Earnings Call: H1 2021

Feb 16, 2021

Good morning to all of you, and a warm welcome to the twenty twenty one Pan African Interim Results Presentation. Thank you very much for taking time out of your schedules to join us. Today marks the second results presentation delivered virtually. Hopefully, we are able to meet in person again soon. The last six months have again seen good progress with Pan African's strategy of positioning ourselves as a safe and sustainable high margin and long life gold producer. Joining me in presenting today will be Dion Lowe, our Financial Director Barry Naika, our Head of ESG and Itu Malenkosoko, our Group Projects Engineer. Rest assured that we will keep the presentation fairly brief and that there will be an opportunity for questions afterwards. Please refer to our Senes and R and S announcement and to the supplementary information available on the Pan African website should you require detail not dealt with in today's presentation. As per usual, our disclaimer and detail on forward looking statements can be found on Page two and three. On Slide four, an overview of the presentation. We will spend time on the impact of and our response to COVID-nineteen and follow with some of the highlights and features of the half year past. We will detail our plans to further reduce the group's all in sustaining costs and also discuss how we continue to reinvest in our mining assets via capital spend. As the mining industry, we need to communicate better on how we make a positive difference to all of the stakeholders in the areas where we operate. Barry will give us more color on our environmental, social and governance initiatives. Dion will analyze our H1 numbers and financials, including detail on a very robust financial performance in the first half and on the group's continued degearing. Itumaleng will focus on recent progress with Igoli, South Africa's newest underground gold mining project. And we will then conclude with some thoughts on the Mintails opportunity and by demonstrating that Pan African is firmly on track in meeting our FY 'twenty one deliverables. So moving along. Slide six. Firstly, our thoughts and prayers go out to all of those who have lost loved ones to COVID-nineteen, including two of our colleagues. I would like to thank all of the people of the Pan African Group and your families for your hard work and dedication in what has been an incredibly difficult time in dealing with the pandemic. As you know, our mining sector has operated close to full capacity since the start of the pandemic, and South Africa has now been heart hit by two waves of the virus. Our people do not have the luxury of working remotely, but Pan African's operational performance is testament to their commitment to continued delivery. I have to say that in my view, the South African mining sector has done very well in managing the impact of the virus. Less than five percent of Pan African's employees have been affected to date. In terms of mitigating measures and response plans, we continue to maintain and update all of our procedures and protocols, with ongoing education and provision of PPE to our staff. In terms of the numbers, it is encouraging to see our current cases declining. As of last week, we only had three active cases in the group, with an overall recovery of more than ninety seven percent. Finally, on the matter of COVID, I believe our mining sector can play an important role in the vaccination drive when this happens, utilizing our medical facilities and resources to get the job done faster and more efficiently. The next section of the presentation deals with some of the key features from the half year past. On Slide number eight, the gold price in U. S. Dollars and South African rand. Now one is always in two minds as to whether to include a gold price graph in a results presentation. We don't try and forecast the gold price. We use fairly conservative estimates when we do our budget planning to ensure our operating margins are robust and that we do not overstress our balance sheet. We then focus on those aspects of our business over which we can exercise more control, which is costs, productivity and efficiencies and production planning and flexibility. Suffice to say that the recent gold price strength has benefited Pan African. Not only have we almost doubled our profitability, we have managed to de gear our balance sheet faster than previously anticipated, pay a record rand dividend to shareholders whilst also investing in our mining assets and into our ESG initiatives, which is part of our philosophy of mining for a future. On Slide number nine, the gold price wasn't the only highlight of the current reporting period. We delivered a robust production performance with gold produced up almost 6%. The Barberton team deserves special mention. Production from Fairview, Sheba and Consort was up more than 15%. Barberton is now well on track to deliver into its 100,000 ounces production guidance for the full year. Dion will speak more about the financial performance, but we achieved a record profit for the half, which one does not get to report on too often. From a cost performance perspective, our lower cost operations, which now comprise some 80% of our production portfolio, delivered very close to our $1,000 per ounce all in sustaining cost target. And we know that the Evander eight shaft will do a lot better in H2 of this year. In terms of our safety performance, we again have to express our condolences to the family and friends of our colleague that lost his life in a fatal accident at Barberton in July, a month after the operation achieved 3,000,000 fatality free shifts. Ilekulu has now gone for eighteen months without a single reportable or lost time injury, and we have again demonstrated an improvement in all reportable accident rates across the group. I'm convinced that we can achieve our goal of zero harm in the next years, as Elukudo has demonstrated is possible. If we then proceed to an overview of our operations and operating environment on Slide 11. So in terms of a track record of operating successfully in South Africa, Pan African's Barbaton has a pedigree second to none. This mining complex has been mining continuously for more than one hundred and thirty years. What investors should realize is that few jurisdictions are without challenges. It is therefore key that you have quality assets and a management team experienced and equipped to deal with problems and challenges as they arise or even more ideally, preempt and avoid some of these challenges altogether. We continuously seek ways of making our business less susceptible to adverse external impacts in South Africa. In terms of electricity, we are constructing our first 10 megawatt solar plant at Ilekulu, and I see our solar power generation very quickly increasing to at least 30 megawatts in the years ahead, with also possibly storage added at a later stage. On mining tenure, Evander's mining right is valid until 02/1938, and we expect Barbaton's mining right renewal is imminent. I'm very proud of the way in which we have professionalized our security function in the last years. We have accepted that it is a core function that we have to do really well. Stakeholder engagement in ESG, these are also now core to our business, and Barry will discuss some very exciting developments in this regard in the ESG section. On Slide 12, Pan African's business represents a unique combination of surface remining and underground mining. The surface mining reduces costs and production variability, whilst the underground provides exceptionally long life of mines, solid returns as a result of a large sunk capital base and also attractive optionality, as recently evidenced by the fantastic find at our new Quonsort operation. On Slide 13 is a bit of a simplified way of summarizing our business. You have Ilekulu and BTRP, our surface operations. These plants are highly automated and have generated fantastic returns for the group. Elekulu will repay its capital investment in three years, and BTRP repaid its capital in eighteen months. Farberton Mines, as I've said, is one of the oldest mining operations in the world, still with a twenty year life, and the Evander 8 shaft will now require very limited capital and generate attractive cash flows in the years ahead. If we move on to the next section, let's spend a couple of minutes on the operational performance of each of our core assets. Ilekulu on Slide 15. Now in the reporting period, we were constrained on tonnage throughput as a result of remedial works to one of our deposition compartments. We therefore could not compensate for the drop in recoveries, which were as a result of the areas where we were mining by increasing throughput. In the next period, we will be remining more of Kinross Dam 3 with higher recoveries, which, combined with higher throughput, is expected to improve Elukudu's gold production. Elukudu is one of the lowest cost producers of gold in Southern Africa, and the 10 megawatt solar plant we are constructing on-site will make this asset even more attractive and sustainable. On Slide 16, the current reporting period saw a decent performance from BTRP, with the asset generating more than $8,000,000 in EBITDA. We processed significantly more material at BTRP, and the costs were higher as a result of increased transport costs for the new feedstock and lower recoveries. BTRP can continue for many more years, but in order to maximize margins from this plant, we will look to convert it to treat material from Royal Sheba in the years ahead. We will do our first Royal Sheba bulk sample in the next twelve months. Similar to Elekulu, VTRP also reduces the tailings footprint for Barbaton mines, turning rehabilitation liabilities into profits. Now Slide 17 to 19 provides more detail on the Barbaton underground operations. And again, credit to our geology and mining teams for the excellent performance in H1. In terms of mineral resource management, in addition to technological advances and implementing industry based practice, our recent focus has been on structural mapping and interpretation at the Barbaton underground. This has resulted in additional mineralization being discovered and accessed, both at Fairview's 64 Level Hope Reef and then also at the 66 Level Main Reef Complex, also called the 11 Block. I have to say that Slide 18 has us quite excited. In the last ten years, Fairview mine has not had this level of minable reserves. Look at how we have increased the size of our minable areas on our current platforms with grades that continue to be world class. Current grades in the MRC are between 15 to 35 grams per tonne on average. The current platforms should give us at least three years of life, with the two fifty eight platform also accessed before the end of the financial year. Now Slide 19, Consort mine is currently shooting the lights out, so to speak. The 42 level find made international headlines. We have reduced all in sustaining costs from $2,000 to $1,200 as promised, with production in the reporting period exceeding targets by more than 30%. The Old Lady Consult really has a new lease on life. If we then conclude on our operations, Slide 20, the Evander H Shaft pillar, I have to say, was a disappointment in the current reporting period. We encountered issues with the pseudo packs utilized for support and then a fracturing of the shaft lining, which has taken almost three months to repair, also set us back. These issues have been addressed, and we have confidence in our Evander team. The H Shaft pillar will generate very attractive cash flows for the group in the next three years. We now have the momentum, and we have to make our investment and hard work count. On Slide 21, all in sustaining cost. 80% of our portfolio now pretty much delivers on the all in sustaining cost target of $1,000 per ounce. Importantly, we now include all of Barbaton's underground in the lower cost operations. The math on the Evanda underground is quite simple. We produce the ounces in the half year ahead, and the unit costs will come into line. A final word on costs on Slide 22 think it demonstrates that our cost performance on core operations is very much in line with our global sector. On Slide 23, group capital expenditure. We continue to invest in our assets. In the last six months, we invested a bit more than previously anticipated, including into a circuit to extract PGMs, specifically osmium and iridium out of Evander ore and also for further drilling at Evander 9A block. In a lower gold price environment, we can cut CapEx to maintain margins, but for the time being, we are able to balance a fairly large capital reinvestment into our assets with debt reduction and increased dividends. The next section of the presentation relates to ESG. Now for Pan African, ESG and sustainability is not a drag or an imposition on our business. It is actually an enhancement, in many instances forcing us to look at ways of improving operations and utilizing existing but dormant assets, such as agricultural land, to benefit all of our stakeholders. Barry Nyker will now take you through some of Pan African's existing and current ESG initiative. Thanks, Gorgos. I will be presenting Slide 25, Environment, Social and Governance. I would like to firstly provide a context of the current ESG space the organization is currently operating under and proceed into the detail of our implementation plan on our ESG projects. In recent years, environment, social and governance initiatives and sustainability development goals have gained momentum within most companies. However, recently, the risk and opportunities on ESG matters have been elevated due to the impacts of the global pandemic. COVID-nineteen has highlighted our social vulnerabilities in our health and safe well-being at our homes, workplaces and communities and thus our drive to be more impactful as an organization. The group has made significant progress on projects targeting social and environmental impacts, including climate change and biodiversity, mine closure and environmental rehabilitation and as well as water management solutions. Workplace health and safety initiatives emphasize the latest COVID-nineteen prevention and mitigation measures, while progress with social and economic development projects continues in our host communities. Our environmental projects. Climate change and renewable energy. Evander Mines has appointed Juhi Renewable Energy's Proprietary Limited to construct a 10 megawatt solar plant. Construction will commence during the 2021 with the commissioning anticipated in the 2021. The solar plant will provide an estimated 30% of Ilikula's power requirement, resulting in a reduction of Scope two greenhouse gas emissions of more than 26,000 tonnes and reducing the group's carbon footprint by an estimated 3% to 5% annually. The total cost of the solar plant is an estimated USD 9,500,000.0 with a payback on investment of less than five years. A feasibility study for a similar 10 megawatt plant at Barberton Mines is currently being undertaken. Water management. Water is a strategic natural resource for South Africa and is vital to Pan African's business. The group's commitment to responsible and sustainable water use is embedded in our water management policy and water use licenses. In December 2020, a feasibility study on a water treatment plant was concluded. The study investigated recycling water pumped from Evander Mines underground workings. The proposed plant design is to treat approximately three megaliters of water a day using reverse osmosis technology, producing portable water for daily consumption and replacing municipally sourced water. The plant's anticipated savings in water cost and in recycling will result in a positive environmental impact. Biodiversity and Conservation. The Group Conservation Initiatives focuses on funding biodiversity projects that ensure the sustainability of protected areas and communities we operate in. The group is currently progressing with several initiatives, including a collaboration agreement with Barbaton Nature Reserve, which neighbors the Makhonjwa Mountains, recently proclaimed as a World Heritage Site by UNESCO for its rich biodiversity and unique geological features. In addition, we have adopted three orphaned baby rhinos at a rhino sanctuary near Barberton called Careful Wild. We will keep you updated on their care and rehabilitation. Our social programs Corporate social investment and local economic development. During the current reporting period, the group invested USD 1,000,000 in its host communities and employee development programs. Barbaton and Evander Minds invested in education and health care infrastructure projects, arts and culture programs and other youth development initiatives. Highlights include the following: 90% progress in the construction of the Cathieville clinic within the Barberton Mines community and a planned handover of the clinic to the Department of Health in March 2021 finalization of the construction tender process of Barberton's Mines, Cathieville, Carve Valley Primary School the Sakasizwe and Mbashleni Township's public lighting projects concluded at Evander Mines, which were much needed public safety initiatives. Job creation: Barberton blueberries, our social agri project flagship. The group has partnered with Primocane Capital, an independent company with a well established track record in blueberry farming to develop a 15 hectare Phase one blueberry farm on land and infrastructure made available by Barbaton Mines. The project was initiated late in 2020 and is on track to be commissioned during 2021. The total cost of the project is estimated at $2,700,000 and indicative of the beyond compliance approach adopted by the group in its endeavor to sustaining its communities. During the construction phase, an estimated 60 temporary jobs will be created. Post commissioning, an estimated 20 permanent and three seventy five seasonal jobs will be created for members of local communities. A sizable first harvest is planned for 2022. Pan African is proud to be part of this exciting agribusiness venture, which will contribute in alleviating the unemployment in Barbaton communities. Our approach to governance. The group reviews its corporate governance practices regularly and have adopted King4 as the recognized corporate governance code to ensure that we act in the best interest of our shareholders, comply with the applicable laws and regulations and adapt to the changes of our regulatory environment. Independent audits completed and ongoing are: carbon tax emissions and disclosures tailings storage facilities audit, mineral tenure compliance, SLP implementation and water use license amendments and applications. The group will continue to assess its ESG risks and opportunities, thus maintaining its sustainability into the future. I will now hand over to our Financial Director, Dion Lo, who will be presenting the financial results. From the summary of the group's results on Slide 27, noteworthy is the operational leverage with a 38% increase in turnover, giving rise to a 73% increase in adjusted EBITDA and 86% increase in attributable earnings, a historical profit record for the group. Equally compelling is the increase in cash from CAD7.4 million at the end of the corresponding period to CAD28 million at the end of this reporting period, which contributed to a decline in net debt by 47%, notwithstanding the payment of a dividend of approximately $21,000,000 in December. Slide 28 illustrates the group's existing senior debt profiles and forecasts debt profiles before the set off of any existing or future cash holdings. The red line graph depicts the contractual amortization profile of the existing RCF and Ilekulu facilities, which results in the existing senior debt being extinguished by March 2024. In comparison, the blue line graph, however, depicts the forecast rate of amortization of these facilities given the assumptions disclosed at the bottom of the slide. And on this basis, the group will have extinguished its senior debt by December. The green line graph depicts the anticipated drawdown rate of the new Egoli facility and its contractual amortization profile over a twenty four month period post the thirteen month development period. We intentionally structured the repayment profile in this manner to ensure that Ngoli's debt redemption obligations do not curtail the group's ability to continue paying dividends and unlocking the potential of the existing asset portfolio through ongoing exploration and development. We expect the Egoli facility to become available in March and the first tranche of approximately R400 million or of approximately ZAR400 million or approximately ZAR27 million being drawn down over the next eighteen month Phase one development period. The remainder of the Goli facility of ZAR800 million or approximately ZAR54 million is projected to be drawn down over the twelve month Phase two of the project's development. Finally, the yellow line represents a solar plant facility of ZAR140 million, which is drawn down as a single tranche and amortizes evenly over a six year period post the nine month construction period. Slide 29 depicts the combined principal debt profile of the four senior facilities referred to in the previous slide. As mentioned, we expect the group to materially degear its senior debt by the end of this calendar year and fully on a net basis within the final quarter of this calendar year. As at Goli Facilities drawdown, the senior debt commences to increase again to a projected peak of approximately $80,000,000 excluding any cash holdings by June 2023, materially below the historical peak in excess of $120,000,000 At this stage, the revenue from the group's forecast production of 250,000 ounces should comfortably support this level of debt. From June 2025, the remaining the only remaining debt is a solar plant facility, which then amortizes over a twenty seven month period. Finally, Slide 30 illustrates the improvement in the group's net debt to net adjusted EBITDA ratio since 2018 and the reversion to the 2016 level of a robust 0.5 for this ratio. We use a net adjusted EBITDA definition as this is consistent with the senior debt facilities' covenant definitions. The only difference between this definition and the conventional EBITDA definition is the exclusion of impairment charges, which tend not to be of a cash flow nature, and hedging gains and losses. The last of the gold price hedges entered into in the 2020 financial year was settled in the reporting period for a net gain of $3,400,000 and the group's gold revenues unhedged going into the second half of the 2021 financial year. Thank you. Itumuleng will now give an overview of the Igoli project. Thanks, Ian. I'll be presenting Slide 32. The Igoli project is South Africa's newest underground gold mining project. It is a low cost brownfield project which seeks to create 1,200 direct jobs. We inherited the Igoly project after acquiring Evander Mines from Harmony. It was previously known as the twenty ten pay shoot. Pan African Resources commenced with a concept study into the Igoly project in 2017 and completed the feasibility study in 2019. The feasibility study demonstrated a robust and economically viable business proposition, which we are now very excited to develop. Igoli has an initial life of mine of nine years, producing 550,000 ounces of gold at an all in sustaining cost of less than 1,000 per ounce, which fits well with Pan African's current all in sustaining cost target of US1000 dollars per ounce. The underground project is expected to contribute 72,000 ounces of gold over its lifespan per annum and produce its first gold twenty months after construction begins. Igolic increased Pan African's total annual gold production to 250,000 ounces per year, once in steady state, from the current market guidance of 190,000 ounces per annum. Our project execution team is comprised of individuals who have a wealth of strategic execution and operational experience, not only at Ivenda Mine, but also at various other operations with similar mining methods. The geology around the Ivenda complex is well understood from the adjacent operations and from recent geological studies and drilling. The Ivenda Mine effectively comprises of two existing vertical shafts, one hoisting and one menin material, a 1.75 kilometer in trimming distance to the start of the decline and a single decline to the ore body, located two kilometers below surface. Ore will be processed at Kinross plant located adjacent to the No. 7 Shaft Surface Complex. Licensing is still in place with the mining rights valid until 02/1938. If we proceed to Slide number 33, DRA Global has been mandated to complete the detailed project scheduling and planning as part of the early works program for Igoly, which commenced in October 2020. Engineering, procurement and construction management contract is to be completed in the next three months. We have now broken the work structures into the following key areas: the Kinross process plant mining surface infrastructure, main power supply, seven shaft and 15 level horizontal infrastructure, three decline main block and east block, which include the mining and associated infrastructure and lastly, mining equipment. Work has commenced on No. 7 Shaft for the early works and comprises of optimization of the ventilation and refrigeration design, dewatering designs and the water balance. Dimensional and nondestructive testing inspection quotations for all winders are in progress. Commencement of large scale project construction is anticipated in March or April 2021. As Dion mentioned, the funding structure for the Igolu project is being finalized and is non dilutive with a dedicated senior debt package from Pan African Banking Confertia. Debt redemptions are commercially ring fenced to the Igoli cash flows and does not affect cash flows from any of our existing operations. Thank you. I will now hand over back to Corbis. Slide 34, Minthales. It is not often that one can possibly acquire more than 2,000,000 ounces of surface resources for $3,000,000 We have extended our Mintail study period to January 2022, and the way we are approaching this opportunity is effectively as a rehabilitation project that generates attractive returns. As part of our work, we are considering ring fenced financing options, which will not have recourse to the Pan African balance sheet. Technically, we believe we can make this project work, but there are a number of other pieces that have to fall into place. We will continue to update the market in the year ahead. Lastly, let us conclude on Slide 36. Pan African is firmly on track to meet our full year deliverables. Key focus areas in the next six months will include continuing to manage the impact of COVID-nineteen, certainly continuing our proactive journey to zero harm. We would like to deliver and potentially exceed our production guidance of 190,000 ounces for the year. We will reduce all in sustaining costs at Evander No. 8 Shaft and at Barbaton Mines' Tsuchiba operation. We will progress Igoli and the evaluation of the Mintails opportunity, and we will endeavor to increase dividends and further reduce net debt. Thank you very much for your time this morning. We look forward to continue mining for the future in the year ahead. The team will now be available to answer questions. Thank you very much. So should we start with questions from the conference call? At this stage, there are no questions from the line, sir. Okay. Thank you. Shall we move to the webcast? We have one question from Mr. A. Ross to the CEO. Are you going to declare an interim dividend? Tian, you can take that one. Sure, Kurus. I think it's something the Board will assess on an ongoing basis. We paid a record dividend in December for the 2020 financial year. Deleveraging is obviously something which also needs to be taken into account. But I think in the context of that deleveraging going forward, the prospect probably becomes more tangible, but it's something the Board will consider on an ongoing basis. We've got another question from Arnold Van Cron of Nedbank CIB. Arnold says, Good results, well done. And he's got two or three questions. Number one, why did you not declare an interim dividend given strong results and a solid outlook? Two, please elaborate on the issues that caused the delays at Evander 8 Shaft. He got cut off a bit, so hear he the full explanation on that one. And three, kindly explain kindly expand on the reasons for the Ilekulu throughput issues, lower recoveries. You mentioned some remedial work. Has all the issues been addressed? And can we expect stable throughput and recoveries going forward? Thank you. Thanks. Thanks, Arnold. So I think we've addressed the first question on dividends. Certainly, we degeared the balance sheet quite materially in the last year, but we'd like to do so further. And so as we've always said in terms of cash flow generation, it's a balance between reinvesting in our assets, dividends and then degearing the balance sheet. So certainly, I think given the prospects with, as Dionne said, degearing to forecast to actually happen in the current year, that will give us a lot more flexibility for dividends with interim dividends in the future. In terms of eight shaft, as we've said, yes, I mean, on a portfolio basis, that was the one asset, but in terms of performance, it was disappointing. So key issues was support on the pseudo packs. It took us some time to actually get that method of support to work as we sort of hoped it would work, and it is now very efficient. So we've replaced the Ilekudu tailings that we were pumping into these packs with dry tailings and fly ash. So it's working very well. Obviously, when one is mining a pillar, safety is a paramount concern. So we're taking it a bit slower and making sure we get it right. And then also, we had a fracture in the ventilation shaft, and that caused quite a big delay. That's been taken care of, and we're already seeing the production increase from H Shaft. So we're certainly forecasting a much better performance from H Shaft in the six months ahead. And despite all of the issues, if you look at the Evander complex, we still generated cash flow, a positive cash flow in the six months. And again, that demonstrates that we can do a whole lot better in the six months ahead. And in terms of Ilekulu, mining is mining, and you're going to have some challenges. So the drop in recoveries on Ilikudu wasn't unexpected. It's the grades and recoveries are variable as we mine through these dumps. And as you go deeper, the material does become more preg robbing and less oxidized. And we allow ourselves some level of flexibility in terms of throughput, but with the remedial work, as we've said, so we were not able to push that button. So remedial work really comprised principally of the installation of elevated drains on the bottom compartment. That's now done. So we can increase throughput. So yes, we're expecting a better half for Ilekulu. But let's put it in context. Ilekulu is sort of probably still the lowest cost producer of gold in Southern Africa and will continue to be so. Thank you, Koovis. We've got a few more questions. There are two from Mark Dutoy of Oystercatcher. I think we've addressed the interim dividend declaration consideration. And the second question is the $777 AISC for the Igoli project, is that still attainable? Or is it closer to the $1,000 AISC group target? Yes. Thank you, Mark. So studies that were done in 2019 calculated the all in sustaining cost of $7.77, which is obviously quite opportune or fortunate. But in terms of our forecast and our planning, we're forecasting or rather budgeting or planning for a bit of a higher cost, I mean, as these things go. So the project is very robust, and hence, it can sustain, obviously, quite a large increase in cost, not that that would be our aim. But I think we're trying to be a little bit conservative in terms of our forecast. But yes, the steady number was $7.77, 100. Thanks, Kvus. And the next question is from Keith McLachlan, who is now private. Keith asked, does the funding package at Igori require any degree of gold hedge in place? Not initially, Keith. There's no prescribed hedge requirement until we get to the second phase of the project. And there, we are looking at a portion of the production, the development production, to actually subsidize the capital. And there is then a hedging requirement for that portion of the production coming out of Egoli specifically to subsidize the capital bill. So that would make a lot of sense at that point in time to get certainty on those ounces. But there's no other prescribed hedging requirement. Okay. Thanks, Tian. The next question is from Mark Ansley of Argon Asset Management. Have we given a target AISC for Evander H shaft? Yes. So Mark, in the effectively, the ninety percent of the costs on Evander H Shaft is fixed. And if you look at the all in sustaining cost slide, we're forecasting about 100 kilos per month from Evander for the next six months. So that's going to have a dramatic impact on the all in sustaining cost. And also, the all in sustaining cost for the period that's passed was skewed by the inclusion of the hedge costs. And so that's no longer the case for the next six months. So definitely, you're going see a big decrease in that all in sustaining cost for Evander eight. Okay. Thanks, Phuis. And last question we have on the webcast is Donald Slater from Mining Weekly. Chris, can you provide a little more color on the Mintails acquisition? And how is the due diligence and feasibility progressing? Yes. Thank you. So as we said in the presentation, we really view Mintails as an option. We have until January to complete our work, and we've done we've made a good progress. We've done a fatal flaw analysis, which didn't identify any fatal flaws. We're busy with a financial evaluation. And really, as we said, the way that we're thinking about Mintails, it's an asset with a checkered history to be kind, is we're thinking about Mintelz as a rehabilitation project that generates attractive returns. And that's the way we'll look to fund it also on a ring fenced basis. And we're progressing funding. We're progressing the studies, and we have a bit of time to make up our minds. Okay. Thanks, Luis. That's it from the webcast questions. Are there any other questions from the conference call participants? Yes, sir. The first question from the line comes from Tim Huff of Peel Hunt. Thank you very much. Yes, well done guys. And just a few questions. I guess the first one would be on CONSORT. You mentioned that you've already hit your targeted $1,200 an ounce. I was wondering if you're looking at that sort of cost level at Consort as being more sustainable now or if you're finding that it's driving even a bit lower as you go into the fiscal second half? Tim, I think we're happy with sort of $1,200 per ounce level. We don't want to overmine at 42 level also. So the way we're looking at 42 level is just sort of, I guess, the opportunity in the next two, three years of sustaining production at this level within sort of doing a lot of exploration, as we'd highlighted in presentation, to identify new areas also. So we're sort of quite happy with the $1,200 number for Consort in the next year. Okay. That's great. And then the back to Ogoli, the twenty months for first production sort of goal that you've got in there. I guess how high conviction are you on that? And is that twenty months from early works? Or is that twenty months from the second calendar quarter of this year? Tim, it will be twenty months from the second calendar quarter. But I suspect we're going to be able to generate a bit of gold before then. We're just being quite thorough and rigorous in terms of the studies to make sure that when we push that button on major capital, all of the boxes are ticked, and it's maybe a bit of a delay, but it's not massive. And in a bigger context, I think, of project, we think it's the prudent thing to do. Okay. That's great. And then the last one was just on Mintails. Just one more question on that. Was that extension is that due to COVID related delays or anything or maybe a change in view? Like you said, you're now looking at it as a rehab project. I was just wondering a little bit of the background behind that. Well, I think we have a good relationship with the liquidators, and they had some regulatory requirements they had to take care of. It was delaying them. And after the initial assessment, we also felt that the sort of period that we had to evaluate the opportunity and come up with a proper feasibility was not sufficient just because of the level of work that we'd have to do on all of the aspects, including water, tailings deposition, etcetera. So we're much more comfortable now that the periods we have is sufficient. There are no further questions from the lines. Thank you. Thank you then very much, and thank you for joining us today. All the best. Thank