Hello, and welcome to the Capital Ltd First Half Results for the period 1st January to 30th June 2021. Throughout the call, all participants will be in listen only mode. And afterwards, there will be a question session. Just to remind you, this conference call is being recorded. Today, I'm pleased to present Jamie Boysen, the Chairman Giles Everest, the CFO Rick Robson, Business Development and Conor Rowley, Investor Relations.
Please go ahead with your meeting.
Meeting. Good morning, everyone, and welcome to
Capital's interim results presentation. So I'm Conor Ralli, the Investor Relations and Corporate Development Manager here at Capital.
As I said, today on the call,
we have Jamie Boynton, our Chairman and CEO Giles Edwards, our CFO and Dave Robertson, our Head of our Corp Development.
Just to make you all aware, at the end
of the presentation, there will be an opportunity to ask questions, which can either be done over the phone or you can send in your questions to us through the webcast and we can read them out. With that, Jamie, I'll hand over to you to run through our results and presentation.
Thanks. Thank you, Conor, and thank you, everyone, for dialing in. Obviously, as mentioned, our first half results presentation, which obviously follows on from our first half revenue trading update that we provided to the market on the 15th July. And today, it is the results flowing into that. I'll reference obviously slides in the presentation deck.
I'll run through them fairly quickly and then we'll open it up Q and A. Starting on Slide 3, again, by way of introduction to Capital Limited, a full service mining, drilling, maintenance and geochemical solutions provider to customers within the Midwest industry, and we focus on the African markets. We've been in Africa since inception for 15 years, operated across 11 African countries as well as one in the Middle East, specifically Saudi Arabia. We have an asset fleet of 100 and 6 rigs. And more recently, we've moved into the earthmoving business.
We have 35 pieces of heavy mining equipment, employing just about under 1900 employee years at the end of June, of which about 1800 are African nationals. We have a very strong concentration of revenue to some very significant mining companies, the likes of Anglo Golgi, Shannon, Barrick and Kinross. Moving on to Slide 4. As I said at the at the commence revenue on the 15th July, We reported first half revenue of $98,700,000 an incredibly strong increase on the first half of last year, fifty 1 0.6% increase. Today, as we release the results, you can see an outstanding performance.
Our EBITDA increased 80 4% to $28,400,000 Our adjusted net profit, essentially our operating net profit increased 239 percent to $12,700,000 And we continue to perform very well with our equity investment portfolio, which gains a further $5,700,000 The returns profile for the business, a slight drop on the first half of twenty twenty. Return on capital employed is 17.9%. But it's important to note that we expanded the company's capital base in December of 2020 to facilitate the capital raising for the equipment for the Sukari earthmoving contract. And that contract commenced in 2021, but doesn't reach full run rate until Q4. So there's still outstanding returns when you consider that large capital base.
Our shareholder equity increased strongly by 65%. We have taken some debt on the balance sheet as previously flagged for the Sukari CapEx. And very pleasingly, as a result of the strong performance, we have today announced an increase in our interest dividend. We've declared a first half dividend of €0.012 per share, that's a 33% increase from the same period last year. And just to round off, we on the 15th July, we actually increased our revenue guidance at that time.
Previously, we've been guiding the market to revenue for this year between $185,000,000 $195,000,000 At that time, we increased the revenue guidance to between $200,000,000 $210,000,000 dollars Moving on to Slide 5. I'll keep it brief because we're going to deep dive a little bit deeper. But 2 cars drilling business, which is 83% of the revenue stream, was incredibly strong in the first half, driven primarily by a rapid increase in our full rig fleet utilization that rose from 57% in the first half twenty twenty to 73%. And the business has really performed very well. I'll digress as we move to that slide.
But then our other services also grew. So our non drilling revenue last year was 9%. That expanded to 17% in the first half. We've grown across all the subdivisions. The waste mining or the earthmoving business grew not only with existing operations, but with the commissioning of the Sukari contract.
Our laboratory business continued to expand. And our leisure and maintenance business won a 2 year hose and services contract with the reservoir at the Syama mine in Mali. Moving on to Slide 6. What is particularly pleasing is we've had a significant growth in revenue, significant growth in man hours work, yet we've managed to maintain absolutely outstanding cycle performance. And I draw your attention on Slide 6 to the paper at the bottom left, which just shows capital and our industry leading safety performance that we're very proud of.
Slide 7. Just a quick overview of the macro. We have in previous calls flagged what we saw as a disconnect taking place in the market, specifically top left, gold prices and metal prices in general, very buoyancy and exploration activity, a disconnect, as you can see on Slide 7 with the green arrow. And Asset Management has also been bearing out in financings, which is the top right, where capital raising activity has really accelerated, particularly in 2019, 2020 and into this year. Yet again, exploration activity still sitting at levels with half of what it was at the previous peak cycle.
So overall, the macro, the tailwinds are very supportive. We have capital raisins, metal prices. We have very strong operating performance by customer base, and we're starting to see a winning investment in our by our clients in their asset bases, which were depleted during what was a prolonged downturn. And that increased investment is driving increase in drilling activity, increase in mining activity and increase in our assay activity. Slide 8, it's a little more granular on the drilling business.
I've already quoted the utilization statistics. We did add 12 rigs to our rig count in the first half, but I should note that the average rig count for the first half this year was actually flat on last year, I. E, because most of those rigs arrived very late in the first half. So that bodes well for the second half performance of the drilling business. We increased rig capacity at a number of the long term contracts, Sukari, Gates and North Mara and Marilla are amongst a few of them.
And that is a key part of the company's strategy is to increase capacity at existing operations. Multiple new contract awards and what is particularly encouraging is the drilling cycle has really come back in favor of the contractors. Rig utilization is increasing. Productivity is increasing. Price is beginning to show signs of improvement and contract terms as well.
So certainly, very pleasing market for drilling. And frankly, the big driver of the outperformance in the first half has been the drilling business, which has surprised us, technically, on the upside. On Slide 9, we give an update with the waste mining earthmoving contract in Sukari. We announced this contract to the market in December of last year. And I'm going to actually go right to the bottom bullet point just to make a point that we had to hire 400 people, we had to move in 17 trucks, 3 excavators.
As the mobilization and operations actually commenced, We started moving there within 2 months of the contract announcement, which is an absolutely outstanding achievement by our mining team. So as we talk now, the workforce recruitment is largely complete. Infrastructure build is well advanced. All of the equipment has been fully commissioned. And the job is on track to be achieving full production run rate in Q4 this year.
So we expected to outperform the contract we have done so, but look, a really, really pleasing achievement for the team on what is our first significant earth leasing contract. Moving on to Slide 10. We give a bit of a profile our Laboratory business. This is a business we invested in 2017. We've moved to majority ownership of that business.
It was initially a Canadian business facing business now of Canada and the Americas, and we've now expanded Rapid Capital's network into Africa. Revenue growth of 97% year on year. A number of significant long term contracts that have been announced with Barrick, 5 inches Kinross and 4, where we're running the client's labs. And very pleasingly, we have managed to secure a number of the revolutionary Khrysos photoassay technology, which we're rolling out in our key markets of operation, which provides a real strategic differentiating advantage for our laboratory business. And then a final pillar of our activities on Slide 11, our direct investments.
We provide a little more detail in this presentation there. Obviously, a very active strategy in 2019. We put our balance sheet to work, partnering with our customers. And we do have to look at our customers as partners. We've invested in some of our customers when need to support capital raisings.
We have, in some instances, acquired exploration companies, development and invented them into a list of companies. We have provided financing for customers buying operating assets. And along with that, we've had partnership agreements, long term preferred contractor status. And that model has worked particularly well and actually generated $20,000,000 of contract revenue on our first half revenue of $98,000,000 So it's again working very well for us. Slide 12, we've included that these are the long term contracts, and this goes to the half of the company's strategy, secure long term contracts and then deliver multiple we've been operating there 15 continuous years.
North We've been operating there for 15 continuous years. North Mara, 13 years. Sukari, 16 years. Again testament to the quality of the operational team to establish such long term relationships. I'll now move into the financial results, Slide 14.
I won't talk through all the numbers as we have covered a lot of them already. I think the critical point to raise here is that the model of increasing capacity at existing sites has really driven operating leverage through the P and L. And as I said earlier, revenue growth of 51% has driven operating or adjustable net profit of 2 38%. Now I do apologize if construction is in the background, but I'll continue. Slide 15, profile of the company's margins.
As you can see, we have been gradually improving our margins from 2017 onwards and we're really pleased with margins in the first half. And again, this just brings to the full the strategy of operating leverage on the existing platform. The margin growth improved asset utilization at existing sites is certainly a key driver, but also improved maintenance practices, improved supply chain efficiencies. And as you can see in the bottom left on Slide 15, our EBITDA margins over time outperforming both the drilling contractors and the mining contractors. Slide 16, cash flow, tells a little different story as we Obviously, very solid EBITDA, but working capital outflows Obviously, very solid EBITDA, but working capital outflows associated with revenue growth, growth capital outflow associated there and obviously inventory growth as well, particularly with Sukari as that was a new type of inventory that we've been producing.
Substantial CapEx investments. So closing, we've moved into a net debt position as of June 30 as previously flagged to the market. I have, however, included in the bottom left of Slide 16, the operating cash flow, which is the blue bar. And as you can see, consistently since 2018, we have generally well, we have experienced stronger operating cash flows in H2 versus H1. Moving on to Slide 17, CapEx.
It's really well, a couple of points I bring out here. The company in 2010. We operated through 2020 self funding cash care of it. We enter the market in 2020 as we move into the earthmoving business. And as you can see, there has been a substantial capital outlay on earthmoving equipment and actually the largest year on year rig fleet growth as well concurrently.
So we're in a heavy capital spend, but the capital spend for the Sukari earth moving is now largely complete. And a lot of the rig purchases, as I said earlier, we've had 12 rigs arrive in H1, another 8 arriving in H2. So we're getting towards the tail end of this heavy CapEx period. Slide 18, a bit more detail on the balance sheet. Post the equity raise in December, we have backfilled some of our debt facilities, as you can see in the pie chart over our Standard Bank has been our banker for some time.
We now have increased facilities with Samoyan, Standard and Embirog and Macquarie have come in with an asset backed facility. So clearly, blooming our swing facilities available to the company. Slide 19, the investments. The cash flows from this, as you can see bottom left, percent over 2019, we were quite proactive and aggressive in terms of identifying opportunities in what was a very depressed market. Since that period, the cash flow has been broadly neutral, but the investment portfolio, as you can see on the bottom right, has continued to go from strength to strength.
And we posted again investment gains in the first half of USD 5,700,000 And then finally, Slide 20, dividends. Please begin, Mr. Ederer, as we have increased the income dividend from $0.09 to $0.012 per share. The dividend timetable is on Slide 20, bottom right. The ex date, September 2 and payment on the 1st October.
So in summary, if I can go to Slide 22 to wrap up and then turn over to Q and A. Increased revenue guidance, as I might note that, that revenue guidance for the midpoint represents 52% growth on 2020, and that follows a 20% growth in 2020 on 'nineteen. So we're certainly in a very strong growth period. Macron, gold price, very strong. That's at 90% of our revenue exposure.
Equity capital markets, very strong. Industry fundamentals, very strong. And I think to bring that out even further, as I mentioned earlier, there is also a case of reinvestment into assets that have been depleted in a protracted downturn and obviously, demand coming from the emerging metals and emerging battery metals. Demand is accelerating across all business units this year and continuing to be very strong and drilling demand is at previous peak cycle levels. Obviously, I alluded to earlier, elevated capital spend across 2020 2021 as we expand our rig fleet and build heavy mining equipment fleet for the long term contract awards.
We continue to maintain a strong balance sheet, gearing ratios of 20%. And I might add that when you balance out the investments, the gearing investments pretty much balance out. So continue to be a very conservative with the company, looking to improving the cash flows in the second half and continue to add flexibility in our balance sheet for future growth opportunities. That brings the presentation to a conclusion. I'll hand back to the moderator.
Thank you very much. Thank
And our first question comes from the line of Richard Hatch at Berenberg.
Just got a few questions. Jamie, first one, just on revenue concentration rate. I know on Slide 12, you talked to the multiple revenue streams in
your long term contracts. But
how do you sort of feel about kind of that revenue concentration risk across core contracts? Are you comfortable with that? Are you comfortable with contract duration and the ability to extend those contracts just as we look out sort of into sort of 2023 and beyond?
Yes. So for Slide 12, a couple of points there. Revenue concentration risk, we've always been very focused in capital on contract selection and client counterpart. And as a result, we probably had a narrower client base than some of our peers, but I feel confident that we've been duplicated in choosing the right people to partner with. Our goal has been to grow the long term contracts from what was a couple of years ago 4 up to 15% to 20%.
We're at 10% now. So we're heading in the right direction. So I'm actually really pleased with that. And second, really, to that semantic is choose the 1st cab off the rank Allied on Page 12. We're doing delineation, rate controlled, large coal, ancillary mining services and laboratory services.
So as time progresses, we're delivering more and more services to these customers and building on that relationship further. In terms of rollover risk, shall we say, I mean, some good examples here are Sukari. I mean, we started there in 2,005 with a couple of exploration rigs. We have had that contract or those contracts, both expanded and rolled over on multiple occasions. And the current one runs until the end of 2023, 2024.
That is going to take us down to 20 years of consecutive service. So I'm very comfortable with the services we deliver. We have a demonstrable track record of getting renewals and expansions, and we're well on track with our strategy to expand the portfolio. However, as I said, we've gone from 4% to 10%, and we're working on expanding that further.
Okay. Thanks for that color. And second one is just on the margin. I mean margin was very strong, and you point in the presentation to the EBITDA margin being showing good margin, good improvement. How do you expect that to evolve over the next couple of years?
Do you think you can hang on to that? We talked a month ago a bit about inflation. You suggested that we're seeing a bit of it come through but not too much. Is that still the case? Do you still feel that margins have scope to be fairly defensive at this point?
At this stage, it feels like a bit, Richard. I mean, if I said to you over the last 4 or 5 years, I if we're in 25%, 26% EBITDA margin, we're in a good spot. And we have been doing that for a couple of years. But as demand has really taken off, so has the margin. And in the last conference call, like I said, I think disingenuous does not acknowledge the fact that as this cycle matures, cost inflation comes.
It absolutely does. But I'd also caveat that the long term contracts have rise and fall mechanisms to provide protection against cost inflation. I won't crystal ball exactly about what guide where those markets will be. I'll leave that with my team in their direct dialogue. But if we're sitting between 25% to 30%, I think it's sustainable, we're in a very good bank.
Yes. Okay. Understood. And then just on 2022 visibility, Where are you with your kind of negotiations with your customers in as we look into 2022. I appreciate that a lot of the revenue comes from the long term contracts, so you know where they stand.
But just in terms of some of the swing stuff like the exploration, where is your what are you seeing? Or are you able to give any color on what you're seeing into 2022 at this point just in terms of how we should think about utilization and potentially ARPU?
So when we look across the in the peer side, we get around 88% of revenue from contracts with mine sites. And most of those mine sites, I'm just thinking as I speak to you, all of those mine sites are long term contracts. Some of them are due to roll off in the short term. But to the point I mentioned earlier, we have a demonstrable track record of not holding those over and in most cases expanding them. So if you use those numbers, 88%, and assume most of those are rolling into next year, that gives you a pretty good starting point.
So exploration is shorter term, as you know. Contracts there range from 3 to 6 months. But again, you just need to, in that case, look at where the cycle is. And I think we are in the early stages of this cycle. We have only seen this demand boom really come through this year, very late last year and this year.
So I think we're quite early in that part of the cycle. Again, I'm not going to specifically guide on utilization and ARPU on this call, but we have, I would say, probably the best visibility going into the next year we would have had at this stage because we have, obviously, the major contracts notably supplying as we signed at the start of this year for 4 years for both the drilling and the earth moving. We announced earlier in the year Gator had re signing. That's one of our other big ones. So the bigger contracts are all locked in.
So I'm feeling fairly good about the visibility into 2020,
And then just on business development. Can you just give us a bit more color on what's going on in the contract mining business development sphere? And just with that in mind, I mean, the investment portfolio has been very strong, and you've got a lot of value held there. Appreciate it's a partnership between your the companies you invest in and work with. But also, do you think that there's scope potentially to lighten that up if you win another contract and just need to add to measure the fleet to
the roster?
Let me answer the latter first. I mean, yes, there's always scope to lighten, and there's obviously liquidity within that portfolio. And I don't think any of that can jeopardize the partnership we have with the customers. The customers are, pardon me, putting this way, head on CEOs and they know that we'll buy and sell shares at any portfolio, manage this portfolio for us. So I think that liquidity is available.
But as always, it will be a question of where can we get where do we think we can get our considered analysis for the return on investment for our shareholders. So it's available absolutely. And as you can see from our cash flows, we actually we've had net interest in the investment portfolio in H1. In terms of the PPD pipeline contract mining specifically, it is building. I think, at drilling with all channels, you'd see the number of projects that are going through PFS and DFS and its development phase is growing exponential.
So there's a lot of activity, a lot of price into budgets for the development side. I think longer dated, but frankly, we're comfortable with that. We have had desks that required rapid movement and we have not moved forward on. Our number one priority was getting Sukari firing on all cylinders, and we feel very comfortable with that heading in the right direction. So some medium data, other opportunities work perfectly for us, and that pipeline is developing nicely.
And we will go back to our next question from Richard Hatcher, Berenberg.
I'm well, I'll take the opportunity while I was there. Right, I've got 2 more. The first one is just on the Labs business, which I think continues to think underappreciated. You just talk a bit more about this Marilla contract? You talked previously about the potential for this business moving to a $50,000,000 revenue run rate.
Is that still the expectation? And what should we have you got any kind of thoughts on potentially where that revenue could get to in, say, 2022? Or is it too early to put a number on it?
It's running this year somewhere in the 30 of we think it's going to be about 14, 15, that sort of number. I'm going to appreciate it potentially that last year was its 1st year of EBITDA positive initiative to now become profitable. I've seen a bit of an investment here for quite a few years, structuring the business the way we thought it needed to structured, winning some bare block customers for long term contracts. In terms of where it's going, that still seems like a totally achievable number. And these are, as we've said before in our conversations, very high CapEx like modular CapEx, high return businesses.
So look, we're very pleased with the growth trajectory. As I said in the free amble that this was a when we acquired our initial status in the business focused on the Americas, Now more than half of the revenue comes out of Africa. So look, I'm very pleased with the growth trajectory. Next year, conceivably, if we do get the 15, see growth rates continue within 30 next year. It's on a path now, building a market reputation.
The Marilla contract is subject to trial and Cs, but it's similar to what we're doing at Bouluduwijk with Barrick and Tanzania, specifically taking over, reserving, running their traditional RSA lab, then bringing in a CRISOS photo and no action machine to working currently with them. It follows the same semantics.
Okay. And then just lastly on rig availability, just in terms of getting fleet yourself.
How much of
a challenge is that? Is there scope to perhaps put some more capital on the balance sheet or utilize your finance leases more in H2 should you want to get a secured fleet? I mean, and also just a follow-up on that. What's the state of the fleet at the moment? Is it in your view, fairly good shape?
I mean, I appreciate you recycled it and it's until it comes in and it goes out. But just in terms of your kind of general broad view on where the fleet is at this point in time of the cycle, is there a large kind of recycling element going to come soon? Or are you comfortable with the longevity of the fleet at this point?
We did commission quite a few rigs late last year, which is why you saw the rig count drop quite a bit. I think it was 5 or 6 rigs. In general, we maintain one of the youngest fleets in the industry. And I think there are some rigs, a few that have actually just gone back into the yard and Milwaukee, for example, that are going under a bit of a revert. So that's ordinary business practice.
Generally, this is a young fleet in good version of the mission. And we don't expect to see any sort of major CapEx bills or spend on the existing fleet. It doesn't seem a good mix. We have an ongoing maintenance program. We stick with that.
So we don't get those sorts of surprises. In terms of the look forward, we still have another 8 odd rigs to arrive over the course of this year, and this is the biggest year of rig growth the company has ever had. But comfortably, for the long term contracts, 7 have gone to Sukari, 3 went to Geita, 2 have gone to Bulunzulu and some others have gone to other long term contracts. One's just on Redwood, for example. In terms of the forward pipeline for rigs, look, it's getting tighter.
All equipment is getting tighter. So we have actually started to place deposits for another 7 rigs. Due we're basically getting the slots for 2022. So we're having to be more forward looking than we've needed to be in the last 4 or 5 years as the market is demanding that.
And there are no further telephone questions at this time. So I'll hand over to James to see if there are any questions via the web.
Thank you. Now we have a few questions here, so I will start going through them. I'd start off with you've got a number of questions from Craig Howie at Surecap. The first one sort of focus on working capital and the other thing. Understandably, there was a material working cap absorption in the first half, particularly the increased receivables as that is wrapped up?
Can it be expected to quickly unwind in H2, enabling sustained free cash flow generation? And then the second part to that would focus on the financial charges where much increased in this period. Is it the company's intention to repay debt facilities as soon as possible in order to reduce interest costs?
Okay. So for the cash flow, I'll just draw you back to Slide 16. You'd be quite right, Craig, that there was a substantial outflow, which is predominantly receivables as obviously the revenue grew and then inventory, most of which was specific to Sukari Mining, which is different inventory than we had across the group. I do expect that to start to unwind in the second half, and that's why we put that table in Slide 16, bottom left. And again, you can see the operating cash flows in 'eighteen, 'nineteen and in 'twenty, just how significantly stronger they are in H2 on H1.
We have broken the back, so to speak, of the inventory build. Chime. And I think we have the receivables build has largely run its course as well, subject to obviously further revenue growth. So I'm pretty comfortable that we'll start to see that come back in the right direction in H2. In terms of finance charges, look, yes, we've obviously put debt on the balance sheet posting more of Sukari contract.
The debt balance sheet is on Slide 18. Obviously, we mentioned it earlier in Macquarie. Being more financed. We're more strategically pleasing with this is that we're already starting to see more competitive interest rates with the OEMs. And I think as the mining business gets more credibility in the market, that will also drive lower interest costs.
But the other point is that this is amortizing with the intention of the DataBank revolver, the other facilities are asset backed amortizing facilities. Finance the Sukari amortizes over the life of that contract. The San Jacinto Epiroc facilities amortized over 3 or 4 years. So yes, debt will be amortizing, and therefore finance drivers will reduce.
Thanks, Jamie. A few more from Craig. The first one regarding the dividend, is it now reasonable to assume a difficult onethree to twothree split between the interim and final dividend going forward?
Broadwind gains.
Thank you. And then final question from Craig. Adjusting for fair value gains, capital effective tax rate now seems to be running at very acceptable levels, just over 30%. Can the effective tax rate now be broadly maintained at peak level?
I think so. I mean we've had some periods. It depends, obviously, your contract performance in the different countries because you've got vastly different tax rates between the different jurisdictions in which we operate, ranging from revenue taxes to corporate taxes and everything you can imagine in between. But I'd as a guide, that 30% number is something that we are comfortable with.
We have a few questions here from Mark Simpson. The first one, the results say 8 further rigs will be added in H2, taking the total to 8 14, assuming no retirement. Is there any can you give any indication of where these additional rigs will be deployed?
2 of them have gone to Egypt, one of which is already underway at Sukari to start work, that's in today's announcement. We've got 2 or 3, 2 going into West Africa, that's actually 2, which are going in there on spec. We didn't have enough reverse circulation capacity. So we're very confident that we'll be willing for those when they arrive. They're actually multi purpose rigs that they continue for RRP.
And then the other 4 are going into Tanzania, which is the residual of the assets that I mentioned earlier, underground, Victoria, Boulashville and Gager plus an RC, Victoria here as well.
Thank you, Jamie. And one final one for Mark. Gross margins of 42% are
phenomenal given the ramp up
in non drilling revenue. Are you expecting this to moderate in the future? Or is this a sustainable level moving forward?
I think we're in the right band at the moment. And they are encouraging margins. I think it all comes down to what is keeping and it comes to the question that Hatchie asked about customer concentration. If we can keep a model where we expand with these long term contracts and have multiple services at those contracts, the margins, I think, have a high degree of sustainability. The key to margin in lean businesses is consistency and activity and leveraging your infrastructure.
And you get consistency and activity through long term contracts and leveraging the infrastructure on delivering multiple services into the site. So that's the strategy. We're confident we can continue achieve margins, again, Slide 15, above industry margins because we think we have the right strategy.
Thank you, Jamie. We have one question here on the MSA Labs. How does the gold cycle affect different MSA Labs compared to the new rig contracts?
The gold cycle, well, I think both of them pretty similar ways. The one of the key reasons when we were looking at the laboratory businesses and making an acquisition was that you have no better lead indicator for the supply of samples through a lab than a drilling company. You can't get a sample unless someone drilled the hole first. So they're very correlated from that perspective, but there's also another similarity to mitigate the cyclicality, which is just back to long term contracts. And I'll take you back to Slide 10.
Since installing some capital management into MSA Labs and focusing and using our network, those selected contracts on Slide 10, top right, that are 5 to 10 or 12. These are all long term contracts. And I look at these like they're a continued outlast hole contract. They're 24 hour double shifting on the mine side. The mine is operating with volume going through, and that's the correlation as well.
So yes, look, that's a very
Thanks, Jamie. And to finish off, we have a few questions here on the investment portfolio. First
one is
what criteria do you apply to the composition of your share portfolio? Is that by or sales?
Slide 19. There is a number of criteria, strategic alignment where we are doing business, Standalone investment case, investment committee oversight there. We have technical people on our committee, geologists, mining engineers, finance people of which obviously are on 1. So we take a rigorous process of DE. We obviously look for commercial services contractor, preferred contractor, exclusive contractor.
So it's going through a number of different iterations. It's not just a case of a place of a puzzle mix because we want to get a contract. It's got to go through the investment committees and tick all the boxes. In terms of ongoing buying and selling, we can just once it's established, it's like the portfolio, obviously in the portfolio. Decisions are made on the prospects for the company and the requirements for capital across the group and where we think we're going to get the best capital return.
So it operates under a pretty rigorous framework. Thanks, Jim. And the final question on the portfolio.
It was to Allied Gold's intention to lift later this year. And they ask, are you likely to see any uplift in value here if they get this away?
It's a big question. I'll take on the part that we take in our life. But we our listed investments are clearly totally transparent using listed prices. Our unlisted go through a pretty rigorous process again. And basically, they're not on a peer comparative basis.
So in the case of Allied, you look at predominantly West African peers with their production metrics, assets, values and then obviously applying the discount for the fact that it's unlisted. So look, we think if it does come to market, that you'll be in uplift on that part of it alone. But we think the value of our unlisted investments committee and through audit committee and through the auditors. So it's been a pretty rigorous process there as well, and we're very comfortable with where we mark that.
Thanks, Jamie. That is it from the webcast Q and A.
Very good. I think that means that I'm obviously happy to field the further questions through to Adam or through Connor, who unanimously started the call. But again, thank you very much for your time.
This now concludes our conference call. Thank you all for attending. Participants, you may disconnect your lines.