Right, we're gonna kick it off now. Thanks, everybody, and good morning, everybody. On behalf of Burgundy Diamond Mines and Bell Potter Securities, welcome to the Burgundy Diamond Mines September 2024 Quarterly Conference Call. My name is Stuart Howe, resources analyst at Bell Potter Securities, and I will host today's call. From Burgundy, we have Kim Truter, Managing Director and CEO, and Brad Baylis, Chief Financial Officer. The format for today's call is that Kim and Brad will take us through a presentation. This will be followed by a Q&A session, which I will chair, so please enter your questions on the Zoom platform. After the presentation, I will read out your name, affiliation, and the question for Kim and Brad to respond to. Today's call is being recorded.
Before I get started, I want to draw your attention to the important notice and disclaimer on slides two and three of today's presentation. Kim, I will hand over to you to kick off the call. Thank you.
Yeah, thanks, Stuart, and good morning, evening, and afternoon, wherever you are in the world. Fantastic to join you good today. Look, we've got a couple of repeat slides, so just jump through some of the preamble, if you don't mind, Stuart, some of the disclaimers, please. We can probably go to slide five. Obviously, these will be the topics we go through today. Following a similar format to previous sessions, we'll go through a bit of an overview, talk about operational financial performance, obviously our growth and mine extension opportunities, and then the market. I won't dwell too much on this slide. I think many of you have seen this slide before, but this just highlights.
Why we're investing in diamonds and, of course, Michael O'Keeffe in particular, and then why we chose the Ekati asset. I think we've shown this slide or a version of this slide multiple times, so I think we'll jump on. Thanks, Stuart. The next slide just talks a little bit about our board composition. The only thing that's changed on the slide in the top right-hand box is our net cash, our diamond inventories, and then our net cash to debt ratio. But Brad will go through that in more detail a little bit later when we talk about the balance sheet, so I won't dwell too much on that slide. And none of our major shareholders have changed, so that's unchanged. I think slide nine is a new slide.
Let's just jump to slide nine there, please, Stuart. Just back up one there. That one. Yep. This slide talks about, I guess, the key focus areas across a number of fronts, but obviously we now own this asset for about 15 months, and the key thing, as you probably remember, is that when we took control of the Ekati asset, it had less than 5 years of mine life, $220 million of debt, and since then, we've reduced our debt substantially by about $120 million, and we've got multiple mine life options.
But if you look down this little table in front of you, you can see there's a few things we've done in the green boxes there. We've managed to renegotiate the surety payments. As you all know, we're very proud of the fact that recently we've paid out the convertible notes, and potentially some of that money will be reinvested into the business, probably once we come out of the blackout period. And the third one there is we've implemented a very rigorous cash forecasting process, which obviously takes into account all the integrated operational and cash forecasting information, including sales and so on. And it gives us a very, very good view of our forward-looking cash situation. I'm sure many businesses have got that, but ours is quite a sophisticated process.
The things that we're busy advancing, obviously the mine life extension, I'll come back to that later. The next two talk about leadership configuration and a major intervention around cost reduction, and we're trying to get our cost per carat down by 15%-20%. That's our objective, and I can assure you, the whole management team is very, very motivated to do that. Now, Brad will talk a lot about the work we've been doing around optimizing our sales processes, and so he'll go into more detail in a subsequent slide. Then ultimately, you know, once we get ourselves into a position, we intend to, you know, get into a sustainable dividend strategy at some point in time.
So that just gives you a bit of a flavor of some of the key things we've been working on. If you go to the I think it's slide 11 there, please, Stuart. This just slide talks to our operational highlights for the quarter. So you can see, the top chart shows our ore and our waste. Our waste movement has moved around a little bit as we're declining in how much waste needs to be moved in the Sable open pit. We're now down into the last two months of mining the Sable open pit, and then it'll be fully depleted.
We'll probably spend about three more weeks in 2025 digging out the ramp in the Sable pit once the drilling has been completed, but pretty much all of the waste in Sable is now gone, and we will now start ramping up the waste movement for the Point Lake project, which we'll talk about a bit later. That's why the waste is coming back down, and then you'll see it climbing back up again during 2025. Ore is largely unchanged, and then if you look at the bottom chart there, you can see the numbers for the tonnes processed and carats recovered and grade. Grade has been down a little bit over the quarter, and that's been a main driver of why our carats recovered have been down for the quarter.
And again, I can talk about that in more detail later. I'll hand over to Brad, just to rattle through some of the sales and financial results, please, Brad.
Yeah, so for the quarter, you know, up significantly compared to the same quarter last year. So we sold just over one point four million carats. You know, a couple things happened there. Q3 last year was a challenging time to sell carats, but we've also, as we alluded to earlier, looking at some different ways of accelerating our sales. So we did actually bring in a sale that was originally scheduled to be in October, and that would've been when it was scheduled last year, and so those carats are showing up in Q3 versus Q2. So far, I think we've accelerated our sales program by about two weeks, and we'll continue to look for ways to accelerate that further.
On a dollar-per-carat basis, so dollar per carat, $83 for the quarter, down quite a bit from last year. A couple reasons for that, obviously, the soft diamond market has impacted our dollar per carat. On a year-to-date basis, we're tracking at about $90 a carat versus our budget of $96. The softer market is starting to rear its head. But the other thing that happened in Q3 of last year was we had a special sale, so that always drives up the dollar per carat. And we've moved to a strategy now where we're incorporating our special sales in every sale. We're kind of flattening that out throughout the year versus having these big lumpy sales.
The other thing that we have done as well is that we've got into some partnership arrangements where, with some of our larger stones, and those will be moved into a manufacturing partnership, where we will share in kind of the upside on the full value chain with regard to those stones. So instead of selling those sales in the rough auction, like we would've done previously, we'll realize those sales at a later date when they sell in the open market as finished goods.
And then on a revenue basis, so yeah, revenue is up quarter over quarter, but, you know, obviously, because of the dollar per carat decrease due to the market, not up as much as we would've expected, and that's also having an effect on our EBITDA versus a year ago. Next slide.
Yeah, I'll do the top half of this slide, and then Brad will do the bottom half. Just on the operational side, we, as a result of some of that shift from Sable to Point Lake and just getting that opening up of Point Lake right, we've lowered our waste tonnes expectation to a slightly lower number. You can see on the screen there, but our all tonnes is on track. Our tonnes processed on track, carats sold is on track, as Brad mentioned. In terms of carats recovered, we've just put another line in the table here. We previously gave a guidance of a low of 4.9 and a high of 5.3.
We decided to moderate that down slightly, primarily because of that grade issue I was talking early on, and also because of this transition from Sable to Point Lake, so we decided to err on the side of caution and just give a slightly lower guidance range of 4.7-5, and we are definitely on track for that sort of range within that range. That's some of the operational guidance, and then Brad will just run through some of the financial guidance. Thanks, Brad.
Yeah, so also on the revenue side, so, you know, given the softness in the market, and we are expecting to see that continue into the fourth quarter, we are seeing prices kind of flattening out, but quite a bit down from where we were a year ago. We have lowered our revenue guidance from a low of $460 to a low of $430, and then from an EBITDA standpoint, we haven't shown this previously, but our EBITDA guidance is between $100 and $120 million, and year to date, we're at $73 million, so we expect it to end the year somewhere within that range.
Perfect.
Yeah, on the balance sheet front, you know, so our priorities still remain the same. You know, and like Kim alluded to earlier, one of the big things that we did in Q3 was actually pay our convertible debt. So we had $23 million of convertible notes, and we paid those out in September. So it's definitely helping strengthen our balance sheet, and so we do remain positive that this helps us set us up to be able to meet our commitments going forward. So brings us down to a net debt position of $23 million.
Like I said, the other thing that we've been working on is kind of accelerating some of our diamond inventories to reduce the amount of diamonds we're carrying. So yeah, to end the quarter at $73 million because we did have a sale right at the end of the quarter, so that always has a bit of a bigger impact on our inventory. And just as a note, that's the carrying value of the inventory, not the sales value of the inventory. So when you look at it from a net cash including diamond inventories, you know, pretty strong position of positive $51 million to end the quarter. From a changing cash position, so we ended Q2 at just under $57 million.
23 million from cash from operations and, you know, that basically funded the payout of our convertible debt. On the capital side, so a large chunk of the 36 million is related to development capital, which is, you know, 24 million of that is capitalized waste for Point Lake. So we've started to mine the Point Lake pit in Q3, and that will continue into Q4. Some change in working capital to bring us to a closing cash balance of 72 million. I will just point out that. So we do have a quarterly bond payment due for our environmental obligations, our closure obligations, and we're working on setting up an environmental trust account.
And this will give us some tax benefits, and so we've held off on paying those payments during the quarter. So that's about $22 million that's due there that once the trust is set up, we will put the money into that trust. So we hope that'll happen at some point in Q4, hopefully in November. Next slide.
Thanks, Brad. Look, I think I just wanna just repeat what Brad said there. To end the quarter with a cash balance of that magnitude, despite paying the convertible notes out, I know that some investors were a bit concerned about our cash management, but as you can see, we've got a very healthy cash balance even if we do pay those surety payments out. So thanks for that, Brad. Now, just getting onto the mine life extension and growth prospects. I know many of you have seen this slide before, but just as a reminder, if you look at that bottom chart, you can see the bottom left-hand corner there was the existing mine plan that we inherited. We've worked on a five-year optimized mine plan, which we keep improving upon.
Then obviously beyond that, we're getting into that green zone, which is sort of the future. The five projects that we keep working on are listed up on the screen there as a reminder. One through five are the Misery Underground, Sable Underground, the Point Lake Open Pit Optimization, the Fox Underground, and the Fox Higher Value Stockpiles. It is probably worth just mentioning that, as you've probably seen in our announcements during the quarter, a lot of activity around the Misery Underground work, and Misery is proving to be a real winner in terms of a mine extension option. It actually does change the complexion of which of the other projects need to go ahead in terms of timing. We'll talk about that a bit later.
As we go on to the next one there, please, again, slide 18 just reminds everyone where all these things are. As I said on the previous slide, the Misery Underground, you could argue should have a bigger box because it's becoming a very, very important part of it of the next five years, both through the, what we call the Misery Deep Extension, and then also the Southwest Extension, which is sort of an offshoot from the main pipe. And it's looking increasingly like it will have a very solid mine life for many years to come. And it does. But we've already deferred the Sable open pit, as you would have seen in an earlier announcement, and the Sable open pit could even be deferred longer.
So the benefit of that is we've already invested all the capital in the Misery underground operation, and the future mine extension options only require incremental capital in terms of mine development. So it's a very low, low capital cost option to extend the life of Misery. And Misery ore is still the highest value ore on the property, and so every day that Misery extends is a day that you don't have to do something else. And so, Misery is very, very important, and probably from a Q3 point of view, probably the most exciting aspect of this call is how Misery is shaping up to become the cornerstone of our plan for the next four or five years.
If you go to slide 19, slide 19 just gives you some more granular detail on exactly what's going on at Misery. So we have now finished the main ore body. Misery Deep Drilling is now completed, and we've already sent all of the material to a laboratory for evaluation, and so we'll be waiting for that. The early indications from the drilling is that the ore body was intersected earlier than previously modeled, which suggests that the pipe is slightly bigger, which is good. As I said, it, the Misery main ore body, could continue past 2026. The southwest drilling has already commenced.
I think we drilled and completed the first hole a few days ago, so there's another 19 to go, and we should finish that during the first part of next year. The other thing we're planning to do is take a bulk sample from that Misery Southwest E xtension. So for those of you who don't know what we mean by that, that's where you basically mine into the ore body. We usually tunnel into it in an underground operation, or if it's on surface, you dig a trench. But in the underground, we'll be tunneling into that southwest extension and taking a bulk sample, so we can get a decent amount of carats and have a very close look at those carats, and that will also inform our reserve and resources update in Q1 2025.
And I'm just repeating what I said earlier on, there's very little capital required to extend Misery because of the existing infrastructure, and it is a very profitable little underground mine. Slide 20 gives you an update on Point Lake. So this is obviously the new open pit that's taking over from Sable. The dewatering is now complete, so that water you can see in the photograph is gone. The waste rock storage construction area is about 60% complete. That just involves basically establishing the platform, and then you can start, you know, putting the rock on top of that platform.
The open pit bench establishment is well advanced, and in other words, as we're opening up the pit itself and getting the top half of the open pit established, and that then obviously means you can start your waste stripping in earnest. At Point Lake, we're also planning to take a bulk sample. It's always good to have more information, and so we'll be taking a bulk sample at the end of, towards the end of this year, and processing it in, in Q1 2025 to give us more information about Point Lake. That first ore to come out of Point Lake will actually start getting extracted towards the end of Q4, and we'll process it during Q1 2025. Very, very exciting. It's the tenth open pit or tenth mine basically to into production at Ekati.
It's got a 24 million carat indicated reserve, and there's quite a nice yellow diamond population and potentially other colored diamonds as well. That's one of the things we wanna have a close look at with that bulk sample, to see if there are other nice colored stones. There's a bit of a hint of that from some of the earlier samples, so we wanna see if there's a bit more of a trend there in terms of fancy colors. One of the other advantages of Point Lake, as a reminder, is that we can use the nearby Misery Camp infrastructure, which is only 2 kilometers away. All of our hauling now becomes super efficient, because we can now haul in one direction from both Point Lake and Misery, instead of two directions, because Sable was in the opposite direction.
So it gives us a lot more efficiency. This schematic probably a little bit detailed, but it just gives a little bit of a feel as to the sequence of things. So you can see, you know, starting with the southwest extension drilling that I mentioned, you know, doing the bulk sample, then updating the reserve and resource statements. Also doing the Point Lake bulk sample, and then in parallel, doing, you know, the drilling for Sable Underground. Updating the reserve statement, getting the pre-feasibility study completed, and then jumping into Fox Underground, and so forth.
As I did mention early on, with the benefit of Misery potentially going a lot longer than originally thought, it does give us the opportunity to revisit the Sable Underground in particular, and so that project may well be pushed out further, but we'll have to just take a closer look at that, but anyway, that schematic gives you a bit of a feel for the sequence of events over the next, you know, six months or so. This slide is always a good slide just to remind everyone, first of all, of the size of the property, so in case you haven't figured it out before, that graphic on the right-hand side there, the maroon color is the size of our lease area, and in the background is the Sydney Harbour.
If you're familiar with your geography, you can see. So then you can really see the size of the Ekati lease area in relation to the Sydney area. There's 125 kimberlites within our lease block, and as I said earlier on, there's 10 mined to date. The two biggest untouched deposits within that maroon area are the Jay and Leslie pipes, and they've got a combined resource of 115 million carats.
And that next statement is a very, very important statement: that if you wind the clock forward a few years, by then the Rio Tinto asset adjacent to us will have closed down, and potentially the De Beers and Mountain Province asset will have also closed down, which means that Ekati will be the only operational asset within a big area. So we'll have all of the controlling infrastructure post, you know, 2027 to 2030. It gives us a huge advantage for future discoveries. And there are active explorers still working around us, including some of the original explorers that found the Ekati asset. So still lots of exciting work in the future. I'll hand back to Brad, because I mentioned some of the sales strategies. So Brad, back to you.
Yeah. So since we've taken control of the Ekati asset, you know. So, so previously, you know, we were selling our stones 100%, auction basis. And with a small, very small number going to our internal cutting and polishing facility in Perth, which is really only cutting and polishing, like, the high-value type stones. So what we've been looking at is kind of extending out our different sales channels to look at ways of not only spreading the risk out a little bit with regard to the auction, but also looking at ways where we can maybe share in some of the upsides. And really try to take advantage of the Canadian product.
It's amazing how many brands, especially a lot of the luxury brands, are really pushing for traceability and clean supply chains. Obviously, the Canadian goods check all those boxes. We have been in a number of discussions. You know, there's nothing that I can really announce at this stage, but once we have some firm agreements. We are working on a number of trials with regard to certain brand partnerships. We're also looking at doing some of selling some of our product via allocations. This is kind of more of a contract pricing model versus having it in the auction.
This helps not only us to have some production underpinned by allocations, but also helps the customers who manufacture goods to have goods that they can count on on a monthly basis, and it helps them plan programs. So that's another area that we're looking at. We are looking at a number of special collaborations, so working with third parties to create a special line of goods or a special collaboration where, again, we can partner with someone, but also be able to share in some of the upside beyond just the rough pricing. Where we can share in some of that final pricing to either the end consumer or to a specific collaboration.
We do have also a strategic partnership that we've been doing a trial with with a third party in the midstream, that, like I had mentioned earlier, we've partnered to on some of our large yellow stones, where we're actually that third party is actually doing the cutting and polishing of those stones. We will be selling some of the first stones from that program in Q4, and if all successful, we will be entering into a formal agreement where we can move forward and do that on a more permanent basis. And then we're also looking at a program where we would contribute some of our stones and earn an interest in an investment vehicle.
And this would kind of help with some of the alleviation with some of the extra goods that have been built up in the marketplace. So this is beyond just us, but you know, there's potential that diamonds could be used as an investment vehicle that would help kind of reduce some of that inventory that's overhanging currently in the midstream.
Thanks, Brad. All exciting work. I don't think I can, you know, overstate how important all that work is. I think the other thing just to highlight there is that there was a plus sign in the middle, so we're doing the auction plus all that, and it gives us an opportunity to grow or shrink any one of those balloons depending on how successful they are. Just moving on to the market. I think we've mentioned this before, but we all know that there are no new discoveries and there are no new mines coming on stream, and in fact, it's the opposite. There's several mine closures. You know, by any calculation, supply is dwindling and demand will keep growing.
So that is the key reason why this is such a good sector to be in. I think that this chart shows that, and this is, by the way, this was sourced from BCG, who are forecasting the rough diamond pricing over the next couple of years. Thanks, Stuart. The next one. I think it probably one of the more common questions I get asked is around lab-grown versus natural diamonds. I think this information on the screen is very, very important. If you look at the graph on the bottom, it shows very, very graphically what's been happening to the price of lab-grown diamonds, and this particular example shows a two-carat lab-grown diamond.
Now, you know, if you go back to 2018, we've been trading around $4,500 per carat, and it's now down to around $1,000 per carat, so it's declined dramatically. At the same time, if you look at a one carat natural diamond, it's grown by about 3% in value. So this, in many ways, highlights the difference in value between a lab-grown diamond and a natural diamond, which is inherently scarce and not replaceable, and consumers are now starting to realize that. The other big benefit is that luxury brands have now publicly stated that they will not be in the laboratory business, and generally, you know, the markets are diverging quite dramatically. In fact, there's a very good market report, if any of you are interested in looking at it.
It's published by Paul Zimnisky. The latest publication that came out today gives some very interesting data on which jewelry stores actually sell lab-grown versus natural diamonds, and generally, it's the cheaper, fashion-type jewelry stores that are selling the lab-grown diamonds. So go and have a look at that, and we'll probably put a sort of link to that on our website, but yeah, very, very interesting. If you look down the bottom there, you can also see how as the market keeps growing over the next few years, the natural diamond jewelry demand will keep increasing and lab-grown you know will not be displacing the natural product.
So, you know, we remain very, very confident in our product, and I think the lab-grown product, if anything, has done us a favor, where it's highlighted to consumers the inherent value of natural diamonds versus lab-grown diamonds. Thank you. Next slide. This is a quite an interesting chart that I think was actually originally published by De Beers. But what it does show on a long-term basis, dating back to 2000, are some of the crises that have happened over the last, you know, 20-odd years. And you can see every time there's been one of those crises, the diamond price has fluctuated. And the way to read this chart, if you look down the bottom, you can see the type of shock that occurred.
So for example, back in 2001, during the 9/11, there was a bit of a demand shock. During the global financial crisis, both there was a demand and financial shock. The China slowdown in 2014, and we seem to have another one now, caused a demand slowdown. COVID affected every single dimension, you know, demand, supply, financial, and health, and then recently we're back into a sort of a demand slowdown. The U.S. is definitely recovering from that, so I'm very, very confident in the U.S. recovery. China has slowed down quite dramatically, as everyone knows, but what we're not showing on this chart is that India is steadily starting to make big progress.
So anyway, that's a, it's a very useful chart to show you that relationship between, some of these crises and then how it affects the price over time. And you can see every single time the diamond prices have rebounded dramatically after those crises. So from a business point of view, we are very, very focused on that rebound, and that's why it's so important to have our balance sheet in good order and our operational performance in good shape, so that we can take advantage of the rebound. The other. This next slide, very good news, again, coming out of De Beers, is that for the first time in many, many years, they are leading quite a strong marketing campaign. There is a very close relationship between diamond marketing campaigns and the growth in consumer demand.
So you can see on the screen here various campaigns that have been launched over the last 80 or so years. The first bridal ads appeared in the U.S. back in 1939, and you can see there was a big uptake in bridal jewelry that carried on for many, many years. There was another one in 1965 in Japan. The first bridal ads in China, and you can see how that demand. And there's a real appetite in 2024 and 2025 to relaunch some of those marketing opportunities. We'll be doing our own bit using probably social media and other channels to market it, and also some of the things that Brad was talking about, partnering with either jewelry luxury brands or jewelry brands so that we can actually co-market.
So, I think the long and the short of it is a lot of effort is going into, from all producers, driving demand through good marketing and branding. Thanks. Stuart. I think that concludes the slides we've got.
Thank you, Kim. Yes, we have some questions coming through, and the first one's come from Mike Millikan . I'll start with a question around the diamond markets. "Kim and Brad, can you please provide some additional comments on the diamond market? Currently soft, but prices flattening. And what can you talk about in terms of forecasts and future price improvements? Also, are you starting to see your midstream inventories unwind, and increased polish demand?
Yeah. Mike, thanks for the question. I mean, that's the perfect question. There's no question that we are seeing a bit of flattening occurring, so I think we're starting to get increasingly confident that we're at the bottom of the trough, Mike. And so that's the good news, is that hopefully we'll be, you know, at the bottom, and it's... Perhaps it'll stay flat for a while, but eventually it'll start picking up. If you look at some of our competitors' recent quarterly reports, some of them are reporting price increases in different categories, so that's a little bit of a green shoot we're seeing there. We are seeing some green shoots in the U.S., with bridal jewelry starting to slowly recover. I think some of those marketing by Signet Jewelers in particular are having an effect.
and as I mentioned early on, we're also seeing some green shoots happening in places like India. So I have no doubt that we are starting to see some sort of revival happening. And again, if you look at that Paul Zimnisky report that I mentioned early on, I see this month he actually shows that midstream inventories have actually come down slightly. So that's very good news. And yeah, we remain very, very confident that it's just a matter of time now before we see a rebound.
Another question from Mike is, "Any update on a proposed or potential diamond ETF?
Yeah, look, we're in close contact with the company that's doing that. At the moment what's happening is that they are busy working in close contact with all of the producers and some of the midstream companies to sign everyone up to the idea so that we can all potentially supply into the ETF fund. And as Brad mentioned early on, what that means is basically we supply generally lower product, lower value product or product that's hard to move, you can push into the ETF. And so they're just busy signing up enough interest so that we can get the launch going, and so that's quite exciting.
... Great. Thanks, Kim. I might just ask a question now on balance sheet. Obviously one of the highlights of the quarter was the strengthening of the balance sheet, and a big part of that was the inventory unwind, or the working capital unwind. Can you talk just a bit more around that, and is that now a step change in inventory levels that we should expect to see? I think previously you'd guided to inventory, rough diamond inventories being sort of $120-$170 odd million. They're now well below that. Just some comments around that, please, guys.
Yeah, look, I think Brad and I will both tag on this one. The short answer to that question is yes, we are busy trying to bake in reducing that inventory cycle time. It's been an objective of ours from day one, but I think what we're now starting to see is the fruits of all of the work that mainly Brad has been doing. So yes, and then... But Brad, maybe you can just give a more complete answer.
Yeah, like, I think previously we were carrying, you know, between three and four months worth of inventory in the pipeline, and through a number of initiatives, you know, we've been able to reduce that by a couple of weeks. So not significant yet, but we are working with the government on a new proposal related to royalties that will actually help us on the front end reduce our cycle time even further, and then we do have some other back-end ideas. So I think, you know, at the end of the day, I think we wanna try to get to about two months versus where we were, three to four months.
I think, you know, I think that between $60 million and $80 million would be the target of where I wanna see diamond inventory sitting at as we move into Q1, 2025.
And just, just casting that waterfall chart that you provide forward, and this sort of blends a question from myself and also from Mike again, there's a surety bond payment coming up, and I think you confirmed that that's $22 million. But, but also, there's the winter road expenditure, and CapEx. Can you talk just a bit about what, what we expect to see in terms of money going out the door, for those items over the next quarter?
Yeah, well, I mean, again, Brad will help me with this one, Stuart, but of course there's money going out, but there's also money coming in. So there's. We've got quite a big sales quarter coming up, a lot of it because of what Brad was talking about, where we are bringing inventory forward. So we're shortening the cycle there, putting all of the, any special stones into that sale, and any inventory we can. So this quarter coming up, we only have two sales, but they are two big sales, especially the second one. So it, it'll be a lot of money coming in. In terms of money going out, yes, the big number will be the surety payment.
Just to remind everyone, the total payment a year is $44 million, so it's $11 million per quarter. So that's why you, if, generally speaking, it's 11 per quarter. Brad, just remind everyone how much will be going out in the coming quarter.
Yeah, for the surety payments. Yeah, so we've got the $22 million from Q1 and Q2 that, like I said, we're waiting for that, the trust to be set up. We do have another $11 million from Q3, and then an $11 million payment for Q4. And then, you know, in Q4, we are also starting now to start paying for the fuel related to the winter road. I think that actually started maybe at the end of Q3, but yeah, that'll slowly trickle in over the next four months as we pay for the 40-odd million liters of fuel that we'll be bringing in for the winter road.
And then the remainder of items do have some prepayments for some of the winter road items, but most of the other winter road items will be paid in probably Q2 of next year as they start to arrive at site, and then we get billed for them. So Q2 is another heavy period when it comes to cash going out the door related to supplies.
Great. Thanks, guys. I might just ask a question around operations, and obviously, you know, grades were just lower as more of the Sable tons made up the mix, and waste was lower as you yet to get into that point, like, stripping. But one thing that was really, you know, strong was processing plant throughput. In fact, it's the strongest on the numbers that we had going back, you know, a couple of years. Can you just talk about, you know, why that was the case? Was it particularly soft ore, or was it? You know, was there something that was driving that, and, you know, can we see that going forward?
Yeah, look, as part of our cash management and cost reduction strategy, Stuart, we've obviously been really taking a close look at how the process plant has been running. We've appointed a very strong leader in the process plant that looks after - well, in fact, doesn't look after the process plant, looks after all of the sort of the fixed infrastructure at the mine. He's quite a seasoned campaigner, been there a long time. He really understands what the plant needs and doesn't need from a maintenance point of view. So some of it's been around how the process plant has been run. It's also been quite smart maintenance programs in the process plant, so just making sure that we're addressing any maintenance-related issues and giving the plant enough runtime.
That plant is definitely capable of even doing better than that. The limitation at the moment is actually not the process plant, it's not the bottleneck. The bottleneck is the mine's ability to get the tons to the process plant, and in particular, the long haul. So that's why when I mentioned early on, the switch to Point Lake and being able to haul in one direction, that's gonna give us a hell of a lot more efficiency going forward, because that bottleneck will be somewhat reduced just by virtue of hauling in one direction. And then we've also. I forgot to mention this, but we've got some quite a bit of gear coming up on the winter road.
We've got three more long-haul units coming up, which will take our fleet from seven units to 10 units, so that's a big increase in capacity for 2025. By the time they come up the winter road and get commissioned, they'll probably only be up and running probably towards May next year, but that'll give us a big boost from a hauling capacity point of view and alleviate one of our big bottlenecks. And the other one, just to mention while I'm talking about that, is for the Misery Mine, because of the confidence that everyone's got in the mine going forward, the underground contractor has committed to bringing up a whole lot of new equipment. So we'll be getting a bunch of new trucks and drills and scoops and things like that for the underground mine.
It'll be the first time the underground mine has benefited from new equipment in many, many years. That bottleneck I mentioned early on should slowly be alleviated towards the middle of next year, and then we can really start putting pressure on the process plant.
Great. I've got probably one time for one more quick question, and I'll blend together, two that are in front of me from the audience here, and the first one's from Cam Stewart and from Nancy Roy. So thank you for those questions. Hi, Kim, are we looking towards, looking at influencers, especially in the USA, to wear our diamonds, especially the gold colored ones? And the second question being, well, why are we waiting for campaigns like to be, shouldn't we be, actively promoting ethical Canadian diamonds to consumers who care about origin and responsibility?
Yeah, well, let me take them both together, 'cause I think they, they're related questions. So, we are already doing a lot to promote ethical Canadian diamonds. If you, Brad didn't mention it too much, but you probably saw on that one slide where he talked about the channels, the concept of CanadaMark. It's probably fair to say that we haven't put as much effort into CanadaMark as we should have, but as we've been engaging with customers, you can see that, back, right-hand side, balloon there called CanadaMark. A lot of our customers are talking about, and when I say our customer, I'm talking about the midstream market, are talking about or asking for the ability to use CanadaMark.
We are going to refresh that program, and part of that refreshing is making sure that traceability is built into it, and we actually approved two parts of that traceability last week. The first part of the traceability is being able to track parcels of diamonds, so these are actual packets that contain hundreds and hundreds of diamonds from the mine site all the way through to Antwerp. The second part of that traceability is to trace individual stones, and both of those have the ability to feed the CanadaMark process, and some of them will actually be laser engraved with the CanadaMark label inside the diamond. To answer your question, we are putting a lot of work on that traceability and promoting the origin and the responsibility.
We recently had a visit from a luxury watchmaker, and they were blown away by some of the ethical work we do at, you know, all the ESG work we do up at Ekati, and we realize that we have to promote that more. So one of our real challenges is how we actually promote that more by better marketing and storytelling and, you know, any channel we can find to tell that story, so we'll put a lot of effort into that.
Then, Cam, your question about influencers, remember, we're not actually in the jewelry business, but we can partner with some of the companies that we sell our stones to, and we certainly will be looking at programs to do that and picking people that we can actually target, you know, to wear our stones and highlight our stones. So I think between the two questions, Cam's and yours, Nancy, I think during 2025 in particular, we'll be putting a lot of effort into branding and marketing and doing a lot more on that side of things. So thank you for those two questions.
Great. Thanks, Kim. I think given time, we might leave it there, but obviously there's lots to look forward to. Next couple of quarters will be very busy, particularly in Q1, 2025. A number of those key catalysts are gonna drop. So, Kim and Brad, all the best for that, and thank you very much for your time today, and thanks everyone for joining the call.
Yep. Thanks, everyone.
Thanks, everyone.