Greetings, and welcome to the Endeavour Mining's Third Quarter 2018 Webcast. At this time, all participants are in a listen only mode. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Sebastian De Montes, CEO of Endeavour Mining Corporation.
Thank you, Mr. De Montes. You may begin.
Thank you, operator. Good morning, good afternoon, everyone. Thank you for joining Endeavour Mining Q3 results presentation. I'm Sebastian De Monticello, CEO of Endeavour Mining. And it's a pleasure to be talking to you once again.
Please note the usual legal statements and disclaimers here. We will be adopting the usual format today. And here with me are Jeremy, Vincent and Patrick. I'll start by talking you through some of the highlights from the quarter before the team go into the financials and operations in greater detail. We will then open the call for questions.
So here is a reminder of our operational pillars and how we tracked against them at the end of Q3. And I'm pleased to say that it has been a successful year so far. As you will have seen from our release, we remain on target to mean full year guidance boost production and cost. And we are at the right end of the range for those, for each. So it's the top for production and towards the bottom for cost.
You will have noted also that construction of the Ity CIL development is now tracking ahead of target while remaining on budget. We are now expecting the 1st gold pour some 2 months early. Our exploration program has enjoyed considerable success I hope you saw the maiden resource figures from the Kari Pump exploration campaign at Hounde in the coming weeks, which we had previously announced in May. Since the last time I talked to you, we have also announced the sale of the Tabakoto assets and that transaction is expected to close in the current quarter. As you will notice in the upcoming slides, Tabakoto has been classified as a discontinued activity and does not appear in our P and L or on our balance sheet anymore.
Of note, however, Tabakoto is still consolidated in our cash flow statement in compliance with IFRS rules. And all this has been achieved that safely. Our record here continues to be strong and constructionally ity continues with not a single LTI. This is because of the as a priority for management. I mentioned earlier that we are on track to meet guidance at the higher end for production and lower end for costs.
As this slide break out where we stand in a little more detail, All our mines are on track, some at the high end and some at the lower, but this just reinforces the benefit of having a portfolio with multiple mines. Looking at cost, we are particularly pleased with where we stand. As you know, the target set in 2016 was to have a group all in sustaining costs below $800 by 2019. Our strategy is not about how much we can produce, but rather it's about focusing on high margin ounces. It is great to see that our costs from continuing operations are already achieving this target, while next year, we will also have the benefits of the Ity CIL project coming on stream at very low all in sustaining costs.
Production from continuing operations in Q3 was 76% higher than a year ago, thanks in part to Hounde entering commercial production, which is the primary reason for the jump in the bar from Q3 to Q4 last year that you see here. And while there has been a slight decrease in Q3 over Q2, this is typically of this time of year during the West African rainy season. Just to come back to production, one of the reasons we are confident of the full year out time is that as you know, we're now living the rainy season and moving into Q4, which is traditionally our strongest quarter. If we were to have I'm therefore expecting a record quarter in Q4. And on costs, this line provides the bridge between where we work this time last year and where we are now.
From over $900 announced, the portfolio improvement we have seen over the past 12 months has seen us sell higher cost assets such as Enzema and Tabakoto. Furthermore, the cost reduction programs launched across the group the addition of Hounde to the portfolio has driven costs down even further, leaving us at the current all in sustaining cost of $7.59 per ounce for the year to date. I think you will agree that represents a significant increase in value for our business and for shareholders. As you've seen on this next page, it means that all in margins have significantly increased. At $134,000,000 so far this year, we are already a 3rd ahead of where we were at the same time in 2017.
Due to higher production and higher gold prices. As previously mentioned, Q4 is a very important quarter in terms of production but also cash flow generation. Therefore we expect to finish the year at a considerably higher level compared to the previous period. And so to the Ity CIL construction, as I mentioned, and you will have seen, thanks to a great effort by the team, We continue to make significant In the chart on the right, you will see that total CapEx remains at $412,000,000. Of that, just $148,000,000 remains to be paid and with $26,000,000 of undrawn equipment financing, the cash outflow for the reminder of the development stands at $122,000,000.
Well within the $213,000,000 of liquidity sources that we have available to us. That is obviously a very good position to be in. In Q4, we intend to spend between $50,000,000 to $60,000,000, bringing the remaining spend in 2019 at less than $70,000,000 and therefore, allowing us to maximize cash flow generation in 2019 once Ity CIL construction is completed. As you've seen in this next slide, because we're tracking ahead of schedule, we are intending to spend a lot more in 2018. Rather than $180,000,000, we are now expecting to spend approximately $260,000,000.
This has been possible due to our strong balance sheet liquidity sources, which potential benefit for us in 2019. As you see on the right hand side of the page, Ity CIL is expected to have an annualized production of 250,000 ounces for the 1st year at an expected cost of $407 per ounce. This means that extra that 2 months extra of production in 2019, representing roughly 40,000 answers more for 2019. Assuming a gold price of $12.50, this represents $35,000,000 of additional all in margin generated in 2019, thanks completion stands at over 75%. I'd like to thank the team for their hard work and excellent progress achieved so far.
The experience that our in house construction team has gained from our previous builds in the region, the early installation of the Ball and SAG Mills, combined with the excellent progress made during the rainy season have been key factors which have helped advance DTCL construction ahead of schedule. Looking at the pictures, starting with the top left, you'll notice the process plant. Its construction is over 70% complete tracking ahead of schedule as the ball and sag mill installation commenced 3 months earlier than initially planned. The structural, mechanical, piping and electrical installation work is well on the way. In the top right, you can notice the 29 Megawatt power station is construction and the 91 KV transmission line are progressing well against schedule with over 70% completed here too.
The first power drawdown is expected in Q1 twenty nineteen. At the bottom left, you have the resettlement program, which is progressing well against schedule, with over 90% already completed. And at the bottom right, you'll notice the whole road bridge to access the DABLOPIT, which is 92% complete with the substructure concrete completed. For other follows, please reference the press release published a few weeks ago, you will notice that the tailings storage facility has worked progressing well against schedule with, again, 70% completed. And the installation of the rubber lining has already commenced.
In essence of time, I won't go through the full details in this next chart. Surfaced to say that the large critical pass items are now behind us, and it is now the final stretch to the first gold pour, which is expected to occur in early Q2 next year. Finally, before Vincent goes through the finances and we looked at each individual mine, a quick word about our exploration activities. I would like here to thank Patrick and the exploration team for the hard work done this year. With over 350,000 meters drilled so far this year, the exploration effort has been huge and we're excited to share our results Moreover, Patrick's unique approach brought from the oil and gas industry of ranking targets and building its 5 year exploration program based on strategic prioritization is proving to be effective.
We will highlight more of this at our upcoming Investor Day. As you can see, we've committed $46,000,000 to exploration so far this year with a significant proportion at Hounde and on greenfield properties. In total, we've drilled almost 350,000 meters so far this year and in third quarter. Despite the rainy season, we drilled 54,000 meters. In essence of time, we've added an exploration page on each asset in the appendix and will provide additional information during our Investor Day in few weeks time.
Today, I would like, however, to focus on Hounde and Fetekro on the next two pages. On Hounde, as mentioned, Hounde has been the strongest exploration focus for us in 2018 with more than 165,000 meters drilled since the start of the year, As you recall, last year, we announced the Kari Pump discovery. And in May of this year, we announced further drill results for Kari Pump as well as the discovery 2 additional nearby discoveries named Kari West and Kari Center. In Q3, drilling focused mainly on infill drilling the Kari Pump target, where we back to publish a maiden resource in the coming weeks. This is expected to be a big catalyst for Endeavour since based on the amount of drilling done, which now stands at over 200,000 meters over the last 18 months, is expected to be material.
In addition, we see 3 advantages. The first one is that it is expected to have higher grades compared to Vindaloo. 2nd, while VindalU is 90% transitional or we expect caripam to have more oxide material. As you know, oxide material is typically less costly to mine and cross sell. For reference in Hounde's 1st months of operation, it was possessing only oxide material and its resulting all in sustaining costs were below $400 per ounce.
And the third advantage is that the infrastructure is already planned as part of the nearby Boire development, which we are completing now. So as you can tell, we're excited to announce this discovery and to then move on to drill the other 2 nearby targets next year. In addition to several other ones on the property. For this reason, we believe that Hounde is a Tier 1 asset, and we will probably prove it very soon. And now on to Fetekro, we have said before that one of our 4 priorities is to identify areas for greenfield exploration where we can develop standalone new projects.
You will hopefully have seen the maiden resource recently announced at the Fetek Hopper in Coddua, which is looking very promising. It used to belong to La Mancha and was injected into the Endeavour portfolio in late 2015, along with the Ity mine, while we knew that the target was prospective before embarking on a larger exploration campaign. We analyzed the geology, which highlighted additional nearby target. The potential of Lafigue along with the other nearby targets then gave us the comfort for Fetekro to potentially have the scale to become a standalone multiple pit operation. As such, Fetekro was ranked as the top priority greenfield target following the strategic exploration, review completed in late 2016 by Patrick and his team, And since then, nearly thirty two thousand meters were drilled, mainly focused on the highly prospective maintained Lafigue target.
As you would have seen, the Lafigue maiden resource stands at over 700,000 ounces at a grade of 2.25 grams per ton, including some very high grade pockets. Endeavor has spent roughly $6,000,000 on Fetek cost installing it, representing a discovery cost of $12 per ounce based only on indicated resources or $8 per ounce based on the MNI Resources and inferred. This discovery cost is in line with our 4 year, 5 year exploration target of finding 10,000,000 to 15,000,000 ounces of indicated resources at a cost of less than $15 per ounce. The initial analysis of its ore characteristics and ore body shapes shows it could be amenable to open pit mining as mineralization started surface, while the preliminary metallurgical test worked on success for high gold recovery rates. And there is additional potential upside as the delineated resources based on 2 thirds of the total mineralized area, defined today and is open at depth and in multiple directions.
As previously mentioned, 14 additional nearby targets have been identified And since announcing the maiden resource, more drilling has started on the Lafigue target and drilling on some additional targets will begin next year. And with that, I'll hand over to Vincent to walk you through the Q3 numbers into more details. Vincent?
Yes. Thank you, Sebastian. I will start by commenting on slide 18, the production bridge between the end of the 3rd quarter last year and today. Starting at the left hand side, we have removed the figures up for Enzema, which has already been sold. And Tabakoto, which is being held for sale at present.
This give us 252,000 ounces for continuing operations up to the end of Q3 2017. So notably, for the 1st 9 months of 2018, we can see a slight decrease in production from Agbaou as a result of the lower grades that we have stockpiled for using the mill as we focus on waste capitalization activities as planned. We can see as well an increase of production at Ity primarily due to higher grades coming from back at 2 o' pit, but also higher tonnage. And a slight decrease at Karma. As expected, the majority of the impact came from the introduction of Hounde, which contributed 201 1000 ounces of production in the year to date, taking total production to 430 8000 ounces.
On the next slide, I will walk through the main line items from revenue to all in margin. So the top line increase, as I just explained, and I want to know just a couple of other points. So the gold price, average, takes as usual, into account the streaming financing for Karma. Otherwise, the real realized gold price without Karma would have been $1282 per ounce year to date. As you see in Note 3, a sustaining capital increase as a result of the increased waste can optimization activities at Agbaou, but also an increase at Tabakoto and the addition of Hounde Mine.
Tabakoto net impact year to date on all in sustaining margin is minus $4,000,000. As you can also see on Note 4, the non sustaining capital increase versus last year can be attributed to Agbaou, with the waste capitalization that has been done for the stripping of West Pit 5 in Q1 and in Q2. And you have seen that there was no non sustaining CapEx in Q3 for Albaou. The pre stripping as well of caro pit in at Karma Mine, which has continued and intensified in Q3, and last, a new mining equipment for the underground mine, which has been received in Q3 for, at Tabakoto. And later on, you will see that our non sustaining exploration spend also increased as a result of the enhanced exploration focus So that leads to the 1 third increase in the all in margin that Sebastian talked about earlier.
On the next slide here, you can see the cash flow over the period compared to last year, starting from the $134,000,000 all in margin I mentioned earlier. The increase in working capital is explained at 0.1 and here, it relates to a number of specific items. Overall, we expect some items in the working capital to reverse in Q4, but also into early 2019. As I go through the specific details, you will see why. First is there was a receivable outflow for $12,000,000 due to timing as we saw the ounces shortly after quarter end.
This item has therefore already been turned into cash in October, and we plan to offset this outflow in Q4 cash flow numbers. The second item is $43,000,000 of outflow in inventories due to the buildup of stockpile and consumable at Hounde, which has performed above nameplate and which needs to structurally build its inventories, but also an increase of off top pile at Agbaou and Karma for $12,000,000 and increase in consumable at Karma and Babakoto. Looking forward, the stockpiles are expected to be consumed across the group in the coming quarters, for all the mine except Hounde, which will continue to slightly increase and continue to build its stockpile in line with the DFS strategy. The consumable should also reduce across the coming quarters. The working capital also include prepayments outflow for $8,000,000 mainly due strategies per part at Hounde.
Lastly, the working capital include the trade payable outflow of $25,000,000, which is mainly due to the buildup of payable attack value at the end of 2017, driven by a regulatory issue in paying a key supplier. This has been paid in Q1. And since then, Q2 and Q3 don't show any major changes. At Note 3, you can see an increase in the interest paid as a result of the increased debt due the construction of the Ity CIL plant. And you see the $231,000,000 project capital at not 4 is comprised mostly of the Ity CIL as you would expect.
And you can see the impact of our convertible issue and debt management in note 56, leaving us with a cash flow outflow of $85,000,000 year to date. On Slide 21, you see the improvement of our overall portfolio quality, with Hounde now on stream, which has led to a significant improvement in cash flow from a $1.49 per share last year to $1.94 per share so far in 2018. That represents an improvement of 30% on the cash flow per share. On Slide 22, you can see the funding tools. And this all leave us with a well funded to pursue our additional growth activity and ambitions.
While our net debt position has increased as a result of the CIL Advancing much quicker than forecast, our financing remains strong, and we expect to generate significant free cash flow in Q4 with a significant increase next year. So we should see a quite rapid deleveraging of our balance sheet when the Ity plant will start next year. We have $180,000,000 undrawn, within our RCF and $33,000,000 in cash. With expected inflows from the sale of Tabakoto for $16,000,000, but as well, the remaining payments for ANZEMA is between $20,000,000 $25,000,000. Plus the future cash flows in Q4 and coming quarters, we have significant sources of funding available to us before the completion of the Ity CIL.
On Slide 24, you see the change in cash based on moderation of cash flow metrics, IFRS standouts, You will see here, we started the year with $123,000,000 of cash to which operating activity added a further $819,000,000. We have invested significantly during the period, about $366,000,000, particularly on the growth capital, where we have spent $231,000,000 also $59,000,000 on capital expenditure and ongoing operation and $38,000,000 in exploration. As you can see, the amount invested into our business to improve the portfolio's quality are quite important. These investment efforts would not have been possible without the balance sheet management effort done over the past 2 years. Going into 2019, despite having invested massively we expect to start benefiting from all the investment made.
Last slide on page 24, and to round off the finance section, this slide gives the net earning breakdown As you had some questions last time, we gave you more detailed commentary on the P and L regarding depreciation, financial results and tax this year. I would like to highlight four items. Year to date depreciation increased compared to last year, mainly due to the inclusion of Hounde, as well as some adjustment in debatable ounces in 2018. Quarter on quarter, it has decreased by $8,000,000 versus last quarter due to the decrease in production. The year to date gain on financial instrument is mainly related to the $17,000,000 gain on the gold revenue protection program, but also $20,000,000 unrealized gain on the convertible senior bond, which was offset by foreign exchange loss.
On finance cost, the finance cost remains equivalent to last year. As while we have paid more interest this year, we have also allocated a higher percentage of interest, which has been capitalized in the Ity CIL project. Finally, Current income taxes was $46,000,000 year to date compared to $7,000,000 a year ago. The increase is primarily due to the inclusion of Hounde in 2018, where we have recorded $30,000,000 of tax as well a higher taxable income at Ity. Q3 2018 current tax is fully compared to Q2.
Lastly, we will have seen that we have a loss of $59,000,000 for Tabakoto discontinued operation, which embed $32,000,000 impairment depreciation following the disposal signed with BCM for $60,000,000. On the year to date, adjusted basis for continued operation, Q3 earnings per share were negative 0 point 0 $1 per share, and amounted to a profit of $0.31 per share year to date against $0.05 per share, 9 months for the 1st 9 months of last year. As you know, the adjustments were mainly due to 4 factor losses from discontinued operation, deferred income tax recovery, prior period adjustment, gain on financial instruments and stock based expenses. And at this point, I will hand over to Jeremy who will take us through the individual mines operation. Jeremy?
Thanks very much Vincent, and good morning, good afternoon to everyone out there. Looking at the operations turning to Hounde first, Hounde continued to perform well, specifically compared to the feasibility study estimates. Plant continued to perform roughly 30% above nameplate capacity and production as expected, did decrease slightly in previous quarter. As the rainy season, you know, gave us limited access to, some of the higher grade areas. Your own sustaining costs mainly in increased mainly due to the lower than anticipated grade, which is a bit of a combination of some drilling glass and mine dilution, etcetera, etcetera.
And a higher unit mining and processed costs, which were partially offset by the lower unit G and A costs and the lower sustaining capital. Due to its strong year to date performance, we're currently on track to meet the top end of our guidance at the Hounde asset. Over to Adbound. Now at Adbound 2018 continues to be a transitional year with a focus on waste capitalization, will then give us access to the high grade ore areas. Production remained at a low level in Q3 as mine continued to be constrained to low grade areas, and the low grade stockpiles continued to supplement the mine fees.
Head of West were in fact to meet the lower end of production guidance at Agbaou and most importantly, the lower end of the all in sustaining cost guidance. Over to Ity now, when we talk about ity, we generally talk about the main horse in the Stobup there, the CLL project. But I'm very pleased to, say the existing heap leach operation continues to perform strongly. We took the decision last quarter to mine opportunities based on equipment availability and the progression of the CIL project itself. As a result, we we have beaten guidance here pretty well.
Production declined. However, less than initially planned over the previous quarter due to lower grade stat and the lower recovery. Which was partially offset by the increase in tonnes stakes overall. We expect production to decline in Q4 and the on sustaining costs to increase slightly as the greater proportion of the lower grade stockpiles are expected to be processed as the heap leach operation winds down by year end. Over to Carver now and looking at Carver as expected, production increased in Q3, despite the rainy season, due to the high grades and the better recovery rates associated with for not only the Cowops at all.
All in sustaining costs, pleasingly decreased and mainly due to increased production, lower processing costs and G and A costs overall. Which were partially offset by the high unit mining costs. We are hauling from circa 12 kilometers away now. And the, the higher pumping costs during the rain season. What's pleasing for me, and I guess for everyone, is to look at the honest with any cost curve on the Karma Assets, and it's progressively decreased over the last five quarters.
Certainly, we're reaping the rewards of our hard work. Going into more oxide material, we can now start seeing the benefits of the plant optimization works that was being done last year, and we continue to improve. Finally, just closing up on Tabakoto. I'm not going to spend too much time on Tabakoto, but I should remain flat despite the impact of heavy rainfall. Has a slightly higher mill throughput, was offset by just a slightly lower grade.
On the cost side, the issue remains the equipment availability and, the need for, you know, some additional underground fleet, at Tabakota and the cigar underground assets. In light of the capital allocation decisions, these investments were not suited to endeavor and we're convinced that the mining employees will benefit from the, the new buy strategy. With that, so I'll pass it over to Patrick now to walk you through the Kala asset. Patrick, over to you, mate.
Jeremy. Good morning, good afternoon, everybody. For the Kalana project, we have been quite active especially drilling over 48,000 meter in the 1st semester. As you may know, it's a high grade, quite complex deposit. And we have been achieving a significant amount of drilling to prove and to confirm and to refine the geological model which is quite okay right now.
Unfortunately, we have been facing some quite important delay in in the lab analysis due to the leach well analysis we are conducting on all the samples due to the high grade characteristic of the ore. That being said, we are right now working on the resource evaluation. It's complex with a lot of vein being modelized and vein set and correlation and domains. And actually, we we expect to publish updated resource quite soon now. Now back to Sebastian.
Thank you, Vincent, Jeremy and Patrick. So to conclude, we have had a strong 9 months performance, and I hope given you the flavor that we have much more to come, in particular in Q4. Our operations are performing well in line with the guidance that we gave you earlier in the year with production at the top end and all in sustaining cost at the bottom end of the ranges. This places us on a solid financial foundation for 2019. The CIL project at Ity continues to progress well we look forward to the 1st gold pour early in Q2 of next year, allowing us to have a strong 2019 full year production.
And do look out for our next announcement, the maiden resource from Kari Pump since, as Patrick said, is expected to be a strong catalyst. Longer term, our ambitions remain unchanged and we continue to work well to grow this company and create more value for our shareholders. I will leave it there, but we'll remind you that we are holding a Capital Markets Day on November 28 in Toronto, November 28 in Toronto. I hope as many of you as possible will be able to join us on the day or listen in, and I look forward to talking to you again very soon. But before
We will now take our first question from Justin Chan of Numis Securities. Please go ahead.
Good afternoon, everyone. Thanks for hosting the call. My first questions on Hounde. It's now run above nameplate, comfortably for some time now, including through harder ore. Are you now in position to update the market on what your thoughts are for a sustainable throughput rate there?
And what are you expecting next year in that regard?
Thanks, Justin. I think we'll give some flavor to the market when we'll be releasing our 2019 guidance. And we'll be at that time in a position to give some more stronger statement going forward are we expecting Hounde to behave visavis nameplate capacity? Jeremy, you want to add something?
No, not at all, Sam. I guess, as part of any nameplate, if there's any change to nameplate, generally goes to a debottlenecking study and we look at the whole asset over over and above just one, just the mills and what the throughput of the mills in. So Certainly, we need to weigh up a number of different factors before we change any key metric like that.
So I think to complete the answer, Justin, clearly up to now, Hounde has been operating at 20%, 25% above nameplate capacity. I think that we'll see what it closed. It's 1st full year of operation. And on that basis, we'll give more guidance in the 2019 guidance on how to look at it going forward. But obviously, it's positive and looking ahead we're expecting to hopefully maintain this type of operation performance.
Okay. Thanks for that. My second one is more of just a high level strategic and it might be kind of infringing on the territory on your CMD coming up. But you've now kind of gotten through the major divestments, and your build pipeline, it seems well along. Clana is coming.
What should we be thinking on the strategy right now? Are you relatively happy with the portfolio? Is it full? What are your I guess, what are your thoughts with regards to that?
Well, I think that our objective was to demonstrate our ability to deliver on the 4 pillars of our strategic plan. Operational excellence, project development, unlocking exploration value and also portfolio and balance sheet management. I think that at the end of the year with the sale of Tabakoto completed and and ity, well on track to its first goal for. We'll basically have delivered all the key items of this 1st 3 year strategic plan and therefore will be going forward thinking in the coming few months with the board at our next 3 year strategic plan. But I think this next 3 year strategic plan will be based on the same lines, which is continuing to to grow our business along with, I would say, low all in answers in order to really be focused on cash flow generation and looking at quality of production rather than just production for the sake of production.
So, let's finish and complete this year. This will end up ahead of schedule our 3 year strategic plan and we'll be able to prepare ourselves and present to the market the next 3 year strategic plan.
Okay, thanks. And just my last one is on Kalana. I realize that the new feasibility study isn't out yet, but Can you do you have any update at all with regards to your thoughts on the size of plant you're looking at there and what your view of the project is?
No, I think it would be a bit too early. The, in fact, part of the debate we will have once the numbers are out is When is the right time to launch the construction of the project, depending also on the exploration upside that we see in the short term. The 2018 Patrick's team have been focused on mainly doing infill drilling on the existing resources that were in the previous owner feasibility study. To check and build our own resource model. Our objective for next year is really to start drilling and expanding the exploration base.
And therefore, question will be on whether we wait for those results in order to grow the size of the plant or whether we go ahead. I think that we've been insisting that for us, 2019 should be an important year in terms of cash flow generation. And therefore, let's see what the feasibility study will show so that we can make the right call. On when is the right time to launch that construction and therefore with what size of plant.
We will now take our next question from Jack Garman of Tareto Securities. Please go ahead.
Hi, everyone. Thanks for hosting the call. My first question was concerning fetekroek and whether or not you have a target minimum resource size to develop a sort of stand alone operation. And secondly, are you able to provide an update on the Landgold JV?
Thanks. Well, on the, on Fetekro and I think, you know, our targets now on all greenfield operation is that target at least 2,000,000 ounce indicated resources to start having an attractive feasibility study for us. And this is why we are investing on Fetekro because we believe that there is potential to further grow beyond 700,000, 800,000 ounce of indicated resources that we have currently. So for that, we just need to let the exploration team to continue to drill the existing Lafigue target and to start drilling the other targets that were already identified. On the Randall joint venture, Patrick, you want to give.
I think we intend to do to give some information on this during our Capital Market Day end of November. As we have a board meeting with the joint venture partners in the next 2 weeks. Patrick,
Yeah. Well, the joint venture is progressing quite well. Well, it was 1st year since we signed this JV, it was a JV as 1 year of existence. We have been the JV as been concentrating on the northern part of the Mankono for the Mankono license of Randgold. And some mineralization was encountered and we are trying to right now to extend this type of mineralization in the southern part of the CCEDU license that we brought to the JV.
So, I would say that it's still early days. We have interesting showing a lot of geological work has been done, including a lot of geophysical activity. I think Rangol will report on their activity because they are operator of this JV. So far for us, would say so good. Things is progressing interestingly, but it's still early days to say whether or not the outcome would be positive.
Okay. Thanks very much. And one further question on ityhl guidance for Q4. Now that you've already met your full year guidance and why are you indicating?
Well, yes, I think that, as Jeremy said, for Q4, we're still expecting the each operation to run. And therefore, if I look at the previous quarters, we should have something slightly lower as we going into the end of this operation. But I think something around 15,000 ounce is probably a good assumption for AT and T for Q4.
Okay. Thanks very much.
We will now take our next question from Mark Bentley of Sherpa. Please go ahead sir.
Good afternoon, gentlemen. I have a couple of questions. First of all, on the taxation, You explained why it has risen substantially in this quarter, but it now seems to be around 50% of earnings. Is this a one off spike or can that be expected to continue?
Yes. So no, the, you have a detail because there are some situations very different from one mine to the other. So you have in the segment reporting note of the financial statements, all the details about the, about the tax. For a moment, we are, we have not paying tax, still at Agbaou. We still, we start to pay quite high level of tax in ity, in this year compared to last year.
Karma is also paying tax, but we are more or less at around the normal corporate rate. And at Hounde, there is a higher rate of tax paid, which is due to some adjustment between the of 2017 and, what has been the final tax return of 2017. So yes, there are some adjustment in, in the, in this quarter for Hounde in particular. But overall, I just want to make one comment is that it's very difficult to follow the tax on a quarterly basis because it's not completely steady. And you don't have a rate.
If you make the division, you don't have a steady rate. So what we will do is probably by the end of the year, is to give you a full detail of the reconciliation of the tax rate per mine to tell you what are the different items between the the normal, the decoupled tax rate and the effective tax rate. So we'll do that once a year. It's difficult to comment on every quarter because you have from one quarter to another some adjustments. But keep in mind that for the moment, again, ity, Carmen, Hounde, are paying tax.
Agbaou is not paying tax and will pay tax next year. And that we will overall, we have a tax amount, which is between $10,000,000 $17,000,000 per quarter.
So from that, I understand that going forward, we wouldn't expect it, over the course of a full year to be as high as that as a proportion of earnings? One technical question on the MD and A. It indicates that you have 100 this is on pages 2728 of the MD and A. Indicates that you have 100,000,000 ordinary shares authorized, but it says that 107,800,000 have been issued. I don't understand that.
Let me see, on that one, I need to go back May I answer to you offline once we have seen this point? Sure.
Okay.
No problem.
Thank you.
We will now take our next question from Georgi Mark of Haywood Securities. Please go ahead.
Yeah, good afternoon. Yeah, just questions. A follow on from previous. If you could just move on to Hounde there, Can you remind me what the sort of cutoff grade is there for, for Linde versus now versus the feasibility and and the stockpiling strategy.
Yes. Good day, Geordie. How are you going? Look, the cutoff grade is, is assumed when we do the resource and the reserve shell and the plan for each year. We haven't changed it.
We're working off the grade control model. And, we still, we still mine and stockpile in accordance with the with the actual plan we started to use. So, it's generally a 0.5, Judy, but, that changes when we start moving away to, blurring to Hearne of course.
Okay. Thanks. And maybe on that theme and moving over to EDUCL, when do you expect to start your gray control drilling there for the mine?
We've started, maybe started about 6 months ago. And well advanced. It's a big property, as you know, and we've got some, you know, the heap leach and the, and the, CIO overlapping. Have a little bit of a slow spurt during Q3. Interestingly, Hyundai Karma, Tabakota Agbaou will have 180 year rain events during the wet season.
However, the Ity CIL heap leach region to the east of the Darply River, oh, sorry, east of the Calgary River had 30% less rainfall. So, go figure. But, yeah, we're well advanced on the grade control and it's more about some whole profiles now and waste deposition and, and stockpile allocation now,
Excellent. Thanks. And in terms of ECL development, obviously, very nice to have brought that forward. With that, reconstituting of that development time frame, are you still keeping total man hours constant? So it's just more effective deployment of people?
I think we pulled the man hours left during when we saw the advantage of having a little bit less rain during the wet season, Joy. Yes, certainly the 2 months ahead Sebastian indicated before is pleasing. But, it's team effort. It's taken a lot of people at all the other sites and all around the place to get to get this to where it is. So, we're at the hard part now.
We don't wanna lose the advantage. We're gonna keep pushing and, and maintain and deliver on our promises.
Okay. Excellent. And maybe one last question on Kari Pump. And the other proximal sort of targets at Western Central. Has drilling recommenced on those targets and sort of what sort of scale of drilling are you looking at there in terms of number of rigs in scope of work?
Okay. Right now, no, we don't have, we don't have started drilling again. As I said by Jian said, we just achieved, I think, in September, end of September, we just achieved the 200,000 of drilling, all included diamond RC, Aircore RC stuff. So, right now, we are allowing some time to the drilling contractor to refurbish all the in because we have been drilling around the clock for that stuff. We plan to restart drilling I would say at the end of the year in December and we are still working on the exploration plan, but we think that in 2019, we should be leading even more meters all included, compared to what we have been doing this year.
So it's going to be a very aggressive template campaign targeting, as you said, Kari Center And Kari West, but not only that because It will address also some possible carri pump extension and also additional target in the vicinity of Vindaloo. But also some marginal targets. So again, for next year, Hounde is going to be our first spending our area for exploration, where we are targeting hopefully a lot of success at the end of next year.
Okay. Thank you very much.
We will now take our next question from Chris Thompson of PI Financial. Please go ahead.
Hi, good morning guys. Congratulations on a good quarter. I just got one question. One of my others have been answered, but just looking at carry pump at the moment, so I wonder if you could just walk us through, I guess, timelines and the type of analysis that you envisage to evaluate the development options for the deposit there?
Well,
you know, Kari Pump is located on an exploration license. So, as soon as we'll have the resource, we'll embark in the process of the exploitation license meanwhile, we'll conduct a kind of a study. Jeremy will take over to what we can do with that. For us. So, the key point is, is going to be 2019 because we have a lot of work to do, especially in Kari West, to try to see how we could unitize these deposits in the future.
I would probably add Chris that the objective for us is if you recall life of mine plan for Hounde. There was a decrease after 22, 23 due to lower grade in the VindalUPIT. Our objective for us is to be able to bring a carri pump, which will have substantially higher grade and also much better metallurgical given it's mainly into oxide. To bring that, I would say, by 2021 at the latest, so that we're able to bring it as early as possible.
Fantastic. That's great. Thanks. Congratulations guys.
It appears there are no further questions at this time. I would like to turn the call back to the speakers for any additional or remarks.
Thank you very much, operator. Well, thank you all for attending the quarterly results. And again, we'll be pleased to host this Capital Market Investor Day on the 28th November in Toronto for the one of you that can join us either physically or by conference call. And I'll be happy to publish with the team, as we said earlier, the carry pump in the next, in the next few weeks to allow and show the progress on this major discovery for Hounde. Again, thank you all for attending and thanks again to my team for this great achievement in this quarter.
Thank you very much
This concludes today's call. Thank you for your participation. You may now disconnect.