Q2 2026 Endeavour Mining PLC Earnings Call

Speaker #1: Young, Chief Financial Officer. Djaria Traore, Executive Vice President of Operations, and ESG, and Sonja Scarselli, Executive Vice President of Exploration and Growth. Today's call will follow our usual format: Ian will first go through the highlights of the first half of the year, Guy will present the financials, Djaria will walk you through our operating results by mine, and Sonia will provide an update on our exploration program for handing back to Ian for his closing remarks.

Speaker #1: We'll then open the line up for questions. I'll now hand over to Ian.

Speaker #2: Thank you, Jack. And hello to everyone joining us on the call today. Now, H126 was a record half-year for Endeavour. Our strong operating performance has led to record free cash flow generation, and together with our healthy balance sheet, we're well positioned to meet our strategic objectives, which prioritize organic growth and shoulder returns.

Speaker #2: Production of 564,000 ounces at an ASIC of 1,871 dollars per ounce for H1 certainly positions us firmly on track to meet our 2026 guidance, with a stronger Q4.

Speaker #1: Good day, and thank you for standing by. Welcome to ENDEAVOUR MINING, second quarter and half year 2026 results webcast. At this time, all participants are in listen-only mode.

Speaker #1: After management's presentation, there will be a question-and-answer session. So, 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 from covering analysts.

Speaker #2: Our operational performance drove record free cash flow generation of 761 million dollars. That's up 19% against H2 of last year, despite the significant but expected seasonal payments.

Speaker #1: And we ask analysts to limit themselves to two questions before jumping back into the queue. Today's conference call is being recorded and a transcript of the call will be available on ENDEAVOUR's website tomorrow.

Speaker #2: This cash flow generation supports our balance sheet, which sits in a healthy net cash position of 254 million dollars, and underpins our ability to grow the business organically and return capital to shareholders.

Speaker #1: We'd now like to hand the call over to ENDEAVOUR's Vice President of Investor Relations, Jack Garman.

Speaker #2: Hello everyone, and welcome to ENDEAVOUR's Q2 and H1 2026 results webcast. Before we start, please note our usual disclaimer. On the call today, I'm joined by Ian Cockerill, Chief Executive Officer, Guy Young, Chief Financial Officer, Djaria Traore, Executive Vice President of Operations, and ESG, and Sonja Scarselli, Executive Vice President of Exploration and Growth.

Speaker #2: On shareholder returns, today we've announced a record 301 million dollars of returns for H1. That's made up of another record, 230 million dollars of dividends, and an additional 71 million dollars of buybacks.

Speaker #2: That's more than double our minimum commitment, as we further strengthen our track record of paying significant supplemental returns. On organic growth, we remain on track for FID before the end of the year at the Assafoo project.

Speaker #2: Today's call will follow our usual format. Ian will first go through the highlights of the first half of the year. Guy will present the financials.

Speaker #2: At the same time, we're working towards our Sabudala Masawa underground expansion with the first phase of development getting underway in H2 and targeting first ore by year-end.

Speaker #2: Djaria will walk you through our operating results by mine, and Sonja will provide an update on our exploration program before handing back to Ian for his closing remarks.

Speaker #2: And on exploration, we're working towards significant resource updates at our Vindaloo Deeps and Kosara Discoveries that we expect to publish later this year. In short, we have built a high-quality, resilient business through our disciplined approach to capital allocation, that ensures we target only the highest return opportunities, preserving our high margins over the longer term.

Speaker #2: We'll then open the line Thank you, Jack.

Speaker #2: up for questions. I'll now hand over to Ian.

Speaker #3: And hello to everyone joining us on the call today. Now, H1 2026 was a record half year for ENDEAVOUR. Our strong operating performance has led to record free cash flow generation, and together with our healthy balance sheet, we're well positioned to meet our strategic objectives, which prioritize organic growth and shareholder returns.

Speaker #2: Now, this approach also underpins our ability to reinvest in organic growth to sustain this portfolio quality. While offering exposure to sector-leading shoulder returns. I'll now walk you through each of those areas in a bit more detail.

Speaker #3: Production of 564,000 ounces at an ASIC of 1,871 dollars per ounce for H1 certainly positions us firmly on track to meet our 2026 guidance, with a stronger Q4.

Speaker #2: Starting on slide 7, as I said, we produced 564,000 ounces in H1, which was stable when compared to the prior period, while our all-in sustaining margin increased by 37%, largely thanks to the increased gold prices half on half.

Speaker #3: Our operational performance drove record free cash flow generation of 761 million dollars. That's up 19% against H2 of last year, despite the significant but expected seasonal tax payments.

Speaker #2: Importantly, our margins have continued to increase, with the gold price over the last 2 years. On slide 8, given this H1 performance, we remain on track to deliver both group production and all-in sustaining cost within the full-year guidance.

Speaker #3: This cash flow generation supports our balance sheet, which sits in a healthy net cash position of $254 million, and underpins our ability to grow the business organically and return capital to shareholders.

Speaker #2: H1 production of 564,000 ounces represents approximately 52% of the low end of guidance, and we expect a stronger production profile later in the year as we move past the wet season and the elevated stripping activity in Q3, and then moving into Q4 when higher grades are expected at most of our mines.

Speaker #3: On shareholder returns, today we've announced a record 301 million dollars of returns for H1. That's made up of another record, 230 million dollars of dividends, and an additional 71 million dollars of buybacks.

Speaker #3: That's more than double our minimum commitment, as we further strengthen our track record of paying significant supplemental returns. On organic growth, we remain on track for FID before the end of the year at the Assafoo project.

Speaker #2: On costs, our H1 all-in sustaining costs were 1,871 dollars per ounce, or 1,687 dollars per ounce when adjusted for the impact of higher gold prices above the guidance price we used, principally due to the higher royalty rates at the higher price.

Speaker #3: At the same time, we're working towards our Sabadell and Massawa underground expansion, with the first phase of development getting underway in H2 and targeting first ore by year-end.

Speaker #3: And on exploration, we're working towards significant resource updates at our Vindaloo Deeps and Kosara Discoveries that we expect to publish later this year. In short, we have built a high-quality resilient business through our disciplined approach to capital allocation, that ensures we target only the highest return opportunities, preserving our high margins over the longer term.

Speaker #2: And that positions us comfortably in the lower half of the guidance range for H1. On capital, we've increased our sustaining capex guidance from 230 million dollars to 280 million, driven largely by increased ore mining and capitalized waste stripping at Hyundai and La Figa.

Speaker #2: Non-sustaining, and growth capital remain on track, with increased stripping activity. The start of the Sabudala Masawa underground expansion and the ramp-up of early works at Assafoo expected in H2.

Speaker #3: Now, this approach also underpins our ability to reinvest in organic growth to sustain this portfolio quality. While offering exposure to sector-leading shareholder returns. I'll now walk you through each of those areas in a bit more detail.

Speaker #2: On slide 9, you can see we've generated a record 1.6 billion dollars of adjusted EBITDA in H1, up 41% from the prior period, a very healthy 63% EBITDA margin.

Speaker #3: Starting on slide 7, as I said, we've produced 564,000 ounces in H1, which was stable when compared to the prior period, while our all-in sustaining margin increased by 37%, largely thanks to the increased gold prices half on half.

Speaker #2: That's been driven not only by a stronger gold price environment, but also our solid operational performance throughout the half. Moving to free cash flow on slide 10, we delivered another record 761 million dollars in H1, up 19% from the prior period, and that's equivalent to 1,350 dollars for every ounce or per ounce of free cash flow generation.

Speaker #3: Importantly, our margins have continued to increase with the gold price over the last two years. On slide 8, given this H1 performance, we remain on track to deliver both group production and all-in sustaining cost within the full-year guidance.

Speaker #2: And this is despite the seasonal tax payments that Guy will walk you through later in this presentation. Since we completed our last growth phase in 2024, we have certainly grown free cash flow in each period thanks to strong gold prices and our consistent operational performance.

Speaker #3: H1 production of 564,000 ounces represents approximately 52% of the low end of guidance, and we expect a stronger production profile later in the year as we move past the wet season and the elevated stripping activity in Q3, and then move into Q4 when higher grades are expected at most of our mines.

Speaker #2: On slide 11, this strong cash flow profile has been mirrored in our balance sheet improvement, which now stands at a healthy 254 million dollars of net cash.

Speaker #3: On costs, our H1 all-in sustaining costs were 1,871 dollars per ounce, or 1,687 dollars per ounce when adjusted for the impact of higher gold prices above the guidance price we used, principally due to the higher royalty rates at the higher price.

Speaker #2: This gives us capital allocation flexibility to deliver sector-leading shoulder returns ahead of and throughout our next growth phase. And that's exactly what we've done for H1.

Speaker #2: We've returned a record 301 million dollars to shareholders, consisting of a record 230 million dollars of dividends and 71 million dollars in buyback, and that's double our minimum commitment and nearly 40% higher than our H2 25 returns and equivalent to 40% of our free cash flow generation.

Speaker #3: And that positions us comfortably in the lower half of the guidance range for H1. On capital, we've increased our sustaining capex guidance from 230 million dollars to 280 million, driven largely by increased ore mining and capitalized waste stripping at Hyundai and La Figa.

Speaker #2: With H1, we've extended our track record of delivering sector-leading shoulder returns. Since 2021, we've returned just under 2 billion dollars, which is about 85% above our minimum commitment.

Speaker #3: Non-sustaining and growth capital remain on track, with increased stripping activity. The start of the Sabadell and Massawa underground expansion and the ramp-up of early works at Assafoo expected in H2.

Speaker #3: On slide 9, you can see we've generated a record 1.6 billion dollars of adjusted EBITDA in H1, up 41% from the prior period, a very healthy 63% EBITDA margin.

Speaker #2: And this reiterates our sustained commitment to sector-leading returns through both phases of growth, as well as cash harvesting. Now we're on track to return at least 1.1 billion dollars over the 2060-28 period, and we expect to achieve this down to even down to a conservative gold price of 3,000 dollars per ounce.

Speaker #3: That's been driven not only by a stronger gold price environment, but also our solid operational performance throughout the half. Moving to free cash flow on slide 10, we delivered another record 761 million dollars in H1, up 19% from the prior period, and that's equivalent to 1,350 dollars for every ounce or per ounce of free cash flow generation.

Speaker #2: At higher gold prices, obviously, we're well positioned to continue supplementing this return. On slide 14, and our other key strategic objective, and that is organic growth.

Speaker #2: At Assafoo, since publishing the DFS in late April, we've launched early works and are advancing on the critical path to unlock FID by year-end.

Speaker #3: And this is despite the seasonal tax payments that Guy will walk you through later in this presentation. Since we completed our last growth phase in 2024, we have certainly grown free cash flow in each period thanks to strong gold prices and our consistent operational performance.

Speaker #2: We've completed front-end engineering and design work, and long lead time item procurement for the crushers, mills, HPGR, and April feeders is now well advanced.

Speaker #2: Mining convention negotiations are on track for late Q3, and these negotiations are under the terms of the current 2014 mining code. The relocation action plan is progressing well, following successful engagement with local community leaders.

Speaker #3: On slide 11, this strong cash flow profile has been mirrored in our balance sheet improvement, which now stands at a healthy 254 million dollars of net cash.

Speaker #3: This gives us capital allocation flexibility to deliver sector-leading shareholder returns ahead of and throughout our next growth phase. And that's exactly what we've done for H1.

Speaker #2: With the assistance of government. Overall activities are ramping up in line with the plan, and we expect to declare FID and launch construction by the year-end.

Speaker #3: We've returned a record 301 million dollars to shareholders, consisting of a record 230 million dollars of dividends and 71 million dollars in buyback. And that's double our minimum commitment and nearly 40% higher than our H2 25 returns and equivalent to 40% of our free cash flow generation.

Speaker #2: On slide 15, growth isn't just about green fields. There's plenty to be done at our existing assets. The underground expansion at Sabudala Masawa is targeting more than half a million ounces of high-grade ore for the CIO processing plant, and that's drive to drive higher production over the coming years.

Speaker #3: With H1, we've extended our track record of delivering sector-leading shareholder returns. Since 2021, we've returned just under 2 billion dollars, which is about 85% above our minimum commitment.

Speaker #2: The first phase is starting, and that's focused on development and construction of the next variation decline giving us a platform for more detailed closer spaced underground drilling.

Speaker #2: Dewatering, earthworks, and power establishment is underway, with the initial fleet expected to arrive on site in Q3. We're targeting development to reach first all by year-end, with the second phase of the expansion expected to launch later this year, subject to approval.

Speaker #3: And this reiterates our sustained commitment to sector-leading returns through both phases of growth, as well as cash harvesting. Now we're on track to return at least 1.1 billion dollars over the 2060-28 period, and we expect to achieve this down to even down to a conservative gold price of 3,000 dollars per ounce.

Speaker #2: On slide 16, the combined Assafoo and Sabudala support our growth ambitions, to 1.5 million ounces by 2030. But we are not growing for the sake of growth, and we are focused on preserving and improving our margins through optimization at our existing mines.

Speaker #3: At higher gold prices, obviously, we're well positioned to continue supplementing this return. On slide 14, and our other key strategic objective, and that is organic growth.

Speaker #3: At Assafoo, since publishing the DFS in late April, we've launched early works and are advancing on the critical path to unlock FID by year-end.

Speaker #2: At Mana, for example, we're investing in the power network to ensure stability whilst also automating our underground operations in the power sense. At La Figa, we recently completed crusher upgrades and feed optimizations, which are already improving throughput and reagent consumption rates.

Speaker #3: We've completed front-end engineering and design work, and long lead-time item procurement for the crushers, mills, HPGR, and apron feeders is now well advanced.

Speaker #3: Mining convention negotiations are on track for late Q3, and these negotiations are under the terms of the current 2014 Mining Code. The relocation action plan is progressing well, following successful engagement with local community leaders.

Speaker #2: At Iti, we're optimizing our re-sign ign circuit to improve our carbon and cyanide management to improve consumables efficiency and costs. And these initiatives are focused on maximizing the value of every ounce that we produce as we grow the business.

Speaker #3: With the assistance of government. Overall activities are ramping up in line with the plan, and we expect to declare FID and launch construction by the year-end.

Speaker #2: Over and above this growth, our expiration program has this year already spent 44 million dollars, advancing our recent discoveries, Vindaloo Deeps, and Kusara deposits.

Speaker #2: These deposits could support further growth beyond the 1.5 million ounces, and help improve our asset quality certainly well into the next decade. We expect to announce exciting resource updates later this year, and Sonya's going to talk through this later on in the presentation today.

Speaker #3: On slide 15, growth isn't just about green fields. There's plenty to be done at our existing assets. The underground expansion at Sabadell and Massawa is targeting more than half a million ounces of high-grade ore for the CIO processing plant, and that's drive to drive higher production over the coming years.

Speaker #2: Before handing over to Guy, I'd just like to touch on ESG. When we launched the first phase of our ESG strategy, five years ago, we were determined to deliver tangible impact, ensuring the value we created served all of our stakeholders.

Speaker #3: The first phase is starting, and that's focused on development and construction of the next variation decline, giving us a platform for more detailed closer-spaced underground drilling.

Speaker #3: Dewatering, earthworks, and power establishment is underway, with the initial fleet expected to arrive on site in Q3. We're targeting development to reach first all by year-end, with the second phase of the expansion expected to launch later this year, subject to approval.

Speaker #2: That phase culminated last month with our inaugural five-year impact report. Between 2021 and 2025, we generated over 11.5 billion dollars in economic value for our host countries.

Speaker #2: That headline figure only tells part of the story. Beyond the numbers is where our true impact lies. Just to give you a few examples, on health, our targeted programs have successfully successfully driven a 77% reduction in malaria across our workforce since 2021, as well as the communities from which that workforce comes from.

Speaker #3: On slide 16, the combined Assafoo and Sabadell support our growth ambitions, to 1.5 million ounces by 2030. But we are not growing for the sake of growth, and we are focused on preserving and improving our margins through optimization at our existing mines.

Speaker #3: At Mana, for example, we're investing in the power network to ensure stability whilst also automating our underground operations in the power sense. At La Figa, we recently completed crusher upgrades and feed optimizations, which are already improving throughput and reagent consumption rates.

Speaker #2: On education, we've created more than 1,800 internships, helping young people develop the skills to launch their careers. On economic empowerment, through more than 215 agricultural initiatives, we've supported more than 5,000 direct beneficiaries and their families in building sustainable livelihoods.

Speaker #3: At Iti, we're optimizing our re-signed circuit to improve our carbon and cyanide management to improve consumables efficiency and costs. And these initiatives are focused on maximizing the value of every ounce that we produce as we grow the business.

Speaker #2: And so as we look forward towards 2030, our conviction remains unchanged. Creating shared value that benefits all of our stakeholders is certainly key to sustaining our success.

Speaker #3: Over and above this growth, our expiration program has this year already spent 44 million dollars, advancing our recent discoveries, Vindaloo Deeps, and Cosara deposits.

Speaker #2: And with that introduction, let me hand you over to Guy to take you through the detailed financials. Guy, over to you.

Speaker #3: Thanks, Ian. And hello everyone. I'll now walk through our financial results for the second quarter. Production and unit costs were broadly stable quarter on quarter, but EBITDA and earnings were lower.

Speaker #3: These deposits could support further growth beyond the 1.5 million ounces, and help improve our asset quality certainly well into the next decade. We expect to announce exciting resource updates later this year, and Sonya's going to talk through this later on in the presentation today.

Speaker #3: Primarily due to a 10% decline in realized gold prices. The seasonal impact of higher tax payments accounts for the lower cash flow, as previously guided.

Speaker #3: On slide 21, in Q2 we produced 283,000 ounces, in line with Q1 levels, as higher production at Iti and Hyundai was offset by lower production at Mana, La Figa, and Sabudala Masawa.

Speaker #3: Before handing over to Guy, I'd just like to touch on ESG. When we launched the first phase of our ESG strategy, five years ago, we were determined to deliver tangible impact, ensuring the value we created served all of our stakeholders.

Speaker #3: All in sustaining costs of 1,907 dollars per ounce was a slight increase over Q1, due to lower gold production and sales at Sabudala Masawa and Mana.

Speaker #3: That phase culminated last month with our inaugural five-year impact report. Between 2021 and 2025, we generated over 11.5 billion dollars in economic value for our host countries.

Speaker #3: Increased sustaining capital at Hyundai, related to the ramp-up of stripping activity at the Vindaloo Main Phase 3 cutback, and higher processing costs at Sabudala Masawa driven by scheduled maintenance.

Speaker #3: That headline figure only tells part of the story. Beyond the numbers is where our true impact lies. Just to give you a few examples, on health, our targeted programs have successfully driven a 77% reduction in malaria across our workforce since 2021, as well as the communities from which that workforce comes from.

Speaker #3: Despite slightly lower gold prices quarter on quarter, we still generated a healthy all-in sustaining margin of 56%, or 2,441 dollars per ounce. We are firmly on track to achieve our full-year guidance.

Speaker #3: In Q3, we will see some higher stripping and lower grades, coupled with the West season impact that will translate to increased ASIC. But we expect to see a material uplift in grades following the wet season and the completion of our stripping programs in Q4, which will strongly reverse this.

Speaker #3: On education, we've created more than 1,800 internships, helping young people develop the skills to launch their careers. On economic empowerment, through more than 215 agricultural initiatives, we've supported more than 5,000 direct beneficiaries and their families in building sustainable livelihoods.

Speaker #3: Onto slide 22, despite the gold price-driven step-down in EBITDA, our EBITDA margins remain resilient at 60%, reflecting the high quality of our operations. On slide 23, our underlying operating cash flow remained robust during the quarter, absorbing our typical seasonal cash tax payments, comprising provisional income tax payments for the prior year, as well as withholding tax payments relating to the cash that we will upstream from our operating entities this year.

Speaker #3: And so as we look forward towards 2030, our conviction remains unchanged. Creating shared value that benefits all of our stakeholders is certainly key to sustaining our success.

Speaker #3: And with that introduction, let me hand you over to Guy to take you through the detailed financials. Guy, over to you.

Speaker #2: Thanks, Ian. And hello, everyone. I'll now walk through our financial results for the second quarter. Production and unit costs were broadly stable quarter on quarter, but EBITDA and earnings were lower.

Speaker #3: This expected impact was compounded by the lower realized gold prices and the higher operating costs, as mentioned earlier. Given our expected H2 weighted operating performance, with production expected to peak in Q4, and with the majority of the year's cash taxes behind us, we are well positioned to continue generating strong cash flow in H2.

Speaker #2: Primarily due to a 10% decline in realized gold prices. The seasonal impact of higher tax payments accounts for the lower cash flow, as previously guided.

Speaker #2: On slide 21, in Q2, we produced 283,000 ounces, in line with Q1 levels, as higher production at Iti and Hyundai was offset by lower production at Mana, La Figa, and Sabadell and Massawa.

Speaker #3: Looking at the significant quarter on quarter operating cash flow movements in more detail on slide 24, firstly, the decline in realized gold prices reduced cash flows by 129 million dollars, while stable quarterly operational performance translated into a marginal decrease of 17 million dollars due to slightly higher operating expenses.

Speaker #2: All in sustaining costs of 1,907 dollars per ounce was a slight increase over Q1, due to lower gold production and sales at Sabadell and Massawa and Mana.

Speaker #3: Then, as mentioned earlier, income taxes paid increased by 419 million dollars in line with the annual timing of our cash tax payments. Finally, working capital was an inflow of 52 million dollars this quarter, and an increase of 144 million dollars compared to last quarter's outflow.

Speaker #2: Increased sustaining capital at Hyundai, related to the ramp-up of stripping activity at the Vindaloo Main Phase 3 cutback, and higher processing costs at Sabadell and Massawa driven by scheduled maintenance.

Speaker #2: Despite slightly lower gold prices quarter on quarter, we still generated a healthy all-in sustaining margin of 56%, or 2,441 dollars per ounce. We are firmly on track to achieve our full-year guidance.

Speaker #3: This was mainly driven by an increase in supplier payables and timing of gold sales and VAT refunds in Côte d'Ivoire and Senegal. This inflow was partially offset by a build-up of consumables at Sabudala Masawa and Hyundai, and a build-up of stockpiles at Hyundai, Iti, Mana, and Sabudala Masawa.

Speaker #2: In Q3, we will see some higher stripping and lower grades, coupled with the West season impact that will translate to increased ASIC. But we expect to see a material uplift in grades following the wet season, and the completion of our stripping programs in Q4, which will strongly reverse this.

Speaker #3: Moving on to slide 25, our free cash flow of 149 million dollars was lower during Q2, as expected due to the higher seasonal taxes, lower realized gold prices, the ramp-up in stripping activities, and the strategic investments in our new venture exploration partners, Altair Minerals and Kulu Gold.

Speaker #2: Onto slide 22, despite the gold price-driven step-down in EBITDA, our EBITDA margins remain resilient at 60%, reflecting the high quality of our operations. On slide 23, our underlying operating cash flow remained robust during the quarter, absorbing our typical seasonal cash tax payments, comprising provisional income tax payments for the prior year, as well as withholding tax payments relating to the cash that we will upstream from our operating entities this year.

Speaker #3: That said, for the first half of the year, we're pleased to have delivered another record free cash flow performance of 761 million dollars, and looking forward, we remain focused on maximizing free cash flow by maintaining our capital allocation and cost discipline.

Speaker #3: At the end of Q2, we remain in a strong net cash position of 254 million dollars, during Q2 we generated 317 million dollars from our operations.

Speaker #2: This expected impact was compounded by the lower realized gold prices, and the higher operating costs as mentioned earlier. Given our expected H2 weighted operating performance, with production expected to peak in Q4, and with the majority of the year's cash taxes behind us, we are well positioned to continue generating strong cash flow in H2.

Speaker #3: Investing activities of 169 million dollars including included sustaining capital of 75 million dollars, 53 million dollars of non-sustaining capital, and 9 million of growth capital.

Speaker #2: Looking at the significant quarter on quarter operating cash flow movements in more detail on slide 24, firstly, the decline in realized gold prices reduced cash flows by 129 million dollars, while stable quarterly operational performance translated into a marginal decrease of 17 million dollars due to slightly higher operating expenses.

Speaker #3: In addition, we invested approximately 25 million dollars through our new ventures program. Financing activities included a net 315 million dollar drawdown of the group's RCF, offsetting the dividends paid to shareholders of 200 million dollars, share buybacks of 44 million dollars, payment of financing fees of 22 million dollars, and payments to minority shareholders of 14 million dollars.

Speaker #2: Then, as mentioned earlier, income taxes paid increased by $419 million, in line with the annual timing of our cash tax payments. Finally, working capital was an inflow of $52 million this quarter, and an increase of $144 million compared to last quarter's outflow.

Speaker #3: This strong balance sheet position provides significant financial flexibility to continue to allocate capital towards both organic growth and our shareholder returns. Finally, on slide 27, I'll walk through some of the net earnings highlights, focusing just on the key line items.

Speaker #2: This was mainly driven by an increase in supplier payables and timing of gold sales and VAT refunds in Côte d'Ivoire and Senegal. This inflow was partially offset by a build-up of consumables at Sabadell and Massawa and Hyundai, and a build-up of stockpiles at Hyundai, Iti, Mana, and Sabadell and Massawa.

Speaker #3: In Q2, earnings from mine operations were 613 million dollars. We recorded a loss on financial instruments of 28 million, comprised mainly of foreign exchange losses, driven by the strengthening USD on our net asset balance sheet position.

Speaker #2: Moving on to slide 25, our free cash flow of 149 million dollars was lower during Q2, as expected due to the higher seasonal taxes, lower realized gold prices, the ramp-up in stripping activities, and the strategic investments in our new venture exploration partners, Altair Minerals and Kulu Gold.

Speaker #3: Along with a fair value adjustment on marketable securities. Current income tax expenses increased as expected, driven by significantly higher recognized withholding tax expenses following local board approvals for our cash upstreaming.

Speaker #3: Deferred tax recovery increased by 234 million, compared to an expense in the prior year in the prior quarter, reflecting the reversal of deferred tax liabilities after local board approval and payment of withholding taxes associated with cash upstreaming in Q2.

Speaker #2: That said, for the first half of the year, we're pleased to have delivered another record free cash flow performance of 761 million dollars, and looking forward, we remain focused on maximizing free cash flow by maintaining our capital allocation and cost discipline.

Speaker #3: Lastly, add-back adjustments included the loss in financial instruments, other expenses of 21 million dollars, and a non-cash tax adjustment of 10 million dollars related to foreign exchange on deferred tax, amounting to 57 million in Q2.

Speaker #2: At the end of Q2, we remain in a strong net cash position of 254 million dollars. During Q2, we generated 317 million dollars from our operations.

Speaker #3: As a result, our adjusted net earnings were 392 million dollars for the quarter, or $1.25 per share. Thank you for your attention, and I'll now hand over to Djaria to walk you through our operating performance.

Speaker #2: Investing activities of 169 million dollars including sustaining capital of 75 million dollars, 53 million dollars of non-sustaining capital, and 9 million of growth capital.

Speaker #2: Thank you, Guy. And hello, everyone. I will begin by discussing safety. Unfortunately, this quarter we've reported a fatality when one of our colleagues, Sam Daouda, who was a team leader with one of our contractors, tragically lost his life during water drainage activities on the 29th May at our Lafayette mine.

Speaker #2: In addition, we invested approximately 25 million dollars through our new ventures program. Financing activities included a net 315 million dollar drawdown of the group's RCF, offsetting the dividends paid to shareholders of 200 million dollars, share buybacks of 44 million dollars, payment of financing fees of 22 million dollars, and payments to minority shareholders of 14 million dollars.

Speaker #2: Any loss of life at our operations is unacceptable. Following the incident, we've completed a comprehensive investigation which identified several key recommendations. These are currently being implemented, particularly in relation to ways of working with and appropriately supervising contractors, reinforcing safety trainings, including immediate changes around contractors onboarding.

Speaker #2: This strong balance sheet position provides significant financial flexibility to continue to allocate capital towards both organic growth and our shareholder returns. Finally, on slide 27, I'll walk through some of the net earnings highlights, focusing just on the key line items.

Speaker #2: In Q2, earnings from mine operations were 613 million dollars. We recorded a loss on financial instruments of 28 million, comprised mainly of foreign exchange losses driven by the strengthening USD on our net asset balance sheet position.

Speaker #2: But as well as mandatory refresher courses for all frontline supervisors, and a supervisor capability program. To reinforce the obligations to our contractors to be 100% aligned with ENDEAVOUR Health, Safety and Environment standard, we would also be holding an annual CEO HSE workshop.

Speaker #2: Along with a fair value adjustment on marketable securities. Current income tax expenses increased as expected, driven by significantly higher recognized withholding tax expenses following local board approvals for our cash upstreaming.

Speaker #2: Deferred tax recovery increased by 234 million, compared to an expense in the prior year in the prior quarter, reflecting the reversal of deferred tax liabilities after local board approval, and payment of withholding taxes associated with cash upstreaming in Q2.

Speaker #2: This workshop will convene the CEOs of our key contractors in practical engagement, focused on HSE performance, governance, and culture across all our mining operations.

Speaker #2: Despite this tragic incident, our trailing 12-month total recordable injury frequency rate of 0.72 remains low. But we will continuously work toward achieving a zero incident work environment.

Speaker #2: Lastly, add-back adjustments included the loss in financial instruments, other expenses of 21 million dollars, and a non-cash tax adjustment of 10 million dollars related to foreign exchange on deferred tax, amounting to 57 million in Q2.

Speaker #2: On slide 13, our first half performance has positioned us firmly on track to achieve our full-year guidance. H1 productions was approximately 52% of the low end of the production guidance, with a stronger second half expected, which is driven by a particularly strong quarter four from Hyundai, Eti, and Sabudala Masawa, due to higher grid in the mining sequence.

Speaker #2: As a result, our adjusted net earnings were 392 million dollars for the quarter, or a dollar 25 per share. Thank you for your attention, and I'll now hand over to Djaria to walk you through our operating performance.

Speaker #1: Thank you, Guy, and hello everyone. I will begin by discussing safety. Unfortunately, this quarter we've reported a fatality when one of our colleagues, Sam Daouda, who was a team leader with one of our contractors, tragically lost his life during water drainage activities on the 29th of May at our La Figa mine.

Speaker #2: While on all new sustaining costs, our H1 performance positioned us in the lower half of the cost guidance range, on a royalty-adjusted basis, with cost improvement expected in quarter four, particularly due to the expected higher grid production and gold sales.

Speaker #1: Any loss of life at our operations is unacceptable. Following the incident, we've completed a comprehensive investigation which identified several key recommendations. These are currently being implemented, particularly in relation to ways of working with and appropriately supervising contractors, reinforcing safety trainings, including immediate changes around contractors onboarding.

Speaker #2: It's important to highlight the productivity initiatives we are driving throughout the portfolio, to reaffirm reaffirm our operational excellence. Our focus remains on controlling our costs with proactive business initiatives across the value chain from blast optimizations to short-distance haulage.

Speaker #2: On guidance, at Lafayette, the better than expected throughput in H1 has positioned the mine to achieve productions in the top handful of the guidance range, with costs in the lower half.

Speaker #1: But as well as mandatory refresher courses for all frontline supervisors, and a supervisor capability program. To reinforce the obligations to our contractors to be 100% aligned with ENDEAVOUR Health, Safety and Environment standard, we would also be holding an annual CEO HSE workshop.

Speaker #2: At Mana, lower grids following the completion of the CEO underground deposit, the deferral of the banner camp open pits, and also the pause in mining are the Avira Port of Wona underground, mean we are expecting production below the low end of the range, with costs above the top end.

Speaker #1: This workshop will convene the CEOs of our key contractors in practical engagement, focused on HSE performance, governance, and culture across all our mining operations.

Speaker #2: At a group level, we are firmly on track to deliver our full-year guidance. On slide 31, I'll start with Hyundai. We increased production during the quarter, as we accelerated oil mining in the Carrie West pit.

Speaker #1: Despite this tragic incident, our trailing 12-month total recordable injury frequency rate of 0.72 remains low. But we will continue to work toward achieving a zero incident work environment.

Speaker #2: Which has provided good grid, soft oxide ore, which has supported a higher levels of throughput. Costs have increased slightly, as stripping activity at Vendaloo Main 3 accelerated.

Speaker #1: On slide 13, our first half performance has positioned us firmly on track to achieve our full-year guidance. H1 production was approximately 52% of the low end of the production guidance, with a stronger second half expected, which is driven by a particularly strong quarter four from Hyundai, Eti, and Sabadell and Massawa, due to higher grid in the mining sequence.

Speaker #2: Similar to all our assets, at Hyundai we have been looking at several optimizations initiatives. We've been improving blast force fragmentation and reducing truck cycle times and haulage distance through more efficient waste then offset external cost pressures.

Speaker #1: While on all-in sustaining costs, our H1 performance positioned us in the lower half of the cost guidance range, on a royalty-adjusted basis, with cost improvements expected in Q4, particularly due to the expected higher grid production and gold sales.

Speaker #2: Hyundai is well on track for guidance, with lower grid expected in quarter three, and a significant improvement in grid in quarter four. Following the completion of wet stripping at the Vendaloo Main 3 pit.

Speaker #1: It's important to highlight the productivity initiatives we are driving throughout the portfolio, to reaffirm our operational excellence. Our focus remains on controlling our costs with proactive business initiatives across the value chain from blast optimizations to short-distance haulage.

Speaker #2: We've increased our sustaining capital guidance, as we have accelerated waste stripping at Vendaloo Main, and ore mining at Carrie West. And we preorder some long lead mining equipment required for next year.

Speaker #2: Turning now to Eti Mine on slide 32. Production increased this quarter, as we source higher grid from the Le Plaque and Bakatua pits. Coupled with lower plant maintenance compared to prior quarter, which result in overall good plant performance, the higher production and sales also supported a slight improvement in our oil sustaining cost.

Speaker #1: On guidance, at La Figa, the better than expected throughput in H1 has positioned the mine to achieve production in the top half of the guidance range, with costs in the lower half.

Speaker #1: At MANA, lower grids following the completion of the CEO underground deposit, the deferral of the BANACAMP open pit, and also the pause in mining are the Avira port of Wona underground, meaning we are expecting production below the low end of the range, with costs above the top end.

Speaker #2: Eti is on track to achieve its production and cost guidance. Higher grids are expected in quarter four at Le Plaque, while at Walter mining activity are advancing into higher grid area of the pit.

Speaker #1: At a group level, we are firmly on track to deliver our full-year guidance. On slide 31, I'll start with Hyundai. We increased production during the quarter as we accelerated ore mining in the Kari West pit.

Speaker #2: Which is anticipated to positively impact production. Mana on slide 33. At Mana, production decreased to 29,000 ounces, due to lower grid, as we finished mining the CEO deposit in quarter one.

Speaker #1: Which has provided good grid, soft oxide ore, which has supported a higher levels of throughput. Costs have increased slightly as stripping activity at Vendaloo Main 3 accelerated.

Speaker #2: The lower production resulted in higher oil in sustaining cost. Which were compounded by an increase in sustaining capital development and the Wona deposit, during H1, Mana has produced less than expected.

Speaker #1: Similar to all our assets, at Hyundai we have been looking at several optimizations initiatives. We've been improving blast force fragmentation and reducing truck cycle times and haulage distance through more efficient waste dumping to increase productivity and then offset external cost pressures.

Speaker #2: Due to the quicker than expected depletions of CEO, but also the deferral of the startup of mining at the banner camp open pit, to later in the year.

Speaker #2: As a result, Mana's production is expected to be below the end, the low end of the guidance range. With costs above the top end of the range.

Speaker #1: Hyundai is well on track for guidance, with lower grid expected in quarter three, and a significant improvement in grid in quarter four. Following the completion of wet stripping at the Vendaloo Main 3 pit.

Speaker #2: During H2, mining will focus on the Wona deposit, with lower turns in quarter three, while higher turns and grid are expected in quarter four.

Speaker #1: We've increased our sustaining capital guidance as we have accelerated waste stripping at Vendaloo Main and ore mining at Kari West. We also preordered some long-lead mining equipment required for next year.

Speaker #2: Unfortunately, during the month of July, as a precaution, we paused mining activities in the Avira portion of the Wona underground mine. As a factor appeared on the surface in the depleted Wona open pit.

Speaker #1: Turning now to Eti Mine on slide 32. Production increased this quarter as we sourced higher grid from the Le Plaque and Bakatua pit. Coupled with lower plant maintenance compared to prior quarter, which resulted in overall good plant performance, the higher production and sales also supported a slight improvement in our oil sustaining cost.

Speaker #2: Above the Avira deposit. But we also expect to resume mining activities in the majority of the Avira deposit in mid-quarter three, subject of course to our ongoing monitoring.

Speaker #2: We will be pushing productions, while we also explore opportunities to get as close as possible to the guided range. Given the strong performance from the rest of the portfolio, we do not see any impact on group level guidance.

Speaker #1: Eti is on track to achieve its production and cost guidance. Higher grids are expected in quarter four at Le Plaque, while at Walter mining activity are advancing into higher grid area of the pit.

Speaker #2: With Lafayette expected to more than compensate any shortfall at Mana. One of the many benefits of operating such a high quality portfolio. Moving to Sabudala on slide 34.

Speaker #1: Which is anticipated to positively impact production. MANA on slide 33. At MANA, production decreased to 29,000 ounces due to lower grid, as we finished mining the CEO deposit in quarter one.

Speaker #2: The production at Sabudala Masawa decreased due to lower throughput in the CIL, but also lower recovery rate at both plants. The throughput was lower due to maintenance in the plants, the recovery through the CIL were impacted, but semi-refractory ore, from the the Nyaka Ferry East pit.

Speaker #1: The lower production resulted in higher oiling sustaining cost. Which were compounded by an increase in sustaining capital development and the Wona deposit, during H1, MANA has produced less than expected, due to the quicker than expected depletions of CEO, but also the deferral of the startup of mining at the BANACAMP open pit, to later in the year.

Speaker #2: While the biased recoveries were lower, due to maintenance activities planned. The oil in sustaining costs increased, as we invested in additional mining fleets, and increased our waste stripping at the Delia, but also Masawa Central Zone pits.

Speaker #1: As a result, MANA's production is expected to be below the low end of the guidance range. With costs above the top end of the range, during H2, mining will focus on the Wona deposit, with lower tonnes in Q3, while higher tonnes and grade are expected in Q4.

Speaker #2: Looking forward, we expect a stronger second half of the year. Particular in quarter four, when higher grids from the Nyaka Ferry West, but also Delia South pit, will increase productions in the CIL plants, while the throughput is expected to continue improving, through the biox plant.

Speaker #1: Unfortunately, during the month of July, as a precaution, we've paused mining activities in the Avira portion of the Wona underground mine, as a factor appeared on the surface in the depleted Wona open pit.

Speaker #2: But as Ian mentioned earlier, we are also starting the first phase of the development of the high grid Guloma underground deposit. With a target to hit first all towards the end of this year.

Speaker #1: Above the Avira deposit. But we also expect to resume mining activities in the majority of the Avira deposit in mid-quarter three, subject of course to our ongoing monitoring.

Speaker #2: These underground expansion is an important stepping stone towards higher levels of production at Sabudala Masawa, bringing in significantly higher grids into the CIL processing plants.

Speaker #1: We will be pushing productions, while we also explore opportunities to get as close as possible to the guided range. Given the strong performance from the rest of the portfolio, we do not see any impact on group level guidance.

Speaker #2: At Lafayette on slide 35. In quarter two production, quarter two production decreased slightly, as we mine and process lower grids from the main pit.

Speaker #1: With La Figa expected to more than compensate any shortfall at MANA. One of the many benefits of operating such a high quality portfolio. Moving to Sabadella on slide 34.

Speaker #2: The oil in sustaining costs has improved, as the sustaining waste stripping activity was largely completed during the quarter. We've had a very strong first half of the year at Lafayette.

Speaker #2: Producing nearly 60% of the guidance midpoint already. Thanks to the throughput in H1, at performing designing plate, but nearly 10% consistently. Lafayette is on track to achieve the top half of its production guidance, with costs in the lower half of the range.

Speaker #1: The production at Sabadella Masawa decreased due to lower throughput in the CIL, but also lower recovery rate at both plants. The throughput was lower due to maintenance in the plants, the recovery through the CIL were impacted, but semi-refractory ore, from the Delia Main pit, but also the Nyaka Ferry East pit.

Speaker #2: Unlike the rest of the portfolio, the performance at Lafayette is expected to be weighted toward H1. With slightly lower grids and slightly lower throughput expected in H2, due to lower grid from the main pit and the wet season impact in quarter three respectively.

Speaker #1: While the biased recoveries were lower due to maintenance activities planned, the all-in sustaining costs increased, as we invested in additional mining fleets and increased our waste stripping at the Delia, but also the Masawa Central Zone pit.

Speaker #2: Thank you everyone, and I will now hand to Sonia to walk you through the exploration highlight.

Speaker #1: Looking forward, we expect a stronger second half of the year, particularly in quarter four, when higher grids from the Nyaka Ferry West, but also Delia South pit, will increase productions in the CIL plants, while the throughput is expected to continue improving, through the biased plants.

Speaker #1: Thank you Djaria and hello everyone. I wanted to briefly provide an update on exploration at three of our exciting projects. At our Honda mine, we have discovered an extension to our Vindaloo main deposit, called Vindaloo Dips.

Speaker #1: But as Ian mentioned earlier, we are also starting the first phase of the development of the high grid Guloma underground deposit. With a target to hit first all towards the end of this year.

Speaker #1: Vindaloo Dips is located immediately adjacent to the processing plant. It can be accessed with limited development from the bottom of the Vindaloo main pit.

Speaker #1: The resort is expected to be a large, high-grade underground resort, and we have already completed the drilling program with a maiden resorts expected later in H2.

Speaker #1: This underground expansion is an important stepping stone towards higher levels of production at Sabadella Masawa, bringing in significantly higher grids into the CIL processing plants.

Speaker #1: Given the size, grade, and proximity to the plant, it could offer significant production and life of mine upside in the near term at Honda, and importantly, this is not included in our 1.5 million gross outlook.

Speaker #1: At La Figa on slide 35. In quarter two production, quarter two production decreased slightly, as we mine and process lower grids from the main pit.

Speaker #1: We have also set out from the Vindaloo Dip deposit toward the south and identified another deposit called Vindaloo Dip Southeast, which appears to be a fault of fat continuation of Vindaloo Dip.

Speaker #1: The oiling sustaining costs has improved, as the sustaining waste stripping activity was largely completed during the quarter. We've had a very strong first half of the year at La Figa.

Speaker #1: Producing nearly 60% of the guidance midpoint already. Thanks to the throughput in H1, at performing design nameplates by nearly 10% consistently. La Figa is on track to achieve the top half of its production guidance, with costs in the lower half of the range.

Speaker #1: We are currently drilling Vindaloo Dip Southeast, and expect to define a maiden resource there next year. At Sabudala Masawa, our exploration program is advancing the Calvara discovery very quickly.

Speaker #1: We currently have seven drill rigs working on defining updated M&I resources by year end. Calvara is a target that is located approximately 35 kilometers south of the Sabudala Masawa processing plant.

Speaker #1: Unlike the rest of the portfolio, the performance at La Figa is expected to be weighted toward H1. With slightly lower grids and slightly lower throughput expected in H2, due to lower grid from the main pit and the wet season impact in quarter three respectively.

Speaker #1: It has a 10 kilometer long mineralized trend that we are drilling in phases starting with the Calvara main in the north. We believe Calvara is non-refractory and should be amenable for processing through our Sabudala CIL plant, potentially supporting higher production for longer, at Sabudala Masawa.

Speaker #1: Thank you everyone, and I will now hand to Sonia to walk you through the exploration highlights.

Speaker #2: Thank you Djaria and hello everyone. I wanted to briefly provide an update on exploration at three of our exciting projects. At our Honda mine, we have discovered an extension to our Vindaloo main deposit, called Vindaloo Dips.

Speaker #1: On slide 39, at Asafu, we already have a 5 million ounces of high-grade resources defined, supporting a 16-year mine life. We have already defined 0.2 million ounces at the pallet trend three deposit, located 1 kilometer west of Asafu, and we have set out again to the pallet trend two target, located only 4 kilometers west of Asafu.

Speaker #2: Vindaloo Dips is located immediately adjacent to the processing plant, and can be accessed with limited development from the bottom of the Vindaloo main pit.

Speaker #2: The resort is expected to be a large high grade underground resort, and we have already completed the drilling program with a made in resource expected later in H2.

Speaker #1: Mineralization at pallet two is hosted in the Burimian rocks and the Tarquayian sands, so we are targeting both type of mineralization and hope to add incremental resources into the overall endowment at Asafu next year.

Speaker #2: Given the size, grade, and proximity to the plant, it could offer significant production and life-of-mine upside in the near term at Honda. Importantly, this is not included in our 1.5 million gross outlook.

Speaker #1: Thank you everyone. I will end back to Ian for his closing remarks.

Speaker #2: We have also stepped out from the Vindaloo Dip deposit toward the south and identified another deposit called Vindaloo Dip Southeast, which appears to be a fault of fat continuation of Vindaloo Dip.

Speaker #3: Thanks very much, Sonia. Before we open up for Q&A, I just wanted to briefly reiterate our approach to value creation. Here at ENDEAVOUR, we view exploration and project development as two of our most important value creation levers.

Speaker #2: We are currently drilling Vindaloo Dip Southeast, and expect to define a made in resource there next year. At Sabadella Masawa, our exploration program is advancing the Calzara discovery very quickly.

Speaker #3: We have consistently discovered more than we have produced, and we have done this at a sector-leading discovery cost, adding top-tier projects like Asafu into our pipeline.

Speaker #3: We have a strong track record in building these projects efficiently and on budget, successfully expanding the portfolio organically. And we have built a high-quality, cash-generative portfolio that has a lot of opportunity for further expansion and optimization within it.

Speaker #2: We currently have seven drill rigs working on defining updated M&I resources by year end. Calzara is a target that is located approximately 35 kilometers south of the Sabadella Masawa processing plant.

Speaker #2: It has a 10 kilometer long mineralized trend that we are drilling in phases starting with the Calzara main in the north. We believe Calzara is non-refractory and should be amenable for processing through our Sabadella CIL plant, potentially supporting higher production for longer at Sabadella Masawa.

Speaker #3: And it's this cash flow generation, coupled with our healthy balance sheet, that puts us in a strong position to continue delivering not only sector-leading shell returns, but also sector-leading organic growth.

Speaker #3: And with that, let me hand over to the operator, and we'll start taking Q&A. Thank you.

Speaker #1: Thank you. To ask a question, you will need to press star one and one on your telephone, and wait for your name to be announced.

Speaker #2: On slide 39, at Asafu, we already have a 5 million ounces of high grade resources defined, supporting a 16 year mine life. We have already defined 0.2 million ounces at the pallet trend three deposit, located 1 kilometer west of Asafu.

Speaker #1: And to withdraw your question, please press star one and one again. Please stand by while we compile the Q&A roster. Thank you. We will now take our first question.

Speaker #2: And we have stepped out again to the pallet trend two target, located only 4 kilometers west of Asafu. Mineralization at pallet two is also in the perimeter rocks and the Tarquay and Sands, so we are targeting both type of mineralization and hope to add incremental resources into the overall endowment at Asafu next year.

Speaker #1: This is from the line of Ovais Habib from Scotiabank. Please go ahead.

Speaker #3: Thanks, operator. Hi Ian and Deborah team. Congrats on a good quarter. And a good beat to our estimates. So looking good in Q2. A couple of questions from me.

Speaker #3: Number one, starting off at Sabudala, looks like you're moving in the right direction with the new oxide discoveries at Kavasara. You're looking at going underground at Guluma and Karakonda.

Speaker #2: Thank you everyone. I will end back to Ian for his closing remarks.

Speaker #1: Thanks very much, Sonia. Before we open up for Q&A, I just wanted to briefly reiterate our approach to value creation. Here at ENDEAVOUR, we view exploration and project development as two of our most important value creation levers.

Speaker #3: Ian, internally, is there a target in mind as to what this operation can do once you bring all these targets in? Can we expect to get back to that 375 to 400,000 ounce level at this operation?

Speaker #1: We have consistently discovered more than we have produced, and we have done this at a sector-leading discovery cost, adding top-tier projects like Asafu into our pipeline.

Speaker #2: Look, I think the honest answer to that question, Ovais, is that is not impossible. But the question is, what would be a higher yet sustainable level of production?

Speaker #1: We have a strong track record in building these projects efficiently and on budget, successfully expanding the portfolio organically. And we have built a high quality cash generative portfolio that has a lot of opportunity for further expansion and optimization within it.

Speaker #2: And personally, I would feel much more comfortable that when all these things come to fruition, somewhere in the mid-300s, as a more sustainable level of production I think for modeling purposes and for aspiration purposes, I think that's more appropriate.

Speaker #1: And it's this cash flow generation coupled with our healthy balance sheet, that puts us in a strong position to continue delivering not only sector leading shell returns, but also sector leading organic growth.

Speaker #2: Clearly, if we can beat that, we will do. But let's build up from where we are now, but importantly, get ourselves into a steady state condition and move away from this boom and bust, which is sadly characterized at Sabudala, and let's get into a more steady state consistent predictable level of performance.

Speaker #1: And with that, let me hand over to the operator, and we'll start taking Q&A. Thank you.

Speaker #3: Thank you. To ask a question, you will need to press star one and one on your telephone, and wait for your name to be announced.

Speaker #3: And to withdraw your question, please press star one and one again. Please stand by while we compile the Q&A roster. Thank you. We will now take our first question.

Speaker #2: That would be my preference.

Speaker #3: I think that would be the preference of the market as well. So I think that's the right way to think about it. So thanks for that.

Speaker #3: Next question, I may say it would be for Sonia. Looks like Sonia, you're very excited on the potential of Winderoe Deeps, Kavasara as well.

Speaker #3: This is from the line of Obeis Habib from Scotiabank. Please go ahead.

Speaker #1: Thanks operator. Hi Ian and ENDEAVOUR team. Congrats on a good quarter. And a good beat to our estimates. So looking good in Q2. A couple of questions from me.

Speaker #3: I mean, you've got seven real rigs at Kavasara and looks like that could kind of move towards coming into the production profile. At Sabudala, and that's become a focus very quickly.

Speaker #1: Number one, starting off at Sabadella, looks like you're moving in the right direction with the new oxide discoveries that Calzara you're looking at going underground at Guluma and Karakonda.

Speaker #3: Are there any other targets we should be keeping an eye on around Iti or Lafigue or any of those other assets that could kind of move the needle?

Speaker #1: Thanks a lot, Ovais, for the question. Look, in Sabudala Masawa, we are talking a length of Calzara, but I assure you it's not the only target.

Speaker #1: Ian, internally, is there a target in mind as to what this operation can do once you bring all these targets in? Can we expect to get back to that 375 to 400,000 ounce level at this operation?

Speaker #1: We actually have identified through a complete new look at the entire area, multiple targets. We leveraged our understanding of the mineral system applied AI tools, and we have identified over 23 targets.

Speaker #4: Look, I think the honest answer to that question, Obeis, is that is not impossible. But the question is, what would be a higher yet sustainable level of production?

Speaker #1: So there will be plenty more beyond the Calzara. Now, in the other region, Iti, we're really excited from the results that we have been having what we call the Iti Eastern Board.

Speaker #4: And personally, I would feel much more comfortable that when all these things come to fruition, somewhere in the mid 300s, as a more sustainable level of production, I think for modeling purposes and for aspiration purposes, I think that's more appropriate.

Speaker #1: This is located south-east of our current operation. If you think where La Plaque Open Pit is, it's containing the two. La Plaque, from La Plaque to the south, and a 10-kilometer corridor where we have identified a continuous structural setting that is mineralized north-south and up and down.

Speaker #4: Clearly, if we can beat that, we will do. But let's build up from where we are now, but importantly, get ourselves into a steady state condition and move away from this boom and bust, which has sadly characterized Sabadella.

Speaker #1: We have tested in the past bits and pieces, but now we are connecting all that portion together. This is definitely a big excitement for Iti, and we will be busy between this year and next year to upgrade the resources in the area.

Speaker #4: And let's get into a more steady state consistent predictable level of performance. That would be my preference.

Speaker #1: I think that would be the preference of the market as well. So I think that's a right way to think about it. So thanks for that.

Speaker #1: Next question, I may say, would be for Sonia. Looks like Sonia, you're very excited on the potential of Vindaloo Dip, Calzara as well. I mean, you've got seven real rigs at Calzara, and looks like that could kind of move towards coming into the production profile at Sabadella.

Speaker #1: And more to come toward the end of the year. In Lafigue we're actually progressing in third resources, around the Lafigue and May Pit. That will be moved into indicated by the end of this year, as well as two more target one and target 11, where we initially drilled a couple of expansion in the beginning of the year, and we're now putting together the next drilling campaign that we will start in the next couple of months following the rain reason.

Speaker #1: And that's become a focus very quickly. Are there any other targets we should be keeping an eye on around Iti or Lafigue or any of those other assets that could kind of move the needle?

Speaker #1: So Lafigue as well, more to come. We didn't similar trend of the main Lafigue ore body. Then from that, Asafu, Asafu is proving to be a very exciting area.

Speaker #2: Thanks a lot, Obeis, for the question. Look, in Sabadella Masawa, we are talking a length of Calzara, but I assure you it's not the only target.

Speaker #2: We actually have identified through a complete new look at the entire area, multiple targets. We leveraged our understanding of the mineral system applied AI tools, and we have identified over 23 targets.

Speaker #1: Of course, everybody knows about Asafu, but what we are starting to see is a set of other prospects, both in the Tarquay and Sand, similar to Asafu, system, but also in the Berymian especially on what we call the pala trend too.

Speaker #1: Now, we're just started with a couple of diamond drilling holes to prove the concept and existing of the mineralization, and we are very great results and now we are planning for the next phase of drilling campaign that we will start this year and will continue in the next progressing in the next year.

Speaker #2: So there will be plenty more to be on the Calzara. Now, in the other region, Iti, we're really excited from the results that we have been having at what we call the Iti Eastern Board.

Speaker #2: This is located south east of our current operation. If you think where La Plaque open pit is, it's continuing to La Plaque from La Plaque to the south.

Speaker #1: And then of course, we also stepped into new jurisdiction and in Kazakhstan, where a little bit more down the line and long term, but we just have a position ourselves on over 720 square kilometer of permit.

Speaker #2: And a 10-kilometer corridor where we have identified a continuous structural setting that is mineralized north-south and up and down. We have tested in the past bits and pieces, but now we are connecting all that portion together.

Speaker #1: So our joint venture partner is far it's just put in application for several permits. We completed a first reconnaissance field work during the summer, and we are continuing with sampling.

Speaker #2: This is definitely a big excitement for Iti, and we will be busy between this year and next year to upgrade the resources in the area.

Speaker #1: So that's something as I say, this long term, but it's moving in the right direction. And then in Guyana, with the placement with the Altair investment, we're starting now to put our booth on the ground and starting to see the potential in the area as well.

Speaker #2: And more to come toward the end of the year. In Lafigue we're actually progressing in third resources, around the Lafigue May pit. That will be moved into indicated by the end of this year, as well as two more targets target one and target 11, where we initially drilled a couple of expansion in the beginning of the year, and we're now putting together the next drilling campaign that we will start in the next couple of months following the rain reason.

Speaker #1: So there is definitely different activities that are happening beyond Calzara and Vindaloo Deep South Extension.

Speaker #3: Okay. So Sonia, that's a lot in terms of exploration, excitement there. So thank you so much for all the color. I think I've hit my two question limit.

Speaker #2: So Lafigue as well, more to come. We didn't similar trend of the main Lafigue or body. Then from that, Asafu, Asafu is proving to be a very exciting area.

Speaker #3: So I'll get back in the queue, but thanks for taking my questions.

Speaker #1: Thank you. We will now take the next question. This is from Alan Gabriel from Morgan Stanley. Please go ahead.

Speaker #2: Of course, everybody knows about Asafu, but what we are starting to see is a set of other prospects, both in the Tarquay and Sand, similar to Asafu system, but also in the Berymian especially on what we call the pala trend too.

Speaker #4: Yes, hi, and thank you for taking my question. A couple of questions from my side. Firstly is on the Calzara. I would like to follow up.

Speaker #4: Is the prospect covered and governed by the same mining permit at Sabudala Masawa, or will you need to kick off a new permitting process?

Speaker #2: Now, we're just started with a couple of diamond drilling holes to prove the concept and the existing of the mineralization, and we are very great results and now we are planning for the next phase of drilling campaign that we will start this year and will continue in the next progressing in the next year.

Speaker #4: Should this prospect be pursued further? That's my first question. I'll save the second for later. Thanks.

Speaker #1: Yes, thank you very much. So actually, the prospect is set into the exploration permit as we are progressing our drilling campaign to move it to indicated resources.

Speaker #2: And then of course, we also stepped into new jurisdiction and in Kazakhstan, we're a little bit more down the line and long term, but we just have a position ourselves on over 720 square kilometer of permit.

Speaker #1: We are also working in parallel to complete the environmental work that is required to move the portion into the exploitation permit, and it will feed into the current mine permit for Calzara for Sabudala Masawa.

Speaker #2: So our joint venture partner is just putting application for several permits. We completed a first reconnaissance field work during the summer, and we are continuing with sampling.

Speaker #1: So that is really the trend. Now, the timeline we're looking at two to three years between completing the environmental work and all the necessary piece of work to move this into the mine permit.

Speaker #2: So that's something as I say, this long term, but it's moving in the right direction. And then in Guyana, with the placement with the Altair investment, we're starting now to put our booth on the ground and starting to see the potential in the area as well.

Speaker #4: Thank you. That's very clear. And another question, I guess this one is for Guy. Guy, a lot has happened to supply chain since you've guided for the Asafu CAPEX, and you have probably done quite a bit of procurement during the first half of this year.

Speaker #4: At the time of big supply chain dislocations, how confident are you in the initial budget that you have provided for Asafu?

Speaker #2: So there is definitely different activities that are happening beyond Calzara and Vindaloo Dip south extension.

Speaker #2: Hi, Alain. Thank you. So as Ian mentioned, we have started procuring some of the longer lead items. So far for the tenders that have come in and the orders being placed, they are completely in line with the costing that we have in the original budget.

Speaker #1: Okay. So Sonia, that's a lot in terms of exploration, excitement there. So thank you so much for all the color. I think I've hit my two question limits, so I'll get back in the queue.

Speaker #1: But thanks for taking my questions.

Speaker #2: So that is not an area that we are seeing any potential inflationary or overrun potential at this stage.

Speaker #2: Thank you. We will now take the next question. This is from Alan Gabriel from Morgan Stanley. Please go ahead.

Speaker #4: Thank you. Thank you very much.

Speaker #3: Yes, hi, and thank you for taking my question. A couple of questions from my side. First is on the Calzara. I would like to follow up.

Speaker #1: Thank you. We'll now move to our next question. This is from Amos Fletcher from Barclays. Please go ahead.

Speaker #3: Is the prospect covered and governed by the same mining permit at Sabadella Masawa, or will you need to kick off a new permitting process?

Speaker #5: Yeah. Hi there, everyone. Excuse me. A couple of questions. First one, to Guy, just on working capital, congrats on releasing a decent amount in Q2.

Speaker #3: Should this prospect be pursued further? That's my first question. I'll save the second for later. Thanks.

Speaker #5: I was just wondering if you can give us a steer on where you're expecting to shake out during the second half in terms of where we could see some more releases coming through.

Speaker #2: Yes, thank you very much. So actually, the prospect is set into the exploration permit as we are progressing our drilling campaign to move it to indicated resources.

Speaker #5: Thanks.

Speaker #2: Certainly. So apologies up front for what might be a slightly detailed and protracted answer, but our Q2 inflow agreed very welcome. The key driver is that, though, was an extension to our trade payables, and this is more a question of timing than anything fundamental or structural that we can necessarily expect to see in coming quarters.

Speaker #2: We are also working in parallel to complete the environmental work that is required to move the portion into the exploitation permit, and it will feed into the current mine permit for Calzara for Sabadella Masawa.

Speaker #2: So that is really the trend. Now, the timeline we're looking at two to three years between completing the environmental work and all the necessary piece of work to move this into the mine permit.

Speaker #2: We did see some receivable inflows. Now, that's partially down to some gold receipts and timing thereof. Again, nothing structural, but some good news is we've seen on the VAT.

Speaker #3: Thank you. That's very clear. And another question, I guess this one is for Guy. Guy, a lot has happened to supply chain since you've guided for the Asafu CAPEX, and you have probably done quite a bit of procurement during the first half of this year.

Speaker #2: So in Senegal and Côte d'Ivoire, we've managed to tighten the turnaround time between submission and receipts of VAT reimbursements. We've certainly looking to hold that line and potentially improve it slightly into the second half.

Speaker #3: At the time of big supply chain dislocations, how confident are you in the initial budget that you have provided for Asafu?

Speaker #2: The question really then becomes Bikina VAT. And whilst we have seen some very welcome reimbursements, cash direct cash reimbursements from the state, I don't think we should be counting on any further reimbursements to be able to completely offset the accruals we're making.

Speaker #4: Hi, Alan. Thank you. So as Ian mentioned, we have started procuring some of the longer lead items. So far for the tenders that have come in and the orders being placed, they are completely in line with the costing that we have in the original budget.

Speaker #2: So I think inevitably we're going to see some extension or increase in Bikina Faso VAT overall balances into the second half. A big swing factor is stockpiles.

Speaker #4: So that is not an area that we're seeing any potential inflationary or overrun potential at this stage.

Speaker #2: I think we've spoken already quite a bit about some of the stripping that we've got planned, particularly in Q3. But then also some residual in Q4.

Speaker #3: Thank you. Thank you very much.

Speaker #2: Thank you. We'll now move to our next question. This is from Amos Fletcher from Barclays. Please go ahead.

Speaker #2: When we are doing our stripping, particularly at La Figa, we tend to draw down on our stockpiles. There will be therefore some incremental drawdowns going into the second half of those stockpiles.

Speaker #5: Yeah, hi there everyone. Excuse me. A couple of questions. First one, to Guy, just on working capital congrats on releasing a decent amount in Q2.

Speaker #2: But as we see the Q4 production ramp up, there probably will counteracting that be some increase in stockpiles particularly at Hyundai. And Sabudala. So I think overall stockpile broadly slightly up in the second half.

Speaker #5: I was just wondering if you can give us a steer on where you're expecting to shake out during the second half in terms of where we could see some more releases coming through.

Speaker #5: Thanks.

Speaker #4: Certainly. So apologies upfront for what might be a slightly detailed and protracted answer, but our Q2 inflow agreed very welcome. The key driver of that, though, was an extension to our trade payables.

Speaker #2: Where I think we unlikely to see much material movement is in consumables. We built our consumables in H1, particularly at Sabudala and Hyundai. But that was effectively for planning in and around our maintenance programs.

Speaker #4: And this is more a question of timing than anything fundamental or structural that we can necessarily expect to see in coming quarters. We did see some receivable inflows.

Speaker #2: And catering for some logistics difficulties that we were facing in Bikina. I would expect the consumables therefore to group level to be relatively flat.

Speaker #4: Now, that's partially down to some gold receipts and timing thereof. Again, nothing structural, but some good news we've seen on the VAT. So in Senegal and Côte d'Ivoire, we've managed to tighten the turnaround time between submission and receipts of VAT reimbursements.

Speaker #2: So the short summary of that protracted answer is I think the Q2 inflow whilst welcome is not necessarily going to be repeated in Q3 and Q4, but I do think that our working capital outflows for the H2 are going to be relatively well managed and should be a smaller swing than we've seen in historical quarters.

Speaker #4: We've certainly looking to hold that line and potentially improve it slightly into the second half. The question really then becomes Burkina VAT. And whilst we have seen some very welcome reimbursements, cash direct cash reimbursements from the state, I don't think we should be counting on any further reimbursements to be able to completely offset the accruals we're making.

Speaker #5: Okay. That's great. And then can I ask a follow-up question just on Asafu? Just wanted to ask how the negotiations on the mining convention are going.

Speaker #5: Has there been any material changes as a result of those negotiations since we last discussed this at Q2?

Speaker #3: Yeah. Amos, look, the negotiations on the mining convention are going extremely well. We've indicated to government that a mining convention that very closely mirrors that which we already have at La Figa would work for us.

Speaker #4: So I think inevitably we're going to see some extension or increase in Burkina Faso VAT overall balances into the second half. A big swing factor is stockpiles.

Speaker #4: I think we've spoken already quite a bit about some of the stripping that we've got planned, particularly in Q3, but then also some residual in Q4.

Speaker #3: There will be one or two minor things that we might want to discuss further, but we wouldn't want to delay the signing of that mining convention.

Speaker #4: When we are doing our stripping, particularly at La Figa, we tend to draw down on our stockpiles. There will be therefore some incremental drawdowns going into the second half of those stockpiles.

Speaker #3: What I can say is that the Minister of Mines has given us the undertaking that the convention will be signed under the 214 mining convention.

Speaker #4: But as we see the Q4 production ramp up, there probably will counteracting that be some increase in stockpiles particularly at Hyundai and Sabadella. So I think overall stockpile broadly slightly up in the second half.

Speaker #3: So it will be a 10% free carry by the state. So the concerns that maybe it will be a 15% free carry don't appear to be valid.

Speaker #3: And we are looking we said that we want to get this done within Q3. That is by mutual agreement. If we can do it a little bit quicker than that, clearly we will.

Speaker #4: Where I think we unlikely to see much material movement is in consumables. We built our consumables in H1, particularly at Sabadella and Hyundai. But that was effectively for planning in and around our maintenance programs.

Speaker #3: And it will obviously be a key factor in us moving rapidly to FID. But as things stand at the moment, I'm not seeing anything that we can't live with.

Speaker #4: And catering for some logistics difficulties that we were facing in Burkina. I would expect the consumables therefore to group level to be relatively flat.

Speaker #4: So the short summary of that protracted answer is I think the Q2 inflow whilst welcome is not necessarily going to be repeated in Q3 and Q4, but I do think that our working capital outflows for the H2 are going to be relatively well managed and should be a smaller swing than we've seen in historical quarters.

Speaker #3: Minor tweaks here and there, but they will be subject to sort of ongoing negotiations. And what would those be? Really more a question of making sure that allowances and sort of agreements are valid not only for external suppliers, but also for local suppliers.

Speaker #5: Okay. That's great. And then can I ask a follow-up question just on Asafu? Just wanted to ask how the negotiations on the mining convention are going.

Speaker #3: So there is a consistency in application of this mining convention to all people. But nothing at the moment that's stopping us from moving ahead.

Speaker #5: Has there been any material changes as a result of those negotiations since we last discussed this in Q2?

Speaker #3: And we've seen sort of a final sort of draft and we're relatively comfortable with it.

Speaker #1: Yeah. Amos, look, the negotiations on the mining convention are going extremely well. We've indicated to government that a mining convention that very closely mirrors that which we already have at La Figa, would work for us.

Speaker #5: Okay. Great. Thank you.

Speaker #1: Thank you. Next question today is from Richard Hatch from Berenberg. Please go ahead.

Speaker #4: Thanks very much. Thanks, Ian and team and thanks for the call. Two questions. The first one is just on manner. I mean, I appreciate your kind of discussions and color around like what's going on with the asset.

Speaker #1: There will be one or two minor things that we might want to discuss further, but we wouldn't want to delay the signing of that mining convention.

Speaker #1: What I can say is that the Minister of Mines has given us the undertaking that the convention will be signed under the 214 mining convention.

Speaker #4: But I mean, how should we think about this mine sort of into the medium to longer term? Because I guess we've been talking about it for a good sort of couple of years about how it's been operationally challenging and it doesn't seem to be improving.

Speaker #1: So it will be a 10% free carry by the state. So the concerns that maybe it will be a 15% free carry don't appear to be valid.

Speaker #4: So how what is your kind of medium-term sketch for this thing in terms of volume and cost? And then the second question is just around capital return.

Speaker #1: And we are looking we said that we want to get this done within Q3. That is by mutual agreement. If we can do it a little bit quicker than that, clearly we will.

Speaker #4: So lovely additional dividend today. I guess if we move into Q3, Q4, you're going to throw off a bit more cash with less tax being paid.

Speaker #1: And it will obviously be a key factor in us moving rapidly to FID. But as things stand at the moment, I'm not seeing anything that we can't live with.

Speaker #4: So how should we think about that dividend come the Q4? Should it be higher than this one on the assumption that the gold price remains flat in the second half?

Speaker #4: Thanks.

Speaker #1: Minor tweaks here and there, but they will be subject to sort of ongoing negotiations. And what would those be? Really more a question of making sure that allowances and sort of agreements are valid not only for external suppliers, but also for local suppliers.

Speaker #3: Yeah. Look, Richard, I'll talk to Mana. And Guy will talk to the capital returns. I think that the most important thing to think of when it comes to Mana is it's really it's only been fairly recently that we've effectively completed the move to a complete underground operation.

Speaker #1: So there is a consistency in application of this mining convention to all people. But nothing at the moment that's stopping us from moving ahead.

Speaker #3: And not a mixture of underground and some surface material. And we've also done a lot of work on optimizing those costs that we are capable of controlling, looking at productivity improvements and what have you.

Speaker #1: And we've seen sort of a final sort of draft and we're relatively comfortable with it.

Speaker #3: We've now moved from multiple underground contractors to one. And that has been very successful in helping us avoid sort of underground conflicts, logistical conflicts and what have you.

Speaker #5: Okay. Great. Thank you.

Speaker #2: Thank you. Next question today is from Richard Hatch from Berenberg. Please go ahead.

Speaker #3: Thanks very much. Thanks, Ian and team and thanks for the call. Two questions. The first one is just on manner. I mean, I appreciate your kind of discussions and color around like what's going on with the asset.

Speaker #3: And it's certainly helped us improve. The short-term issues that we've got there at the moment are what they are. They're short-term. I mean, these things happen in mines.

Speaker #3: If one looks at the costs, clearly costs are driven as much by your ability to produce the ounces, divided by your costs. And one of the there are two key factors driving higher costs on the well, three factors higher costs.

Speaker #3: But I mean, how should we think about this mine sort of into the medium to longer term? Because I guess we've been talking about it for a good sort of couple of years about how it's been operationally challenging and it doesn't seem to be improving.

Speaker #3: One, slightly lower production this quarter. Secondly, we've had to do a lot more self-generation of power because the state have been unable to supply us with what was previously guided by them that they could supply.

Speaker #3: So what is your kind of medium-term sketch for this thing in terms of volume and cost? And then the second question is just around capital return.

Speaker #3: So lovely additional dividend today. I guess if we move into Q3, Q4, you're going to throw off a bit more cash with less tax being paid.

Speaker #3: That's had a fairly material impact on our costs. So those, I think, are sort of key issues. And obviously, the other one, the other key factor influencing the cost there is the big step up in royalties that we've seen in Burkina Faso.

Speaker #3: So, how should we think about that dividend come Q4? Should it be higher than this one, on the assumption that the gold price remains flat in the second half?

Speaker #3: Thanks.

Speaker #1: Yeah. Look, Richard, I'll talk to Mana. And Guy will talk to the capital returns. I think that the most important thing to think of when it comes to Mana is it's really it's only been fairly recently that we've effectively completed the move to a complete underground operation.

Speaker #3: Not helping us. So when one looks at the controllable costs, those that we can control, actually, the guys are not doing too bad a job.

Speaker #3: It's the non-controllable administered costs that are starting to weigh down on the operation. On the sort of the longer term, Mana being an underground mine, it looks like it's got a short reserve life.

Speaker #1: And not a mixture of underground and some surface material. We've also done a lot of work on optimizing those costs that we are capable of controlling, looking at productivity improvements and what have you.

Speaker #3: But actually, it's got a fairly large resource. And it constantly rolls over and replenishes itself. We do need to drill that out. What we're seeing, we've done some deeper drilling.

Speaker #3: We do see a deeper levels. The extension of the existing ore bodies. Similar grades. It is simply a question of us getting into it.

Speaker #1: We've now moved from multiple underground contractors to one, and that has been very successful in helping us avoid sort of underground conflicts, logistical conflicts, and what have you.

Speaker #3: There's no doubt that it's higher cost than we like. But I said previously, that there is a utility value to Mana in terms of how it helps us enhance our underground mining skills.

Speaker #1: And it's certainly helped us improve. The short-term issues that we've got there at the moment are what they are. They're short-term. I mean, these things happen in mines.

Speaker #1: If one looks at the costs, clearly costs are driven as much by your ability to produce the ounces, divided by your costs. And one of the there are two key factors driving higher costs on the or three factors higher costs.

Speaker #3: And that's going to be helpful when it comes to places like Sabadell, Buruma, and then ultimately even a little bit further south to Mana, at the Hyundai mine.

Speaker #3: But we're not asset huggers. We have built a high-quality portfolio through portfolio management. This is part of a broader portfolio we do believe it has potential.

Speaker #1: One, slightly lower production this quarter. Secondly, we've had to do a lot more self-generation of power because the state have been unable to supply us with what was previously guided by them that they could supply.

Speaker #3: And importantly, at these prices, it still makes money. It still throws off cash. So bluntly, unless we could realize more value through our divestment, we're going to continue to operate it, mine it for cash, and use that for reinvestment in growth and shell returns across the broader group.

Speaker #1: That's had a fairly material impact on our costs. So those, I think, are sort of key issues. And obviously, the other one, the other key factor influencing the cost there is the big step up in royalties that we've seen in Burkina Faso.

Speaker #2: And Richard, if I can take the shareholder returns piece. So I think the shortage answer is we don't envisage any change to our existing.

Speaker #1: Not helping us. So when one looks at the controllable costs, those that we can control, actually the guys are not doing too bad a job.

Speaker #2: And well-publicized returns policy. So we maintain that at $3,000 gold. And below 0.5 times leverage, we've got our minimum commitment of a billion. The first half of this year, we had a realized gold price of above 4,500.

Speaker #1: It's the non-controllable administered costs that are starting to weigh down on the operation. On the sort of the longer term, Mana being an underground mine, it looks like it's got a short reserve life.

Speaker #2: And we had clearly stated at the time of the release of the policy, at that kind of level, we would be doubling our shareholder returns, which we've importantly done.

Speaker #1: It actually has got a fairly large resource. And it constantly rolls over and replenishes itself. We do need to drill that out. What we're seeing, we've done some deeper drilling.

Speaker #2: So I think the kind of message is we do what we say. But what we've said isn't going to change and therefore a current gold prices of whatever 4,100, then we would still look to supplement significantly in both dividends and share buyback.

Speaker #1: We do see a deeper levels. The extension of the existing ore bodies. Similar grades. It is simply a question of us getting into it.

Speaker #2: But probably not to the extent of doubling, which we would have at around 4,500. So whilst not necessarily a straight line, I think that indicatively is what one can expect in the second half.

Speaker #1: There's no doubt that it's higher cost than we like. But I said previously, that there is a utility value to Mana in terms of how it helps us enhance our underground mining skills.

Speaker #4: Yeah. Thanks, Guy. Thanks, Ian. Cheers.

Speaker #1: And that's going to be helpful when it comes to places then ultimately even a little bit further south to Mana, at the Hyundai mine.

Speaker #1: Thank you. And the next question today. Is from the line of Alex Bedwani, Stiefel. Please go ahead.

Speaker #1: But we're not asset huggers. We have built a high-quality portfolio through portfolio management. This is part of a broader portfolio. We do believe it has potential.

Speaker #5: Hi, everyone. Just a simple question following on from the Mana discussion. Can you fracture that was identified at surface? What caused it? And what turned up through the monitoring?

Speaker #1: And importantly, at these prices, it still makes money. It still throws off cash. So bluntly, unless we could realize more value through our divestment, we're going to continue to operate it.

Speaker #5: Should we be concerned at all through the rest of the year about disrupting any other areas that might be active?

Speaker #6: Yeah. Thank you, Alex, for the question. What we've noticed is indeed a small fracture at the surface, which obviously will be monitoring so definitely the production is expected to be impacted.

Speaker #1: Mine it for cash and use that for reinvestment in growth and shell returns. Across the broader group.

Speaker #4: And Richard, if I can take the shareholder returns piece. So I think the shortage answer is we don't envisage any change to our existing.

Speaker #6: But that event and temporary, what we've decided is really to pause mining activities and purely as a precautionary measure. The affected area remains under close monitoring.

Speaker #4: And well-publicized returns policy. So we maintain that at $3,000 gold. And below 0.5 times leverage, we've got our minimum commitment of a billion. The first half of this year, we had a realized gold price of above 4.5 thousand.

Speaker #6: With a partial reentry expected shortly. We will not reenter that area until we have a full validation from our geotech. So are we seeing an impact?

Speaker #6: Yes. But what we are currently doing as well is to really push on productivity initiatives. The expected impact that we're seeing will be completely offset by the other assets, mainly La Figue.

Speaker #4: And we had clearly stated at the time of the release of the policy at that kind of level, we would be doubling our shareholder returns, which we've importantly done.

Speaker #4: So I think the kind of message is we do what we say. But what we've said isn't going to change and therefore a current gold prices of whatever 4,100, then we would still look to supplement significantly in both dividends and share buyback.

Speaker #6: We are also, as I mentioned earlier in my section, we've delayed the Banachem, which is the open pit from quarter one to now quarter four.

Speaker #6: So that definitely will bring in additional higher-grade and additional ounces that we expected as well. But on top of that, as I mentioned, we are doing some productivity initiatives.

Speaker #4: But probably not to the extent of doubling, which we would have at around 4,500. So, whilst not necessarily a straight line, I think that indicatively is what one can expect in the second half.

Speaker #6: And the major one that we've been focusing on with the team is really how to reduce our reentry time and where we are, we're seeing year-to-date.

Speaker #3: Yeah. Thanks, Guy. Thanks, Ian. Cheers.

Speaker #2: Thank you. And the next question today is from the line of Alex Bedwani, Stifel. Please go ahead.

Speaker #6: Mana has actually increased their mine tons productivity by almost 19%. So going to H2, I'm expecting the team to continue with the productivity initiatives and also try to accelerate the startup of Manachem by the quarter four.

Speaker #5: Hey, everyone. Just a simple question following on from the Mana discussion. Can you just elaborate a little bit about the fracture that was identified at surface?

Speaker #5: What caused it? And what turned up through the monitoring? Should we be concerned at all through the rest of the year about disrupting any other areas that might be active?

Speaker #5: Thanks, Jerry. Just a follow-up to that. So based on the commentary, it's not over active ore zones, right? So the zones that the fracture was identified, when were they planned to come into the mine plan?

Speaker #6: Yeah. Thank you, Alex, for the question. What we've noticed is indeed a small fracture at the surface. Which obviously will be monitoring. So definitely the production is expected to be impacted by that event.

Speaker #6: So that area we still currently maintain it closed. It does not affect the entire Vieira. It's only the northern part. The southern, the central are still active.

Speaker #6: And temporarily, what we've decided is really to pause mining activities, purely as a precautionary measure. The affected area remains under close monitoring.

Speaker #6: The Nguna and Wona are still active. So we are really talking of very limited area of the Vieira underground.

Speaker #6: With a partial re-entry expected shortly. We will not re-enter that area until we have a full validation from our geotech. So are we seeing an impact?

Speaker #5: Okay. Thank you. Appreciate it, Jerry.

Speaker #6: Yep.

Speaker #1: Thank you. And I'll take the next question. This is from Anita Soni from CIBC. Please go ahead.

Speaker #6: Yes. But what we are currently doing as well is to really push on productivity initiatives. The expected impact that we're seeing will be completely offset by the other asset.

Speaker #7: Hi. I think all the Mana questions have been asked, which was my concern as well. So thanks for that discussion. Secondly, I guess I wanted to ask on Sabadell and Masala just moving into the back half of the year.

Speaker #6: Mainly La Figue. We are also as I mentioned earlier in my section, we've delayed the Banachem, which is the open pit from quarter one to now quarter four.

Speaker #7: What kind of, I guess, rebounding grades and recovery rates are you expecting right now? It looks like it's lagging a little. And it needs a little bit of an uptick to achieve the guidance.

Speaker #6: So that definitely will bring in additional higher-grade and additional ounces that we expected as well. But on top of that, as I mentioned, we are doing some productivity initiatives.

Speaker #7: So do you provide some color on that? And apologies if you've already addressed it. I've got two calls. Yeah.

Speaker #6: Thank you, Anita. So what we're expecting at Sabadella for quarter three the production is will be fairly stable. We expect as well a small decline.

Speaker #6: And the major one that we've been focusing on with the team is really how to reduce our re-entry time and where we are is seeing year to date.

Speaker #6: Mana has actually increased their mine tons productivity by almost 19%. So, going into H2, I'm expecting the team to continue with the productivity initiatives and also try to accelerate the startup of Mana Chem by Q4.

Speaker #6: In grid, especially for the CIA plant. But it will be offset by the expected better grid from Masawa North. Zone stockpile that we plan to start feeding towards the end of this quarter.

Speaker #6: But when you look at the entire H2, we expecting a much stronger H2 with much better grid, especially from Nya Kaferi West. As well as the Delia South pit, to feed into the CIL plant.

Speaker #5: Thanks, Jerry. Just a follow-up to that. So, based on the commentary, it's not over active ore zones, right? So, the zones where the fracture was identified—when were they planned to come into the mine plan?

Speaker #6: Which again will increase the production we also expected a much better recovery in both the plants and definitely a throughput as well. I think in previous discussions, you did ask about throughput.

Speaker #6: So that area we still currently maintain it closed. It does not affect the entire Vieira. It's only the northern part. The southern, the central are still active.

Speaker #6: We are seeing a consistent minimum of 10% above the name plate. We're also trying to raise that 15%, which we discussed. We're not there yet.

Speaker #6: Then Guna and Wona are still active. So we are really talking of very limited area of the Vieira underground.

Speaker #6: I think what is important for me is that we constantly reach that 10%. And that's where we currently have. When you look at the recovery, I think it's improving.

Speaker #5: Okay. Thank you. Appreciate it, Jerry.

Speaker #6: We've reached about 84% in the month of June. And that is the type of level of recovery that I want to see consistently in the SDP.

Speaker #6: Yep.

Speaker #2: Thank you. I'll take the next question. This is from Anita Soni from CIBC. Please go ahead.

Speaker #6: It's not yet there. We still range between 78, 80, 81%. But I know that at peak, we have been reaching 84% as well. So continue working with the team to ensure that that 84% or so remains consistent.

Speaker #7: Hi. I think all the Mana questions have been asked, which was my concern as well. So thanks for that discussion. Secondly, I guess I wanted to ask on Sabadell and Masala, just moving into the back half of the year.

Speaker #7: Okay. And then in order to achieve those higher grades, I'm sorry. I did not hear which pit that you were talking about. But is there stripping involved?

Speaker #7: What kind of, I guess, rebounding grades and recovery rates are you expecting right now? It looks like it's lagging a little and needs a little bit of an uptick to achieve the guidance.

Speaker #7: Or I'm just trying to understand what you have to get through by the end of this quarter. In order to be able to access those things, what are the key deliverables or blocks?

Speaker #7: So do you provide some color on that? And apologies if you've already addressed it. I've got two callers. Yeah.

Speaker #6: Thank you, Anita. So what we're expecting at Sabadella for quarter three the production is will be fairly stable. We expect as well a small decline.

Speaker #6: So I think what I said is that for quarter three, the production will remain stable. I'm expecting a small decline. In grid, especially from Nya Kaferi East, which is for the CIL plant.

Speaker #6: In grid, especially for the CIA plant. But it will be offset by the expected better grid from Masawa North. Zone stockpile that we plan to start feeding towards the end of this quarter.

Speaker #6: The grid at Masawa Central is more or less stable. We will start feeding the Masawa North zone stockpile, which is transition. Because we still need to feed it.

Speaker #6: But when you look at the entire H2, we're expecting a much stronger H2 with a much better grid, especially from Nya Capri West, as well as the Delia South pit, to feed into the CIL plant.

Speaker #6: So we expect from that stockpile a much higher grade than what we have at Masawa Central. But again, it's a stockpile. The remainder of the quarter four, we will be feeding the CIL plant from Nya Kaferi West as well as the Delia.

Speaker #6: Which again will increase the production we also expected a much better recovery in both the plants and definitely a throughput as well. I think in previous discussions, you did ask about throughput.

Speaker #6: Which both of them bring in a much higher grade through the CIL plants that we currently see.

Speaker #6: We are seeing a consistent minimum of 10% above the name plate. We're also trying to raise that 15%, which we discussed. We're not there yet.

Speaker #5: I think Anita, just give a bit more color on this. There's not anything sort of specifically that has to be a big stripping campaign.

Speaker #6: I think what is important for me is that we constantly reach that 10%. And that's where we currently have. When you look at the recovery, I think it's improving.

Speaker #5: It is more this is the continuous process that we're working through. And as we naturally migrate into better quality material, that will give us the better grades that Jerry has been referring to.

Speaker #6: We've reached about 84% in the month of June. And that is the type of level of recovery that I want to see consistently in the FCP.

Speaker #6: It's not yet there. We're still range between 78, 80, 81%. But I know that at peak, we have been reaching 84% as well. So continue working with the team to ensure that that 84% or so remains consistent.

Speaker #5: So there's not a major campaign that we have to prepare ourselves for. Like we're seeing perhaps, say, at Hyundai, where big stripping at Hyundai in Q3 that will definitely open up higher-grade material from mining in Q4.

Speaker #7: Okay. And then in order to achieve those higher grades — I’m sorry, I did not hear which pit you were talking about. But is there stripping involved?

Speaker #5: It's not as heavy as that.

Speaker #7: Yeah. Thank you.

Speaker #7: Or I'm just trying to understand what you have to get through by the end of this quarter. In order to be able to access those things, what are the key deliverables or blocks?

Speaker #1: Thank you. And I'll take the next question. This is from Marina Calero from RBC Capital Markets. Please go ahead.

Speaker #6: So I think what I said is that for quarter three, the production will remain stable. I'm expecting a small decline. In grid, especially from Nya Capri East.

Speaker #8: Good afternoon. Thanks for the call. Most of the key questions related to the quarter have been asked. So I just have a couple of higher high-level questions.

Speaker #8: The first one is on West Africa. We have seen the regional security picture deteriorated in recent months. Are you experiencing any disruptions or increased lead times on fuel or consumable deliveries to your sites, particularly in Burkina?

Speaker #6: Which is for the CIL plant. The grid at Masawa Central is more or less stable. We will start feeding the Masawa North zone stockpile, which is transition.

Speaker #6: Because we still need to feed it. So we expect from that stockpile of much higher grid than what we have at Masawa Central. But again, it's the stockpile.

Speaker #5: Marina, I would perhaps question the your comment about the deterioration in the security situation. In the areas that we operate in, I think it's fair to say we're not seeing a deterioration in the security situation.

Speaker #6: For the remainder of the fourth quarter, we will be feeding the CIL plant from Nya Capri West as well as Delia. Both of them bring in a much higher grade through the CIL plants than we currently see.

Speaker #5: It's actually being specifically with respect to Burkina Faso. Because my sense is that's where your question is focused. Burkina Faso is being actually, I would say, quite stable over the past six to nine months.

Speaker #5: I think Anita just give a bit more color on this. There's not anything sort of specifically that has to be a big stripping campaign.

Speaker #5: It is more this is the continuous process that we're working through. And as we naturally migrate into better quality material, that will give us the better grades that Jerry has been referring to.

Speaker #5: Certainly, governments seems to be much more in control of the area. And the situation on the ground is actually quite stable. With regards to supplies and what have you, at the beginning of this year, the government insisted on bringing in a national logistics company.

Speaker #5: So there's not a major campaign that we have to prepare ourselves for, like we're seeing perhaps, say, at Hyundai, where big stripping at Hyundai in Q3 will definitely open up higher-grade material for mining in Q4.

Speaker #5: Which meant that our existing logistics teams or contractors that we use were sort of pushed to one side in favor of this effectively state-owned enterprise.

Speaker #5: It's not as heavy as that.

Speaker #5: And that certainly did impact supplies of things like explosives, and what have you. Not so much fuel, funnily enough. But that was really a question of inter-government departmental permitting that should have taken place between the new logistics provider and the providers of permits for that provider to actually bring our stuff to mines.

Speaker #7: Yeah. Thank you.

Speaker #2: Thank you. And I'll take the next question. This is from Marina Calero from RBC Capital Markets. Please go ahead.

Speaker #8: Good afternoon. Thanks for the call. Most of the key questions related to the quarter have been asked. So I just have a couple of higher high-level questions.

Speaker #8: The first one is on West Africa. We have seen the regional security picture deteriorate in recent months. Are you experiencing any disruptions or increased lead times on fuel or consumable deliveries to your sites, particularly in Burkina?

Speaker #5: That initial sort of administrative I should we call it confusion has died down. And we're now seeing better performance. It's still not, in my view, ideal.

Speaker #5: Marina, I would perhaps question your comment about the deterioration in the security situation. In the areas that we operate in, I think it's fair to say we're not seeing a deterioration in the security situation.

Speaker #5: I would still prefer that we could run things with our own contractors. But that's the rules of the it is certainly improved from the very beginning of the year.

Speaker #5: January and February was really tough. But it seems to have settled down. And it's got more into the rhythm. And we are in terms of material on site that we require, consumables, we're in much better shape than we were at the beginning of H1.

Speaker #5: It's actually been specifically with respect to Burkina Faso. Because my sense is that's where your question is focused. Burkina Faso has been actually, I would say, quite stable over the past six to nine months.

Speaker #8: That's great to hear. My second question is more on M&A. At your recent exploration day, you clearly defined the geological areas where you see the best opportunities.

Speaker #5: Certainly, government seems to be much more in control of the area. And the situation on the ground is actually quite stable. With regards to supplies and what have you, at the beginning of this year, the government insisted on bringing in a national logistics company.

Speaker #8: Some of your peers might be divesting assets. In other African countries, such as Tanzania, DRC, Zambia. Do you see yourselves operating in these countries if the asset meets your quality standards?

Speaker #5: Look, I mean, we've identified, as you quite rightly say, we've identified where we would prefer to operate. Obviously, as or when things come along.

Speaker #5: Which meant that our existing logistics teams or contractors that we use were sort of pushed to one side in favor of this effectively state-owned enterprise.

Speaker #5: You always look at them. But whether you actually go ahead and do anything, honestly, I couldn't give you a general answer to such a broad question.

Speaker #5: And that certainly did impact supplies of things like explosives and what have you—not so much fuel, funnily enough. But that was really a question of intergovernmental departmental permitting that should have taken place between the new logistics provider and the providers of permits for that provider to actually bring our stuff to mines.

Speaker #5: Because every single opportunity you look at on a case-by-case basis. But our main focus is continuing where we are, as well as the other areas that we have identified.

Speaker #5: But if there's a compelling opportunity, that we believe we have the ability to genuinely add value, and it's cost-effective, and it meets our return criteria, obviously, we will look at it.

Speaker #5: That initial sort of administrative should we call it confusion has died down. And we're now seeing better performance. It's still not, in my view, ideal.

Speaker #5: But there's nothing in the pipeline that we're actively involved with at the moment.

Speaker #8: That's very clear. Thank you.

Speaker #5: I would still prefer that we could run things with our own contractors. But that's the rules of the game. That's what we have to work with.

Speaker #1: Thank you. We'll now take the next question. This is from Mohamed Sidibe from National Bank of Canada. Please go ahead.

Speaker #5: But it is certainly improved from the very beginning of the year. January and February was really tough. But it seems to have settled down.

Speaker #2: Thank you, Anita, for taking my questions. And congrats on the strong quarter. So I think most of my questions were answered. And specifically around, I guess, your capital allocation priorities.

Speaker #5: And it's got more into the rhythm. And we are in terms of material on site that we require, consumables, we're in much better shape than we were at the beginning of H1.

Speaker #2: Around the capital return and, I guess, any sort of inorganic growth priorities, I think you have a growing cash balance there. But maybe on the good cost performance in the quarter.

Speaker #8: That's great to hear. My second question is more on M&A. At your recent exploration day, you clearly defined the geological areas where you see the best opportunities.

Speaker #2: I think, could you provide us maybe with a high-level commentary around inflationary pressures you're seeing at your operations? Of course, your delivery on the operating front is definitely helping manage that.

Speaker #8: Some of your peers might be divesting assets in other African countries, such as Tanzania, DRC, Zambia. Do you see yourself operating in these countries if the asset meets your quality standards?

Speaker #2: But what else have you been doing to kind of mitigate the cost? And specifically, I see at Latighe, pretty good unit cost performance on the process cost.

Speaker #2: So yeah, any color on inflation that you're seeing at the assets? And how you've been able to offset it would be great. Thank you.

Speaker #5: Look, I mean, we've identified, as you quite rightly say, you've identified where we would prefer to operate. Obviously, as or when things come along.

Speaker #3: Sure. Thanks, Mohamed. I think just briefly on a kind of quarter-on-quarter, we did see a slight uptick in our ASIC in Q2. Primarily driven by mining volumes.

Speaker #5: You always look at them. But whether you actually go ahead and do anything, honestly, I couldn't give you a general answer to such a broad question.

Speaker #3: That was both at Manor and at Sabadalla. The Manor increase in tonnage was, however, at a lower grade as we depleted seal, which Jarius touched on earlier, as well as some development at Wona.

Speaker #5: Because every single opportunity, you look at on a case-by-case basis. But our main focus is continuing where we are, as well as the other areas that we have identified.

Speaker #3: Sabadalla was an increase in tonnage, again, associated with waste for Delia and in Masawa Central Zone, again, which Jarius touched on. With some maintenance, both equipment and processing plant maintenance at Sabadalla.

Speaker #5: But if there's a compelling opportunity, that we believe we have the ability to genuinely add value, and it's cost-effective, and it meets our return criteria, obviously, we will look at it.

Speaker #3: Those items gave rise to that small increase in Q2. When we look forward into the rest of H2, there are elements on cost. So we are going to see another increase albeit relatively marginal in our mining cost.

Speaker #5: But there's nothing in the pipeline that we're actively involved with at the moment.

Speaker #8: That's very clear. Thank you.

Speaker #2: Thank you. We'll now take the next question. This is from Mohamed Sidibe from National Bank of Canada. Please go ahead.

Speaker #3: And that is fundamentally, again, driven by volume and our waste stripping, which I think we've spoken on quite a bit on the call already.

Speaker #5: Thanks again and team for taking my questions and congrats on a strong quarter. So I think most of my questions were answered. And specifically around, I guess, your capital allocation priorities.

Speaker #3: When it comes to inflationary elements and here we're looking predominantly at fuel and explosives, we are not seeing anything at this stage that would make us change what we've already said in terms of broad guidelines.

Speaker #5: Around the capital return and, I guess, any sort of inorganic growth priorities, I think you have a growing cash balance there. But maybe on the good cost performance in the quarter.

Speaker #5: I think, could you provide us maybe with a high-level commentary around inflationary pressures you're seeing at your operations? Of course, your delivery on the operating front is definitely helping manage that.

Speaker #3: And that is that we've got around a dollar increase in ASIC for every dollar increase in oil. So the guidance itself remains as previously mentioned.

Speaker #5: But what else have you been doing to kind of mitigate the cost? And specifically, I see at Lafiga pretty good unit cost performance on the process cost.

Speaker #3: But from our perspective, at this point, that's not going to be and shouldn't be regarded as a significant inflationary pressure into the second half, all of those are being offset by a variety of productivity measures, which Jarius did go through on a site-by-site basis.

Speaker #5: So, yeah, any color on inflation that you're seeing at the assets, and how you've been able to offset it would be great. Thank you.

Speaker #5: Sure. Thanks. I think just briefly on a kind of quarter-on-quarter, we did see a slight uptick in our ASIC in Q2. Primarily driven by mining volumes that was both at Manna and at Sabadalla.

Speaker #3: I think the key thing just to remind everyone on the cost subject is the likely impact that the production profile is going to have on our cost.

Speaker #5: The Manna increase in tonnage was, however, at a lower grade as we depleted seal, which Jarius touched on earlier, as well as some development at Wona.

Speaker #3: So I don't think you should be looking into H2 with very significant inflationary measures on the cost line. It's more a question of understanding the production profile, which being lower in Q3 is inevitably going to see a spike in ASIC in Q3.

Speaker #5: Sabadalla was an increase in tonnage, again, associated with waste for Delia and in Masawa Central Zone, again, which Jarius touched on. With some maintenance, both equipment and processing plant maintenance at Sabadalla.

Speaker #3: But then, as I referenced in my section, we expect that to fully reverse with the higher production in Q4.

Speaker #2: Thanks for that call.

Speaker #5: Those items gave rise to that small increase in Q2. When we look forward into the rest of H2, there are elements on cost. So we are going to see another increase, albeit relatively marginal, in our mining cost.

Speaker #1: Thank you. We'll now take the next question. This is from Daniel Major from UBS. Please go ahead.

Speaker #5: Hi. Thanks for the questions. So the first one's maybe revisiting some of the commentary on the capital returns. Et cetera. So if I look at your exceeding your minimum commitment, but even at 4,000 dollars, the free cash flow would by far exceed your sort of capital return.

Speaker #5: And that is fundamentally, again, driven by volume and our waste stripping, which I think we've spoken on quite a bit on the call already.

Speaker #5: When it comes to inflationary elements and here we're looking predominantly at fuel and explosives. We are not seeing anything at this stage that would make us change what we've already said in terms of broad guidelines.

Speaker #5: So if we look at consensus, there's something like a 3 billion dollar net cash position at the end of next year. What do we need to see to factor in that you don't need any more cash and you're going to pay 100% commitment to the market of all of that cash out?

Speaker #5: And that is that we've got around a dollar increase in ASIC for every dollar increase in oil. So the guidance itself remains as previously mentioned.

Speaker #5: That's the first sort of part. What is the level of cash on the balance sheet gives you all the optionality you need? And then the second point, just on the M&A front, any comment on the Barrick reports earlier in the quarter?

Speaker #5: But from our perspective, at this point, that's not going to be, and shouldn't be, regarded as a significant inflationary pressure into the second half.

Speaker #3: Hey, Dan. I'll probably take the first piece and then I imagine Ian will take the second. But so just in terms of the overall shareholder returns piece, I just it's difficult to say anything other than to reiterate.

Speaker #5: All of those are being offset by a variety of productivity measures, which Djaria did go through on a site-by-site basis. I think the key thing, just to remind everyone on the cost subject, is the likely impact that the production profile is going to have on our cost.

Speaker #3: But if the concern is more in and around building cash balances on the balance sheet, no, that's not our intention. We've stated it before and I'll state it again.

Speaker #5: So I don't think you should be looking into H2 with very significant inflationary measures on the cost line. It's more a question of understanding the production profile, which being lower in Q3 is inevitably going to see a spike in ASIC in Q3.

Speaker #3: Your question on what is it going to take for us to fundamentally shift in terms of that supplemental, my answer to that is just to have the cash on the balance sheet.

Speaker #3: So the things that we're obviously looking forward and trying to predict and just make sure that we have in hand is our organic growth pipeline.

Speaker #5: But then, as I referenced in my section, we expect that to fully reverse with the higher production in Q4. Thanks for that call.

Speaker #3: So we've got 50 to 100 million coming through this year on growth capex. We want to make sure that we are going to be able to fully fund ASFU off our balance sheet.

Speaker #2: Thank you. We'll now take the next question. This is from Daniel Major from UBS. Please go ahead.

Speaker #3: In order to do that and look forward a couple of years, we are having to take a decision today based on today's spot and today's cash balance as to what we feel comfortable in being able to distribute.

Speaker #6: Hi. Thanks for the questions. So the first one's maybe revisiting some of the commentary on the capital returns et cetera. So if I look at your exceeding your minimum commitment, but even at $4,000, the free cash flow would by far exceed your sort of capital return.

Speaker #3: So within our overall framework of capital allocation and the billion to potential doubling that, depending on gold price, we stand by that. If there is excess cash at any point that doesn't require spending in our organic growth pipeline, then we will look to supplemental shareholder returns.

Speaker #6: So if we look at consensus, there's something like a $3 billion net cash position at the end of next year. What do we need to see to factor in that you don't need any more cash and you're going to pay 100% commitment to the market of all of that cash out?

Speaker #3: So the policy remains we are doing what we said we would do thus far, and there is no stated ambition to grow excess cash balances in the near or medium term.

Speaker #6: That's the first sort of part. What is the level of cash on the balance sheet that gives you all the optionality you need? And then the second point, just on the M&A front—any comment on the Barrick reports earlier in the quarter?

Speaker #5: Okay. Thanks. Sorry, just before you answer the M&A question, just to follow up on that, guys. So and I guess you've got to factor in your own gold price and own we're trying to factor in your capex assumptions.

Speaker #5: But if you were on our side, would you be putting in 100% free cash flow distributions in 2027, 2028 to prevent endeavor building a growing cash position?

Speaker #5: Hey, Dan. I'll probably take the first piece and then I imagine Ian will take the second. But so just in terms of the overall shareholder returns piece, I just it's difficult to say anything other than to reiterate.

Speaker #3: Okay. Nice pointed question. Thanks, Dan. So Guy Young personally speaking here, if I were in your shoes, no, I would have thought that that would be excessive to look at 100% free cash flow distribution.

Speaker #5: But if the concern is more in and around building cash balances on the balance sheet, no, that's not our intention. We've stated it before, and I'll state it again.

Speaker #3: So if you look at our H1, I think we're at about 41% free cash flow distribution. Somewhere in that kind of region, until such time as we've got a cash balance that then cannot be used by an organic growth pipeline.

Speaker #5: Your question on what is it going to take for us to fundamentally shift in terms of that supplemental, my answer to that is just to have the cash on the balance sheet.

Speaker #3: So the closer we get to ASFU completion and we're still building cash, then I would expect us to move up in terms of percentage free cash flow.

Speaker #5: So the things that we're obviously looking forward and trying to predict and just make sure that we have in hand is our organic growth pipeline.

Speaker #3: But until that started and we're through some of that project, I think it would be rash for us to be distributing 100%.

Speaker #5: So we've got $50 to $100 million coming through this year on growth capex. We want to make sure that we are going to be able to fully fund ASFU off our balance sheet.

Speaker #5: Okay. So you continue to build cash on the balance sheet until you finish the ASFU? That's the right message?

Speaker #3: I think at least until we've got a higher degree of certainty with regards to the total build, yes.

Speaker #5: In order to do that, and look forward a couple of years, we are having to take a decision today based on today's spot and today's cash balances, to what we feel comfortable in being able to distribute.

Speaker #5: Okay. That's great. Thanks. So yeah, maybe the Barrick question.

Speaker #2: Yeah. Look, Daniel, I have to say, when I saw that comment, bluntly, I was quite surprised. I'm not sure where it came from. And as you know, I mean, we really don't sort of comment on market speculation.

Speaker #5: So within our overall framework of capital allocation and the billion to potential doubling that, depending on gold price, we stand by that. If there is excess cash at any point that doesn't require spending in our organic growth pipeline, then we will look to supplemental shareholder return.

Speaker #2: And that's why we were silent. What I would say is, if you're looking at M&A from a growth and a value creation perspective, our approach to that is absolutely unchanged.

Speaker #5: So the policy remains we are doing what we said we would do thus far, and there is no stated ambition to grow excess cash balances in the near or medium term.

Speaker #2: We have said all along that our growth is going to be more biased towards organic opportunities. That's why we've focused on these exploration programs that we've got in Kazakhstan, as well as in Guyana.

Speaker #6: Okay. Thanks. Sorry, just before you answer the M&A question, just to follow up on that, guys. So and I guess you've got to factor in your gold price and own we're trying to factor in your capex assumptions.

Speaker #6: But if you were on our side, would you be putting in 100% free cash flow distributions in 2027, 2028 to prevent endeavor building a growing cash position?

Speaker #2: You've heard today from Sonia that some very significant opportunities in terms of our brownfields opportunities that can feed into the pipeline. I mean, we've consistently produced more ounces than we've depleted.

Speaker #5: Okay. Nice pointed question. Thanks, Dan. So Guy Young personally speaking here, if I were in your shoes, no, I would have thought that that would be excessive to look at 100% free cash flow distribution.

Speaker #5: So if you look at our H1, I think we're at about 41% free cash flow distribution. Somewhere in that kind of region, until such time as we've got a cash balance that then cannot be used by an organic growth pipeline.

Speaker #2: And that's where that really will be where our focus is. We're comfortable with where we are at the moment. We can operate in these areas.

Speaker #2: And going forward, certainly it would make a lot of sense for us to go and look at perhaps what would be a perception of lower risk areas if we were to do any M&A.

Speaker #5: So the closer we get to ASFU completion and we're still building cash, then I would expect us to move up in terms of percentage free cash flow.

Speaker #5: But until that started and we're through some of that project, I think it would be rash for us to be distributing 100%.

Speaker #2: So we're selling we're moving out of assets in Mali. So it hardly makes sense for us to think about going back into a place like Mali.

Speaker #6: Okay, so you continue to build cash on the balance sheet until you’ve finished ASFU? That’s the right message?

Speaker #5: I think, at least until we've got a higher degree of certainty with regard to the total build, yes.

Speaker #2: So let me leave it at that.

Speaker #6: Okay. That's great. Thanks. Sorry, yeah, maybe the Barrick question.

Speaker #5: Great. That's useful color. Thank you.

Speaker #3: Yeah. Look, Daniel, I have to say when I saw that comment, bluntly, I was quite surprised. I'm not sure where it came from. And as you know, I mean, we really don't sort of comment on market speculation.

Speaker #1: Thank you. And we'll now take the next question. This is from Felicity Robson, Bank of America. Please go ahead.

Speaker #6: Hi. Thank you for taking my question. Just one on Las Vega, which is performing well and exceeding nameplate design. Is there any further operational upside we can expect from the asset in the short term?

Speaker #3: And that's why we were silent. What I would say is if you're looking at M&A from a growth and a value creation perspective, our approach to that is absolutely unchanged.

Speaker #7: Thank you, Felicity. I'll take that one. Yes. I think we've been very pleased about the performance of Las Vega. And really, thanks to the team on the ground.

Speaker #3: We have said all along that our growth is going to be more biased towards organic opportunities. That's why we've focused on these exploration programs that we've got in Kazakhstan, as well as in Guyana.

Speaker #7: I think there's few initiatives we were in place, especially in and around the plant. And that's really what has led to now this really good result.

Speaker #7: I think going forward, we have also pushing through some of the other productivity initiatives. One of them is really around reagent usage, as well as how can we what can we do to really reduce our operating costs.

Speaker #3: You've heard today from Sonia that some very significant opportunities in terms of our brownfields opportunities that can feed into the pipeline. I mean, we've consistently produced more ounces than we've depleted.

Speaker #7: One of the initiatives that we have is really how can we increase the recycled water and also the reagent dosage. And we're testing some alternative flocculents.

Speaker #7: And what we've seen as a result so far is that we've seen a reduction in our consumption by about 30%. So those are the thoughts and the type of initiatives that we want to really bring around while we continue to, again, upgrading in and around the plant.

Speaker #3: And that's where that really will be where our focus is. We're comfortable with where we are at the moment. We can operate in these areas.

Speaker #3: And going forward, certainly it would make a lot of sense for us to go and look at perhaps what would be a perception of lower-risk areas if we were to do any M&A.

Speaker #7: That 10% above the nameplate that I mentioned to you earlier is really a result, again, of upgrades that have been done initiatives on the ground.

Speaker #7: And that's really where we want to continue pushing. Las Vegas is not different from any of our sites. We push our plant. We make sure that each one of them sweats.

Speaker #3: So we're selling we're moving out of assets in Mali. So it hardly makes sense for us to think about going back into a place like Mali.

Speaker #7: We look at opportunities. We want to be able to mine best margin ounces and make sure that when we fit them and we process them, we get the best recovery every ounce count, every percentage point on recovery count.

Speaker #3: So, let me leave it at that.

Speaker #6: Great. That's useful color. Thank you.

Speaker #2: Thank you. And we'll now take the next question. This is from Felicity Robson, Bank of America. Please go ahead.

Speaker #7: So with the team that's where we're focusing on really make sure that we stabilize. We've seen that 10% and how far can we take it.

Speaker #7: Hi, thank you for taking my question. Just one on Las Vegas, which is performing well and exceeding nameplate design. Is there any further operational upside we can expect from the asset in the short term?

Speaker #6: Okay. Thank you.

Speaker #4: Thank you, Felicity. I'll take that one. Yes, I think we've been very pleased about the performance of Las Vegas. And really, thanks to the team on the ground.

Speaker #4: I think there's a few initiatives we put in place, especially in and around the plants. And that's really what has led to this really good result.

Speaker #4: I think going forward, we have also pushing through some of the other productivity initiatives. One of them is really around reagent usage as well as how can we what can we do to really reduce our operating cost.

Speaker #4: One of the initiatives that we have is really how can we increase the recycled water and also the reagent dosage. And we're testing some alternative flocculents.

Speaker #4: And what we've seen as a result so far is that we've seen a reduction in our consumption by about 30%. So those are the thoughts and the types of initiatives that we want to really bring around while we continue to, again, upgrade in and around the plant.

Speaker #4: That 10% above the nameplate that I mentioned to you earlier is really a result, again, of upgrade that have been done initiatives on the ground.

Speaker #4: And that's really where we want to continue pushing. Las Vegas is not different from any of our sites. We push our plant. We make sure that each one of them sweats.

Speaker #4: We look at opportunities. We want to be able to mine the best margin ounces and make sure that when we fit them and we process them, we get the best recovery. Every ounce counts; every percentage point on recovery counts.

Speaker #4: So with the team that's what we're focusing on, really, make sure that we stabilize. We've seen that 10% and how far can we take it.

Speaker #7: Okay. Thank you.