Good afternoon ladies and gentlemen. Welcome to B2Go's 1st Quarter 2020 Earnings Conference Call. I would now like to turn the call over to Mr. Clive Johnson, President and CEO. You may proceed, Mr.
Johnson.
You, operator. Welcome everyone to the conference call today to discuss the first quarter 2020 financial results for V2Gold as the operator said. I'm going to just say a few introductory words, and then I'm going to pass it on to Mike Cinnamon, and he's going to walk you through the result financial results, Bill Lytle is going to come on the senior GP operations and give us an update on what's happening operationally. And Garrigan is going to come on and tell you a little bit about what we're doing exploration. In terms of what we've we've had an excellent very strong quarter again with record coal production gold revenue, cash flows and record low cash operating costs.
$367 an ounce. So we're very happy with the quarter. And obviously, we're in challenging times these days with the worldwide impact of the, of the COVID 19 virus, we've continued to operate extremely well. Through the time. And I do like to think it's due in part to get jumping on, jumping on the seriousness of the virus very early on in Vancouver and on our site.
Also like to think it's a because of the experience of our team and our great teams at the mines who have, I mean, years years of experience and managing through good times in that. So we've done a very good job. And partly because of that, we are maintaining our guidance for 20 and 'twenty. In terms of strategy going forward, it's going to be very much the same, 1st and foremost, the health and safety of our people is our is our paramount concern and always our top priority. The others is to maximize, continue to maximize our profitable gold production and look into our pipeline for growth.
From Bill about the expansion of the Fekola Mill and the new fleet that's come on very successfully and we're on schedule to meet the expansion of the field to mill by the third quarter of this year. Also, when we look in our pipeline, the opportunities there are Gramalote, which we'll talk about that, getting back on track there with drilling and a feasibility study that that we're looking for the first quarter of 2021 now to have a final feasibility study. And we also, of course, in the pipeline, things like exploration, which Tom will talk a little bit about looking to 20 kilometers north Fekola, the Anaconda area and the cardinal area, which is fairly close to the deposit itself, the Fekola deposit. So That's really where we are strategically. And we were sufficient confidence in our guidance and a tremendous financial strength seeing our debt reduction continue And we're confident enough in our financials to double the dividend, as we just announced yesterday as well.
With that, I'm going to pass it over to Mike Cinnamon and and he'll give you an update as I said. And then at the end of it all, we'll open it up for questions. So what do you like?
Thanks, Clive. Just to Jack, can you hear me okay?
I can.
Yes. Okay. As well as, as Clive said, it's very good first quarter and then quite your record. Results records to comment on. Now firstly, on the revenue side, revenue for the quarter was $380,000,000.
That's a quarterly record on sales of 239,000 ounces. And we realized an average price of just under 15.90 bucks an ounce. Which is considerably higher obviously than the price we budgeted originally at $13.50. Also contributing to the increase against budget was we had approximately 5% more ounces sold in the period than we anticipated. Moving to production, Production from continuing operations was 251,000 ounces and that was 17,000 ounces higher than budget mainly led by Fekola.
If you add in our share of 34% attributable share, caliber's Nicaragua production of 14,000 ounces. Our total gold production was 265,000 ounces, which is another quarterly production ramp cord for the company. If you comment to Caliber's number, we originally, when we first wrote production release, we had estimated Caliber's production 12,000 ounces, but they've subsequently issued the production results. So it was actually 14. So for 2000 ounces higher than total production than we released about a month, 3 weeks ago.
Just to comment on some of the individual components of that. So Paula led to charge, Fekola had 164,000 ounces, which was 14,000 ounces ahead of budget. It's attributable to several factors that mainly to the higher than budgeted grade we mined from phase 4 of the pit. We also had some of the expansion fleet on-site early in the quarter and got that commission buildings. We had the benefit of that.
And as everyone's aware, this is the year we're executing the expansion plan, which included optimization of the pit designs in the mine plan and actually going out higher grade earlier in general than originally in the original feasibility study. Another point to note, I think, is that getting what was going on in the world and the COVID related, risks that were being experienced around the world We decided to temporarily mine higher grade areas in case for the Fekola Pit. And the idea was to supplement the ore stockpiles there. Just just in case we ever find ourselves happy to go to a stockpile only scenario. But the good news is we've continued to run very well at Fekola and in fact all the other sites right through the quarter.
And right through the initial impacts of the pandemic. And I think Bill's going to comment a bit in a bit more detail on that later after the financial update. Just moving to Masbate. Masbate had 45,000 ounces. Just still be budgeted by 1000 ounces, but pretty much on budget.
And that was achieved, even though we did lower than budgeted through product to mail, and lower mining activity than we budgeted. We had higher than budgeted process grade and recovery. And that's really a function of the timing of getting in to Montana, but we had budgeted to be in Montana right from the start of the year.
But
in fact, we didn't get in until early 2020. Consequently, we focus more on main bay. And we have better ore grade, better oxide ore tonnage and total ore tonnage for main bay than was modeled, and that resulted in the higher than budgeted grade in McHenry. Growjikoto 42,000 ounces, 20 ahead of budget, just a solid quarter for Otjikoto. We're higher than last year and that's a function of us being in high grade ore.
From the Wolfshag pit in the first quarter of 2020. We didn't get into Wolfshag last year until the second half of the year. So overall, 251,000 ounces from our operating mines and 265,000 total ounces, as I said, a record for the company. Can you talk a little bit about cost now? So, on a consolidated basis, total costs from all operations, including our share caliber of $3.99 an ounce.
You look at the cash flows from our 3 operating mines that we control, $3.67 an ounce and that's a record low consolidated cash cost per ounce produced company. And on a per ounce sold, it was $3.82 an ounce. Again, if you look at the dig into the components of that, it was led by Fekola Fekola had a quarterly record low for its operation of $2.51 per ounce produced. Or $2.96 per ounce sold, below budget by approximately $40 an ounce. And that's predominantly for Fekola was due to higher gold production, higher production and the same overall cost led to lower cost per ounce.
I should comment maybe just one comment on fuel at Fekola. We have seen obviously the global fuel prices decline. We didn't experience overall fuel price declines at Fekola yet. We're starting to see them come down now and sort of mirror some of the the way the crude price declines. But just to just to let you know why that is in Mali, the governments, that's the price of fuel once once a per month in advance.
And also in West Africa, there's a certain fixed price component to fuel. Joe has to be brought in Typeport in our case to car. And then it's shipped through one continent over another border into Mali. And it so it has a couple of components of cross border costs. And the other thing that we do is we typically keep 2 to almost months fuel inventory on-site and on hand.
So we built up those fuel inventories during the fourth quarter of 2019 when costs were a bit higher. And we've been drawing those costs down in Q1 as we utilize that fuel. So overall, fuel costs didn't we didn't see experience decline in fuel costs in Molly for the quarter. They were slightly higher than budget, but we are starting to see those fuel costs drop as we move forward. Ms.
Baddy, cost per ounce $7.22 an ounce, again, significantly under budget by just over $60 an ounce. Favorable budget variances were a function of cost savings because of lower mine 20s from Montana. Less waste stripping activity. And also the temporary suspension of mine activities later in March when we had the shutdown for the week or so. Due to disruptions in the fuel supply caused by COVID-nineteen.
And as we announced, we had the fleet up and running again very quickly. I should say when we shut down, we didn't didn't see smilling operations only mining activity. And we got it up and running again very quickly and the mines up and running again now. We also did see it in the study. We saw lower than budgeted fuel prices, actual unit prices, they flowed through quicker to that site.
And Ojigoto, $4.41 an ounce, which again $64 under budget. Marginally higher production and budget, but really as the lower costs were a function of lower fuel costs for both diesel and HFO, lower reagent costs. And a weaker than budgeted in the $1,000,000. We saw the Ram plummet in March and the maybe dollar followed. We probably had change saving of somewhere around $2,000,000 just for later in March due to that decline in the currency.
And just a comment on all in sustaining costs, $7.21 an ounce consolidated $695,000,000 from our 3 operating mines in $721,000,000 if you include our share, our estimated share of calibers cost. And from our point of view, our operating mines were $110 an ounce lower than budgeted. And that's a function of the lower cash cost per ounce is approximately $50. And then really the other component is timing of capital expenditures. We did see some significant capital expenditure on underages at several of the sites and also slightly lower exploration costs in dated due to the accessibility of some sites later in March.
But for the year, we expect those 2 of those. And overall, just a comment on CapEx generally for the year. We're still budgeting the full CapEx that we've seen for the total year. We haven't changed our guidance or budgeted number there. Maybe a comment on overall guidance production guidance.
We had guided 1,000,000 to consolidated guidance for the year. And that includes our attributable share of caliber between 45,501,000 and 50,000 ounces, 45,000 and 50,000 ounces. And Caliber announced late in March, a big suspended operations in Nicaragua to proactively manage any COVID-nineteen related issues there. It's not really it's not clear at this point when when Nicaragua and ops may come back up and money in the game. However, given that we're at 14,000 now, ahead or sorry 17,000 ounces from our own mines after already in Q1.
We've retained our consolidated production guidance as think we can cover any shortfall that might come if Keller is not able to get its operations up in line in the near term. And on the cash costs, Nolan, for sustaining costs, just to remind, we maintain the same guidance, $4.15 to $4.55 per ounce cash costs and $7.80 to $8.20 all in sustaining costs. Couple of comments maybe on the operations overall, but Fekola, the expansion is going well. And Bill, I think after the segment that was going to give you a bit more detail on that. So I'll leave that to him to give you the overall picture.
Also in Fekola Solar, we did announce that we were slowing down the solar, we temporarily help it. So the activity there just to allow us to better prepare for any COVID related shift changes and people management at Fekola. So that is temporarily suspended, but We expect that once we start that again, we'll be able to have that up and running and completed within 6 months of starting the game. Otjikoto, just to remind you, the board has approved the development of Wolfshag Underground. I mean, that's portal development expected in Q3 2020.
Graeme Alezzi, Phil's going to give you an update on where we are there, but just a comment here that we had an obligation to solve one $13,900,000 in order to end our way back to fifty-fifty and to joint venture in to maintain our position as manager. And by the end of quarter 1, we sold funded $12,700,000. So we're almost back to that. We've almost achieved that $13,900,000 in sulfony amount by the end of the quarter. And maybe just a general timing too on fuel hedging.
We've had a few questions on that. And fuel hedging, we've always had a fuel hit was certainly for the few years, we've had a fuel hedging program. Our goal is typically to have 50% of 1 year's usage hedged out. And then 25% of the following 12 months covered by hedges. At the end of the quarter, we had approximately 40% of our 1 year in the next 12 months.
We've subsequently subsequent to the quarter end, we've actually updated the we put on more positions and now we're up to our target the 50% for 1% 25% for the next 50% for the 1st year and 25% for the next. We did have we did put a bunch of hedges on. We obviously started the year with some in place, so you will see in the income statement. There's an unrealized mark to market loss of the $14,000,000. The majority of that is fuel as some of those hedges that we put on in earlier periods were hit by the decline oil prices.
But overall, because our hedging goal is to never be more than 50% and we never overcame those results and not benefiting from fuel. From fuel price declines. Okay, just a couple of comments maybe on the income statement. You'll see interest in finance of expense, a significant reorder this year. And last, and that's a function of us having paid down, $200,000,000 in debt loss.
Year and continuing to do so this year. We did announce earlier in early April that we had as a preemptive measure drawn down $250,000,000 on our revolver. That's money that was purely precautionary. That was money that we don't need. For operations or we don't have intended for any other purpose right now.
It was just precaution given the sort of economic environment that we saw around the world and still see And that money was just reinvested and is sitting there. It is our intention overall as we move through the year to keep monitoring that cash position. And we expect to be probably in a net cash positive position, sometime later in this quarter and certainly have the ability at some point during the year. To be able to repay that debt if we see that the economic environment has settled a little bit and there's easier movement of goods and services around the world. Also comments on the current income taxes, $63,000,000, quite a big jump from the prior year quarter of 25 that's a function of more profitable operations, especially at Fekola and much higher gold prices that are primarily driver for that.
In that total, it was $47,000,000 for Fekola. $37,000,000 of it is for Parent Lincoln, Texas. And then $10,000,000 is the priority dividend. So that's that 1st 10% interest if the government of Maui in Fekola operations and that's reflected as a tax system review of that. I'm going to comment now a few comments on Sorry, maybe just a comment on EPS too.
So when you put all the results together and where we got to on a GAAP basis, we had EPS $7 per share and an adjusted EPS taken out some of the large noncash items, we came up to $0.10 per share. Over the cash flow, another quarterly rack book to highlight, $260,000,000 and operating cash flows from operations. That includes as well any working capital movements. That equates to 21% $0.21 per share of operating cash flow. Record operating cash flows in, I should say as well as what we saw as certainly later in 3rd the last month of the quarter in March as individual countries were impacted by changes in airline schedules or international flights being canceled are banned.
It certainly got more difficult to ship gold from sites. But we were successful at all our sites and being able to continue to do that using our own or shared charters with other companies were needed. So We continue to be able to ship gold and also our refinery our refiners who are running refinery in South Africa. And Matador and Switzerland. They continue to operations uninterrupted as well.
So we haven't had any overall issues in being able to ship gold or refine our product and then have it available retail. And we've been able to take advantage of these high gold prices. One other comment in the operating cash flow, we guided for the year that we expected that the $1500 goals for the full year, we thought operating cash flows would be somewhere around $700,000,000. If we see gold state where it is right now. We're in the $1700 per ounce mark for the balance of the year.
We expect operating cash flows to be somewhere north of $800,000,000 for the year. Few other comments just on some items in the cash flow. So $25,000,000 we repaid on the revolver. That was pre as doing that preemptive drop of $2.50 in early April. And like I said, it was always our intention to pay down that outstanding revolver debt of $200,000,000 this year.
And we currently have 425 drawn with preemptive drop. Again, like I said, we do expect to be generating enough cash flow if that would be in cash, cash positive territory. By the end of the current quarter. And certainly, our goal would be to monitor this and hopefully pay down the entire amount of that debt later in the year. First dividend, just to comment, we did pay our 2nd quarterly dividend of $0.01 per share.
We started the B2 depicts its first ever dividend quarterly dividend in the last quarter of 2019, 0 point 0 $1 per share. We repeated that. In the first quarter for a cost of $10,000,000. And as Clive mentioned, we have announced that we're doubling our quarterly dividend from $0.01 to 0 point 0 $2 per share in U. S.
And we expect to declare the first $0.02 dividend later in June. Cash from flow from investing activities, we signed $112,000,000 on our investing activities. And as I said, we when I was discussing the all in cost per share, sustaining cost per share. We have had some CapEx timing differences. There were some CapEx that wasn't in credit sites, mainly some increases the mobile that we're planning and some prestrip development.
And, for example, in maybe the NAND part connection. So we didn't get those things done in Q1 as we'd originally budgeted, but we are expecting that we will happen later in the year. So really those CapEx are just timing differences. Could you comment too that I think as we mentioned in our new we entered into a deal with West African Resources to sell our interest in the Towega deposit post period end for our total proceeds that's over time of $45,000,000 plus a small royalty. And, and with that, I guess, we ended the period with $200,000,000 just under $208,000,000 in cash and very healthy situation, cash liquidity wise, like I said, and looking forward to continued strong operations from the balance of the year.
And I think that, that point, that's these are the main items that I was planning on commenting on.
Okay. Thanks, Mike. Bill, can you give us a quick rundown on what's happening in operations?
Yeah. How do you hear me, Clive? I Mike was fading in and out when he was talking.
There's a bit of static when Mike was talking, but It's a bit of static now. But go ahead. You sound pretty clear to me.
Okay. So very quickly on the operations. Mike covered a lot of the stuff, so I'm going to keep it relatively short. I guess the key takeaways that I want to speak about our number 1, we do continue to maintain guidance at all of our operating mines and our overall guidance for the year, as Mike said. And significantly impacted our operations.
Hasn't impacted significantly impacted any of our operations. Also, B2Gold very, very early on, got in front of the pandemic. Early on in February, we had made the decision that we were going to cease all necessary, all all unnecessary travel and have a stay at stay at home order placed And that has helped in us being successful in implementing our operational requirements. Just going through the operation at Fekola, in Molly, Molly has, has, had a restriction on the country since the beginning of April? And they've indicated that so we've been we've been able to continue to operate and been able to continue to receive.
Indicated, we have expedited mining in phase 4 we currently have a very large stockpile to get us through not only the second quarter, but also through the second half of the year. So we continue to maintain our guidance at 600,000 720,000 ounces for the year. On the expansion, the expansion is kind of 3 parts it's a full enterprise expansion. On the mining side, the mining fleet was ordered in June of last year, June of 2019, At the beginning of Q1, twenty twenty, ahead of the pandemic, that mining fleet has been put into operation And as I already noted, we've we've advanced the mining rate and have a very large stockpile to support expansion of from 6,000,000 to 7,500,000 tons per annum. That expansion continues to be on schedule, for completion and commissioning at the end of Q3, twenty twenty.
In addition to that, we talked about doing a double tailings lift, ahead of the rainy season for 2020. That project is almost finished, more than 90% complete now, and we anticipate that season of 2020. That'll give us capacity into 2023. So that'll give us a couple of years to design and develop the next lift. Additionally, as Mike indicated, the solar plant, was put on hold that solar plant expansion was not required to support the expansion of the mill.
That expansion was designed to reduce costs. And as Mike indicated, once we bring the solar group back in and we anticipate within 6 months having the solar plant complete and operational. Yes, Masbate. So Masbate in the Philippines, maintaining guidance of 200,000 to 210,000 ounces for this year. The pandemic has hit the Philippines quite hard with more than 9000 So it's shut down, not only international travel, but had a stay at home order for the entire population.
That has been reduced or lifted a little bit. Now it's a As they bring the economy back up, the island of Masbate is as it does not have any cases of COVID-nineteen. And so they're bringing our workers back from their self quarantine and getting back to full strength. Our plan is we're currently mining in both, main vein and the Montana pit and mining a full strength. So we're not changing guidance here for this year as well.
At Otjikoto, Otjikoto, early on decided to isolate the country. They are concerned about the issues related to the population are living, living in, informal settlements with no power and no water. So they went ahead and did a quarantine for the, city of Intook in that region as well as all of the coastal region where most of the population is located That has been very successful to date. There's less than 20 cases in Namibia reported. And based on that at last month, in April, the government decided to start to release some of the restrictions and the quarantines.
And so the Otjikoto mine is currently in the process of ramping back up to full production on the mining side. So there, once again, we maintain guidance for the year and, and do not see any lasting issues related to COVID-nineteen at this time. It's just Gramalote. So Gramalote is, we announced that when the pandemic broke out, that we decided in consultation with both the community and the government, despite the fact that we were allowed to continue to operate. We made the decision to temporarily suspend exploration.
The process there is we were supposed to complete a feasibility study by the end of 2020. And then make a decision in early 2021 with AngloGold. We publicly announced that that would be delayed until the end of Q1 2021 completion of the feasibility study. So and that's due to the fact that we suspended the drilling. But in the meantime, we have continued to develop the feasibility study.
The metallurgy metallurgical testing has been ongoing. We're getting ready to do some work with our feasibility engineer or our mill engineer. And the mining has been the mining design has been ongoing. So on the engineering side, we continue On schedule. And we anticipate within 6 months of us getting back up to full speed that we'll be able to delivered resource into the engineering group.
So maybe sometime in first quarter, maybe a little bit sooner, we're seeing what the schedule will be once the drilling gets up and running. Like I said, for me, it's really it's hit and miss on what I'm saying because I can hear a bunch of background noise.
I think you got the gist that you're cutting in and out a bit. Are you done?
Yes, I'm done. I'm just asking if there was anything you want
Okay. No, I think that's good, though. Thanks, Stephanie. Just one thing I would add that I mentioned the front end. I think one of the keys of the reasons for success in dealing with, with COVID and the and continuing so well on our operations is our relationships with our employees and government.
I think that we pride ourselves as everyone knows on our cultural fairness, respect and transparency in the way we treat people I think at times like this, the mutual trust we've earned and gained with our employees and the governments in which we work really comes to the forefront. So it's a great cooperation. Our employees have been amazing and, they wanted to work. The unions and our employees wanted to keep working if they could be safe and the governments and the countries weren't wanted us to keep working if we could be safe. We haven't had in the past our critics talking about political risk in the areas that we are in the world and we understand that.
But I think it's important to point out that there's some positive things to be in countries that want you to be there. And they want the tax revenue and they want the good jobs if they could be safe. And if you take care of the environment, and if you're socially responsible, and do the right things in delivering the promises you make. So sort of the flip side of political risk sometimes is the fact that you're interested in a way that you're a very important part of the economy and your important part of socially and environmentally in what's happening. I think that's the case for B2Gold.
So I think a lot of our success in the normal times is due to that and our success in terms of the crisis. Christa's management comes from our vast experience in doing this around the world for years, but it comes from the relationships we have with people. The governments where we are locally and federally trust us, We've built trust relationship both ways with them and our employees have a high level of trust there, we're out looking out for their interest. So I think those are some of the keys to to our success. I'd now like to get Tom to give us a quick update on what's happening in terms of exploration.
We continue to successfully explore around our mines and are looking for major discoveries, the cheapest ounces are always the ones you find and we've done a lot of that and then that continues over to you, Tom.
Thank you, Clyde. Can you hear me alright?
I can hear you well.
Okay. Or afternoon or good morning, everybody. Expiration, for B2 has continued on at the, at the mine sites at Maui, Masbate and Otjikoto through this time. The, a lot of our grassroots exploration has been cut back to minimal field work or none at all due to limitations created by COVID, but we hope, to get back going in some of those areas, later on in the summer. In terms of, expiration of mass body, we've drilled 7000 meters out of a 25,000 meter program so far.
The focus of the program has been on drilling, near the base of units as we see it's have a great potential to get larger with the higher gold prices or continue higher gold prices. So we're focusing on the bottom of those pit areas. At Otjikoto, we've drilled four thousand meters of a 14,000 meter budget. The focus on Otjikoto has been, to drill the inflow on, on Wolfshag. And as we're looking at the underground development coming into the area, we want to see what it looks like going down.
We've had success so far in continuing mineralization and want to get a better handle on grading with tighter space drilling. We'll also drill some grassroots drilling near the mine site on several other parallel pressures we see have potential. At Fekola, expiration has continued on through these times. So far this year, we've drilled about 5000 meters of, sorry, 10000 meters of diamond drilling and over 24,000 meters of RC drilling at the Fekola area. Focus has been mainly on two areas.
The Mamba area to the north and related related parallel structures, identical Honda and adder. And then we've started to focus a lot more on the cardinal area. In fact, we're shifting our exploration focus for some of our exploration focus, to the cardinal area. Cardinal area is just a little bit west of, the Fekola pit, moving five hundred meters of the Fekola pit. In fact, it's an area that was originally planned for some waste area.
We've had quite a bit of good success in that area. And are starting to define a resource. So we're refocusing the drilling in that area within field drilling and testing out where the edges of this is to see how big it can get. That'll continue for the rest of the year, but we will continue with at least 1 or 2 drills in the Malawi also. We also plan to start doing some met testing on the Cardinal ore in the near future.
I have no other discussion over to your client.
Thanks, Tom. Okay, I think, operator, we'll open it up for questions now.
Thank you. As a reminder,
Chris Thompson, Josh Wolfson, Carrie McCurry and Lawson Winder. Who is it?
You're on the main line. Ian, you're on the main line. Hello.
Hello.
Hello. Do you want, we're open up for questions. We'll be too bold. And your first
question comes from Avaris Harvey?
Hi, Clyde. Can you hear me? Sure. O'BARs. Hey, Avi.
How you doing? Good.
Okay. Hi, everyone. Again, just wanted to say congrats on a good quarter. And also congrats on being able to maintain your guidance during these unprecedented times. So Clive, just my first question is on the cola.
Type, how should we be looking at Fekola in the second half in terms of production and costs? I mean, you've got the mill expansion kicking in in Q3 or at the end of 3. And you do you expect this high grade that came from Phase 4 to continue into the 2nd half as well? Yes.
No, I don't think so. I'm going to pass it over to Bill.
Basically, the whole concept is we pulled ounces forward to make sure that we were that we had the ounces for Q3 and Q4. So at this time, we're not comfortable in saying that we're going to continue the grade through Q3 and Q4 that we'd like to say that we're going to meet guidance at this time until we know what's going to happen with the mill extension.
Okay. And so I mean, what I'm trying
to ask you is like, I mean, is there
kind of low grade stockpiles that you guys have on-site that you guys can blend through in Q3 and Q4? Or is it just continuing to go through phase 4 and then went to phase 5?
Yes, there's a lot of a great stockpile on-site. Okay.
So just, and then just moving on to Masbate about, obviously the oxides of Masbate I think we've talked about this in the past that they were supposed to end in 2017. And you guys have continued to mind these oxides into this quarter. Are these transition in ounces that have turned into oxides or were not tested as oxides and then do you expect these oxides to continue into the second half?
Yes. There's the question today. The answer is, yes, there are some transition oxides which have turned into oxide, but a lot of it is, is that we're mining through surface dumps. And some of the stock works from some of the old underground, which had been backfilled with materials that now can basically considered ore. And so I can't answer that, you know, going forward, but it's something that we continue to look at.
What I will tell you is that, that, some of it does come as a surprise. As upside and that we continue to hold our guidance.
Got it. Okay. Okay, guys. I'll leave it at here. And pass it on to others.
Thank you again.
Thanks, Ramesh.
Your next question comes from Geordy, Mark.
Yes, maybe some questions to Tom Smith. And just in terms of Cardinal, can you give us an idea of remind us you did mention also because it was away from the just a type of mineralization there and it's more followed here to you now?
Hey, Tom, you kind of break it up. George, I think I got the gist of it about Cardinal. I'll ask you about Cardinal Com. Do you
have a comment on that? I couldn't hear Jordy very well, but in general, Cardinal is slightly different from, from Fekola, it's hosted within a combination of diurettes. And I guess you call it black channels. And they are mudstones. The zones are multiple zones associated with a very intense alteration, disseminated sulfide, a little bit of copper, and I can't place on the visible gold.
There definitely style zone. They're more shear zone related. However, it's been pretty wide space drilled so far, so we're still learning about it. Is that your questions, Rudy? I couldn't hear you very well.
Yes, that was. Thank you.
And maybe sort of follow on for Bill in terms of for coal and mining fleet and mining fleet capacity as you have today. Any thoughts in terms of changing with that mining fleet capacity gold price where it is changing effective strip ratios, stockpiling strategies, given your bonding capacity that you've instituted?
I didn't get that question at all.
It's alright.
I might just write these out and we can take that offline.
Yeah, that might be best you pick up pretty badly.
Your next question comes from Chris Thompson.
Hi, good morning guys. Congratulations on an absolutely stellar quarter. And I've said, it's really good you guys are holding guidance through a tough period. Just I've got one question. I guess it relates to the slate deposits, obviously within reach of Fekola there.
Can you give us a sense of where we sit by way of the testing of the economics of these deposits? Well, I guess
I would say
that Chris, we're looking at the saprolite. You know, there's, was 800,000 ounces in that resource a little over gram in the saprolite that has not gotten quite a bit bigger to peers. We're getting bigger. And now we've been getting some very nice hits on the lower relief, as you know, on the sulfide, those are Namba coming out of context. So I get, right now, we've, we're waiting to see a bigger destiny, Frank.
So I think we would be to, is this additional feed down the road for Fekola at some point in time in the middle, it's 20 kilometers away, as you know, or is this a standalone scenario? So we're really giving Tom the ability here or the time to aggressively drill these multiple targets that we've seen in the sulfides now and find out, 1, how big does the capital gap? And secondly, are we looking at potentially significant deposit in the sulfide or deposits? The sulfides as well. So I would think that as we go through the end of the year and into next year, we're probably going to start getting a bit of a better handle on that.
Would you would you sit up here to say Tom?
Yes, Clive. That's pretty good. If I could add to that, we've had multiple hits in the sulfides and certainly a mamba we've now seen at least 2 very good looking continue as long as the mineralization have a shallow plunge. We're working on trying to interpret those things And with the drilling that we're doing on saprolite, we continue to find other areas of saprolite mineralization. So I would say it's still early stage and as wife says, they've given us a chance to try and figure out where it's going and how big it can go going before we hand it over and the resource over to the engineers.
Great, guys. And then just one more quick question maybe just on Mazzbaddy. Can you give us a sense of, sort of, steady state run rate sort of the split between Maine vein and Montana?
A steady state? Well, it's we're kind of changing that right now because as you know, originally, we were projected to be into Maine or into Montana in February. And now we've gotten in there now And so we're actually looking at that right now. So I wouldn't want to come right out and just say what I think the steady state splits going to be for the rest of the year we get our revised mine plan up and running.
Your next question comes from Josh Wilson
Thank you.
Just a quick question
Yeah. Can you hear me?
You cut out a bit there, please go again. Okay. We've seen the last Josh.
Yeah. Hello, everyone. It's Ian MacLean here. We're obviously having a tough time with the line If anyone has any questions that didn't get through, please email them directly to me. And I'll point you to the right direction of people who can answer that for you.
Any more questions?
Your next question comes from Carey Macquarie.
Hi, can you guys hear me?
Yes, I can hear you, Terry.
Yes, okay. So maybe just another question on Fekola for Bill, $2.51 in the quarter. Is there anything sort of unusual in the quarter that we should expect to reverse in later quarters? And then secondly, any color on the costs, mining versus milling, etcetera, in terms of where you're seeing the productivity?
No.
And in terms of
mining versus mill in the past?
Yes. Well, so no, I mean, certainly we don't see anything as far as production. I mean, we're basically, implement We went a little bit faster on phase 4 and a little bit slower on phase 5. See some of the capital expenditures that which were deferred in Q1, be pushed out. I think that Mike had already commented on that that that basically we're not adjusting our capital costs down for the year.
We're going to say exactly what they were going to stay on budget for that.
Okay. Maybe I think the question Jordy was trying to ask was In terms of the mining fleet for the expansion, is that now fully deployed and up and running?
I didn't get that I didn't get what the question is. I'm sorry.
He's asking about the mining fleet. Is it fully up and running now, the new mining fleet?
Oh, okay. No. Sorry. I'm really struggling to hear on this line. So the answer is no.
The Phase 1 of the mining fleet is up and running. Phase 2 is arriving at site right now. We actually literally, within the last week, have been receiving, the next the next batch of 60 40s in 7, 8, 9 trucks.
Carry anything else?
I would now like to hand the conference back over to Clive Johnson.
Okay. Well, thanks everybody. Ian, maybe you can talk to whoever's, set up this call up and see if we can improve it next time we use somebody else. If we can put them out on the moon, we should be able conference call. Okay.
Thanks everybody for your participation. Stay safe. Have a nice day.
This concludes today's conference
call. You may now disconnect.