Good morning and afternoon, ladies and gentlemen, and welcome to the OceanaGold Q1 2020 Financial Results Webcast and Conference Call. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session. Note that this call is being recorded on Thursday, May 14 at 5:30 pm Eastern Time. And I would like to turn the conference over to Sam Pizookie.
Please go ahead, sir.
Good evening, morning. Welcome to OceanaGold's Q1 2020 results webcast and conference call. I'm Stan Tazucchi, 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 and Jim Whittaker, our Executive General Manager of the Haile operation. We turn over to Slide 2 and the cautionary statements.
Before we proceed, note that references in this presentation adhere to International 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.
It's also important to note that although we have maintained our formal 2020 guidance, the current situation related to the COVID-nineteen virus is still fluid and could impact the current state of our business. However, we have strict protocols in place to safeguard the health and well-being of our workforce. I refer you to the disclaimers on the forward looking statements in our presentation. I now turn it over to Michael Holmes, our President and CEO.
Thank you, Sam, and good morning and good evening to all. I hope everyone is healthy and safe through this unprecedented time. Moving on to Slide 3, the results overview. Despite the emergence of the COVID-nineteen global pandemic creating additional and varied risks across our global operational footprint, we delivered a good quarter of operational performance while safeguarding the health and well-being of our workforce. Production and unit costs were in line with our expectations with continued productivity increases at Haile despite the strict protocols we put in place at the beginning of March and a higher than normal rainfall during the Q1.
At quarter end, the New Zealand government imposed restrictions in the wake of COVID-nineteen, resulting in the curtailment of mine operations and limited processing at Macraes as well as the shutdown of development activities at Waihi. On April 28, we resumed full operations at Macraes and restarted the development of the Martha Underground project following easing of those restrictions. Revenue decreased from the previous quarter due to the lower gold sale volumes, which was partially offset by a higher average gold price received. The EBITDA decreased slightly quarter on quarter from lower sales and margins, but this was partially offset by lower corporate costs. Our adjusted net loss of $10,700,000 for the quarter reflects decreased revenue as expected and a similar quarter on quarter depreciation and amortization costs related to higher pre stripping activities.
Our adjusted EPS was negative $0.02 Cash flow per share was $0.19 inclusive of the gold pre sales and $0.07 without the pre sales, which was ahead of consensus. As we manage the near term risks associated with the COVID-nineteen virus, we're also advancing our organic growth opportunities. Moving on to Slide 4. We have operated a sustainable business for the past 30 years by applying robust ESG practices across our business. We are proud of our ability to discover ore bodies, build projects, operate mines and rehabilitate depleted mines.
Our overall ESG performance has been recognized by the major ESG rating agencies, where we are currently ranked in the top 5 globally in the gold industry. As an operator for much of my career, I recognize that managing health and safety in mining requires continued and sustained focus. It requires having the right culture in place and strong committed leadership that reinforces health and safety values across the workforce, whether it's in an operation or in the corporate office. I've always been a believer that there is a direct correlation between health and safety performance and operational performance. As such, the health, safety and well-being of our workforce will always be paramount.
With the rapid escalation and spread of the COVID-nineteen virus, we were required to act swiftly to safeguard our workforce. It was nearly 2 months ago that we implemented very strict protocols at each of our operations and for our corporate staff. The situation remains fluid, however. We have managed this risk effectively. And to date, we have no known cases of COVID-nineteen anywhere in our business.
Overall, our safety performance continues to improve, particularly at Haile and Apres, resulting in the company's total reported delinquency rate trending lower. Our focus will remain on ensuring that our people understand and manage risks every day, and we continue to achieve this through strong leadership and persistent communications to ensure the trend continues in the right direction. Moving on to Slide 6 and looking at the operational results and a summary of Haile. The Q1 at Haile saw the implementation of the enhanced safety and health protocols to manage the COVID-nineteen and more rainfall than forecasted historical averages in the Carolinas. Despite these factors, we managed to deliver on planned production and mine raw material quarter on quarter and particularly year on year.
Haile improved its safety performance quarter on quarter and significantly improved from the same period last year. Haile had one recordable injury during the Q1, reducing its trigger to 5.7. This performance reflects the site's ongoing commitment to safety leadership and increased employee engagement. We are pleased with Haile's 3rd quarter operational performance. Production is in line with our expectations, while mining rates continue to increase and mining unit costs continue to decrease quarter on quarter and year over year.
It was the 4th consecutive quarter of productivity improvements at Haile. Mining costs in the Q1 were 5% lower than in the Q4 of 2019 and 50% lower than a year ago. Total mining movements increased 8% quarter on quarter and more than doubled year over year, reflecting the productivity improvements from our upgraded mining fleet. By the end of the quarter, we had all 15 of the new Komatsu 730e haul trucks operated, and these trucks are supported by 6 785 Caterpillar haul trucks. The process plant continues to operate ahead of expectations.
And over the past couple of months, we have achieved record throughput days annualizing to 3,800,000 tonnes per annum. Mill feed was 16% higher year on year and similar quarter on quarter despite an extended shutdown of the regrind circuit in the process plant for planned maintenance in January. Recoveries were as expected and in line with the planned processed grades. We are seeing year on year increases in recoveries at the same wells at mine grade, and we continue to fine tune the regrinding circuit. As the year progresses, production will increase and the all in sustaining costs will decrease at Haile.
This is simply a function of the mine sequencing where grades improve as the year progresses. Our head grades in the Q1 was 1.36 grams per tonne. For the Q2, we expect it to be around 1.4 grams per tonne, increasing to 2 grams per tonne in the 3rd quarter and around 2.4 grams per tonne in the 4th quarter. We also expect our mining unit cost to continue decreasing as the year progresses. With the right leadership team and the workforce in place, we are confident in delivering our full year guidance at Haile.
Moving on to Slide 7 and the Praise. We call it the mine that keeps on giving. However, it is truly the most unappreciated asset in our portfolio. During the Q1, the operation recorded no reportable injuries and a triple rate of 3.1 per 1000000 hours worked. We continue to see a reduction in the number and severity of injuries, reflecting strong site engagement in the behavioral based safety initiatives implemented last year.
In the Q1, Macraes produced around 39,000 ounces of gold, down year on year and quarter on quarter as expected, reflecting a lower head grade and increased total waste movements as prestrip progressed at the Coronation Mill Stage 4 and Ennis Mills open pits. Total mill feed decreased quarter on quarter and year on year due to the hard oil feed from the Coronation Stage 5. And it also reflects some impacts of suspension of a portion of the milling circuit in late March due to the COVID-nineteen restrictions. The all in sustaining cost of $12.18 per ounce sold includes $113 per ounce related to the purchase of a new Hitachi excavator, which helped facilitate increased waste movements during the quarter. Looking ahead to the remainder of the year, we expect production at Macraes in the second quarter to be lower than in the Q1 due to the 5 weeks of limited processing.
We are looking to make up the shortfall in production over the course of
the year. The second half of
the year is expected to be stronger than the first, with the 4th quarter expected to be the highest quarter of production at the lowest corresponding all in sustaining costs. It's important to also highlight that Macraes has generated very strong free cash flows over the past few years. The New Zealand denominated gold price has never been this high, which along with the lower fuel prices and the exchange rate represents some major tailwinds for our New Zealand businesses. With the release of the Golden Pond underground study in the second half of this year, we expect to daylight a mine life extension at Macraes at consistent production levels of 150,000 to 190,000 ounces a year and an all in sustaining cost around US1 $1,000 per ounce. We expect Macraes to be a major source of free cash flow generation for many years to come.
Moving on to Slide 8. And Waihi reported one recordable injury during the quarter, increasing its trigger rate to 4,200,000 from 3,600,000 hours worked at the end of
quarter at the end of 2019.
Mining activity of the major veins in the Kalenta underground were completed during the Q1, producing approximately 12,000 ounces of gold. The processing plant was shut down in February and will restart in the Q4 to batch process ore from the Narrowdame Mining that will continue for the duration of this year. We're expecting 7000 to 8000 ounces of gold production from Waihi in the 4th quarter. During the quarter, we completed over 1500 meters of development for Martha Underground until activities were temporarily curtailed due to COVID-nineteen related restrictions, which were then lifted on April 28. You will note that as the year progresses, the development rates will continue to increase.
The dip in development in the Q2 relates to the 5 week hiatus. And despite this, we remain on track for 1st production from Martha Underground in the Q2 of 2021. Moving on to Slide 9 and Didipio. Currently, all levels of government in the Philippines are responding to the COVID-nineteen pandemic. Our focus remains on lifting the restraints of the mine and the renewal of the FTAA.
The FTAA renewal remains with the office of the President, and we understand the President was involved in discussions about the renewal with senior government officials at the end of February. We recognize the impact of the uncertainty of the renewal has on our operating and financial results, the shareholders of the company and importantly, the locals that depend on the Lithipio's ongoing operation to support themselves and their families. The mine is a significant source of jobs, taxes and revenues that we believe will be critical in contributing to the Philippines post COVID-nineteen recovery. Despite the temporary layoff of non essential workers in mid April and the uncertainty around the timing of the COVID crisis, we do remain confident of the positive outcome. I will now turn the presentation over to Scott McQueen to take you through our financial results.
Thank you, Scott.
Thank you, Michael, and hello, everyone. The next few slides cover some key aspects of our balance sheet and our Q1 financial performance. Moving to Slide 11, which provides a snapshot of our balance sheet. As at March 31, our cash balance was $177,000,000 and our net debt decreased to 121,000,000 dollars This reflected steady underlying operating cash flow in the quarter, proactive steps taken to enhance liquidity as well as re profiling our 2020 operating cash flow to better align our capital plans and to ensure optimal development time lines at our key organic growth projects. These steps included the sale of our equity position in GSB, which netted 22,700,000
dollars continued engagement with regulators in the Philippines
to secure approval to export and sell just over $11,000,000 of gold gourmet, which have been on-site since mid-twenty 19. And as noted, the re profiling of our 2020 operating cash flow by the gold prepay executed in March, bringing forward just over $78,000,000 from late in the second half. In response to the onset of COVID-nineteen pandemic, we also took the preemptive step of drawing down the remaining $50,000,000 from our revolving credit facility given uncertainty how the crisis would impact global credit markets. We are also seeing downward pressure on input costs across the business, the full benefits of which should start to flow through in the next in the current quarter. This included lower diesel costs, which at Haile were expected to account for up to 15% of operating costs and at Macraes up to 10%.
The weaker New Zealand currency also represents a significant broad based reduction in U. S. Dollar terms in respect to our New Zealand dollar operating costs. Despite the material shift in key inputs, we currently have no plans for additional hedging. Our strategy at Macraes has always been focused on protecting margins on the downside.
Both gold price and currency are not seeking to pick the top. Currently, spot prices as well as consensus forward expectations support continued strong cash margins. Therefore, we are happy to continue to benefit from market prices and current exchange rates and oil price decline on an unhedged basis. We continue to manage the balance sheet to meet whatever short term challenges arise while ensuring we have the capacity to deliver our growth projects on the optimal time lines. Moving to Slide 12.
The quarter on quarter reductions in both revenue and EBITDA mostly reflect the planned lower gold production and sales in the quarter. Lower volumes were only partially offset by 7% quarter on quarter increase in the average gold price received, combined with lower G and A costs and indirect taxes, both predominantly related to Didipio. The reported NPAT for the Q1 was a loss of $26,000,000 which included an unrealized mark to market loss of $21,000,000 dollars on revaluation of the New Zealand dollar gold hedges, which reflected material increases in spot gold prices and declines in the New Zealand dollar exchange rate across the quarter. As noted, the adjusted net profit, excluding unrealized hedge gains and losses, was a loss of $10,700,000 or negative $0.02 per share fully diluted. As per the cash flow summary at the bottom, operating cash flow for the quarter increased from the prior quarter coming in at $121,000,000 inclusive of the gold prepay, which equates to $0.19 per share.
On an adjusted basis, after removing working capital charges, including the prepayment, the result was $0.07 per share, as noted. 1st quarter investing cash flows decreased 30% from the prior quarter, although capital expenditure increased due to higher pre stripping, which offset which was offset by the sale of our position in Gold Standard Ventures netting $22,700,000 as previously noted. Financing cash flows of $45,000,000 reflects the positive impact of the $50,000,000 drawdown from our revolving credit facility, partially offset by quarterly finance charges. Turning to Slide 13, which provides some additional detail on our capital expenditure. As outlined at the top of the table, total capital expenditure increased 19% quarter on quarter to approximately $59,000,000 The increase reflects higher pre stripping activity at Haile and Macraes, partially offset by lower exploration spend, where the focus has been narrowed to our organic growth opportunities.
The increase in general operating capital largely reflects the purchase of a new excavator at Macraes, which accounted for $113 per ounce of Macraes Q1 all in sustaining costs. We have recently completed an effective salmon leaseback arrangement covering that excavator under a $10,000,000 fleet finance facility with Westpac Bank. We're happy to have yet another leading bank associated with the company. Growth capital was relatively unchanged quarter on quarter. The main areas of investment during the quarter were the Haile expansion, which included construction of the TSF wall lift and additional PAG storage capacity.
Growth spend at Waihi increased, reflecting the development progress at Master Underground. As already noted, pre strip at both Haile and Macraes increased materially in the Q1 as expected and consistent with the respective mine plans. At Haile, we expect the 2nd quarter to include the highest level of capital expenditure for the year related to the TFS list, which will be completed in the Q3. Sustaining capital, which mainly relates to pre strip, expected to increase into the Q2, again into the 3rd before reducing in the 4th. The grants capital will decrease in Q2 and Q3 before increasing slightly in the 4th quarter.
Naturally, we are prioritizing investment in exploration as a value creator, and we are focused in our efforts at and around Waihi given the positive progress both the Martha and the WP drilling programs provide. I will now turn it over to Michael to discuss these opportunities in more detail.
Thank you, Scott. Moving on to Slide 14. We have a high quality management team and high quality assets, which is a recipe for success, combined with one of the best organic growth pipelines in the gold sector. Over the next several years, we expect to build 4 underground mines in low risk jurisdictions where we have extensive operating expertise. Moving on to Slide 15.
More specifically, we can see here the investment and then we are investing in the growth opportunities at each of them at different stages. The majority of our exploration activities, as mentioned, are in New Zealand, particularly at Waihi, where we have significantly increased the resource from 500,000 ounces when we acquired the asset in 2015 to over 2.5 new ounces today. We have invested significantly in the drill bit, which has successfully delivered this resource expansion at a discovery cost of less than $30 per ounce. We believe that today's resource at Waihi is really only the beginning, particularly in WKP, which is a new discovery with only 35,000 meters of drilling to date. The master underground development will continue to progress over the course of the next year.
At a high level and subject to the results of the Waihi District study, we expect the Martha Underground to produce approximately 40,000 to 50,000 ounces of gold next year and ramp up to 90,000 to 100,000 ounces of gold within a few years. The Waihi District study, which is a preliminary economic study, is expected to be released later this quarter or next quarter. The study will provide only an initial view of the value creating potential of the opportunities in Waihi District, including the Master Underground and WKP. With a lot of drilling ahead of us, it is important to highlight that the district study will only include the reported resource and that will only capture what we believe to be a fraction of the value of Martha Underground and WKP. At Macraes, we continue to advance the Golden Point underground study, which we expect to highlight a new underground mine replacing the Fraser's underground and extend the mine life in Macraes at similar production rates.
This study is expected to be completed in the second half of this year with an updated 40three-1 101 technical report. At Haile, the FDIS permitting process is in the final stages. Meanwhile, we continue to optimize the Horseshoe underground mine plan and we expect portal development to begin next year. Once Horseshoe is developed, we will explore more extensively at depth in the 1 kilometer corridor between Horseshoe and Palomino deposits, where we have sparsely drilled and have identified high grade zones. Moving on to Slide 16.
We are driving, implementing and looking to achieve OceanaGold's strategic goals, delivering on the company's commitment and advance our organic growth opportunities over the next several years. Together, we are managing the near term risks and planning for the long term with an acute focus on health, safety and the well-being of our workforce. While production was impacted at Macraes in the month of April due to the COVID-nineteen restrictions, we believe we can achieve our 2020 production guidance that coming in at the lower end of that range. We'll also be looking to make up for lost production throughout the course of this year. We expect lower quarter on quarter production from New Zealand operations as Waihi is shutting down until the Q4 and Macraes had limited production in April.
This decrease is partially offset by the high expected production from Haile. We also continue to strictly enforce the protocols and safeguards we have in place at each of our operations. To summarize, we have 3 key initiatives this year. 1 is to deliver on the 2020 expectations 2 is to resume our operations at Didipio and 3 is to progress our organic growth on time and on budget. OceanaGold has high quality operations, a high quality management team and a strong growth pipeline with the balance sheet to support it.
We continue to advance our organic growth opportunities, which again, we believe represents one of the most significant growth platforms for investors in the gold industry. Thank you very much. And now back to Sam.
Thank you, Michael. That concludes the formal presentation segment of the web cast. I will now turn the webcast over to the moderator to facilitate the Q and A session.
Thank And your first question will be from Daniel Morgan at UBS. Please go ahead, sir.
Good morning. Just a question on you've got various growth projects for underground mines you're looking to develop over the next little while, which is quite a big growth platform. Just wondering how that looks versus the balance sheet where how are you going to fund it? Do you need to stagger any of these developments? Are they competing with each other?
How do you think about that? And do you need more
capital? Yes. Thank you, Daniel.
They are the 4 underground mines are stated. So we're currently in the 1 underground mine at Martha at this point in time. When you look at the Frasen's underground mine, we're currently in progress in sort of finishing that off at Macraes, and that will sort of roll over into the Golden Point underground. So utilizing the same equipment, the same people, and it's a fairly short sort of decline in waste until they're straight back into the ore. So that will be a minimal spend.
With the underground at Haile, it seems that it's been deferred a year due to the current sort of restrictions with Didipio as well as the COVID. And so we're just finalizing that and bringing that in line with the production sort of output at Haile. So the projects are to be funded within our current cash flows.
And materially higher gold price than I think any of us expected maybe 12 months ago. Just wondering how you're thinking about that impacts your business visavis, how you think about reserves, how you think about what grades you might choose to mill over the next little while?
Yes. Thanks, Daniel. We're stuck with the currently got our mine plan and the ore bodies are limited to the current cutoff grades that we have got. It is the opportunities with a higher gold price to have a look at some of the ore surrounding the current ore bodies and what the opportunities are there for expansion of fixed, particularly in Macraes where it is highly leveraged to the gold price. The rest of the ore bodies are fairly well contained from a hard sort of geological boundary or infrastructure boundary.
Okay. Thank you very much.
Thank you. Next question will be from Chris Thompson at PI Financial. Please go ahead, sir.
Hi, guys. Congratulations on a good quarter. I've just got a couple of quick questions here. We'll start off with Haile. Nice to see the grades obviously coming up in the Q1.
And I guess the question is what should we be expecting by way of an increase in grade in the second half of the year? And how does that sort of layer into an improvement in recoveries? Obviously, I understand you guys have been doing a lot of work on the processing side of things. And what should we be modeling?
Yes. Thanks, Chris. So what we're looking for is with the mining schedule and increasing in grade quarter on quarter. So quarter 1, it was around the 1.36 quarter2, around about 1.4 quarter3, at $2 and then at quarter4, 2.4. And we'll be working with that, looking at the higher recoveries quarter on quarter as we sort of move forward with the now complete regrinding circuit.
So first, it's the hail, the way it presents itself is that twothree of the ounces come out in the second half of the year. So the first half of the year, the recoveries around the high-70s to low-80s in the second half of the year, getting up to the sort of mid- to 80, 85 percent to 86% recoveries in the second half and the highest being the 4th quarter.
Great. Thanks for that. I appreciate the detail there. And then just quickly moving on from Macraes. I just wonder if you can give me a sense of the mill tons percentage split between the Fraser's underground and the open pit?
Yes. So, Parese is currently on large figures, about 5,800,000 tons processed and about 900,000 tons from processed underground.
Okay. All right. And I know just a bit of a jump there in the underground mining costs. Was that COVID related or maybe comment on that?
Yes. The last week of the yes. So I mean we basically had almost a full week there without any mining and still covering all the labor and other costs.
Great. Thanks, Michael. And yes, nice to see you taking the role of the CEO and Pezo.
Thank you very much.
Thank you. And your next question will be from John Tumazos at John Tumazos Very Independent Research. Please go ahead, sir.
Thank you for taking my question and thank you for your service to the company. Given that the gold price is firm and costs are falling and things are moving again in New Zealand and the grades picking up in the second half of the year, Are you feeling good enough about things to pay back the precautionary $50,000,000 drawdown on the bank line?
Thanks, John. With the drawdown with the current capital profile, we will continue to have that drawdown until it gets triggered to the end of 2021.
What's the different restrictions in various jurisdictions on movement, are you having any delays on drilling you'd like to do or equipment you'd like to have delivered or independent QA, QC people or other things necessary to do normal day to day work?
It's a very good question, and there has been impact of some delays with equipment. We've seen we've now got a new jumbo that was sort of delayed in the in Australia that's now headed over to Waihi, and it will be in the dirt in on Monday. We have seen some delays in the new drill fleet that we've ordered for Haile. But to counter that delay in the deal that we did with Sandvik was to actually get some secondhand pieces of equipment in the dirt while we wait for that. So that was always the process and to have those that fleet readily available for us while they were building the new fleet.
So that new fleet has been delayed by a couple of months, but that doesn't that hasn't impacted the operations at this point in time. We will continue to manage a number of that. New Zealand, the eradication with the strategy they have with the COVID has allowed us to get back to full operations down to level 2 there. And the important thing for us at Haile is to ensure that we continue with our strict protocols to ensure that we have no COVID sort of impact or no COVID related cases at our site.
I have some friends at juniors in Peru or Madagascar that are at risk of losing a whole year. If the person has to go from Victoria and quarantine into Western Australia and then quarantine into the next country to do a week's work then quarantine twice to come back, it's 2 months. And some people just pulled up the program rather than go through all that. You don't have anything that's bureaucratic anywhere, do you?
No, John. And our major one of our strategies and why that we run our
business is a diversified model. And so the decision making that we've done and the
And so the only client client site that we do have is the Philippines. That's currently sort of in a state of suspension at this point in time. But that being said, the workforce of the Philippines is 98% Filipino. So we have the resources within the countries of our operations.
Thank you very much.
Thank you. Next question will be from Reg Spencer at Canaccord. Please go ahead.
Thank you. Good morning, Michael. A few questions from me. If I could start with Hal and Horseshoe Underground. Can you just remind me what the key outstanding permitting milestones might relate to?
And following on from that, are you in a position at this point to provide any potential guidance on when you currently expect underground production to commence
then? Yes. Thanks, Reg. So we are
in the SEIS process with the U. S. Army Corps and the Department of Health and Environmental Control. The process is to get through to a draft FDIS and then a 45 days of community consultation process, and that was to be delivered in the first half
of this year. So we're still sort of
working towards those time lines. Some of the frustrating things have been the ability to have the community consultation and trying to work how we can do that virtually as opposed to the face to face. So that's something we're working with the current process. And that SDIS permitting process is for the expanded open pit and the underground. We have worked with the U.
S. Army Corps of Engineers and the Department of Health and Environment Control. And we've had approved up to date from the EIS 29 model modification. So the WMP government and bodies are working with us to ensure that the mining continues unimpeded and we can sort of achieve what we want to achieve. So we are targeting an underground development start at the beginning of next year.
We're currently going through a few trade offs. So with the delay in the start process, we're looking at some trade offs with regards to the mining sequencing of a bottom up or a top down. The bottom up in the NR43-1 hundred and one has the cemented rock drill. We're also looking at a top down approach with pace fill. So we're currently going through that, and we'll guide the market when we finish the we have a bit more clarity on the way in which we want to do that.
So that that investors and the reason for that sort of dictates when you can actually get some more out, the top down approach, as you know, with Didipio being a lot quicker time to ore body and time to production.
That's great. Thanks, Michael. So that was actually going to be my next question, just around that reassessment of the mine design there? It sounds like in part, it is due to that permitting.
Yes. The permitting process is
and the delay of it
the permitting process hasn't really sort of impacted. It was more the delay that we sort of chose to do with Didipio on suspension. We chose to push from the capital program, pushed the Haile underground out of here. And that's given us the opportunity to investigate some other opportunities to optimize the underground mine.
Understood. Shooting over to Didipio, can you tell me what had previously prevented you from moving that dore? And secondly, given the what I would consider positive developments with respect to government assistance in getting diesel into site and that export of dore, what are the chances of you being able to shift some of the concentrate that you have on-site there? Yes.
Look, thanks, Reg. It's a continual process of working with the government and the doorway removal from site is following the meeting, the presidential meeting with ministers and governors and congressmen. So an outcome of that was to allow the dore to removed from site, which requires an oil transport permit as well as the ability for us to get 100,000 liters of fuel into site for the emergency backup generators we have. So we are continuing to work with that with the government's working group and still back in and working, which is good. That was another outcome of the meeting with the President.
We allocated a working group that sort of to progress the FTAA, which was made up of the executive sector the deputy to the executive secretary, a undersecretary from the Department of Finance and the Director of the MGB. So that process is still working, and we're still working hard on getting the FTA renewed in the 1st place as well as a lot of the opportunities that are to be moving the concentrate from site.
So would you say that
they have a timing on those?
Yes, okay. Understood. Understood. Thanks very much, Michael. I'll pass it on.
Thank you.
Thank you. Next question will be from Mike Parkin at National Bank. Please go ahead.
Hi, guys. Thanks for taking my question. What's with regards to the Haile? I just wanted to check to see if the water discharge plant is operational? And if it is, is that flowing through the costs on processing?
Soon? Thanks, Mike. I'll hand it over to that question over to Jim. Jim Whitaker, the Executive General Manager
actually added some additional capacity to our water treatment plant that has been installed. It's running very well. We're hitting higher levels of water treatment month after month, which is basically taking the pressure off the input side, which is mainly from the snake pit at this point time. Those costs are going in directly into the annealing costs.
Okay, great. Thanks very much.
Thank you. This does conclude the question period. And I would like turn the call back to Sam Bozuki.
Thank you. So that does conclude the webcast and conference call. A replay will be available on our website later today. On behalf of Michael, Scott, 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.