Good evening. Good morning. Welcome to OceanaGold's Second Quarter 2020 Results Webcast and Conference Call. I am Sam Pizzewski, the Vice President of Investor Relations for OceanaGold. I'm joined today by Michael Holmes, President and CEO of OceanaGold along with Scott McQueen, Chief Financial Officer Mark Hadzo, Chief Development Officer and Jim Whitaker, Executive General Manager of the Hale operation.
Financial reporting standards and all financial figures are denominated in U. S. Dollars unless otherwise stated. Also note that the presentation contains forward looking statements, which by their very nature are subject to some degree of uncertainty. There can be no assurances that our forward looking statements will prove to be accurate as future results and events could differ materially.
Note also that we are providing the current status of operations in our business and announced earlier a revision to our 2020 guidance related to COVID-nineteen impacts on the Macraes operation. Despite already flagging this change, it's important to point out that the current situation related to the COVID-nineteen virus remains fluid and may still have further impacts. In this presentation, we will also discuss again the results of the Waihi District study preliminary economic assessment. According to the definition of a PEA, it is not intended to demonstrate viability, but rather study the potential viability of the Waihi District. The PEA includes the inferred mineral resources that are considered too geologically speculative to have economic considerations applied to them in order to be categorized as mineral reserves.
Further drilling, evaluation and studies are required to provide any assurance of economic development case. I refer you to the disclaimers on the forward looking statements in our presentation. I will now turn the presentation over to Michael Holmes.
Thank you, Sam, and good morning, good evening to all. I hope everybody is staying healthy during this continued unprecedented time, and thanks for joining us today. Moving on to Slide 3. The second quarter was always expected to be our weakest quarter for production, but the results also demonstrate the impact the global pandemic has had on our business. Although we originally believed we could maintain our original guidance range, we have come to realize that the 5 week hiatus at Macraes had more of an impact in the context of the full year outlook than initially expected.
Our revised 2020 outlook reflects the direct impact on the Q2 production at Macraes, as well as the flow on timing impacts to the mine grades in the 4th quarter. As a result, we now expect consolidated gold production to range between 340,000,360,000 ounces, down from 360,000 to 380,000 ounces, albeit at an improved all in sustaining cost ranging between $10.50 $1100 per ounce sold, down from $10.75 to $11.25 per ounce sold. At Martha Underground, we developed nearly 1.5 kilometers, which was higher than what we expected given the COVID lockdown. Approximately 2,900 meters of underground development have been completed year to date. At Haile, we are maintaining our full year production guidance range of 180,000 to 190,000 ounces, while reducing our site all in sustaining cost range to $10.20 to $10.70 per ounce sold on the back of the lower forecasted sustaining capital spend.
Power production and costs in the Q2 were broadly in line with expectations. And despite record May rainfall, combined with the ongoing management of the COVID-nineteen protocols, Productivity improvements continued with higher plant throughput, increased material mined and lower unit costs. We do, however, note the continued trajectory of the COVID-nineteen in the U. S. And South Carolina remains highly uncertain and poses ongoing risks.
At a total company level, revenue and EBITDA decreased from the previous quarter due to lower gold sale volumes. The key change has been the completion of the main stoping at the Carrenso orebody at Waihi in the first quarter, no quarter no second quarter gold sales from Didipio and lower than expected production from Macraes where COVID had a material impact. Our adjusted net loss of $42,000,000 year to date and $31,000,000 in the Q2 reflects the lower sales volume and revenue. Our 2nd quarter adjusted EPS result was negative $0.05 And while a weaker financial performance was expected, the quarter was further impacted by the COVID restrictions at Macraes along with non cash financial adjustments, including losses on currency translation and a higher tax expense. Cash flow per share was $0.09 year to date, excluding the Q1 gold presales and $0.02 in the 2nd quarter, which is broadly in line with analyst consensus.
We continue to advance our exciting organic growth opportunities. We delivered a robust Waihi District preliminary economic assessment a couple of weeks ago, We continue to advance development of the fully permitted master underground, where we're on track for 1st production in the Q2 of 2021. We continue to advance the other Waihi District opportunities, including WKP through the permitting process. At Macraes, the Golden Point underground study remains on track for completion in the Q3. Turning to Slide 4.
Safeguarding the health and well-being of our workforce remains a top priority for us, and we have very strict protocols in place across the business. With the rapid escalation and spread of COVID-nineteen virus at the beginning of Q2, we acted quickly to safeguard our workforce, implementing very strict protocols at each of our operations and for our corporate staff, including workplace health screenings, staggered shifts and rigorous cleaning practices. The Haile operation has had 8 positive COVID-nineteen cases, of which 3 cases remain active and under quarantine. Due to our COVID-nineteen protocols at Haile, the 171 workers have had to self isolate for 2 weeks at some point since the beginning of March. The New Zealand government's lockdown curtailed operations at Macraes and halted capital at Martha Underground at Waihi for 5 weeks.
To date, we've had no confirmed cases of COVID-nineteen at either site. There are currently no restrictions in place across the country other than the borders remain closed to foreigners. Didipio remains in a state of operational readiness. There are no confirmed cases of COVID-nineteen at site to date, and we are operating under the general community quarantine requirements. Despite all these challenges, our safety performance continues to improve, resulting in the company's total recordable injury frequency rate trending lower to 2.7 per 1000000 hours worked.
This is a fantastic effort and a near record for the company. Moving on to Slide 5. We have operated a sustainable business for the past 30 years by applying robust ESG practices across our business. And in June, we launched our 2019 sustainability report that captures our commitment to responsible mining and is based on the globally recognized Global Reporting Initiative Framework. In 2019, under our new integrated management system, we made significant progress in a few areas, including the review of our responsible mining policies, the launch of a new policy around our engagement with government and civil society, and the issuance of 9 statements of position focused on social and environmental aspects.
We are extremely proud of our ability to discover ore bodies, build projects, operate mines and rehabilitate depleted mines. Our overall ESG performance has been recognized again by the major ESG rating agencies. And most recently, we maintained our A rating with MSCI, putting us among the elite ESG performers in the mining industry. Moving on to Haile and on to Slide 7. Haile delivered continued improvements even despite the challenging conditions that I previously mentioned.
In my 30 years in the mining industry, I've come to understand that mining carries many risks, technical, social and economic. Layering on a global pandemic has added even more complexity. With that said, I am pleased to see the Haile operations continued safety performance improvement with the total recordable injury frequency rate significantly lower at 2.7 from 7.7 per 1000000 hours worked a year ago. I attribute this to the strong leadership we put in place at the operation, and Jim and his team have instilled a strong safety culture with continuous employee engagement. Despite these challenges, where a meaningful proportion of our workforce have been off work due to COVID-nineteen protocols and the record rainfall in May.
Haile has managed through this and delivered significant operational improvements. Total second quarter mining movements have nearly doubled year on year and increased 18% from last quarter, reflecting the ongoing improvement in mining productivities. The excessive rain did impact our ability to access high grade areas of the open pits, which we now expect to mine this quarter. Ore mining during the Q2 increased from the Q1 and the prior year with activities focused on ore mining at Red Hill and the pre stripping of waste in the Snake Phase 2 and Leadbetter Phase 1 pits. Higher mill throughputs in the quarter helped to deliver significant increase in production quarter on quarter.
This was partially offset by moderately lower grades. We maintained gold recoveries despite the slight reduction in hair grade, which reflects the continuous improvements to the fine grinding circuit. Mining unit costs decreased 22% from the previous quarter and 43% over the prior year period. Processing unit cost per ton decreased 14% from the prior quarter and 17% from the previous year. The reduction in unit cost reflects the increased mining productivity and process plant improvements and enhancements.
We have maintained Haile's gold production range and we continue to expect a strong second half of the year, particularly in the Q4. As a reminder, the second half of the year is expected to deliver 2 thirds of Haile's annual gold production at the corresponding lower all in sustaining cost. In this second half, we will focus on increasing mining rates and we'll commission an additional 4 Komatsu 730E large haul trucks to support the mining operations. Although we expect to see the lower sustaining capital costs, this is offset by higher growth capital spend, which is associated with progressing an additional lift on the tailings storage facility and additional waste rock stacks to support the expanded mining operations. The original 3 meter lift of the TSF is nearly complete.
And with the contractor on-site, we are bringing forward the next phase of the lift from 2021 to this year. This will further support the expanded mining operations while managing the water balance on-site. Turning to Slide 8. We recognize that weather has been a consistent theme for us at Haile. The reality is that the Carolinas continue to experience record excessive rainfall.
And although we have factored in rain when setting our budgets and guidance, it is a variable that we cannot predict and it does and will remain a factor of our operations until we've opened up more pits and mined down to hard rock. I draw your attention to the slide where we are highlighting the enhancements we have made to the Haile operation, which has yielded continuous improvements to productivities and costs. In the month of May, the site recorded 12.5 inches of rainfall, which is significantly more than the period between September December of 2018. Despite this rainfall in May, we mined as much material for the month as we did mine for the Q4 for the whole quarter of 2018 at a mining cost of nearly half. This is a testament to how well we had adapted to mining in the heavy rain periods and changes we have made to mitigate the risks of weather.
Turning to Slide 9 in Macraes. During the Q1, Macraes operation reported one recordable injury. It's the 1st of the year resulted in a total recordable injury frequency rate of 1.5 per 1000000 hours worked. The operations continues to see a significant reduction in the number and severity of injuries as compared to last year. And again, I employed the concerted effort by Matt Hine, our Site General Manager, and his team on the ground for establishing a strong safety culture.
In the Q2, Macraes produced approximately 28,000 ounces of gold. Though lower production was expected, the performance was further impacted by the COVID-nineteen restrictions. Over the 5 week lockdown, we were required to curtail operations to meet regulatory requirements, including the suspension of mining operations. Mine operations were limited to hazard management activities exclusively and the processing plant was restricted to the minimum throughput capacity required to maintain the autoclave. Despite mining a near record 5,200,000 tonnes in May, followed by the 4,500,000 tonnes in June, the 5 week cessation in mining has adversely impacted how it looked for the year for Macraes.
The 5 week loss of mining will delay access to the higher grade ore from the Coronation North Phase 4, which we're expecting would be the principal feed in the 4th quarter. This material will now be mined in the first half of twenty twenty one. Additionally, the suspension of mining activities required us to feed oxide materials from stockpiles, which we could not effectively sample resulting in significantly lower than expected gold recoveries. These challenges have culminated in the reduction in the expected gold production for the year and the result in higher all in sustaining costs. We do continue to expect the 4th quarter to be our highest quarter of production at the lowest corresponding all in sustaining cost.
Moving on to Slide 10 in Waihi. Waihi reported one recordable injury during the quarter, increasing its total recordable injury frequency rate to 5.3 from 4.2 per 1,000,000 hours worked at the end of the Q1. The development of Martha Underground was temporary curtailed due to the COVID-nineteen related restrictions, which were lifted on the 27th April. At the end of the quarter, we completed 13 42 meters of development, which was ahead of our expectations. As the year progresses, we expect development rates to continue to increase as shown on the chart.
And despite the 5 week COVID-nineteen lockdown, we remain on track for 1st production from Macraes underground in the Q2 of 2021. Looking ahead, we expect to process ore from the narrow vein mining in the upper Carrenso to produce approximately 8,000 ounces of gold production in the Q4 of this year. Moving on to Slide 11 in Didipio. Our focus in Didipio is the lifting of the operational restraint of the mine and renewing the FTAA. We remain in dialogue with the appropriate government representatives at the national level.
And during the Q2, all levels of government in the Philippines were responding to the COVID-nineteen pandemic. Following the meeting with the President at the end of February, a government working team was established to renew the FDA renewal. This team commenced their work in March before temporarily pausing to focus on the COVID crisis. The government FTAA working team reengaged on the renewal process. And following the completion of that work, they re endorsed the FTAA renewal to the Office of the President at the end of the quarter.
Currently, our understanding is the FDA renewal remains with the Office of President for approval. Since the operations were restrained in July 2019, Our objective has been to maintain as many of the operational workforce for as long as possible to quickly and safely resume operations. Following nearly 12 months of restraints, we made the difficult decision to begin the progressive temporary layoff process in mid April. Today, approximately 500 of the 7 50 direct workforce have been temporarily laid off. Under the labor code of the Philippines, the company can temporarily lay off employees for no longer than 6 months.
At the end of that period, the company will either commence the process of termination or renewal of employment. Decision to terminate or renew, which must occur in mid October of this year, will be dependent on the lifting of restraints or the renewal of the FTAA. We are also engaged in open dialogue with local government units to address the continued blockade of the access road by the anti mining activists. Didipio is a significant source of jobs, taxes and revenues that we believe will be crucial in contributing to the Philippines post-nineteen recovery. I will now turn the presentation over to Scott McLean to take you through our financial results.
Thank you, Scott.
Thank you, Michael, and hello, everyone. The next few slides cover our Q2 financial results and balance sheet. Turning to Slide 13, which includes a snapshot of the balance sheet. As shown on the slide, as at 30 June, our cash balance was $148,000,000 and our net debt stood at 170,000,000 dollars We have been actively managing our cash and liquidity position for some time in response to the ongoing Didipio suspension. It includes steps already taken in the Q1 to better align our 2020 operating cash flow profile with our capital investment plans.
These steps included the sale of our strategic equity interest in Gold Standard Ventures, the export of the dore inventory from Didipio, to gold prepay arrangement executed in the Q1 and the drawdown of the final $50,000,000 available on our revolving credit facility. The timing of these steps in part reflected our expectation of weaker performance through the first half, given, as Michael has pointed out, 2 thirds of our 2020 production is expected in the second half of the year. However, the 5 week New Zealand COVID-nineteen restrictions, which impacted Macraes in particular, made the Q2 even more challenging. However, with Macraes back to full operation and as we progress through the balance of the year, we expect to see our performance improve as mine to grades increase at both Haile and Macraes with the 4th quarter remaining the strongest quarter of the year. Given the continued suspension of operations at Didipio, we have and will continue to proactively manage the balance sheet to meet the short term challenges we face, while ensuring adequate funding capacity to deliver the company's high value growth projects on the optimal time lines.
Given the record gold prices and strong future margins they represent, I would also add that we don't have any current plans to undertake further hedging. Moving on to Slide 14 in the financial results summary. The quarter on quarter reduction in both revenue and EBITDA aligned with the lower gold production and sales. As already noted, the results included lower than expected Q2 production at Macraes given the COVID-nineteen restrictions. Other key Q2 changes included no sales from Didipio, whereas the Q1 included the sale of the Douro inventory, plus the idling of processing of Waihi with main stoping at Carrensa completed in the Q1.
Waihi is, of course, scheduled to run a campaign in the Q4 to process narrow vein ore, which is currently being mined and stockpiled. The overall second quarter result was a net loss of 31,000,000 which included an unrealized asset tax gain of just under $7,000,000
on the
fair value of the remaining New Zealand dollar gold hedges. Approximately 59,000 ounces remain on those hedge contracts in the second half. On an adjusted basis, after excluding non cash unrealized gains and losses on hedging and asset write downs, Revenue as a result, sorry, was largely unchanged at a loss of $32,000,000 or negative $0.05 per share.
Please go ahead, Mr. McQueen.
Hi, everyone. Sorry, it appears that the line got cut off and not be taking the lockdowns here in Victoria pretty seriously. I think I was just referring to the negative $0.05 per share fully diluted EPS, which took the first half results to an adjusted negative $0.07 per share fully diluted. As noted earlier, the 2nd quarter results was impacted by the COVID restrictions in New Zealand. Also, as Michael mentioned, the 2nd quarter included several material non cash adjustments in adding to nearly a cent on EPS, including unrealized movements related to currency conversions and related tax provision.
These currency impacts related to a material appreciation of both the New Zealand and the Australian dollar exchange rates across the quarter. It is also worth noting that we are not currently recognizing any potential income tax credits associated with the cost incurred in the Philippines to maintain Didipio in a state of operational revenues. As per the cash flow summary at the bottom of the slide, operating cash flows for the quarter decreased to $17,000,000 This compared to $121,000,000 in the first quarter, which included approximately $79,000,000 related to the gold prepay. On an adjusted basis, after removing working capital changes, the operating cash flow per share for the 2nd quarter was $0.02 fully diluted and $0.09 on a year to date basis. Noting that the prior quarter investing cash flows included $22,700,000 credit for proceeds on the sale of our equity interest, 2nd quarter actually shows a slight reduction in CapEx.
This reduction primarily reflects lower pre stripping, given the COVID restrictions suspended 95 weeks in Macraes, as well as lower general operating capital. Financing cash flow of approximately $4,000,000 reflects the net proceeds received from refinancing recent New Zealand equipment purchases, partially offset by ongoing periodic finance lease payments. Turning to Slide 15, which provides some additional detail on our capital expenditure. As outlined at the top of the table and already mentioned, total capital expenditures decreased quarter on quarter around 9% to approximately $54,000,000 As previously noted, the decrease reflects lower pre stripping and general operating capital, partially offset by an increase in growth capital. The decrease in general operating capital largely reflects lower spend at Macraes with the previous quarter including equipment purchase.
In the current quarter, we received $7,800,000 spend on 2 new Macraes excavators via a $10,000,000 equipment finance facility established with Westpac Bank. That facility offered superior terms to vendor finance on that specific equipment. It's pleasing to see the new excavators contributing to the record mining rates achieved at Macraes in May following the easing of COVID restrictions in late April. Growth capital increased 24% quarter on quarter. The main areas of investment during the quarter were the Haile expansion, which included the tailings wall lift and additional storage capacity, plus ongoing development at the Martha Underground.
First 3 meter tailings wall lift at Haile is expected to be included in the Q3 this year. Given the unprecedented levels of rain received in 2018 and again in recent months, the water levels in the current CSF are materially above the modeled amount. As such, we have chosen to continue works to advance the 2nd 5 meter lift that was scheduled for next year to enhance freeboard. While transitioning straight into that lift offers some potential cost benefits, in doing so, we are bringing forward approximately $15,000,000 of capital into the second half of twenty twenty previously planned for next year. In addition, we're expecting to spend an extra $10,000,000 continuing expanding PAG capacity at Haile.
There's also been advanced from 2021 to increase short- to medium term capacity. Based on various other revisions to our plan, our year to date spend rate, plus an expected $15,000,000 reduction in sustaining capital, mainly pre strip, our consolidated 2020 capital spend is expected to remain within the previously guided ranges on a group basis. We have however provided some updates to reflect these changes. I'm going to turn back over to Michael to discuss the rest of the presentation. Thank you.
Thank you, Scott. And moving on to Slide 17. We are investing in these growth opportunities and each of them are at different stages. Beginning with the growth in the Americas, the Horseshoe Underground represents the opportunity to add high grade ore to the existing Haile open pit production profile. Optimization of the project is currently underway, including an assessment of all the mining scenarios.
Paste fuel versus cemented rock fill backfill and the development of the deposit from an either a top down or bottom up approach. We expect to complete a feasibility level economic analysis of all mining scenarios by the end of the year and portal development is on track for 2021. The company is in the final stage of the supplementary environmental impact statement permit process to further expand the Haile operation and mine underground. To date, there have been no objections by any stakeholder group to the SEIS. And at this stage, the company anticipates a successful record of decision and completion of the process by year end.
In New Zealand, the Golden Point underground study at Macraes is advancing with an updated NI 40three-1 hundred and one technical report expected to be completed by the end of Q3. Golden Point is expected to replace the Frasys underground and extend the mine life of Macraes. We expect Macraes to be a major source of free cash flow generation for many years to come. Turning on to Slide 18, the Waihi District overview. 2 weeks ago, we were pleased to announce the robust results of the preliminary economic assessment of the Waihi District in New Zealand.
We have operated responsibly in New Zealand for the past 30 years, creating significant value for shareholders and significant socioeconomic benefits for the host country. In fact, we're quite proud of our track record of successfully and responsibly exploring, consenting, developing, operating and rehabilitating mines in country. The components of the Waihi District study are at the Martha Underground, which is fully permitted and currently in development with 1st production expected in the Q2 of 2021. The district also includes the Martha Open Pits Phase 5, which is an additional cutback to the already permitted Martha Open Pit Phase 4. Near the process plant is a proposal for a small open pit called Gladstone.
Approximately 10 kilometers away to the north from the Waihi process plant is WKP, a major discovery with a resource of 1,100,000 ounces between 12 13 grams per ton. And this is only based on 35,000 meters of drilling. So we will be drilling there for at least the next decade. Our base case utilizes $1500 per ounce long term gold price. And under this scenario, the district produces over 2,000,000 ounces of gold for the next 16 plus years at a competitive all in sustaining cost of $6.27 per ounce.
The after tax net present value discounted at 5% is $665,000,000 dollars and the corresponding after tax IRR is 51%. This is a compelling figure that falls well below our cost of capital. At spot pricing of $17.50 and after tax IRR increases to 75%. Moving on to Slide 19. Based on the PEA results, the Waihi district has a strong free cash flow generation profile, noting, of course, that half the resources used for the study are currently classified as inferred.
This is where one of the opportunities exist for us in the Waihi District. Our expectation is that through the drill bit, we will convert resources and pursue expansions that appear to be significant opportunities for us at the Martha Underground and WKP. We haven't fully defined or delineated the resource at Martha Underground, and we continue to believe that WKP will grow into a multimillion ounce deposit. This will take a considerable amount of time to prove up. However, we have initial resource of over 1,000,000 high grade ounces based on the 35,000 meters of drilling to date as mentioned.
And as a reminder, since we acquired Waihi in 2015, we have increased the resources here from 500,000 gold ounces to currently 2,500,000 at a discovery cost of less than $20 per ounce. Permitting in New Zealand represents both an opportunity and a risk for us at Waihi. With the New Zealand economy heavily dependent on some sectors that were significantly impacted by the COVID-nineteen crisis, the government has stated its intention to look to other sectors to kick start the economic recovery. They have mentioned removing the red tape from the permitting process, and that may allow a more streamlined process and thus could mean earlier production. Conversely, the permitting process may be protected depending on whether a decision goes to the environmental courts and how long it stays there.
The typical time frame for a decision by the environmental courts is 12 months, which is what we have conservatively assumed as our base case. It is important to note that WKP and the other opportunities are shovel ready, and we look forward to working with the government to bring these projects forward and deliver the significant socioeconomic benefits the district opportunities will bring to the rural communities in the Coromandel. Capital investment for the Waihi District is projected to be approximately $450,000,000 spread over the next 9 years, beginning with investments at the Martha Underground this year that are expected to taper in 2021. Balance of the spend is staggered from 2022 to 2028, beginning with the commencement of the initial underground mine development at WKP and the infrastructure related to assessing the underground and ending with the spend related to the Martha open pit development. Our mine plans have been built from first principles and to a high level of detail for the PEA mining inventories they reflect.
But as you can see from the robust cash profile, Waihi proves the greatest king and the district, even in its early stages, continue to deliver more resources at consistently high grades and costs and supports the cost of development. Moving on to Slide 20 and in summary, although it has been disappointing to downgrade the outlook at Macraes, we are pleased to maintain the outlook for the Haile despite the challenging first half conditions. We will work tirelessly to manage the near term risks due to the global pandemic, including safeguarding the health and safety of our workforce. We will continue to proactively make decisions to support the business by adapting to the near term risks, while ensuring we advance our long term growth initiatives in the optimal timelines we have outlined. We have a strong asset base, and we have what we believe to be one of the best growth pipelines in the industry, particularly at Waihi.
We focus on what we can control, and we have traditionally been a company that has delivered on its commitments and one that has generated strong returns. And that is where we are planning to be again this year as the year progresses, and we expect stronger production in the second half. We have a strong shareholder register and a group of very supportive shareholders, but we value their support over this challenging 12 months. We recognize that it's been a year of uncertainty, but our resolve to deliver consistent positive results remains strong. Restarting Didipio is a top priority, and we wish we had the timelines to provide to the market, but unfortunately, we do not know when a decision will be made.
We continue to engage with all stakeholders and government agencies to renew the FTAA. However, we also need to get on with our business, including advancing what we believe is one of the most robust growth projects in the gold industry at Waihi. Achieving the results of the PEA delivered will be one of the major achievements of Oceana Gold's 30 year history. Thank you very much. Now back to you, Sam.
Thank you, Michael. That concludes the formal presentation segment of the webcast. I will now turn the webcast over to the moderator to facilitate the Q and A session.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. And your first question will be from Levi Sprae at JPMorgan. Please go ahead.
Good morning. Good evening. Thanks, Michael. Thanks for the call. Just on Haile and the strong second half and particularly the even stronger December quarter.
Can you maybe just step me through some of the numbers that you I think you've previously given us there on material movements and grade? And maybe even just talk a little bit more about the risks to that coming home with a really wet sale?
As we've always mentioned, the sort of the profile, the grade profile at Haile is always second half weighted with twothree of the ounces coming out in the second half. We're expecting grades in the 3rd quarter to be that sort of 1.8 to 1.9 grams per tonne and the 4th quarter 2.5 to sort of 2.6. We're continuing to improve with our material movements month on month, quarter on quarter, and we're looking at around that 25,000,000 tons movement for the 4th quarter. What I'll do is sorry, for the second half. What I'll do is I'll hand it over to Jim Whittaker, who is our General Manager at Howe, just to step through some of the opportunities that we're seeing and some of the actions they're working on.
Thanks, Jim.
Great. Thanks.
Thank you, Michael, and thanks for the question. Obviously, as we've gone through, despite ongoing challenges with COVID, manpower and also rainfall, we've been managing to mine more material quarter on quarter and it's going in the right direction. During the Q2, yes, as you've seen by the graphs, we did have some problems accessing higher grades. We are expecting to the mill. So this material is now in front of us and we'll be attacking that through this quarter.
Some options that we have, we looked around plans that we could get into Leadbetter pit a little bit earlier and we've looked at mine phase designs and redesigns to get to higher grade ore sooner and basically trying to move less total materials to get to the ore quicker. And also based on the previous agreements we have with Komatsu, we did recently this month mobilize 4 additional large Komatsu 7.3e haul trucks that were originally in the plan for next year. We were able to negotiate that with Komatsu and actually push those financial costs into 2021. And that will help us with not only tonnage, but also streamline training and reduce our total mining unit cost per ton. So this is just a few of the things that we're doing.
The focus is obviously really on the mining part and getting back to basics in the drilling and the shovel operation and also making use of the additional 730s.
Yes, great. Thanks for the additional color. And just thinking about the grade, very high grades in that last quarter, How do we think about that pushing into calendar year 2021? I would think most people have the grades falling back towards sort of reserve grades fairly quickly a year or 2 later, but yes, 2.5 back is a long way to fall from. What can you give us there in 2021, start of
2021? Sure. Yes. Thanks.
Sorry. Go ahead, Marcos. Yes. So the grades will sort of continue into with the areas that we are into 2021 and the first half of 2021, and then they will drop in the second half
of the year, which should be
a bit different from us as you for those that have followed Haile, we always seem to come home with a very wet sale in December with some really good grades and really good production, and that's really happened year on year. Next year, you'll see those higher grades sort of go into the first half of twenty twenty one with the mining sequence showing that the grades will be reduced in the second half of twenty twenty
one. Yes. Okay. And maybe some of the silly questions, but just the accounting of the presales maybe for Scott, the 48,000 ounces at $16.35 what happens to the other $300 Do you get that or the guys who have already bought it get that?
Hello, Mr. McQueen, could you please unmute your line? That's cool. I can follow-up later.
Sorry, it's Levi, the gold's already sold. So yes, we don't get the additional.
Yes.
That's great. Thanks, Michael. Thank you. Thanks, Matt. Thank you.
Do you have any further questions, sir? No, thanks. That's great. Thank you. Thank you.
And at this time, it appears that we have no further questions registered. I would like to turn the call back to Mr. Pizookie.
Thank you, operator. That was easy. That concludes our webcast and conference call. A replay will be available on our website later today. On behalf of Michael, Scott, Mark, Jim and the rest of the team, thank you for joining us.
Bye for now.
Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.