprised? No. But the dialogue between ourselves and government, I think, is fairly good.
Speaker #3: And I think if there are going to be any changes, there's certainly going to be well telegraphed. And I would sincerely hope that we all have a high degree of input into what goes into them.
Speaker #3: But I don't see any immediate change in the immediate
Speaker #3: future. Okay, great.
Speaker #4: Thanks. And then maybe just wondering on the recent JV signed with IFSAR. Can you just talk about the strategy going forward regionally for the company?
Speaker #4: Just given Endeavor's long-standing history of operation in West Africa, are you still keen on expanding within the country where you operate? Or are you now looking to diversify out into other developing regions
Speaker #4: globally? I
Speaker #3: I think the answer as I've mentioned previously, Wayne, we still see good potential in West Africa. We're really sort of doubling down, particularly on our brownfields exploration.
Speaker #3: I think you can see what Sonia mentioned about specifically at places like Sabadala highly, highly prospective piece of real estate. We've just got to go and look for it.
Speaker #3: So we are certainly not walking away from West Africa far from it. But we do recognize that looking forward, and bear in mind exploration is a long-term game.
Speaker #3: This is not something that we're doing for the next quarter. The reason why we're expanding and taking sort of baby steps outside of West Africa is we're actually looking longer term.
Speaker #3: We're looking for the mines that we will develop in the 2030s. That's sort of time horizon that we're looking at. And our focus is going to be on those areas that we think are highly prospective, relatively underexplored, and where we believe that our unique exploration expertise can be applied and we can be equally as successful over the next decade as we've been if you look back over the past decade in terms of cost-effective discovery of answers in
Speaker #3: gold. Okay, great.
Speaker #4: Thanks for taking my questions.
Speaker #1: We are now going to proceed with our next question. And the questions come from the line of Richard Hatch from Berenberg. Please, go ahead.
Speaker #1: Your line is
Speaker #1: opened. Thanks.
Speaker #5: Yeah, hi Ian and team. Yeah, two questions. Firstly, just following on from the previous questions around tax. And royalty regimes in West Africa, it has been a theme amongst some shareholders just questions around that.
Speaker #5: And I guess you've got your stability agreement in Senegal and Burkina is already moved on that. But what about Cote d'Ivoire? What are you kind of hearing or seeing in Cote d'Ivoire?
Speaker #5: And how should we think about changes to royalty regimes in Cote d'Ivoire, tax and royalty regimes in Cote d'Ivoire? That's the first one. Thanks.
Speaker #3: Hey, Richard, guy. Richard, in Cote d'Ivoire, I think a relatively well-publicized discussion continues between the Chamber of Mines on which we're obviously represented. And the state.
Speaker #3: The state's primary focus appears to be amongst other things on the royalty rates. It's important to us, obviously, predominantly with regards to ASAFU because that's the site which we'd like to start developing.
Speaker #3: But for which we don't have any signed convention. So that's the key aspect for us. In terms of ITI in particular, we do have, as you know, a stabilization clause on which we would rely to avoid any near-term increase in royalty.
Speaker #3: All such times we're looking for permanent renewal. Lafigue, we would hope to be signing a convention relatively soon at which point we'd be able to confirm, but there is no doubt there is ongoing and upward pressure from all of the states, including Cote d'Ivoire, particularly in terms of that royalty rate.
Speaker #5: Thanks. I'll ask my second one, but just to be clear. You can go forward with ASAFU construction without having that convention signed, or would you prefer to have it signed before you go forward?
Speaker #5: And then the follow-up, sorry, was how significant is a significant hike in the dividend, right? So if I look at 225 million, I mean, a significant hike could be 30%, but that takes it to 300 million.
Speaker #5: So is 300 million like a fair number, rule of thumb, or could it be more, or how do we think about the significance of significant?
Speaker #5: Thanks.
Speaker #3: Richard, in terms of the numbers that you've spoken of, you may say that we couldn't possibly comment at this stage.
Speaker #5: Thanks, Ian.
Speaker #3: Richard, we will, of course, be coming up with some more directional numbers very early next year. It's just a question—so significant is obviously a subjective term and a qualitative one at that.
Speaker #3: Open to interpretation. It's just that we do need to get to the end of our annual planning process. We need to take some views on gold pricing, reassessing cash flows, making sure we understand where we think the ASAFU numbers are going to land.
Speaker #3: But in any of those scenarios, we see some significant—apologies—capacity for us to improve the current scenario, which we believe is relatively sector-leading anyway, and is only upside from here.
Speaker #3: But it won't be long and we'll be able to provide you with a lot more quantitative directions.
Speaker #5: Okay, much appreciated. Thanks, team. Cheers. Get well.
Speaker #1: We are now going to take our next question. And the question comes from the line of Uwais Habib from Scotiabank. Please go ahead. Your line is open.
Speaker #4: Thanks, Alfredo. Hi, Ian and Nandeva team. Congrats on a good quarter and really glad to hear that production is tracking towards the top end of guidance.
Speaker #4: Ian, a couple of questions from me. I'm just wanted to start off with—sorry, ASAFU. Exploitation permit approval and DFS looks like they're on track to completion in Q1.
Speaker #4: Ian, there was a lot of drilling completed over the last couple of quarters, and Sonia did mention that minimization extends over a three-kilometer strike length.
Speaker #4: And it remains open. Obviously, that looks like there's a lot more further upside over here. Is this drilling going to be included in the DFS, and is there any change or scope change in the DFS that we should expect?
Speaker #3: Uwais, great question. Thank you. Look, I mean, we've actually addressed this issue previously. At some point, you actually have to sort of close off the reserve because you've got to do it against your published reserve and resource statement.
Speaker #3: We've taken the—we've taken the view that the numbers that we used in the PFS, which was a 4.1 million ounce reserve, would be the number that we would use for the study.
Speaker #3: But we're cognizant of the fact that there is potential upside from there. Having said that, it's our belief that the 4.1 million ounces is more than enough against which we can do a realistic study—the final feasibility study—but we will make sure that whatever design we come up with and that we finally go.
Speaker #1: Option that over the the life of this project that there scope to will be expand the throughput over and beyond the 5 million tons a year , which is the design profile that we're using for the initial study .
Speaker #1: So decided to we've fix our that view at level . the design will be flexible . We will not sort of bottle ourselves in .
Speaker #1: We'll leave lots of room and shape and capacity in the design that if we wish to increase capacity , we could do so .
Speaker #1: And it's not going to make life difficult for ourselves. That's the approach that we've decided to take.
Speaker #2: Okay , that . thanks for Ian . And then just moving on to exploration , the new five year exploration strategy is expected in Q4 .
Speaker #2: we Are going to get a resource target like we did previously ? And , you know , maybe a part two to that is is kind of where the low hanging fruit that you would be targeting in the near term .
Speaker #3: Yeah . Thanks a lot for the question . So as I mentioned , the strategy will be presented on the fourth on the next quarter .
Speaker #3: However , just looking at as the next five years will be play , we will definitely double down in our existing operation . We have a pipeline of brownfield and greenfield that have been identified that will move forward , especially the brownfield and the short term and greenfield will be progressed in the next two , three years to really building on keep that pipeline in parallel .
Speaker #3: We're really looking to expand the portfolio . That's why we're looking at this low entry , low cost entry strategy of joint venture with partnership and juniors in different countries , but definitely in the short term .
Speaker #3: We have identified a pipeline for strong brownfield in our existing areas and hoping . Applying a new technologies and new data sets to actually continue expanding on that .
Speaker #1: But as we did previously on this , you know , be the it would intention that we will be setting ourselves internal targets , you know , for for So that will be doing achievement .
Speaker #1: as well .
Speaker #2: Thanks for that . Sonja . Ian . And just in terms , you know , brownfields like you talked about brownfields targets is is the donut concept still in , in on the plate right now .
Speaker #2: And going to be a focus that's going into 2026 .
Speaker #1: it's Look , as a plan . Absolutely . I mean , you know there's you've seen the the plans . You know we're busy doing the engineering studies .
Speaker #1: We're looking at the implications meant of what is by I think , as we said previously , one of the the real issues that we have at it is a very , very tight site .
Speaker #1: You know , the donut requires , you know , a high fairly degree of ground movement . And the question is where best do we do ?
Speaker #1: We put , you know , all the particularly the waste material and that's what's requiring some very careful thought requiring us to do some fairly rapid drilling to condemnation make sure that , you know , in terms of waste pile positioning not putting it on any future .
Speaker #1: All reserves and sterilizing stuff that we could go go into in , in the future . But it's absolutely a very important part of , you know , organic growth opportunity , potential within the group .
Speaker #2: Perfect . Thanks for that , Ian . And thanks for taking my questions . And Sonia , looking forward to meeting you soon .
Speaker #4: Thank you .
Speaker #5: We are now going to proceed with our next question. And the questions come from the line of Fahad Tariq from Jefferies. Please ask your question.
Speaker #5: Your line is open .
Speaker #6: Thanks for taking my Hi . questions . Ian , I just wanted to come back to your first answer on Senegal . There was a Bloomberg article just this morning talking about the government seeking to perhaps change its mining code by the end of the year .
Speaker #6: Given the debt crisis in the country , your answer said , you know , you don't see an immediate change in the future .
Speaker #6: Can you maybe just comment on that? Like, is it based on discussions that you've had with the government or the team has had with the government?
Speaker #6: Thanks .
Speaker #1: Look , Fahad , we've not had any discussions with government around the change . We also saw that comment . I think there's a huge difference between an aspiration and an ability to deliver .
Speaker #1: I And think being realistic , there's no ways that government may want to have a change in the mining code . But I do believe that , you know , it's not really going to to to happen .
Speaker #1: I mean , our , you know , our current mining code extends up to 2040 . So any changes to the existing 230 mining code , you know , are unlikely to affect us at .
Speaker #1: San all . You know , in the in the short term . So , you know , it's there's always lots of of commentary in fairness , as I think guy mentioned earlier , you know , all all jurisdictions are looking at ways of increasing their take , you know , the , with the higher gold price received .
Speaker #1: And let's be frank , you know , that's not unique to countries . You know , where we're mining every country around the world is looking at ways of , of grabbing extra tax dollars .
Speaker #1: So if you are asking me , is there going to be a change by the end of the year ? I would say , you know , that's not going to happen .
Speaker #1: If you're asking me , what is the trajectory , I think it's fair to say that the the trajectory , like in all countries , is likely to be higher , but over the longer term time timeline which I'm afraid of at this stage I can't actually define .
Speaker #6: That's helpful . Thanks . And then just switching gears to exploration . Philosophically , is there a prioritization of mines that are , let's say , around the ten year mine life ?
Speaker #6: And you want to maybe extend those mine lives , for example , and or is it really just based on where you're seeing the most geologic potential .
Speaker #6: And that's where the exploration focus and the rigs will be .
Speaker #1: I think , you know , it would always be great if you had a short mine life and there was lots of potential and you could focus there , you know , that would be the logical thing to do .
Speaker #1: But you're exploration focus is absolutely going to be where you believe is the maximum potential . You know , we're very fortunate that in our portfolio , you know , we have some great potential .
Speaker #1: And historically , you know , there's Perhaps insufficient emphasis on the underground potential . And if you look at at 80 Hyundai , you know , all three of those mines have been fabulous mines within the portfolio but got really good underground potential .
Speaker #1: we And we recognized this , that , you know , this is a great internal upside potential for the group . know , we You are increasing our focus on underground exploration .
Speaker #1: But importantly also bringing on board people into the group who got extensive underground mining , execution capability . So we're preparing ourselves a that future within endeavor is not just going to be cut .
Speaker #1: It will be open cut, as well as appropriate, you know, and commercially viable underground operations as well.
Speaker #6: Great . Thank you .
Speaker #5: We are now going to our next proceed with question . And the question comes from the line of Marina Calero RBC from Capital Markets .
Speaker #5: Please go ahead . Your line is open .
Speaker #7: Hi . Good afternoon . Thanks for the call . I have two questions on on my side . The first one is a follow up from previous questions on the JV agreement announced today .
Speaker #7: clearly looking You're to diversify into new regions . Can you comment where else you're seeing potential at the moment . And as an extension of that , how much capital are looking you to invest in these type of agreements going forward ?
Speaker #7: Thank you .
Speaker #1: Yeah . Marina , again , I think previously we've we've flagged that we certainly . Have an interest , you know , in the the Teflon So belt .
Speaker #1: clearly you know that's why Kazakhstan has been flagged as being high potential . Let me reiterate what I earlier , which is areas of high prospectivity the potential for tier one deposits , as well as being relatively underexplored , where we can apply our previously acquired expertise and knowledge and also perhaps our familiarity with specific geology , which we've is why said also that , you know , parts of sort of northern South America , you know , are prospective .
Speaker #1: highly It's the same geology as we're you know , we're exploiting in in West Africa . So those are the areas of focus .
Speaker #1: So it is it's not a shotgun approach to just to expanding our exploration It is a portfolio . very deliberately focused program where we believe our approach to exploration , you know , our ability to have a higher probability of success , we believe that we can actually , you , repeat the know success that we've had over the past decade , you and going forward , do the same , generate more greenfields ounces , and prepare ourselves for the the next mines post .
Speaker #1: Masafu .
Speaker #7: Thank you . That's very clear . one more question And I have for Sonia on the non-refractory targets . You are drilling at Massawa .
Speaker #7: Can you give us a bit more color on that ? And when we could see those coming into the mine plan .
Speaker #3: There are . We are still completing the drilling campaign that has to in two aspects . One on an already . I part of the , as it resource was an infill drilling really to next to year .
Speaker #3: The 23rd . The resource . But in parallel we are also doing the exploratory drilling to really understand the full extension of the resource .
Speaker #3: So what we see as an extension of potential today over a five kilometres where the mineralization continues . That's why we are working with the team fully understand the resource size , which will impact on where it will be on the scheduled mine plan on the other .
Speaker #3: Opportunity , this is a brownfield opportunity . Nearby are still facility planned , are so we will accelerate in 2026 . The drilling to get campaign into indicated So the goal to resources .
Speaker #3: Actually, accelerate is to the mine plan as we get into 2027 and display the lower-grade resources.
Speaker #7: Thank you .
Speaker #5: are now We going to proceed with next question and the questions come of from the line Anita Soni from CIBC World Please go Markets .
Speaker #5: Your line is open .
Speaker #8: Hi . Good morning Ian team , I just
Speaker #8: wanted to ask a couple of related CapEx on I think the Fiji . CapEx has shifting questions been the from ahead . sustaining to .
Speaker #8: Non-sustaining And I think , can you me some color on that ? I thought you said it . Was it related to a focus on the different of kinds just give stripping that you're doing ?
Speaker #8: And then should we then assume that that sustaining capital will catch up next year ? Is that is that a good assumption or no ?
Speaker #9: Hi , Anita , guy , I'll try this . And if Jerry wants to add anything , yes , you're absolutely right . There is a slight there is a change in the CapEx split .
Speaker #9: So there's another 10 million in our Non-sustaining that is effectively associated with a to our stripping plan revision . So we're increasing some stripping at the main pit .
Speaker #9: That's allowing effectively better access us in the short term to to fresh or and ounces . We will push stripping into non-sustaining from sustaining .
Speaker #9: If the pushback strip or the itself is both of life of mine ahead ratio as well as accessing all that's going to be mined over multiple So in years .
Speaker #9: this particular case , those those criteria have met . been And consequently it's moved from sustaining to non-sustaining . I think over longer term the , we don't have any fundamental shift in our expectation for total CapEx at the site .
Speaker #9: This is a question of short term mine plan to .
Speaker #8: Okay . So the strip ratio is higher than life of mine . And so it moved from one to from the from the sustaining .
Speaker #9: In this strip particular .
Speaker #8: Okay . And then secondly on sabadilla the , the the processing costs dropped . This quarter . And I'm just that a wondering , is function of , of something that's I guess more sustainable or is that is that a function of the higher really just contribution of , of the CIL or presume is slightly cheaper than the Biox ?
Speaker #9: Anita . Maybe I can chat to you offline . Just exactly the understand quantum's you're at looking . I think it fair to from say though , a broader trend perspective , yes , our processing costs have benefited some from improvement in we recoveries , which which we touched earlier in the call .
Speaker #9: The other impact that you're likely to see , having started to come through in our 25 numbers and arguably going to be a bigger contributor into 2026 , is the solar our solar investment , which we investment online year this , is an investment which we've been very proud of , not only for its credentials , but the ESG fact that it does have a fundamental improvement to our operating costs .
Speaker #9: So as the solar has ramped up , it's starting to contribute to a greater proportion of our overall power consumption . And that , I think , again , as a long term trend , should be underpinning some of the improvements you're seeing in processing costs at Silver Dollar
Speaker #9: .
Speaker #8: Thank you . .
Speaker #8: Thank you . .
Speaker #8: That's it for my questions
Speaker #5: you . As a reminder to ask a question , you need to press star Thank one one on your telephone and wait for your name to be announced .
Speaker #5: Once again , it's star one one on your wait for your name to be announced . telephone and We are now going to with our next proceed question and the questions come from Mohamed Sidibé from National Bank Capital Markets .
Speaker #5: Ahead. Please go. Your line is open.
Speaker #10: Thank you . Good morning . And thanks question . I think you that mentioned goal is not to stockpile as cash you're advancing through the next year .
Speaker #10: maybe Could you help us understand what's the minimum amount of cash you would like to hold while advancing the build at Asafo ? In order to better maybe your capital understand , return profile or your capital allocation you priorities .
Speaker #10: .
Speaker #9: No problem . I'm afraid I'm
Speaker #9: Not going to be able to give a thank you, even through the back door, sufficient quantification to kind of reverse engineer the shareholder returns.
Speaker #9: But what I , what I can just point to , which I think we've discussed before is in terms of minimum cash requirements , we fundamentally look to hold sufficient liquidity at both mine site as well as offshore .
Speaker #9: When we look at those numbers, we tend to look at $150 million of liquidity offshore. We also like to keep around $15 to $20 million of liquidity at the mine site.
Speaker #9: I do keep trying to underline the liquidity point here . So if we hold it in cash , that's fine . But it doesn't necessarily have to be in cash .
Speaker #9: It just needs to be liquidity availability . So I would reiterate the point made . During the presentation itself . no have We stated short or medium term ambition to be holding cash piles .
Speaker #9: However , those cash piles , as you would expect , form part of the capital allocation and ongoing capital allocation . And we will look to , of course , provide the right levels of liquidity and balance sheet strength .
Speaker #9: But equally , we will continue to focus on shareholder returns and CapEx , cash CapEx requirements of the business for for organic growth .
Speaker #9: So there isn't there isn't a substantial amount of cash requirements or liquidity at either an offshore or a site level .
Speaker #10: All right . Great . Thanks for that . And then maybe if I could follow up the on capital side of things , working you noted that you expect , you know , a big part of that to to be coming out and flowing out in 2026 , should we expect this to be mostly coming out in 26 , or would some be seen in 2027 as well ?
Speaker #10: Just wanted to think about the amount and levels going into next year. Thank you.
Speaker #9: Sure . Sorry . Just to make sure I understood you're talking about the the unwind profile . .
Speaker #10: Exactly . The unwinding of the inventory and the accounts receivable .
Speaker #9: Okay , perfect . So I think from a stockpile perspective , which which is arguably the the most material number . Yes . We see going particularly into partly as a result of the mine plans , the ability to start unwinding and and in particular , as I mentioned , it's it's likely to be happening at Lafage as well as Sabadilla Sabadilla as we start blending slightly differently and looking to change our process , plant , feed , we should see North Zone material starting to become consumed in in H2 of 26 Lafage it's the same point we've got .
Speaker #9: We've got a plant that is currently managing to produce well above nameplate capacity . And as a result , we've stockpiled in order to be ensure able to that that plant is filled through 2026 .
Speaker #9: So whilst I think the trajectory is better for 2026 , I think it would be presumptuous to assume that we'd be able to consume all of our stockpiles .
Speaker #9: Clearly , there are going to be stockpiles consumed over life of mine , but there is an improving trend between 25 and 26 , as I've , I think slightly more difficult to to described answer the VAT is on where we have higher degrees of confidence is in and around Cote d'Ivoire and Senegal .
Speaker #9: d'Ivoire Cote is associated with with Lafage , Lafage having just come online and as it turns out , simultaneously state of the Cote d'Ivoire implemented a new administrative process and online automated process .
Speaker #9: year , those two things did end up In the slowing down our ability to submit and and and claim VAT reimbursements . The quarterly nature will not change .
Speaker #9: So I expect us to be able to stabilize at a level which is slightly lower than where we are now . And then that should .
Speaker #9: And that would be in 2026 . And then would flatten in terms of overall that would movements , unless the nominal amount changes in Senegal , we remain on track .
Speaker #9: It's a monthly process . So that's just a question of lead time . And the nominal amount , if it goes up associated with cost it might increase slightly .
Speaker #9: But that I to remain expect relatively flat . The big unanswered one and very difficult to answer one is Burkina Faso . We don't see Burkina Faso as a counterparty risk , is why we which don't account for it as such .
Speaker #9: So our ECL associated with our VAT is focused entirely receivables on timing . The Burkina Faso state has always remained true to its word .
Speaker #9: In when it owes us money, it pays us. And there is a question around timing because they're under their own cash constraints.
Speaker #9: So we don't see the counterparty risk, but we remain cautious in terms of being able to commit to timing. Consequently, we're looking at alternatives where we might be able to explore some kind of factoring that allows us access to the cash.
Speaker #9: Failing that , arguably , this is going to be a slightly longer term issue , but not not one which we believe is insurmountable .
Speaker #9: We'll continue to work on it between 25 and 26 . We should see some improvement , but thereafter we'll have to wait and see whether the success of the factoring program can be repeated .
Speaker #10: Thanks a lot , guys .
Speaker #5: We are now going to proceed with our next question, and the questions come from the line of Felicity Robson from Bank of America.
Speaker #5: Please go ahead . Your line is open .
Speaker #11: Thank you for taking my question at your expecting costs above the top end of the guide , in part due to higher power costs and issues around grid stability .
Speaker #11: How can we think about the cost profile going forward ? There ? Please ?
Speaker #12: Thank you . Felicity , I think I will . Previously mentioned last quarter . We know that we don't have issues around mana , and we do still have a lot of cost of work to do .
Speaker #12: We mentioned that there are 2 or 3 key elements here is the reliance still on the self-generated power . And we are currently improving some of the initiatives .
Speaker #12: One of them being the the transformer . That will be setting up . So normally by the beginning of next year , we should be seeing an improvement , at least on the current power cost , because what that will allow us to do with that transformer is to be able to then use the grid on the underground mining .
Speaker #12: So, that's one thing to think about in Q3. What we've seen is that one-off cost due to the transition from two contractors to one contractor now, which we are very comfortable with.
Speaker #12: So with that , that means that there is a lot of productivity initiatives that we'll be putting in place . But one thing is for sure , for mana , I think what we've seen is that in terms of production , which are stable , mana contributing to the good production as overall is still generating cash .
Speaker #12: So I think for now we just need to continue putting together some initiatives in order to reduce the cost of mana .
Speaker #11: Okay . Thank you .
Speaker #12: Okay . Thank you for your .
Speaker #5: you . That Thank conclude will today's Q&A session and today's conference call . Thank you for your participation . You may now disconnect .