Good morning. Welcome to the Q4 2024 presentation for Akobo Minerals. I have with me today Helge Rushfeldt, our Head of Mining and Processing. Together, we will take you through the latest updates from the company. Q4 is some time back. We will try to focus more on the latest developments and try to give you the information you're looking for. Akobo Minerals, what's new? We are now officially an Ethiopian gold producer, a major step forward for the company after 15 years of working on the project. That's a great milestone and achievement for the company. We are the second operating mine in Ethiopia since the Lega Dembi Mine opened in 1994. That says a lot about what we have managed to do over the last few years. We've been there for 15 years. We have now a strong local foothold in the area.
It's a nice place to work, and we're operating on a daily basis, every day, all year round. The Segele mine is now in commercial production, and it's based on the exploration and mining licenses that we have in the Gambela region and the Dima Woreda that you can see on the small map here, all the way to the border of South Sudan. A very nice area to work in. The company has some strategic advantages. We have our exploration license with a world-class deposit potential. We still see a lot of potential within the area and more and more confidence as we explore the bigger and larger area around us. Of course, the high margin cash flow that we expect from the Segele mine is based upon our resource mineral estimates with an indicated part of 41,000 ounces.
As you can see, it's pretty good at 40.6 grams per ton. This is closest to the surface, and it is the area that we are moving into these days. Total resource is 68,811 ounces at 22.7 grams per ton. It's some of the richest gold in the world. However, of course, it's a small resource, but we are confident that we will be able to extend this over time. We do have a very modern and efficient processing plant established, and we do have in-house drilling capacity. For the growth and the future of this company, within the mining license, we already see potential for expansion. That's something we will focus on in the near term to try to establish a wider area of mining. Of course, the Segele deposit, as I said, is positioned to deliver a substantial cash flow over the next few years.
In general, for us being the second producing mine now in Ethiopia, we are well positioned to become a key player in the Ethiopian mining industry. For the latest key events, of course, the most important, our first ever revenue achievement and first quarter with revenues in our 15-year history. Coupled with that, the record gold price has a significant impact on the cash flow and the value of the Segele deposit from where we are right now. We have strengthened our cooperation with Sutton Global. They're working hard on progressing the vertical shaft project with the preparation for that, the design work, and also the site establishment. It's all moving very well forward. We'll talk more about that later. We do have some leadership transitions. It's not unusual in our business that there are changes from time to time.
Helge Rushfeldt, he will pursue new opportunities outside of the company. Of course, I would like to extend my gratitude for all the hard work he has been doing for the company over the last few years. It's not been easy, but he's been a strong supporter of the company, of the project, and will continue to be so going forward. We'll have to do some changes with that regard. What we're doing is bringing in Akobo Minerals Jock Evans. He has 40 years of mining experience, and he's joining us from Sutton Global. He is already actively working in Ethiopia, and I've had the pleasure of working with him in Addis for the last couple of weeks. It looks very, very promising. Also, some changes.
Since we're moving from a project-based operation to a more steady-state operation where we do the same every day, and we're trying to improve on what we're doing every day, we have also decided to change our local general manager in Etno Mining. Tamiru, who is a mining engineer, one of the first pioneers actually who started the mining industry in Ethiopia many, many years ago, he will take over. While Tesfaye Medana, our general manager for the last four years, he will step down. I would like to, of course, commend his work of getting the Segele mine up and running. It's been hard work, and it's very much appreciated. On the production side, we have produced 18.5 kilos of gold so far. We've started our cost covering, which of course is very important for us.
Even though the first 2 months of the year was lower than anticipated, we don't see any reason to change or modify our overall ambitions. Helge will talk a bit more about this, but we're still in the early phase. We're still working to expand and open up areas underground. With that, we will also be able to produce more efficiently and get higher grades out. On the financial positioning side, we are continuing our efforts to support the development on the vertical shaft, and we're focusing on securing funding for that. We're looking at different options being in strategic industrial offtake agreements and more. We will update the market once we have more information on that. I think it's worth mentioning now all the recent Ethiopian economic development.
I've spent a lot of time in Ethiopia lately, and it's an enormous development and activity that I see every day. This country is transforming itself again into what we thought it would be a few years ago before the conflict in the north and before COVID. I'm very, very happy to see the latest developments, especially driven on the economic reform side. We've seen a successful currency flotation. That's not an easy achievement, but that has been, in my view, very successful. We've seen a huge reduction in inflation that is expected to continue. We've also seen the IMF and World Bank agreements coming into place. That is also helping on upgrading and renewing the economic reform. There's a push for that. They have launched their own securities exchange.
That, of course, is in the early stage, but it will definitely enable future capital raising through equity and bond markets in Ethiopia and just expand the general economic activity in the country. Opening of the bank sector. Just last week, the new directive came. It is now possible for banks to get up to 40% foreign ownership. That will also strengthen the whole banking sector, connect it more to the national banking systems, and just improve the competition and financial inclusion that we see. Also important for us is the improved access to foreign currency. We are now able to pay our national suppliers from local currency, being exchanged into dollars in the country, and then pay them. This has never been possible before. We are very, very positive with regards to the economic development these days.
Even you see the economic growth here estimated at some 7%, 8% last year in 2024. Of course, despite challenges, again, Ethiopia is making significant progress in economic reforms and creating a more attractive environment for investors. We would, of course, like to see more foreign direct investments into Ethiopia and also especially in the mining sector. That will only be positive for all of us. What they're working on in addition is the entry to the World Trade Organization. A lot of work's being done there, and that might be expected to conclude in 2026. Also a very interesting and exciting opportunity is a potential collaboration with the Ethiopian Sovereign Fund. The Sovereign Fund in Ethiopia, called Ethiopian Investment Holdings, is now in charge of managing all state-owned enterprises, some 50 companies with approximately assets under management of $150 billion.
They have a philosophy that is close to market-based and economic-based follow-up. They're here to make money. They're here to improve, to make their state-owned companies more efficient. They do have extensive expertise in commercial management. They're now a driving force in the Ethiopian economic development. Mining, being a strategic industry for Ethiopia, they are now putting more effort into understanding it, more effort into seeing how they can help expand and support companies. With that comes a very long-standing and ongoing discussion that I have had with Ethiopian Investment Holdings for a long, long time on the potential collaboration and investment into the company. We have overcome a lot of regulatory hurdles since no company in Ethiopia has been allowed or ever been investing outside of Ethiopia before.
EIH is now awaiting their final guidelines from the National Bank in order to conclude their first ever international investment. We are saying this now because the attention in Ethiopia and the level of, yeah, the National Bank level of handling this tells me that we now need to disclose this. There is, of course, still a chance that this might not happen, but we are very confident and we are addressing this together with Ethiopian Investment Holdings. We will get back to this once we have more news and updates, but so far it looks very promising. Also worth mentioning these days is our cooperation with Sutton Global. Sutton Global, they're a group of companies with expertise in certain areas and especially within mining and financing related matters to mining.
They are now more and more and gradually taking over all our mining and processing operations at site, which is something I'm very happy with. It gives me a lot of comfort. They have a lot of expertise. From just the first interaction that we're seeing now, it makes me very comfortable on especially the trajectory towards sinking the new vertical shaft. They already have a business support manager with us. We have now a mine manager, operations manager. We will get a process plant manager in once we start the CIL in the near future. They have a team and working on supplier selection for the vertical shaft project. They have the technical expertise on how to do the vertical shaft project. The mine planning side also goes along with this.
I'm very happy again that Sutton is taking full responsibility for this now going forward. As you can see here from the right-hand side, Sutton is a trusted partner, not only of us, but also of our lenders, Monetary Metals. The three of us are working hard together to find good solutions and move the project forward. On the gold sales and financial updates, as I said earlier, we have ongoing strategic discussions, not only with EIH, but with other industrial and strategic partners. We're also looking at some offtake agreements, and we will get back once we have something. We are working to find the solution that is the best for current shareholders and, of course, current bondholders. You can see here, Monetary Metals support.
We have a strong relationship and a continued support from Monetary Metals in finding now solutions that will facilitate our expansion, but will also be more fit for the current operation and the risk level that we're working on. You can see from the table that we're building up the small gold inventory. Of course, we would have liked to have processed that already and sold it to the bank. That is not possible before we start the processing plant and the CIL startup. It is good to see we have gold in the bank, sort of, even though it's in the tailings at our site. You can ask some questions here on the purity of the last three batches smelted.
That's something we're reviewing, and I'm happy to see that certain specialists will arrive the first week of April to investigate this further and help us with the next smelting that will happen that week. Hopefully, we will be able to fine-tune and get more out and also work more efficiently. Here you can see the total production, 18.5 kg of gold. It has an average before taking into consideration what's in the tailings of 15 g per ton. That's still amazing when you look at the industry average of 1 to 3 g per ton. If you include what is in the tailings, we're closer or we are above 20 g per ton, which is starting to match what we expect from the overall grade from the overall deposit. So far, it's looking good, but we're also expecting this to improve over the next few months.
Again, while still early days, we are expecting improvements as we also open up new areas for mining underground. Helge will talk more about that. I found this one again. It is a slide we used a few quarters ago. It is probably even more relevant these days. We have all seen the gold price reaching all-time high, passing $3,000. I will not speculate which way it will go, but you can see here at least as an illustration of what a change up and down from $3,000 per ounce, what that will do to both the cash flow and the in-situ value of the resource. If you look at the $3,000 mark on the cash flow side, it is an estimated $90 million cash flow.
Here I would like to add in that if you do compare that to the Monetary Metals Gold Loan, which will peak at 8,750 ounces now, that is valued at $25 million. There is still more than enough cash flow to support that loan. That is important to understand, even though we are in an ongoing dialogue with Monetary Metals to restructure the terms now for better alignment with the current operational status and also the risk level. ESG, health and safety. That is still important. You see here our lovely team on the clinic. We are taking care of all our 200 employees every day. It is a wide range of, well, things they fix every day. We are very, very happy to have this team at site supporting us.
In general, they're doing also the regular work on the environmental monitoring side, noise, dust, annual performance report being submitted. We do have increased focus on health and safety initiatives, especially on-site clinic, which you can see here, and also working a satellite clinic at the camp or at the mine. We're focusing on upgrading also with trained safety officers and the general documentation and reporting of incidents so that we can improve all the time. We are definitely committed to responsible mining, and we're prioritizing the environmental stewardship and also the safety of our workers. Exploration, still a bit scaled back in Q4. We've still had to prioritize the Segele mining ramp-up, but we have done some essential geological groundwork. We did complete five holes at the Segele surroundings. We have identified and prioritized new drilling targets.
We've also re-examined a lot of the old holes and done core relogging. Data management is important to get a better understanding of what we have and trying to get the puzzle to fit together. A lot of surface mapping and sampling is happening. That's field work where you do chip and rock and soil sampling and adding that into the geological mapping. Unfortunately, the drill rig is now under maintenance. We need to get spare parts from abroad. In the meantime, we're focusing hard on still doing surface mapping and sampling and then in preparation for the next drilling phase. It's not decided yet where that will happen, but I have a strong feeling we will start now to focus on the Gambela area together with Sutton and see if that is something we can get mining operations started on.
That is something we're excited about, and we will get back once we have more. Yeah, a couple of nice pictures. This is the area. Guys working the drill rig. It's not always this nice. We're moving into the rainy season, but this is the area that we're working on. It's a nice area. Over to the more important part of our operation and what is going to generate revenues for us and cash flow, the Segele mine in itself. You see a lovely picture here. Helge, I'll leave it to you to take us through the next few slides and explain what we're doing underground, what's been happening, what we're looking for, and what we expect going forward.
Thank you, Jørgen. Good morning, everybody.
I would like to show you this picture first, particularly because it shows the mining management discussing and painting yellow paint on the wall. This is kind of a historic moment because this is the first race, and the yellow paint is marking where we are taking the first blast for the first stope in the mine. It is a very nice picture of a historic or a milestone for us. Next. Okay, the mine, as I have explained to everybody before, has two winzes going down. We have for some time now operated through one of them, but now we have extended the eastern winzes, as you can see, from this cross-cut one at level 585 down to cross-cut two at level 575. That is a bit deeper.
The areas where we have so far mined are in this area of the cross-cut one, which is also called the trial stope area. We knew that this one was not the highest grade of all, but we have still seen very high grade there. Now we are moving into the level 575 and where we go into this stop 01 area, which is the highest grade area of the whole mine. I would believe that any day now, the cross-cut at level 575 would reach ore, and then the dynamics of the mine will change because then you can start to take out ore both from the western winzes and the eastern winzes at the same time, and we are moving into very rich ore in that level. Yeah, the key mine metrics, you have seen this before. It's nothing new.
We still have a very high indicated resource. We have a plant capacity that is much higher than we have so far been able to mine, and we have excellent possibilities at the depth. Next. Okay, what has happened? We have, as I said, sunk the eastern winzes level down to level 575 and started a new cross-cut, the cross-cut two. We have opened several phases for ore extraction in cross-cut one. That is very important because then we have the possibility to find different kinds of ores, and we can blend it into the plant so that the plant receives homogeneous ore at any given time, and that gives us a better recovery in the plant and in the production.
Another thing that is very important and easily overlooked is the fact that we have had steady ore production day by day for the last quarter and in the whole Q4 and also the first quarter of 2025. The system is working. We are extracting ore every day, and we are also blasting development down, as I've talked about, down to level 575, and we have been able to do that day by day and in continuous operation. That is a very good thing. The eastern winder is now at 86 meters and will be used for extraction of ore from cross-cut two down at that level. The western winder is at current length 63.5, and it's used for extraction of ore from the higher-up cross-cut at cross-cut one.
We have previously said that we have an incline shaft, and the previous slide showed that the incline shaft still, but we are now, through the help of Sutton Global, moving away from that plan in favor of a vertical shaft. I will go to that next, but that is a significant change in how we will really plan and operate the mine. The challenges we face is that the current mine infrastructure with these 2 winzes severely limits the extraction of ore from the mine. That is also why this new sink shaft or the vertical shaft is planned. Next. Okay, so the new vertical shaft, the first thing I want to say about it is that it will replace the incline shaft, and it will save us time and money.
A vertical shaft is much shorter in length, and it is easier to get down in a shorter time period. The area where it will be started is between the two current winzes, so it's very close to the ore. Once we reach down to levels, it's almost on the ore. So far, it is planned to a depth of approximately 130 meters, and it will be at four levels. The first level down in the mine will be at minus 40 meters from the surface, and then 30 meters down, minus 70, minus 100, and minus 130 meters. Those are the four levels that have been planned so far. The capacity of this is like 100-150 tons per day. That is important to compare that with the current 10-20 tons per day that you get from the winzes.
Each of these skips that are going up and down will have two carts in them. You use small railway carts that are filled up with about 1.5 tons each. Two of them makes 3 tons per trip to the surface. Already just three of these hoistings will be the whole day production for one winder today. This system also can be used for personnel carriage up and down. You have a personnel cage, and you also use it for waste ore and ore, of course. What is also important is that when we reach the minus 40 level, we can already then immediately start working at that level while we are still sinking the shaft down further to the 130 meters that are planned. That means that it can be used for operations while it's being developed. That is a major advantage for us.
Yeah, size is about two by, of the hole would be about 2.5 by 2 meters. The headgear or what you see in this drawing on top is a standard design, and it will be manufactured in South Africa. The approximate cost of everything on top and all the equipment is around $900,000 for the winder, the headgear, and everything you need. For personnel, we need two experts from South Africa that are experts on making sink shafts, vertical sink shafts. We also have people that have been doing this for a long time, the specialists, operators from Zimbabwe, about seven of them. Okay, next. This is just a few pictures I took last time. I was down in Ethiopia. To the left there, you have two of our best geologists discussing what they see on the ground in the cross-cut.
Right beside them, I took a picture of the wall in the mine. Do you see my fingers there pointing to relatively rich ore, to say it mildly, with also visible gold just on the face of the wall? That is how it looks like on the ground there. Next. Okay, we are back to the processing plant. The Q4 saw very good production, especially in November, with 2.8 kilos in October, 10 kilos of gold in November, and 2.3 again in December. We were going through some very rich areas in this trial stop area of the mine. Another thing is that the processing plant has been running every day with minimal downtime processing the ore from the mine. Next. Yeah, the key recent developments is that, yes, we have produced on a daily basis without much downtime.
The way we have been producing now is on a batch-wise, meaning that we have started and stopped the process every day. That has given us actually a huge advantage in how to run the plant because if we have been running like it should be with the CIL tanks, we would have to run it continuously for weeks and months. That would have given us less opportunities to methodically go through and uncover bottlenecks and optimize the plant. Now, since we are running short, just daily operations, we have had the chance to uncover all kinds of small things that we have improved.
That is a big advantage when we go into the next phase where we have more ore coming to the plant because that way we have already uncovered a lot of the things that would possibly be a problem in the future and have already rectified these and made the plant ready for more tonnage. That has been kind of a blessing in disguise for us at this point. We are also moving now into making a permanent tailings storage. We have the plans ready for implementation. This is something we are working on now. Next, this is the last gold pouring that happened when I was down there. Me and Jørgen were on site together. I think that was the first time, Jørgen. That was a pleasant time.
Here is showing the operators just finished pouring the gold smelt and how the smelted gold looks like right afterwards with red-hot smelted mass. After breaking apart this thing and cooling it down, you see a happy CEO with a fresh doré gold bar. This typically happens once a month with these smeltings. Next. Okay, going forward, the main focus now is to getting the new operations management in and transfer all knowledge to them. We have a new site manager, Kobus, that Jørgen mentioned, and he has extensive mining experience, and he will be rotating to site and stay on site most of the time. We also have a shaft sinking team now that we talked about that will come to site on just a few days on Monday, on April 1.
They will start to look at that project and get that into production as quickly as possible. The production from the two winzes will start very soon when cross-cut two comes into ore. That can happen any day because we have a model of where the ore is, but we do not know exactly where the ore is. We do not know before we have actually blasted into it. It can happen during the next blast, or it can happen in a few blasts, but we know it will be very soon. That would be a major milestone, coming into ore at the 575 level and being able to produce ore from both winzes at the same time. When the vertical shaft is operational at the first level, the ore haulage can be dramatically increased.
As we saw, we have now a capacity of maybe between 15 to 30 tons realistically from the two winders, maybe up to 40 if we push it. When we have the vertical shaft operational, we are into 100 to 150 tons per day. That will no longer be a bottleneck. We are also planning to commission the rest of the plant with the CIL tanks when the temporary tailings dam is full because, as Jørgen said, it is full of material that has for us not very high value, but still around 5 grams per ton in the tailings, which is quite a lot. That is something we will move into quickly. I would like to use the opportunity to thank you for this opportunity I have had with joining the company and working for Akobo for many years.
It has been a fantastic journey, and I really root for the company going forward, and I will follow up as much as I can. I use all my time now to make sure that the new transition with the certain people coming in is going smoothly and that all the knowledge that we have had and all the experience is being transferred properly to the new management. I also think this is the right thing to do because now we will have operational leadership on site all the time. I think that that is the way it should be done. I am very positive towards this change, and I wish them all the luck with this going forward. Thank you. I think that was my last slide.
Thank you, Helge. Yeah, again, thank you for all the hard work.
It's been hard, but we see the results. As you said, the changes we are doing right now will be important and will yield very good results going forward. On the short financial update, we did, again, have our first revenue quarter ever with revenue. You can see the development of the operational expenses here. We're close to covering all the expenses in the Q4. We are working hard, of course, on still keeping our operational expenses as low as possible. This looks good. On the equity debt side, I think that's more for your information. On the debt side, we have the convertible loan and also the Monetary Metals loan. The negative equity as such is not something that is a problem to us. Just wrapping up with the corporate structure and top shareholders, not much happening on the top shareholder list.
We have still a strong supportive long-term shareholder base that would like to see this move into the next phase now. Listed on your next growth, we have a ticker on the Frankfurt and on the OTC market. You can see the company at the end of the year had 8,400 ounces in the gold loan to Monetary Metals. A lot of key metrics, income statement figures. If you want to look into the details and reach out, please do so. Most important thing here is that we have our operating income. Just a small remark, it's excluding the 2.3 kilos that we smelted in the beginning of January, but it's related to the production we did in December. In reality, we probably did cover more of our costs when you look at the actual production and not the.
A lot of actually Q&As means that we probably have been good at explaining what we're doing. If there are any other questions, please feel free to reach out. Apart from that, I think we're all good. Again, I would like to thank Helge for participating. He will not be here next time, so you'll probably see only me, but that should also work out fine. In the meantime, I wish you all a good day and thank you for joining.