Thank you for standing by, and welcome to the Resolute Mining June 2023 Quarterly Activities Report. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you'd like to ask a question, you'll need to press the star key followed by the one on your telephone keypad. I'd now like to hand the conference over to Mr. Terence Holohan, CEO. Please go ahead.
Thanks, Darcy. Once again, welcome everybody. I know it's been a very busy day already for you, for a lot of you. Welcome to our quarterly call, our Q2 activities. We'll talk a little bit about H1 for the year. We've got a slight change this year to our format in that we have loaded up a 17-point slide presentation on our website at rml.com.au. I'll be talking to this through the discussion, so you can actually follow me, and I will tell you what page I'm on, et cetera. It's under the Investors section on the presentations, and it's a Q2 activities report.
I am going to go through the bulk of the slides here, and I will pass over to Chris, our CFO, who will take you through the financials, and then I will do a wrap at the end, and then the conclusions, and then we will hand it over for questions. We have got the normal disclaimer on page two. If you go straight through to three, which is the executive highlights. First of all, kicking off on the safety side, I am really pleased to report, our safety stats are still up there.
Syama, 4.5 years without an LTI, Mako, 2 years without an LTI, and we've just had the audits, the World Gold Council audits for the Responsible Gold Mining Principles, and we're expecting to hit 100% on those over this over the next month or so, and we'll report that accordingly. Production. I was expecting to be telling you we're way ahead of guidance at this point. However, we did have a tricky month in May, I'll go into that in a bit more detail. That sort of kept us a little bit sober.
June, we did get back on track again, however, I will go into a bit of detail, but I think the key thing is that we had a stable month, a lot of improvements, and I will actually highlight those, which you can see in the numbers in the tables. I think if you look at where, if I just focus on May a little bit as a headline, on the sulfide plant, the crushers went down. If you remember, I've been talking about these crushers now for nearly 2 years. We did order new crushers to be replaced in the September month. They are long lead items. They're on the way. They are starting to arrive now, and we will fix them in September. However, one of the crushers went down.
It cost us quite a bit of time, and our maintenance team got the machines back online fairly quickly, but it did hurt us a little bit. If you look at the oxide circuit at Syama, for some of the last cuts we did in the Taba pit, had some carbon in the ore, something we didn't pick up in the grade control. That got into the plant, and it depressed our cut recoveries, and we went from typically in the high 80s to the low 80s for a short period. We obviously immediately stopped mining in the Taba pit. We moved across to the A21, and we did a little bit of stripping there to. We hadn't originally planned to move into A21 so fast.
Did a bit of stripping there, so a little bit of lower gold production there in May, and a little bit of higher costs. That did impact us, but we believe we're back on track now. As a result, we're exactly on our guidance, and we're in no danger of not meeting it. I would suggest that our bumper quarter will be the Q4 this year, after all those fixes have been sorted out, and we're on, be on to a slightly higher level in terms of production. I said, I think there are many takeaways from the quarter, and as we systematically improve, if I go through to slide four, if you look at the asset highlights, I mentioned the strip. You can see the quarter there.
Taba, sorry, Mako, I did highlight earlier that Mako is going through a low-grade patch that performed slightly ahead of production, which was quite pleasing. We've got 1 more quarter of that before we get into the bumper areas, back up to 33 in Q4 this year and then Q1 following year, et cetera. The oxide circuit, a little bit of a hiatus, as I mentioned there, 15,500, and then the sulfide 38.5. This we expect all back on track again in Q3.
If you read this table at the bottom there, what's very interesting to see is despite our lower, significant lower production in May, and, you know, I think we'll see it on the individual tables in a moment, our cost did not go crazy because essentially all the cost initiatives that we've been talking about and Chris is headlining, are starting to come into effect now. We didn't get as punished as much as we would have done if this had happened last year. We'll jump to page six, which is the Syama operational highlights. The key ones are really on the table on the right-hand side. If you look at the mining, we've cut back on the, on the sulfide ore.
If you remember in Q1, we pushed the sulfide ore just to see what that mine could do, and it did hold the grade at 2.86, so we're really pleased and reported on that in the last quarter. We took that off a little bit because we do have a lot of stock in front of the plant and grade slightly up at 2.88. Just remind you that the original design of the Syama SLC was 2.71 grams a ton. If you look at the table, H1 23 to H1 22, if you look at the 2.5 years, you can see the great improvement that's taken place over the last 12 months, which is really exciting.
The oxide grade, 1.55, we did lose a little bit of that Taba material, which was slightly higher grade because of that carbon issue. Again, if you look at the half years, again, you can see with the grade control that we put in over the early parts of last year, we're starting to see better performance there. If you look at the processing side, again, I'm focusing on grades. You can see the sulfides in the plants, 2.94 for the half year compared to 2.5, a 17% step up, we think that's sustainable at these sort of levels. Oxides also come up, even though we're expecting to see that slowly but surely come up a little bit more. It's also worth pointing out, it's only a small number.
If you remember, I've said that the magical number of sulfides is to get 80% recovery. You'll see that it's not an easy job. As the closer you get, it's tougher, but we're actually creeping up towards that 80% recovery level that you couldn't achieve in the laboratory, and we're actually getting close to that in the plant now. The oxides, yes, as I mentioned, that took a bit of a hammering because of that carbon coming through. That's been curtailed now. We've finished off that mining tab. In fact, there's no mining tab. We're only open pits at this point in time, and there won't be for some time. If you look at the costs, you can see, yes, the oxides came down a bit, but they're still of concern.
We've still got a lot of work to do there, still on that circuitry, improving that. What is actually quite comforting is that the all-in costs on the sulfides are fairly stable. If you remember, there was a huge step up this last year because of the diesel prices, and we're still in that domain of diesel prices, high prices, but this especially at Syama, they're starting to come off now to more reasonable levels. Just a mention on Mali itself, you've probably watched all the wires. There's a lot of politicking going on, as the country is now moving fully into politicking with the elections, the democratic elections coming up in Q1. There's quite a lot of noise about the new Mining Code to replace the existing Mining Code.
If you remember, the Mining Code was last revised in 2019. We operate under the 2012 Mining Code with stability agreements in place. We are fully cooperating with the government. We have been right through this audit process over the last 12 months. We don't see any material changes at this point in time. Let's go across to page seven, which is the Mako operations. As I mentioned previously, Q2 and Q3 are gonna be quite tough for us in terms of grade as we go through the low-grade areas, and then When we get to the other side in Q4, we've got 24 months of really good running in terms of cost and of grade.
You can see the grade came down to 1.8, got through the plant because we actually stepped the tons up a little bit, and we've actually managed to get a grade through the plant at 1.91, but it's nowhere near the above 2 grams that we've been accustomed to on this operation. That was in line with what we expected. Recovery's come off a little bit because the grades come off, and obviously, the gold, as I did highlight previously, we expected about 30,000 for these two quarters before we get back to the 32. What again, is very encouraging here is that the gold poured is, sorry, the all-in costs, even though we had 10% less metal over the two quarters, the all-in costs are essentially the same.
We're really excited about the operational performance there. If you go to the next slide eight, I'm gonna slide nine, start to talk about the exploration and the expansion, which is where the excitement really is starting to build up. We, Syama, we finished all the infill drilling for the ore reserve, that is quite exciting. We've got a draft on the table, we'll announce it fairly quick. If you remember, we put out on maiden ore reserve, 845,000 ounces , sorry, 854,000 ounces. We expect that to go up to seven figures in the next couple of weeks, we'll actually announce that and drop those numbers into our studies that we're conducting at the moment on the expansion. At Mako, some good news there.
As you know, I've been fairly neutral on Mako in terms of exploration, but we've made some huge steps forward. We've managed to sign the joint venture and get into the Laminia area, which on the map there, you can see is fairly close to Mako. Also we've managed to finally start after 2 years of negotiation, but we've sped that up in the last few months. At Tombo, this is the one that Randgold we originally identified as 300,000 ounce resource at about 1.7 gram a ton. We've got back in the drills are turning finally in that area, and that's after quite a long, protracted discussion with the community. What is also very exciting on exploration is I've just come back from Guinea to look at our projects out there.
We do have five major licenses out there, and we've hit some gold anomalies at one of them, Mansala. We went on the ground to have a look at it, and we've put a fence line of 40 drill holes, and a lot of them hit gold at economic levels. Obviously, it's extremely early days at this stage. We're not yet in a position to put sections out. We will be putting a note out in the quarter. It is the rainy season. We have just conducted the IP geophys, which is also showing that there's a structure there. We'll talk about it a little bit later in the quarter.
With a view that's based on the information that we're dissecting now, in terms of the geophys and the drilling, we'll actually start redrilling again after the rainy season, which is in another two months. The real excitement for us going forward is the Syama Phase I Expansion Project. This was originally called the Syama North PFS, but this, however, has grown into a full study now of Syama. This is because the sulfide plant is really starting to operate. The underground mine is really starting to hum, and the guys are telling me that they can expand that area now under low capital trade. We've also got access to the Nampala area, which is the south area of the sublevel cave from underground.
We're starting to put drives into there, and we will be exploring it from underground, which you remember me telling you a long time ago that there are some waste dumps on top of this material, so we couldn't really drill it fully from surface. Now we're at from level four in the mine, we're actually online with some of those large high-grade areas that were originally identified, and we're actually gonna start attacking those now from the level four. Those would be a long hole stoping addition to the sublevel caving. If you look at the plant, the plant is becoming a bit of a no-brainer now because it's part of our expansion strategy.
We did present it to the board this week, and they've approved that we go ahead with long lead items, based on our study work. Those orders are going ahead, long lead obviously being the mill, the flotation plant, et cetera. We have got quotes from all the three major mill suppliers, and we're actually going through those in detail with the companies. Expansion project will increase the overall sulfide ore capacity by 60%, taking us up from 2.4 to 4, which gives us the flexibility, given that we all said that within 3 years- 4 years, there's no guarantee we'd have much oxide left, except those that are sitting on top of Syama North. The project will give us the operational flexibility to be able to switch to oxide or sulfide-chasing margin.
This is a huge step forward and the ability for us to have huge flexibility in the operation. The revised capital cost is $52 million. I always said $40 million-$50 million. We do have a 20% contingency on that, despite us having quotes for all the major items. We have increased the scope a little bit for water storage in that area, and we've stepped the contingency up a little bit, and but we are fairly accurate on our costs now, customs, et cetera. We expect construction of that to start on the plant in 2024. We're ordering the long lead items now, as fast as we can. That gives a quarter advantage on the study, with a view to commissioning it in H1 2025.
I'd say, you know, whereas we're originally going to only be looking at feeding this with Syama North, we've actually embraced the idea of taking on more material from underground. We think 2.8 is feasible, could get through over the next 2 years, rather than the 2.4, so the levels that we're operating now from underground. We've got quite a lot of high-grade stockpiles, which actually haven't got an opportunity at this point in time to get through the plant. We're in the process of looking at the optimization on the circuit, we're still waiting for that geotech information so we can firm up on the footwall angles, et cetera. We're also looking at extending that pit further with the new mineral resource that's coming in the next two weeks.
We'll keep you informed as this one grows, because it will be a growth project over the next six to nine months. On page 11, gives you a little bit more detail there. I'll not go into that, but this is a common across industry where you have a plant having the ability to switch backwards and forwards from oxides and sulfides, and that can be done by literally valve changes within eight hours. Slide number 12 gives you the timeline. As I've mentioned, we're looking at starting Q1. These monies that we're talking about, $52 million, that will be taken from free cash flow. It will be taken. The operation will go to over 250,000 ounces, and our target is $200 an ounce reduction in cost.
You'll also see that the operators are using 2.7. All these numbers are slightly conservative, obviously, this is the function of the study, but we've got tough targets, slightly higher than these, that we want to meet. Just a heads up, we are starting to work and look at the larger sale on that operation, the 400,000 ounces plus, that we're expecting to look at within 3 years- 5 years. Okay, with that, on the operation summary, I'll hand over to Chris, and he'll take us through on slide 14 with the financials.
Great. Thanks, Terry, welcome everybody again. Starting on slide 14, just a few of the key financial metrics that we are issuing at this stage. At a very, I'd say solid quarter with gold sales of 84,100 ounces at an average sales price of $1,922, which is slightly higher than the previous quarter. As Terry mentioned, our all-in sustaining cost of $1,000.89 per ounce was slightly higher than last quarter, due to the issues that we experienced in May, which therefore had lower production and higher costs. That being said, we think we've had a very strong first half of the year. We've provided a few key metrics.
Our gold production for the year is sitting at 176,000 ounces at an all-in sustaining cost of $1,469, which is right on top of our guidance for the year. We have gone through quite a lot of co-cost initiatives in the business, and one of the items that we've reviewed in quite detail is our capital expenditures for the year. We've tracked for the first half of spending $36.7 million, which is below our guidance for the year of $88 million. I think we'll probably be more in that $75 million range for the year, plus or minus, based off some of the reductions that we've done on the CapEx side. Look, we mentioned this in the past call. We're doing a lot of work on cost reduction.
There's been an awful lot of happening in the first half of the year. We've hired, quite a few people in the London office, and we've been reducing our Perth office systematically. To give you some specific context, last year, Perth was sitting at one point at over 50 people, and we're expecting that to reduce to six or seven people by the end of this year. In London, where we had three or four people last year, we'll be targeting around 20 people by the end of this year. A lot of change in the senior management of the business and also at site. We've been very much focused on reducing the expat of the sites. We've also been looking on how we purchase, do we need to purchase? We've been negotiating key contracts.
We've been also focusing a lot on inventory levels throughout the business because they were quite high. Look, we're very much trying to instill a new culture of being an owner-operator, and changing the way that we think. It's a cultural shift, which takes time. We've got some of those benefits coming through now, which has offset some of the misses that we've had in May, but we really feel like the bulk of those cost initiatives will work its way through the business by the end of this year. We're very pleased about the progress that we're making on the cost cutting, but obviously we see that now into the numbers. Finally, on hedges, we're not putting any more hedges.
We do still have about 6% of the production hedged to Q1 of next year. That's in an average price of $1,929. At this stage, we don't see ourselves putting any future hedges within the business. Moving to the next slide, on page 15, just to give you a little bit of overview of our liquidity position. Because of the stable and strong results, we generated good cash for the quarter of $17.3 million of operating cash. This is operating cash flows, less CapEx and exploration. With that cash flow generation, we did reduce our net debt slightly by $2.7 million, so we're sitting a net debt of $17.2 million, and we have a healthy amount of liquidity of around $165 million.
I feel quite comfortable with the liquidity situation in the business. That being said, after the quarter that we have today, and knowing that our banks, effectively our financing facilities mature in Q1 of next year, we will, in the second half of this year, be targeting a refinance for existing facilities and obviously with the intent of reducing our cost of capital and increasing our liquidity profile. Again, from a financial perspective, albeit with the few misses that we had in May, we still maintain a very strong financial quarter, and we will be releasing our H1 financials sometime towards the end of August, which will have the full numbers for the market. With that, I'll turn it back over to Terry for a few concluding remarks before we open the questions.
Thanks, Chris. As Chris mentioned, you know, we have been, there have been a lot of activities going on at the head office sort of level, and I do now have my full executive team in place. As Chris mentioned, we've revised a few key positions on site, and I would suggest that we've got a great team now in place going forward. If you look at the in conclusion, slide 16, what are we focusing on now? I don't think there's any major change in this over the last 2 years, but obviously meeting our production and cost guidance, and that May month was sobering for us. It just reminds us that we're fighting nature, but we do need more flexibility in our operation.
What we wanna try and do is make sure that if the crusher has a bad day, then the company doesn't have a bad day. I would suggest that in terms of the Syama sulfide circuit, the major step will be in Q3 when the new units actually are installed. Cost guidance, sorry, and the cost you've heard, we've got a lot of work on. Chris has got a lot of things in place with his team there, and we're starting to build traction on that. We're trying to reduce our cash costs, cost optimize our capital. As you heard, we're actually seriously looking at our capital, what we spent it on and why we spend it. Then it's Phase I expansion of Syama. This is getting very exciting. It's coming down the track, but now it's real. We've actually started.
We're ordering equipment. It's really happening now. Phase 2, we're starting the work on that. Obviously, what you don't want to do, and we've always kept this in mind, is put some pieces of equipment in the wrong place if you want to look at expanding further, and we are looking at all major step changes that we will do to actually take the operation up to sort of the 400,000+ sort of levels. Syama North, this is a story. We know that Syama is now still open at depth with the three major plunges there and open on strike. We're still recording decent hits. We've started going down to testing these further again, because we've done the infill drilling again for the ore reserve calculations.
We will be revising the ore reserves, sorry, the minerals reserves. Sorry, I'll say it again. We will revise the mineral resources now this month and then again at the end of the year, and we will systematically change those to ore reserves as part of the project and as they come up. The drilling is still finding decent hits outside our existing pits at this point, so just expect that to keep growing. First time I'm excited about what's happening in Senegal in terms of the exploration. I think we've now got a better chance of finding something there, and I'm very keen to drive this prospect team in Guinea, because that looks very interesting. As Chris said, we are exploring the ways to reduce the group's cost of capital and improve our liquidity. With that, I'll hand it back to Darcy, we'll go for questions.
Thank you. If you'd like to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you'd like to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question today comes from Richard Hatch, from Canaccord Genuity. Please go ahead.
Thanks. Good, I guess it's good morning for you, Terry. Congrats on a solid quarter. I've got a lot of questions, but I might just stick with a couple, and then we'll see how we go with other people, and I might come back to you or follow up offline.
Right.
I'm most intrigued by your stated Phase 2 in terms of taking it on the production up to 400,000 ounces per annum. I was hoping you might be able to unpack this a little bit for me. There's implications about what you've got in terms of resources and potential reserves, which I guess you've provided a clue with the resource upgrades through the back end of this year. If I just did some quick maths and looked at what kind of throughput rate you would need to get 400,000 ounces per annum, it's about 16 tons. Looking at Syama North current resource and underground reserve at Syama itself, and that only gives you kind of 10 years.
The fact that you're thinking about a 400,000 ton production rate, should we be getting a little bit more positive or bullish about the overall resource potential at the Syama complex?
Yeah, definitely. You know, as we've mentioned before, we think this whole area is vastly unexplored. I think Syama North is just indicating that. We've just recently, you know, we're still looking at satellite ore bodies, and Bruce is still finding oxides where we didn't expect them. We actually found some free milling sulfides, which is a bit anomalous. It's nowhere near at the stage where we can put it into mineral, you know, resources yet. Bruce is still finding a lot of stuff, and we've got joint ventures that we've signed with two new parties.
We've been to have a look at their areas, and we've got a lot of resources on our books that we've never turned to reserves because of the plant's historic, because the mines and the plants historically haven't been able to treat the stuff. I think if you remember when I first got there and somebody asked me a question: Okay, you know, what's your view on Syama long term? I said, "Well, if you've got 10 million ounces on the books and you're doing it at $225 a year, you know you're gonna be here for 30 years, 40 years. That doesn't make a lot of sense. We need to spend some money on upgrading our resources to reserves, and we're starting to look at that seriously. We are still finding a lot of material, and we expect to find a lot more, you know, as we go forward.
Okay. I've just got a couple of follow-on questions on that potential Phase 2, Terry. If you had to think about what you might need to spend to deliver that expanded production rate, you know, an expanded comminution, increased roaster capacity, first thing up, and what might the timing be on completion of those initial studies?
We're probably gonna spend about 12 months on the study. You know, this will run in parallel with the construction of Phase 1. You know, once you've got your engineers focused on these things, it's good to keep the knowledge there and keep them going. Yes, we'd be looking at a new train on the comminution circuitry, and that'd be key on the sulfide. We're looking at doubling up there. What is always, I think I've been mentioning, for a long time, you know, the roaster, you can double the throughput in that roaster by just putting oxygen onto it. It's simple. An oxygen plant costs you $3.5 million-$4 million. You've got a $60 million equivalent, roasting plant sitting there, which was always the weakest link.
I think that now is the opportunity. You can, as I say, you can take that up, the air flowing there, from slightly increased, but you can take the oxygen levels from 20%- 30%, and your bite on the air at the moment is from 20% down to 10%, so you take it up to 30%, take it from 30% down to 10%, 'cause you'll need a residual 10% oxygen in the air discharging, then you've got double the ability. It's not necessarily just as simple as that. You know, there's a lot of engineering changes that can be made, but you're certainly not looking at significantly increased costs or having to build another roaster. It's, it's in a good position.
All your money would be going into the comminution circuits, the mills, which would be a great opportunity to upgrade the existing mills. You know, those mills have been there for some time. New crushers, more leaching, more elution, et cetera. You know, question mark would be: Would you put all the plants in the same footprint, or would you spread it around the 85 km? We've got some key decisions to make based on, you know, which ore bodies we think are going to be the most accessible and have the best margin.
Okay, yeah. It sounds like there's quite a few things to look at there, Terry. Look, I'll just, I've got two quick more questions, and then I'll pass it on. Otherwise, I might come back to you. Can you remind me of the oxide, the sulfide split at Syama North?
Syama North is 8% oxide, you're spot on. We have not factored those in. I accept, you know, we've been conservative. They are patchy, but 8% of that $3 million is oxides. The plan would be as we're coming in, because it's patchy, we would stockpile, and then we campaign back to the oxide plant. They do represent the highest grade oxides we've got on site at 2.5 g/t- 2.9 g/t . We've done some basic network on it. We'll do a lot more follow-up, but they're looking good on recovery. It is stuff that it's upside the project.
Great, thanks. One very last quick one, maybe, just on the financials. I think where we thought you might be on cash flow during the quarter was impacted by your capitalized waste stripping. Given that you finished the Taba, can you give me any guidance on what the capitalized waste strip will be going forward?
Chris, I don't know if you could help me on that one.
No, I'll have to come back to you on that one. I'd be shooting a bit in the dark with the numbers, let me just come back to you.
No problem. No problem. Look, thanks, guys. I've worried I'm monopolizing the call. Well, I'll come back to you offline. Thank you. Good quarter.
Thank you. Have a good day. I'm sure you've had a busy day.
Thank you. Once again, if you'd like to ask a question, please press star one on your telephone and wait for your name to be announced. The next question comes from William Dalby from Berenberg. Please go ahead.
Hi, guys. Thanks for your time today. Thanks for the presentation, and congrats on a steady quarter. Just a quick question from me. On the Syama Phase I Expansion, I just saw on slide 12, and you mentioned around the some regulatory approvals and engagement with local community. I just wondered if you could maybe provide a touch more color around that on sort of the process involved and how that will feed into the timeline there.
Yes, in terms of regulatory stuff, it's really we've got all the permits in place. You know, we wanted to build another water dam, we've asked for a permit for that. We have got one of the satellite pits there that is permitted for water. With the footprint growing, we said, "Oh, well, we'd like to move that down." Nothing's gonna stop the move into ore. It's really just having those conversations with the villages. We do have the communities on site, they will happen. It normally takes us about three to six months to get those things formalized, I certainly don't see that as a roadblock.
Okay, great. Thank you.
Thank you. Once again, if you'd like-
Thank you.
-to ask a question, please press star one on your telephone and wait for your name to be announced. The next question comes from Matt Griffin, from Maple-Brown Abbott. Please go ahead.
Hi, guys. Just a question on Syama Phase I Expansion. Just wondering what sort of recoveries we should expect from that plant when it's fully up and running?
In terms of sulfides, we expect 80%. That's right across the board, so 80% with underground is the target, 'cause you can get that in the laboratory, plus a little bit. I mean, what normally you do on recoveries in the lab, you discount about 2% for large plant scale-up, and so you can get 82% in the lab, so you aim for 80%. With the Syama North stuff, it's coming in slightly higher. In sulfides, it's coming in at about 84 in the lab, but at this stage, we're sort of targeting 80 as well.
It's really straight off the bat when you start with a new ore body, you will get a slightly higher discount than 2%, and then the metallurgists have to tweak it over about 6 months - 2 months to get it up there. In terms of our studies, we're focusing sulfides across the board at 80%, and the oxides, we are 87%, which is our experience right across the Syama.
Thanks. I guess I was just trying to work out some of the math, because if I plug in 4 million tons at 2.7 grams, you've given them 80% recoveries, I'm getting a fair bit above the 250,000 ounces of fine. Is it?
It will display.
Am I close?
What will happen, it will display oxides. That plant will be doing, you know, whereas it's doing 1.7 million tons now of oxide, at 1.5 gram a ton, you're gonna replace that, majority with sulfides and then just treat the higher oxides.
Okay. Okay, makes sense. Just the $200 cost reduction you're talking about, is it a good base for that, the $1,390 guidance this year? You're going to get under kind of $1,200, is that what we should think?
Yeah.
Okay. Thanks very much.
It sounds aggressive, but we're comfortable with those numbers. These are a conservative, also, you know. It's generally easy to get something like the first 100 done. That's generally easy on these things, and it's hard work to get to the next 100 of it. These are with conservative numbers right now, given we don't have the full geotechs on the pits. Our strip ratios in our calcs, and we don't want to talk about them yet because they're provisional until we've got the geotechs, but we expect them, the weight, the strip ratios to come down with the work, and then we'll be comfortable presenting it to you.
Great. Thank you.
Thank you. Your next question comes from Tim Elliott from Regal. Please go ahead.
Yeah. Hi, Terry. Could you give an update about the status of Ravenswood and whether there's any likelihood of receiving proceeds from that, and if so, what sort of timeframe? Thank you.
That's a good question. Chris is on top of this. Chris, I think, if you could just give us a brief update. We are in consultation with them on a continuous basis.
Yep. To answer the question, as Terry mentioned, we are in constant dialogue with the team over at Ravenswood in Queensland, as they are ramping up their profiles on their project. The first payment due to us would be sometime next year, when they achieve 500,000 ounces of production cumulatively. We think they will be making that target. That would trigger an AUD 50 million payment to us. There's a note of another AUD 50 million due either upon they achieving some sort of liquidity event, you know, selling the business or having an IPO or at the tenure maturity, which is in 2027.
Those are the call, the two key future milestone payments that we see happening. Those may change if they come and talk to us about wanting to revisit the deal. Right now, that's what we have.
That's great. Thank you very much.
Thanks, Tim.
Thank you. As there are no further questions at this time, I'm going to hand back to Mr. Holohan for the closing remarks.
Okay. Thanks. Thank you very much again for listening, and I think the mantra is exactly the same as it has been for the last 2 years. It's all about productivity, cost effectiveness, and growth, and all of that to give us that flexibility that we're getting slowly but surely and systematically. It's all productivity, cost effectiveness, and growth. Thank you very much.
That does conclude our conference for today. Thank you for participating. You may now disconnect.