Thank you for standing by. This is the conference operator. Welcome to the K92 third quarter 2020 conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to David Medilek, Vice President, Business Development and Investor Relations. Please go ahead.
Thank you, operator. Thanks everyone for attending K92 Mining's third quarter 2020 conference call. We hope you and your families are doing well. In addition to myself, we have on the line, John Lewins, Chief Executive Officer and Director, and Justin Blanchet, Chief Financial Officer. I would also like to remind everyone that after the remarks from management, the call will be followed by a Q&A session. As we will be making forward-looking statements during the call, please refer to the cautionary notes and risk disclosure in our MD&A. Please bear in mind that all dollar amounts mentioned in the conference call are in United States dollars, unless otherwise noted. I'll turn it over to John to provide you with an overview.
Okay. Thanks for that, David, welcome everyone. The third quarter, once again, really represents another step forward for K92, completing our Stage 2 plant expansion commissioning to basically double our throughput from 550 tons per day, or 200,000 tons per annum to 1,100 tons per day or 400,000 tons per annum. In addition to significant progress on exploration and a number of our other project areas. If I start, first of all, with safety, third quarter, no lost time injuries, we've only had one lost time injury since start of operations in 2017. We continue to operate with one of the best safety records in the Australasia region, we continue to have a very strong focus on that area of occupational health and safety.
On the production front, we delivered 22,261 oz of gold equivalent and combined that with a record mill throughput of 64,702 tons processed. We compare that to Q3 2019, gold equivalent production was up approximately 16%, while throughput over doubled, an increase of 102%. Important to note that for part of the quarter, our head grades were actually kept deliberately lower to mitigate any gold losses during the commissioning of that expansion. Overall, plant commissioning has performed well. We've seen positive in terms of the ultimate plant throughput, where we have actually been able to achieve over 1,200 tons per day on a number of consecutive days, which is obviously notably higher than the design throughput of 1,100 tons per day.
On the mining front, longhole stoping continues to perform to design on both K1 and K2 Veins. This year, a major focus has been on expanding a number of operating levels that we have from the mine to expand throughput. I'm pleased to say, having just returned from site, in fact, that we've now got seven operating levels, eighth level being opened up. The incline continuing to go up towards the 1,285 level and the decline going down to the 1,130 level. We've also started production from our largest stope to date, which will provide the base production for the balance of the year. As a result of the completion of Stage 2 plant commissioning and the multiple production fronts opened up underground, we're really looking for this fourth quarter to be the strongest of the year and therefore of mine to date.
I'd now like to turn over the call to our Chief Financial Officer, Justin Blanchet, to discuss our financial results for the third quarter. Justin, over to you.
Thank you, John. Hello, everyone. Our Q3 2020 revenue increased by 70% to $35.6 million, compared to $21 million in Q3 2019. The increase in revenue was attributable to an increase in the realized selling gold price of $1,815 per ounce as compared to $1,409 per ounce in the prior year, as well as increased production. As of September 30th, 2020, there are 5,859 oz of gold in concentrate inventory. Inventories increased by 2,420 oz of gold during the quarter as we had a strong finish to the quarter after commissioning was completed in September. These ounces were subsequently sold in October. Cost of sales was $15.9 million for the quarter and increased to 30% compared to the third quarter 2019.
This was primarily due to increased operational activity, including the commissioning of the Stage 2 plant expansion. The company incurred costs related to the COVID-19 pandemic, including additional pay for employees completing longer rosters at site, additional costs related to the movement of personnel and supplies, and safety and medical-related costs. Cash flow from operating activities for Q3 2020 was $12.8 million, compared to negative $2.6 million in Q3 2019. As of September 30th, we had a $41.2 million cash balance, our highest balance on record, which includes making corporate tax installment payments in Papua New Guinea of a little over $5 million, paying $6.4 million year to date in principal loan payments to Trafigura, having a remaining balance of $7 million as of September 30th, and spending $15.3 million year to date in expansion capital.
As John mentioned, in Q3 2020, the K92 gold operations produced 21,298 oz of gold, 488,020 lbs of copper, and 7,127 oz of silver. During the same period, we sold 19,265 oz of gold, 487,087 lbs of copper, and 7,166 oz of silver. We incurred cash costs of $695 per ounce and an all-in sustaining cost of $834 per ounce, which was significantly below our realized gold selling price of $1,815 per ounce for the quarter. In comparison, 18,636 oz of gold, 209,287 lbs of copper, and 5,284 oz of silver were produced, and 15,562 oz of gold, 181,422 lbs of copper, and 4,847 oz of silver were sold in Q3 2019. A cash cost of $649 and an all-in sustaining cost of $800 per ounce were also well below the Q3 2019 realized selling price of $1,409 per gold ounce.
Our 2020 cash cost per ounce increased relative to the prior year due to deliberately lower feed grades to minimize potential gold losses during the commissioning of the Stage 2 plant expansion, as well as additional costs incurred related to COVID-19 pandemic and higher labor costs associated with the plant expansion. We see downward pressure on the cost via economies of scales following the successful commissioning of the Stage 2 mill expansion and continued expansion of longhole stoping activities. I will now turn the call back to John to continue with the rest of the presentation.
Thanks for that, Justin. We move on and look at on the exploration front, we are, I think, quite obviously very pleased with the progress to date. Recent results reported from three separate near mine infrastructure vein systems, Kora, Judd, Karempe. We look at Kora, late August, we announced results consisting of both the infill drilling and step-out drilling to the south. First hole reported from the southernmost drill cuddy, which we only opened up in Q2, demonstrated the system basically continues alongside, which I have to say was pretty much what we expected, and recorded 9 m at 10.2 g per ton gold equivalent. Other results that we reported at that point in time included 4.3 m at 113.8 g per ton gold equivalent.
Our exploration development drive for the site has now extended beyond the mining lease, and we're putting in a drill cuddy, which will actually be in our exploration area. We will be drilling Kora South. In fact, we already have, I think, a hole in Kora South, which is outside of our mining lease. On Judd, the announcement was made in early September and then again in mid-November. They were the first ever done by K92. The Judd vein system really has had very limited historical exploration. It's got a strike length of over 2.5 km up to four known veins, and it's subparallel to Kora and approximately 200 m to the southwest . Generally only 50 m-100 m from our main infrastructure underground.
In early September, ventilation infrastructure drive was developed along the Judd J1 vein, as we call it, and that was done to provide a more detailed evaluation in terms of both grade continuity and the geotechnical conditions of that vein. Preliminary results estimated that we had taken 6,200 tons at 5.5 g per ton gold equivalent, average thickness 3.4 m. That we're now putting it as a bulk sample and putting it through the plant. In fact, we have already completed that work, and we'll be reporting it in the near future. I think it'd be fair to say that we're happy with what we've seen come out of that. Geotechnically, the vein was shown to be very calm. Overall very happy with it. Importantly, I think, mineralization encountered from the bulk sample, very similar to Kora.
That really, with the continuity and the grades that we saw, really drove us towards putting two of our rigs to actually commence an initial systematic exploration program from underground. Mid-November, we announced the first four holes from that Phase 1 program, as we call it, three of the holes intersecting high-grade mineralization. Highlight was JDD0006, 7.25 m at 258 g per ton gold equivalent. Hole JDD0003, 4.5 m at 22.4 g per ton gold equivalent. Mineralization intersected was similar to that which we've seen in the bulk sample and also Kora. It's obviously still very much early days, but the results are certainly very exciting. We've got additional work planned for Judd. We'll be enhancing our knowledge of Judd's continuity, size, grade potential, et cetera, et cetera, through exploration in the coming quarter and in the new year.
Karempe, late October, we announced our maiden drill results from the vein system, reporting six holes. Like Judd, Karempe runs parallel to Kora, and the vein system has been mapped for a strike length of about 2 km and has very little exploration on it. Now that vein is actually to the north, to the northwest and about 400 m away. Results recorded in multiple intersections, sub-parallel veins. The highlight being what we've quoted as a KA1 vein, which in one hole came up with 2.45 m at a bit over 40 g per ton gold equivalent. Approximately 100 m down dip from that, 3.2 m at 18.3 g per ton in one of the other holes, gold equivalent. Again, mineralization encountered very similar to Kora. Results from both Karempe and Judd, I can only term as exciting.
They highlight the significant near mine exploration upside potential of K92. We've basically evaluated something like 20% of the vein field strike so far with the work we've done. We've got an enormous amount of upside potential, which is still to be drilled with all veins remaining open at depth and open to the side. Over the coming months, we plan to assess the impact of our exploration results carefully. In terms of the throughput potential, we're looking for Stage 3 expansion and the potential for a Stage 4. Who knows, maybe a Stage 5. As a result, we continue to increase the number of drill rigs we've got on site. We're currently running four rigs underground. A fifth rig is due this week and so should be drilling by the end of the month.
We've actually got a sixth rig due to arrive the first quarter of next year for underground. That takes us to currently five rigs on the surface, four rigs underground, five rigs by the end of the month, six rigs, a total of 11 rigs by the first quarter. I can assure you our exploration people believe that they could actually use a few more. We're having a look at that in our budget for 2021. Of course, I'd remind everyone that our exploration, production growth is all self-funded, and we continue to bolster our balance sheet. With that, operator, I'd be happy to commence the Q&A session.
Thank you. We will now begin the question-and-answer session. To join the question queue you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are on a speaker phone, please pick up your hand set before pressing any keys. To withdraw your question please press star then two. We will pause for a moment as callers join the queue. Our first question comes from Varun Arora of Clarus Securities. Please go ahead.
Hi, John. Congratulations to you and the team on continued execution, particularly on the cost front, despite the lower grades during the quarter. I have a couple of questions. I guess I'll start with the gold sales. I noticed they were a bit lower as compared to the previous quarters. Could you talk about what happened during this quarter regarding the gold sales?
Okay. Basically, as was mentioned by Justin, and myself in my talk, we were commissioning during the third quarter, commissioning the plant. What that meant was we deliberately put lower grades through the plant first half, a good portion of the quarter to make sure that in commissioning, where you always get a few issues. We didn't want to be putting high grade through the plant while we're commissioning expansion. We had higher grades towards the tail end of the period, and we had a lot of high grade right towards that end. That high grade production, especially in the latter half of September, would then basically not be sold until October. I think Justin made a comment on that I think there's a quite the amount of gold unsold at the end of the quarter, the previous quarter.
That's just something that we'll pick up in the next quarter.
All right. Thank you. On the cost front, I believe, you're seeing some unit cost savings as a result of commissioning. Could you comment a bit on that and what would be your guidance going ahead? Do you expect more cost savings on the unit cost front?
Yeah, look, we certainly anticipate seeing continuing savings or reductions in our unit cost as we complete the ramp up from underground. Basically commissioned the plant and as I flagged, the plant, in fact, has shown that it can in fact potentially do more than the 1,100 tons per day. Underground, we've said it would really take us until the end of this quarter to get the production ramped up to the 1,100 tons a day. We've still got a little way to go in terms of the underground. It's fast approaching that 1,100 tons a day. Certainly, we would anticipate that that'll continue to drive down the unit costs. As you'd be aware, probably your single biggest cost is labor. Expat labor actually forms a fairly major cost center, doubling through-put.
Adds less than 10% to your expat labor and probably about 30% to your other labor. It's not a doubling of the labor or anywhere near it. Same thing with power, which is one of your other major costs. Doubling throughput doesn't double your power cost. Of course, underground longhole stoping is ramping up. It's still not at what we would call the stable point because we're still opening up vertically underground. As we move to more and more production coming out of longhole stope, and ultimately, I think we're looking at about 60% longhole stope. That again, will drive down the costs.
Right. What's the current breakdown between long hole versus cut-and-fill?
It does vary. I would say that from probably around 70% + is now long hole stope.
70% long hole. Okay, great. Thank you.
As opposed to cut-and-fill. Obviously, you get some production from developing along your main vein systems and opening up the stopes.
Right. Just last question, what would be your guidance for the grade in Q4?
Grade in Q4, I would anticipate that, I think we'll be around the 12 g per ton-15 g per ton.
Okay, great. Thanks, John. Thanks for taking my questions. That is all from my side.
No problem. Thanks, Varun.
Our next question comes from Geordie Mark of Haywood Securities. Please go ahead.
Good morning and good evening, John. Thanks for arranging the call today. Just an extension from earlier questions there. On mining, you're saying ultimately, obviously, you're doing pretty well to get up to your 1,100 ton per day rate. What do you think prevailing sort of capacity is there? I guess that's an interplay between mine design and stopes that you've got going forward. Ultimately, when you're looking at long hole open stope at the moment, can you give us an idea of the dilution factor that you're incorporating there and anything that we can garner from how you're executing at the moment on that?
Well, look, the capacity of Stage 2 at 1,100 tons a day or 400,000 tons per annum was actually based on the plant. That was at the existing mill, which is a 900 kW mill. All the work that we did and our consultants and the actual Outotec, who supplied the mill, all the work said the mill itself could do 1,100 tons a day. That's the existing mill. That what we needed to do was increase crusher capacity by putting in a bigger cone crusher, increase flotation capacity, pumps, pipes, and some other upgrades, such as the process control system, et cetera. To go beyond that 400,000 tons would involve a new mill, and obviously the costs would go up dramatically if that's what you wanted to do. Of course, impact on production, et cetera.
That was the driver that really said, we're looking at 400,000 tons, around 1,100 tons a day. From the perspective of underground, certainly you could do significantly more than that. Obviously the Stage 3 has shown that with the resources it currently stands, the PEA said you can do a million tons per annum. With continuing to open up and importantly a twin incline, you can get to a million, probably significantly more than a million tons per annum. Underground with the existing incline, I would certainly say we would be comfortable saying we could get to 500,000 tons per annum. We are moving currently a lot of waste as well. We're actually moving more waste than mineralized material. Haven't got a study, so we don't have any ore. We just have this mineralized material that makes us lots of money.
We can certainly move material, but we couldn't move a million tons, not with the existing incline. As you'd be aware, one of the things that we have done is committed to that twin incline. In fact, the twin incline now, I think the six by six would be pushing about 100 m in and the five by five probably around 70 m in. They're progressing fairly well. The important thing in the expansion or expanding underground production is opening up levels. I was underground last week, on-site. Longest trip I've had underground because there's just so much more to see. You've got 11 What have you down there? 1150, 1170, 1185, 1205, 1225, 1245. Then incline going up to 1265 and the decline going down to 1130. Up to 600 m of strike length, a long strike as well.
We've got multiple levels open. We've also got Judd, which is sitting at 1235, which is, as we mentioned, that ventilation development, but it is actually producing ore. Ramping up that production is about opening up those levels and then stope production from it. Realistically, I think until you get the twin incline in, you could probably push to 500,000 tons. Whether or not the plant can do that on a sustained basis, that would be something that we're still really to look at. This is still early days of having done that expansion. You're still in that optimizing phase, and then you start moving into your debottlenecking and seeing what you can actually get out of what you've done. Did that answer all your questions, Geordie? Was there something else I can do too?
Yeah, I was just thinking, on that sort of the dilution factor.
Oh, dilution. Yeah.
Yes.
Look, I'd say that, generally longhole stoping, we've probably picked up less dilution than we anticipated. We certainly get less dilution from our stopes than we do actually from our development. I think we're running at 15%, 20% dilution.
Okay, great. Thanks. I've got more, but I'll pop in the queue. Thanks.
Okay. Thanks for that, buddy.
Our next question comes from Chris Thompson of PI Financial. Please go ahead.
Hi there. Congratulations on a good quarter. I understand obviously you've been engaged in a lot of areas, a lot of things. Just a quick question just back to the unit costs. Could you quantify exactly what you anticipate the unit costs to be on a per ton mill basis? Obviously, when you reach your desired throughput rate.
I can't give you the detail right now off the top of my head. We have from the study and from our current budget that we're doing for next year. Overall average cost is around $150. It hasn't really changed that much. We haven't finished our budgeting process for next year. When I've finished the budgeting process, that's something that will then allow us to give our guidance for actual production for next year. It's been delayed somewhat because of COVID and all the rest of it, which has handicapped us a little bit. I've actually just returned from PNG, from site and from Moresby, where we actually went through our budget. We're just finalizing them hopefully as we speak. It will be in that order, Chris.
Okay. Thanks a lot, John. That's great. Just one more quick question. Obviously, you said you lowered the grade for obvious reasons. Have you got a sense of what sort of grade you'd be looking at to provide the optimum sort of recoveries you'd be looking for on a forward-going basis?
Well, if you look at the, certainly the studies that we've done all indicate that you're looking around the sort of 10 g per ton-12 g per ton, up to 14 g per ton, 15 g per ton in certain times. That is the sort of grade that we'll be looking for next year. I think this year it's pretty much the grades that we were looking for. We've gone a little bit higher than that, in part because the long hole stopes have come out cleaner than we anticipated. Of course, the other one is that positive reconciliation that we've historically had has continued all of this year. We've also got that positive reconciliation. Simplistically, if you look at it, 400,000 tons at 94% recovery or thereabouts.
If you're running 10 g per ton at 400,000 or 10 .5 g per ton , then you're running 400,000 oz, you're running about 135,000 oz. 10 g per ton-12 g per ton basically gets you 120,000 oz-140,000 oz, 150,000 oz. That is the sort of figure at 400,000 tons per annum that we projected we'd be able to produce. Over the medium term, that's the sort of grade you expect to be producing.
Great. Thank you for that, John. Yeah, congratulations again.
Well, thanks, Chris. It's, yeah, sometimes things are fun.
Our next question.
Even when it's challenging.
Our next question comes from Andrew Mikitchook of BMO Capital Markets. Please go ahead.
Hi, John. Congratulations on a strong quarter. Lots of keen questions have already been asked. Maybe I can just take us away from this quarter to looking forward. What kind of flexibility do you guys have to adapt the mine plan to take advantage of anything you guys see at Judd and Karempe? It's not far from underground workings and, obviously to some degree, grade is king. Are you able to fairly quickly pivot? Could we see an impact if you saw some sort of high-grade shoots as early as next year?
Look, Karempe is a long way off. It's 400 m away, and it's only got a few holes in it. It's reasonably far away from infrastructure, so setting up something there would be a relatively longer term. Judd, obviously, we're mining through Judd right now, and I make the point that we've known that Judd has grade. We've always known it's had grade. It has some historical drilling in it. Our focus has been on Kora because we knew it had grade and had continuity, and it had a resource in it, whereas Judd did not. Almost all of our work has been focused on Kora and developing that resource so that we could go into Stage 2 and then Stage 3. Guys on site quite frequently are pushing to do more drilling on Judd.
From our perspective, we've been driven by wanting to get into Phase 2 and then going to get into Phase 3. You're developing, you're opening up. The degree of flexibility we've had in some ways has been limited because we're moving at a pretty rapid pace. As a result, we haven't drilled Kora, and the guys actually on site came up with the idea that, look, okay, so we get that we've got to focus these drills on Kora because we've got a feasibility study to finish. We need to increase the measured and indicated, and we're actually expanding the ounces as well. We need to put a return airway development in. What about if we put it along Judd?
We've actually gone through it and we know it's sitting here, and we were just going to go out a little bit to the east of it. How about if we develop along it'll give us a lot of information on grade continuity and it'll give us geotech. That's what we did. That's actually forced us to do some drilling in Judd because we got such good results out of it. Certainly, because you're right there, you have an ability to very quickly open up Judd if you wanted to. If there were higher grades there, higher-grade shoots that said, "Look, that's something you should be doing." I think the important thing to remember is it's still relatively early days in Judd. If you think about it, Kora, we drilled the first hole May 2017.
We took the first bulk sample out in September, October 2017. We've basically taken two and a half years, say, to get the resource, or add to the existing Kora resource, which was the 1.6 million ounces, to add 3.2 million ounces. If you're looking for an impact from Judd, and you want to add this, I've seen some people suggest 3 million ounces. That'll take us quite some time to drill that if the continuity is there, and we don't know because we haven't done enough drilling. I'm not sure that Judd's going to have an enormous impact on Stage 3. Stage 3 is, we're going to start Effectively, we started it because we started twin incline. In terms of committing to a plant or whatever else, that's probably 12 months away or thereabout.
By that time, we may have a bit more information, and I suspect we're going to have to rely for even more information coming out. Long-winded answer. Short of it is we're going to continue drilling Judd. It will start generating information. If there are areas there that could offer us a good return, then we could relatively quickly open those up, certainly over the next 12 months, and be able to bring those to account. In fact, as I mentioned earlier, we will be bringing out the results on the bulk sample that we put through the Judd. We have also been blending Judd into our core material. Quite frankly, there's no real difference between the two materials.
Okay. Well, thank you very much.
Your question, Andrew?
That was perfect. Thank you very much for taking us through that. I'll step back and see if other people have questions.
Thanks, Andrew.
Our next question is a follow-up from Geordie Mark of Haywood Securities. Please go ahead.
Thanks. I'll make it quick. This is an extension, I guess, to Andrew's question on Judd. Obviously, very successful so far. In terms of, in reference to, I guess, Stage 3 expansion or Stage 3 plus, given the amount of drilling, I guess you would need to complete, as you indicated, on Judd to a substantial level. Given the ramp up in drilling and your technical requirements, I guess, would you be looking to integrate that into a subsequent PEA on an expansion to 1.4 million tons per annum? Would the 1.4 million tons per annum potentially include Kora only? Just to give an idea of what the potential sort of Stage 4 could look like.
Okay. Well, first of all, Stage 3, I mean, the PEA said a million tons per annum. We also flagged as part of that in the PEA, we had run a cut-off grade on the mining side of around 5 g, so 5 g per ton. That had actually meant that we had about 4 million tons at 4 g per ton that was actually not being brought to account. Much of it would be sterilized if you actually mine in that manner. The reason that we used that cut-off was that that optimized your NPV5 after tax. It was about optimizing NPV5. If you want to optimize production ounces, then you would run at the economic cut-off grade, which is actually below 3 g per ton.
What we said was, in the feasibility study, we will actually be looking to bring those extra tons and ounces to account. Simplistically, if you look at it, a million tons per annum was averaging, I think, 318,000 oz gold equivalent per year. There was another 4 million tons at 4 g per ton that was not treated. We just happen to have a plant of 400,000 tons per annum capacity, which just nicely fits in with a 10-year life of treating that additional material, which could add another 40,000 oz , 50,000 oz to your production. 400,000 tons per annum, 4 g per ton, 95% recovery or thereabout. There's an immediate potential from Kora alone that, in fact, you could run at 1.4 million tons , 1.5 million tons per annum. That is something that we're definitely looking at in the feasibility study.
Whether you then say, well, actually, maybe the new plant should rather be 1.5 million tons per annum and leave that plant for other potentials such as Karempe, such as Judd, Maniape, Arakompa. That's part of what we'll look at in the study. We're not wedded to 1 million tons per annum for Stage 3. In fact, I'm almost of the view that it almost definitely will not be 1 million tons per annum. It will be 1.4 million tons per annum, 1.5 million tons per annum, which may be entirely a new plant or may be a combination of the new plant and the existing plant. We'll continue over the next 12 months with our additional rigs to be drilling Kora South. Continuing to push to the side. We are continuing to take that development further and further to the south into our exploration ground.
Looking at some deeper holes from underground as well. Also drilling Judd from underground and also from surface, both Judd and Kora. Continuing to drill Karempe as well. All of that's going to be happening over the next 12 months. Plus of course, we're drilling at Blue Lake right now as well. If I let my exploration boys get every rig that they want, we'll also be drilling at Maniape and Arakompa, and there's a couple of other things Matthew would like to be drilling as well. Exploration guys, it's what defines them. How many drill rigs have you got versus how many drill rigs have I got? There's no two ways about it. They can justify having more rigs.
Okay. No, that's good to know on that. The cutoff for the feasibility is still kind of mid-2021 based on that potential expansion?
Look, feasibility certainly because of where we are looking at now with Judd and various other things, it'll be second half of 2021.
Right.
We've already taken the rigs off of drilling Kora to drill Judd or two of the rigs anyway off to drill this thing of Judd. I anticipate that we'll continue drilling Judd because, although to get 3 million ounces is a relatively long procedure, there is an area that you can focus on it very quickly. You could certainly bring a 1 2-month period of a million ounces plus to account if they're there, of course. If they're not there, no matter how much drilling you do, you ain't gonna find them. One thing we haven't been able to figure out yet, how to make exploration drilling actually generate answers. It's only really good for finding them.
Okay, great. Thanks. I appreciate it.
Thanks, Geordie.
This concludes the question and answer session. I would like to turn the conference back over to Mr. Lewins for any closing remarks.
Well, thank you for that. Look, for us, this has been a challenging period. This is COVID-19. We currently operate with quarantine for all of our people coming to site. I was on-site, did a week on quarantine before I could go out into the workforce. I'm back in Perth now. I'm sitting in a hotel in Perth. I'm quarantining here for two weeks. All my wife can do is drop me off some supplies and whatever else. This is a challenging time. It's a challenging time, I think, for many people. I'm actually in awe of our team on-site and what they've achieved. I went to site. Now it's the longest I've ever not been to site, not been to PNG. It's six months. The change was stunning from going to the camp. We took the place over. It was 400.
It's now 1,000-man camp. Going up to the warehouse. The warehouse is now being tripled in size. We've now got a concrete cement batch plant that can do 5 cu m in five minutes so that we're shotcreting underground. With that plant to be big enough to actually do a million ton per annum expansion as well. Obviously seeing new process plant operating. These guys, all of that has been done without anyone coming in from outside, from overseas to assist with that. It's all been put together by our own people. In the case of camp, by local suppliers and contractors. Of course, you get up to the portal, twin incline. Steel sets now in six by six, the five by five. Looking at it going in, all the walls and the backs shotcreted looks absolutely beautiful.
Guys are doing an incredible job there. Brought in the additional equipment to be able to do it. We've set up remote control of the LHDs of the 517i, all of that as well. All of that done in the last six months. All of that done in the middle of COVID. It's really been an exciting period, and there's an exciting period coming forward. David loves to use transformative, and the problem with the word is that we keep having transformative periods, and we have to keep using the word. We haven't come up with a better word because every quarter is transformative for us. I like to think that we've delivered on so many areas. We are really excited by Judd and Karempe. We've got more results coming out for Kora in the next couple of weeks, and there's some usual story with Kora.
There's always some good results that come out from there. We're back at Blue Lake as well again, and so exciting there. Blue Lake now being drilled with our own surface rigs. We've now got two of our own surface rigs, as well as three of our underground rigs, fourth of our own underground rig coming in this week, and a fifth of our own underground rigs coming in this quarter. Very much driven by our people, and that's our greatest strength, is the team of people that we've been able to put together. At the same time as all that's happening, coming up with a safety record, which is in PNG is second to none. We're looking forward to this quarter, we're looking forward to next year, and all the potential that has.
Really appreciate the interest and the opportunity to share that with you. I think I've done enough pontificating. Thank you all for your time today, this evening, this morning, wherever you are. Thank you.
This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.