Earnings Call: H2 2021

Aug 25, 2021

you, Melanie. Good morning, everyone, and thank you for your time this morning. I have Ian Poole and Peter Trout with me this morning. This morning, we'll run through our FY 'twenty one results and achievements and cover off guidance, but more importantly, make a direct link to our strategy by way of some clear expectations on our growth projects, milestones and schedules. I'll be referring to the presentation posted this morning titled FY 'twenty one Financial Results and Outlook and make a start on Slide 4. We covered many of the tactical achievements at the June quarter and full year update we conducted in July this year, including the significant improvement in our ESG performance, operational outcomes, guidance and achievements with a hugely successful exploration program, resulting in a remarkable lift in our resource base across the assets. To boil it down to a simple statement for the year, it was all about delivery in the short term and investing in for the long term. New records in EBITDA and gold production equivalent, significant lifts in our NPAT, 2nd only to a very strong half 2 in FY 2018. The portfolio has been boosted with the acquisition of DUGS to 3 operating assets. The mills run harder than ever before and this combined with an increase to a large increase in our resources has put the company in a great position for funding our growth plans across all three assets and making prudent capital allocation decisions, of which one includes not declaring a dividend this year, so that we can create resilience in the light of COVID-nineteen and direct capital to the highly attractive returns our growth projects offer our shareholders. If we move to Slide 5, this hasn't been an overnight story, these sets of results. The results of prior investment into exploration, planned upgrades at peak, development and our commodity mix and prices achieved have driven improvement across the board, all in sustaining cost margin up to 41% at $11.40 and on a percentage lift even higher on an all in cost basis. Earnings and profit all lifting, including recent exploration at approximately $20,000,000 at DARS investment and growth across growth capital across all the sites. And additionally, and this is $8,000,000 in debt repayments and additional $8,000,000 going to the cash backing of our environmental bonds. I'll now hand over to Iain for further detailed analysis. Thanks, Dan. So I'm on Slide 6. So it really generated a record €416,000,000 in revenue during the year, a 26% increase over the prior year. This was driven by a 50% increase in volumes and a 48% increase in prices achieved. During the year, Aurelia also benefited from a reduction in treatment charges as competition for concentrates remained strong due to supply disruptions in South America and global demand. Aurelia's revenue is gold dominant with 61% derived from gold sales complemented by significant base metal byproducts. Now to Slide 7, net profit. Aurelia more than doubled its underlying NPAT to $57,000,000 with a statutory NPAT of $43,000,000 for the year, which included a one off DAGS acquisition cost of 20,000,000 dollars The primary changes in NPAT from the prior year are the 26% uplift in revenue as described on the previous slide, an increase in operating costs at Peak and Hera was volume driven with an increase of ore throughput and increased concentrate produced. The inclusion of the operating cost at Targs, which was added to the portfolio of assets in December, also contributed to increased costs. There was also an increase in depreciation and amortization due to the addition of TARGS to the portfolio. Interest and taxes increased by $17,000,000 The taxes were higher in the current year due to higher profits and the permanent difference in respect of the DOGS acquisition costs. Interest costs were higher due to the establishment of the finance facility for the Dharug's acquisition and interest arising from the term loan and the guaranteed facilities. If we go to Slide 8, cash flows. Mine operating mine cash flows generated $195,000,000 for the year, which funded sustaining capital, which is made up of the sustaining capital, sustaining leases and cash cover on our guarantees for rehabilitation of $8,200,000 Growth capital of $26,000,000 was focused on the mine development at Kairos and Daugs And in FY 2022, mine development for those two operations will be sustaining capital. In December 2021, I already acquired the Dags operations for a cash outlay of $165,000,000 to the vendor and also incurred we also incurred associated acquisition costs of $20,000,000 The acquisition cost was funded by an equity raise of $125,000,000 and term debt of $45,000,000 The exploration costs of 21,000,000 dollars included on the ground exploration at Federation, Great CohBar and DAGS as well as the scoping study and the feasibility study for Federation and the associated EIS studies required to enable the consenting of these projects. During the year, we incurred debt servicing costs, which included interest as well as $8,100,000 in debt repayments on the term loan. The tax paid during the year relates to the tax installments required during the year. And the dividend of $8,700,000 relates to the final dividend from FY 2020, which was paid in October last year. All in all, a pretty good set of numbers. I'd like to hand back to Dan. Thanks, Ian. So I'll move over to Slide 10, please. We covered group guidance in detail in July, so I'm not going to dwell on it this morning. But where I do want to take the presentation and the discussion is, it's really important to draw out the link of this guidance to our growth and the investments in front of us. Our metal production does on average across the board lift by approximately 10%. Our all in sustaining cost does rise predominantly with a reallocation of growth capital to sustaining. And subsequently, there has been further sustaining lists, including the acquisition of DAS and some reinvestment into infrastructure at peak based on our views of a longer mine life. One of the key differences this year looking forward is that in the growth capital of $16,000,000 to $18,000,000 the vast majority of that is aimed at federation and or including in exploration valuation a 20% lift in exploration all targeted across the 3 projects and regions that I'll cover shortly. One other key difference this year, if we look at the bottom of Slide 10, is the smoother nature of the gold production on a quarter on quarter basis in comparison to prior years. This is due to the inclusion of DOGS, its continued ramp up of head grade and the Kairos ore body at peak settling in after the commencement of it in June 2021. Moving to Slide 11. The results of the prior investments and our current plans see all the metals rising across the board with the exception in the short term of copper. Further double digit growth in the gold equivalent production to north of approximately 200,000 ounces for FY 2022. The achieved growth, investment and balance sheet strength all come together, driving our strategy for long term value and returns growth. And then moving to Slides 13 to 15, we'll run through the actual activity on the ground right in front of us and our expectations on delivery. Focus on Slide 13 now with Federation. This is a remarkable organic growth story and we have now had it set clearly on a set of paths to a set of rails to delivery. Its history is actually very short. It's quick and it's testament to the agility of a company like Aurelia and the value of the ore body. 4 years from discovery to a planned first production for an underground is quick delivery of cash flow. This year, namely FY 2022, the focus is on the continuation of the EIS and the approvals process, enabling works for the underground that covers camp expansion at Hera and the civil and surface works required for the preparation of the decline. This is all contained within the $16,000,000 to $18,000,000 growth bracket in the forecast. Gives us two things and these are really important points. Exploration declines really are about drilling, but what it does for us here at the moment is it gives us early access to the ore body starting very soon. FY 2023 then becomes about the continuation of that decline and the commencement of the plant either being an upgrade or new depending on the feasibility outcomes through the balance of this financial year. It's important to note here that the exploration decline can commence before the full EIS preparation and approvals processes commenced by way of the exploration decline, rest. Important to note that the plant and development and early production can't commence until those approvals are achieved somewhere in the period of half one calendar year 2023 or late in FY 2023. The real advantage here, Chorus, is the early access to the ore body, the early commencement of the decline and the enabling works on the surface give us the ability to smooth out the capital from now and be well contained within our operating cash flows to ready the asset to full production post completion of the mill. This and added to this is our advantage with our mills. Shareholders will be well aware we've got peak 100 kilometers up the road. And in the region, the opportunity for us to bring on early production, particularly when the heavier loads of capital come on, is a significant advantage we have in the region and over greenfield sites. And from my perspective, goes to the heart of funding of our growth plans for the business. If I move to Slide 14, peak has been a similar story. Great CohBar is well advanced down the regulatory approval path and the exploration decline is already approved. Although the exploration decline kicks away in half two calendar year 2022. That does coincide with the full approval for the asset, but that decline can commence earlier as it is already approved. This gives us a 2 to 3 year horizon to a real organic copper exposure for the company. Moving over to Slide 15 for DAGS. The absolute priority for us here is the continuation and completion of Phase 1 and the subsequent planning of Phase 2 drilling. In parallel with that is the environmental assessments and regulatory approval paths for an extension of the mine life and incremental capacity increases of the asset all well within the current mine life position. So with that, please Melanie, I'd like to hand over to question and answer time, please. Thank Your first question comes from Dylan Kelly with Ord Minut. Please go ahead. Good morning, team, and thank you very much for a nice clean set of numbers this morning. Two questions from me just to start and I'll probably circle back. Can we just talk, Dan, firstly about the dividend? Has the Board sort of edged towards a policy or a fixed policy at this point? And or could you just give us a bit more color around what considerations were made in light of the decision to not to declare 1 in this instance? Sure. I'll take that one. Dylan, the in answer to your first question, no, we don't have a formalized dividend policy. What we are what considerations we went through are pretty much twofold here. One being we have significant growth trajectory in front of the company. And when we can now with extended mine lives, the development load coming at the business and the returns on offer from those growth opportunities, it enables us to make what we think is much more prudent capital allocation decisions. And it's not without consideration of the COVID-nineteen environment in New South Wales at the moment. And for O'Reilly Metals, we have 3 assets all concentrated in Western and Southern New South Wales. And the COVID threat is real. It is real to regional New South Wales, and we can't ignore that. So our decision is basically twofold on investment back into the business and ensuring the resilience of our balance sheet in the business in the event of any implications of COVID-nineteen. The next question just around the balance sheet. How do we think about the current debt position that you've got, preferred gearing levels looking forward? Do we take what you what it really has done in the past in terms of just paying down debt as quickly as you can? And thinking about it being 0 and just generating cash? But how do we think about it from here? There's a couple of facets here. I think through the course of FY 2021, we did pull the valuable levers for capital for the business being across cash off the balance sheet, equity and debt within the company to set ourselves on the platform that we've established over this last year or 2. In fact, it's over the last 3 years, 4 years. In looking forward, on the basis of our producing assets and cash flows, we are planning on repaying the debt, where we are repaying the debt on a quarter on quarter basis right through for the term of that facility. So that equals that's roughly $4,000,000 a quarter. So we paid $8,000,000 to date. We'll pay another $24,000,000 odd over the course of FY 'twenty two on that facility. Sitting next to that is the cash backing of our environmental bonds that we require for our license to operate with the businesses. There's 2 different angles that this needs to be looked at. And I'll just draw into this answer the large growth we've had in our resource base as we go through feasibility studies over the course of this year. Our ability to have large conversion of resource to reserve and therefore mine life extensions significantly mitigates any cash backing requirement on the business for our bonds once those reserves are placed and the mine lives extended. So what that does for us is allows further cash within the business to handle the growth opportunities. In addition to that, the debt facility, whilst it is being paid down now, we've got a great relationship with our banking syndicate. It's a corporate debt facility and it's in place now for the existing mine lives. So we would naturally be talking to the banking syndicate about what flexibility looks like on that existing facility as it stands now to be one of the key attributes of what our funding solutions are looking forward. I think, Dylan, what's really important to note here is that the sheer grade value of federation from our perspectives, we shouldn't be scared or nervous about taking on a debt with such a great project in front of the business. It warrants us being able to ensure the most effective and lowest cost way to fund the growth to that and bringing on to that project in the future. Fair enough. That makes a lot of sense. I'll just take just one final question just to lead off from your final point there about funding Fed. I mean, it seems as if you can do this quite cost effective or quite cheaply. It's a question of how much modifications you want to make to the existing Hera Mill. I mean, in light of the time line that you've put out here, do you have anything further to update in terms of how we should think about size or incremental CapEx to expand the mill and put this into production? It would be considering we've just gone scoping into feasibility, we have penciled circa 600,000 tonne capacity for the facility. The option as to whether it's an upgrade of the existing facility or constructing next to it is really for feasibility. I think what's really important here tonight is that the flexibility within our business because of the availability of the peak mill as well enables us to bring on that early production. Whilst when we were seeking consent or while we are seeking consent for federation, it does include the flexibility to track north to peak such that we can prioritize the highest NSR into our available milling capacity. So if we've got a mill shutdown because we're giving it an upgrade to handle the full value of Federation, we've got the opportunity to displace much lower NSR material at a peak and bring Federation in early to get much better cash outcome for the business while we've got the lumpy capital. So in that alleviates the issues around the larger capital in and around the time that, that mill is needed to be constructed. In terms of capital cost to that mill, we haven't released that to the market yet. I feel that's too early on the basis of the feasibility to being completed over the course of this financial year. But I think there's plenty of benchmarks out there, Dylan, that you can work from on that front, considering that it's not a greenfield site. We have existing tailings facilities. We have existing MIA areas. All our environmental structures are in place. The camp's getting an upgrade now, not in a year or 2's time. So it really isn't from a mill perspective. It's not all of the capital costs that's going into that project. Okay, understood. I'll circle back with more questions, Dan. Thank you. Your next question comes from Michael Evans with Ocova Capital. Please go ahead. Good morning, Dan and Ian. Thanks very much for the update and the extra information on the guidance. That's really helpful. I just pretty simple one, I think, on Federation. So you've got the approval for the exploration decline at Great Khobar, but you don't have the approval for the 1st Federation yet. And are you expecting that imminently? And I'm assuming in that growth capital, you did mention at the beginning that most of that vast majority is at federation. I'm assuming that is the exploration decline. And so what are you assuming on when you get the approval? And how quickly can you get the equipment or the contractor to sort of get cracking on that because assuming it's all planned, etcetera? Yes. There's a couple of things with that, Michael. The approval for the exploration decline and its associated secondary type approvals that are required to put boots on the ground is quite imminent. So that application was made some time ago. So I think that answers the first one. Secondly, the to put a decline in is all the civil and surface works and construction of the MIA required, the mine infrastructure area required to that. The civil works and the packages associated with camps, civil works, box cuts are all well and truly advanced. And we're actually not far off the capability of having ourselves in a position where we're ready to execute. You can see that nothing will happen on the ground until the environmental ref and associated secondary approvals are granted. So that is right in front of us and all contained within that $16,000,000 to $18,000,000 So those surface works will start. And it's really it's also important to note here too that the biodiversity offset requirements for business and the development like this have also coincided in a very similar time frame. And that is also a very clear regulatory gate for us to commence activity on the ground. And we're also in a very good position with those biodiversity offsets due to work the company has been doing on Hera and associated properties for many years now. So that's all good. Those works and civil works will commence during the course of this the remainder of this calendar year with ambitions of being ready for the decline commencement in half 1 calendar year 'twenty two. So some point in the next 9 months. Okay. Got you. Right. That's half one calendar 'twenty two. Okay. Yes. Noting those timetables, the bars, the gaps at the bottom are in calendar year and the years above are articulated by the way. Yes. I got that. Thanks very much. And whilst I've got you, you sort of mentioned that you penciled in around 600,000 tonnes for the facility at Heron last time, I think, we spoke. It's obviously a triple flotation plant you're looking at given Federation's got copper lead zinc. You just made a comment then if the NSR is that compelling and you've got the ore there's a potential to displace ore at peak and truck ore to peak from Federation. Can you sort of give us a bit more color in thinking around that? Why you would do that? Yes. I think the key with it is, Michael, is that there's absolutely no doubting that federation on its own justifies its own mill in and around that capacity. There's no doubting that. That is not at any way, shape or doubt for us. It will take that through the feasibility study to lock down its degree of accuracy and make sure that whilst we are I've got to remember here, we are continuing to drill as well. We haven't found the extensive federation yet. So while we do that in parallel, we've got to draw a line at some point as to what our capital decision is. But please don't take the fact that we are trucking we may truck up the road for early production as any sign of our views on the value of generation. That's not at all the case. What we are trying to achieve here is that if, for example, we were going to do a significant upgrade to the existing Hera mill, flotation and filtration at the back end, but also grinding the front end because we're going to the 3 separate tons means you're all over that plant. The reality is the plant is going to be down and we can't be producing through it. So we look at it then as a company and say, well, we have in the region then only 1 mill operating at 800,000 tons a year capacity. It would it makes sense from a better cash outcome for the business. So for the business, not necessarily just Hera or just take that for the business, it makes it much better to get a much better cash outcome if you are prioritizing at that point in time when you've only got the 1 mill, the highest NSR material to those mills. And what we would logically look at there is that there is an average NSR across peak, which is a mixture of higher NSR, particularly from the likes of Kairos, Cronos, Perseverance, Deeps, etcetera. There's also a mix of the lower NSR material in the Northern mine. In my there's no doubt in my mind that the early material from Federation would, including its trucking costs, clearly outstrip that the NSR, that peak material. So for that period of time, until we have whichever way the new mill or updated mill is configured while it's in construction, we have the ability for a better cash outcome for the business that really smooths out our requirements and particularly assists in funding. So that's what it is. I wouldn't at all reflect that sort of decision on our view on Federation's value. It's purely about making sure that we're in really good shape to bring that asset on as soon as possible. No, I wasn't trying to infer anything on your view of Federation. In fact, I was wondering if you had a you mentioned the 600,000 tonnes a year and you do have to draw a line to do your studies at some point in time and understand that. But I suppose I would look at the here at the Federation Resource and I'm trying to guess something higher. I was just wondering whether you had a situation where you adjusted the here at mill to do the triple flotation at 600,000 tonnes and then Federation got bigger as you said it possibly could, no one knows at this point. And then you find a way to get 800,000 tonnes out of Federation, but you expect here to 600,000 tonnes. I mean, and then you might truck 200,000 tonnes to peak. I don't know. But your point about I think I'd sort of now I think about it, clearly, there's a bit of work to be done here. And what you're saying is if we have to shut it down to 3 to 6 months of the group, where's the highest NSR material? And I totally get the tracking cost given the NSR of the material at Federation is so high. It's negligible in the scheme of things, and I get that. So that actually makes perfect sense. I think it's a agile problem, Michael, here for us. Yes, circular. We are moving quickly on this asset from discovery to first production approval and first production of 4 years for an underground. That's what we've got. And we can clearly see the value in it. We would be remiss not finding the fastest way to monetize the highest value ore bodies we have in the group. And I think that's what this plan lays out. And the consequential benefits of doing that is that it smooths out our capital requirements and our operating cash flow inputs to the funding solutions for the business going forward. Yes. No, no, no, I totally agree on Federation and that's why I think that extra color you've given in those back end slides is fantastic. Appreciate it. I'll hand it back. Thanks, Dan. Thanks, Mark. Thank you. Your next question is a follow-up from Dylan Kelly at Ord Minit. Please go ahead. Hi, Dan. Sorry, just a quick follow-up here. You're talking before about just the regional lockdowns and potential impacts on the business. Could you just run us through how it's impacting the operations day to day? I assume that the workforce is exempt, but supply lines of all sorts of flavors and taste, I'd assume have some degree of interest. Any color you could give there would be appreciated. No problem. I think Dylan and any of the listeners, it won't be a surprise that we're on high alert with our assets and our communities. It has Canberra is an hour's drive for DOGS. It's been in lockdown. The regional LGAs around Dubbo and to the North Northwest have also seen spread of the Delta strain. We have added additional precautions to entry to our sites, whereby we are requiring full tests and the return of negative results before people will actually be allowed through the front gate on our sites. That's an additional precaution above and beyond what New South Wales Health is requiring for movement within those LGAs for, as you say, 4 exempt workers of which we are. So we've gone the extra steps. There's 2 key reasons. Obviously, there is the protection of our communities and because we have people in and out of those communities and that is of utmost importance to us that we protect that. And also, additionally, absolutely minimizing, I can't say we can definitely eliminate, but absolutely minimizing the chances of delta coming onto the sites. The impact of that is, particularly in Western New South Wales, probably more until more recently, where the ADF has been deployed into the region to help, has been the turnaround on testing does cause people to not be able to come back to their normal rostered swing or shifts. So we have been suffering a little bit on labor availability and therefore productivity of the sites. But as I've said before, I think we've dealt with this in most quarters since March 2020 is that it ebbs and flows depending on where the pinch points are on border crossings or testing and results return. So we're most certainly continuing to produce through this quarter, but we are on high alert and that does introduce some inefficiencies in our business without being able to get labor into the operations. Okay. That's quite clear. And thanks for including some of the color around guidance and exactly how you look at things on a dollar per ounce sorry, not dollar per ounce, gold equivalent basis as well. Just a question on the spread by quarter of gold production. What's the thinking there? And what's the basic rationale for that spike in, say, like the Q3 of this year? It's a combination of a couple of areas. Predominantly, it's the continued ramp up of DUGS as its grades improving. So that's predominantly September and the growth into December quarter. And then similarly with phasing and the settling down of the Kairos ore body and others at peak, we look particularly for a strong December March quarter to be achieving for the full year guidance. So it is driven by orebody phasing predominantly, Dylan. Okay. That's mostly clear. Thanks, Dan. Thank you. Your next question comes from Bill Murray, Private Investor. Please go ahead. Good morning, Dan. Just on the Great CohBar exploration decline. The initial decline was due to start in February 2019 and you've now got it starting in second half of twenty twenty two. That's a 3.5 year delay. I just wonder if you can expand on why there has been such a huge delay given the fact that it would have helped with the infill drilling and all that sort of stuff and copper being such a hot topic at the present time? I think the primary reason that Great CohBar has moved out in timetable whilst it has been approved is that the couple of the simple facts of the matter that we found, Kairos in the intervening period and have injected our capital and operating focus into the bringing on of Kairos. Similarly, for the higher grade NSR ore bodies or higher NSR ore bodies in and around the existing peak infrastructure. I think that's primarily the reason for the delay. I think we've spoken about as a company being copper ready now for 18 months. I think I would say that the increase in the copper price or the rise in the copper price has probably caught quite a few people by surprise in the last year. Great CohBar is our copper exposure coming, and you can see now that the further work going into the drilling there. But I think in summary and in looking back in hindsight to a degree is that we believe the Kairos, Peak North, Percy, Kronos areas, S-four hundred were of higher value NSR than what we knew of Great CohBar back then, albeit now with the drilling that's occurring from surface before we go to the expenditure of an exploration decline and not being sure, we believe that was a better decision and that's the way it's panned out. But given the fact that you do have capacity in the mill, why wouldn't you start the exploration decline now? Mainly because we're still going through pre feasibility work on the configuration of the Great Cobar mine. Okay. Just another question on Dags, are you still happy with that acquisition? I suppose it's fair to say that there's very few people outside the company that thought it was fairly, very poorly priced. I mean, obviously, we don't have all the information that you have. I'm just wondering if you could put a bit of flavor and give us a bit of hope for the future because it's been pretty dark up to now really. I can understand the market's view on that, Bill. There's no doubting that. From our perspective, it's got nothing but high conviction. The work that was done to ascertain how we could bring that asset into our portfolio, We've had the keys now for just over 6 months. At that last quarterly call, I did express our disappointment in the latter month or 2 or 2 months of that June quarter. We did have a number of issues. I would call them at the moment learning issues, particularly geotechnical and ground control issues in the early stages stoping that did defer the high grade ore bodies. But you'll note that in July, we did put through the interim July number of, I think, 3.6 grams a ton, which was a significant improvement over the June quarter. And we know the grade improves with depth. So we're confident. We remain confident in the asset that it was right for the company to invest in, and we continue to drilling. And the approvals to get the incremental capacity to drive further value in that decision. From our perspective, the investment thesis is alive and well. That's all for me. Thanks. Thank you. Your next question comes from Ed Chan, shareholder. Please go ahead. Hi, thanks for the opening. I'm looking at Slide 10. And that's one of the concerning things there is a jump of about 20% in the ASIC costs. You've mentioned this rise in sustaining capital. The other thing I noted is that if you look at your reference prices for the base and silver metals, the silver and copper are about spot prices about 10% higher than the reference prices and lead and zinc at the moment are about 20% higher. And I assume that would have a substantial impact on that calculation of the AISC. Is that correct? Yes. Yes, it's spot on, Ed. It does. I think for planning purposes, similarly to what Michael was talking about with at some point, you've got to draw a line in the sand with drilling and feasibility and things. It's similar here in that for the company to lay out its position on forward guidance, we've got to draw a line in the sand at some point as to what the commodity price is for our assumptions. We drew that line in that sand prior to June 30 through our budgeting and planning process. And if you look back to roughly that May, June period, what spot prices were quite a bit lower than where we are now. So you are correct. I think on a rough calculation, any of the analysts will be able to do this if you put today's base metal spot prices through that calculation, that all in sustaining cost of $1500 to $1700 does drop, all else being equal in production and cost per ton on the sites. Yes. I mean, if you're looking at Slide 11, revenue from bioproducts is pretty close to the gold revenue. So I assume it would have a very substantial impact on that cost number. It certainly does. Yes. Okay. Thanks so much. We will see that. We just we've got to as I said, we've got to draw a line in the sand. The commodity prices are important for us, obviously, particularly with the natural hedge of these base metals in our mix. And we will we update these on a regular basis going forward, primarily to make sure that we are from a grade control and start scheduling, we're extracting full value based on pricing in those in that quarter on quarter terms, really. But we will keep an eye on these and update accordingly as we see commodity prices move. They do have an impact and we'll guide forward on a quarterly basis if there's any material changes in our assumptions. Okay, great. Thanks a lot. Thank you. Your next question comes from Stuart Dodd with Renaissance Asset Management. Please go ahead. Thanks for the opportunity and well done on the results guys. No one probably says that enough, but it's a good set of numbers. I guess you did let the genie out of the bottle there, Dan, by saying you've got that conviction at DOGS and you're highlighting the grade improvement in July. Has that improved or been sustained in August? It's continuing, Stuart. Great stuff. And just for just maybe for Ian, just remind me that the 3rd party royalty that you can get out of the balance sheet there, that goes through the AISC, this is for Dives. Is that right? I think it's been stripped out. The cost itself goes through there, the actual expenditure on a month by month basis, the revaluation doesn't go through there. There's a revaluation at the end of the period. That doesn't go through, but the actual cost of the royalty goes through in the all in sustaining costs. Perfect. Thanks. There are no further questions at this time. I'll now hand back to Mr. Clifford for closing remarks. Thanks, Melanie, and thank you, everyone, for your time this morning. So just in summary, we've got a terrific asset base here, mine lives and a commodity mix. The combination of those three things really puts us in a terrific position to being able to see clean through any commodity cycles coming within the business. We've got terrific ongoing organic growth. We've got the ability to phase that growth and the capital requirements within the contents of our balance sheet operating cash flows with existing assets, puts us in a great position going forward for improving our asset quality and into the future returns growth for our shareholders. So again, thank you very much for your time. Next update from us will be for the next quarterly release for the September quarter. Okay. Thank you, everyone.