Good afternoon, ladies and gentlemen. Welcome to B2Gold's First Quarter 2020 Earnings Conference Call. I would now like to turn the call over to Mr. Clive Johnson, President and CEO. You may proceed, Mr. Johnson.
Thank you, Operator. Welcome everyone to the conference call today to discuss the first quarter 2020 financial results for B2Gold, as the operator said. I'm going to just say a few introductory words and then I'm going to pass it on, and Mike Cinnamond is going to walk you through the results, the financial results. Bill Lytle is going to come on, the [SVP], Operations, he'll give us an update on what's happening operationally. Tom Garagan is going to come on and tell you a little bit about what we're doing with exploration. In terms of overview, we've had an excellent, very strong quarter again, with record gold production, gold revenue, cash flows, and record low cash operating costs, $367 an ounce. We're very happy with the quarter, and obviously we're in challenging times these days with the worldwide impact of the, you know, COVID-19 virus.
We've continued to operate extremely well. Through the time, and I do like to think it's due in part to jumping on the seriousness of the virus very early on in Vancouver and on our sites. Also like to think it's because of the experience of our team and our great teams at the mines who have years and years of experience in managing through good times and bad. We've done a very good job and partly because of that, we are maintaining our guidance for 2020. In terms of strategy going forward, it's going to be very much the same. First and foremost, the health and safety of our people is our paramount concern and always our top priority. The other is to continue to maximize our profitable gold production and look into our pipeline for growth.
You'll hear a bit today from Bill about the expansion of the Fekola Mill and the new fleet that's coming on very successfully, and we're on schedule to meet the expansion of the mill by the third quarter of this year. When we look in our pipeline, the opportunities there are Gramalote, which we'll talk about that, getting back on track there. We're drilling in a feasibility study that we're looking for the first quarter of 2021 now to have a final feasibility study. We also, of course, in the pipeline are things like exploration, which Tom will talk a little bit about, looking to 20 km north of both Fekola, the Anaconda are , and the Cardinal area, which is fairly close to the deposit itself, the Fekola deposit.
That's really where we are strategically, and we're sufficient confidence in our guidance and our tremendous financial strength, seeing our debt reduction continue. We're confident enough in our financials to double the dividend, as we just announced yesterday as well. With that, I'm going to pass it over to Mike Cinnamond, and he'll give you an update, as I said. Then at the end of it all, we'll open it up for questions. Over to you, Mike.
Thanks, Clive. Just to check, can you hear me okay?
I can.
Yeah. Okay. As well as Clive said, it's a very good first quarter, quite a few results records to comment on. Firstly, on the revenue side, revenue for the quarter was $380 million. That's a quarterly record on sales of 239,000 oz We realized an average price of just under $1,590 an ounce, which is considerably higher, obviously than the price we budgeted originally at $1,350. Also contributing to the increase against budget was we had approximately 5% more ounces sold in the period than we anticipated. Moving to production. Production from continuing operations was 251,000 oz, that was 17,000 oz higher than budget, mainly led by Fekola. If you add in our 34% attributable share of Calibre's Nicaraguan production of 14,000 oz, our total gold production was 265,000 oz, which is another quarterly production record for the company.
To comment to Calibre's number, when we first put out the production release, we had estimated Calibre's production at 12,000 oz, but they've subsequently issued their production results, so it was actually 14,000 oz. For 2,000 oz higher than the total production than we released about three weeks ago. Just to comment on some of the individual components of that. Fekola led the charge. Fekola had 164,000 oz, which was 14,000 oz ahead of budget. It's attributable to several factors, but mainly to the higher-than-budgeted grade that we mined from phase IV of the pit. We also had some of the expansion fleet on-site early in the quarter and got that commissioned early and we had the benefit of that.
As everyone's aware, this is the year we are executing the expansion plan, which included optimization of the pit designs in the mine plan and actually going after a higher grade area in general than the original feasibility study. Another point to note, I think is that given what was going on in the world and the COVID-related risks that were being experienced around the world, we decided to temporarily mine higher-grade areas in phase IV of the Fekola pit .
The idea was to supplement the ore stockpiles there just in case we ever find ourselves having to go to a stockpile-only scenario. The good news is we continued to run very well at Fekola and in fact all the other sites right through the quarter and right through the initial impacts of the pandemic. I think Bill's going to comment in a bit more detail on that later after the financial update.
Just moving to Masbate. Masbate had 45,000 oz, just still beat budget by 1,000 oz, but pretty much on budget. That was achieved even though we had lower than budgeted throughput at the mill and lower mining activity than we budgeted. We had higher than budgeted process grade and recovery. That's really a function of the timing of getting into the Montana pit. We had budgeted to be in Montana right from the start of the year, but in fact, we didn't get in until early February 2020. Consequently, we focused more on Main vein, and we had better ore grade, better oxide ore tonnage and total ore tonnage from Main vein than was modeled, and that resulted in a higher than budgeted grade and recovery.
Otjikoto, 42,000 oz, 2,000 oz ahead of budget. Just a solid quarter. For Otjikoto, we're higher than last year, that's a function of us being in high-grade ore from the Wolfshag pit in the first quarter 2020. We didn't get into Wolfshag last year until the second half of the year. Overall, 251,000 oz from our three operating mines and 265,000 total ounces, as I said, a record for the company. We talk a little bit about cost now. On a consolidated basis, our total cost from all operations, including our share of Calibre, is $389 an ounce. If you look at the cash cost from our three operating mines that we control, $367 an ounce, that's a record low consolidated cash cost per ounce produced for the company. On a per ounce sold, it was $382 an ounce.
If you dig into the components of that, it was led by Fekola. Fekola had a quarterly record low for its operation of $251 per ounce produced or 286 per ounce sold, well below budget by approximately $40 an ounce. That predominantly for Fekola was due to higher gold production, and the same overall cost led to lower cost per ounce. I should comment maybe just one comment on fuel at Fekola. We have seen, obviously, the global fuel prices decline. We didn't experience overall fuel price declines at Fekola, yet we're starting to see them come down now and sort of mirror some of the wider crude price declines. Just to let you know why that is, in Mali, the government sets the price for fuel once per month in advance. Also in West Africa, there's a certain fixed price component to fuel.
It has a couple of components of cross-border cost. The other thing that we do is we typically keep two to almost three months fuel inventory on site and on hand. We built up those fuel inventories during the fourth quarter of 2019 when costs were a bit higher, and we've been drawing those costs down in Q1 as we utilized that fuel. Overall, we didn't see experience decline in fuel costs in Mali for the quarter. They were slightly higher than budget, but we are starting to see those fuel costs drop as we move forward. Masbate, cost per ounce, $722 an ounce, again, significantly under budget by just over $60 an ounce.
Favorable budget variances were a function of cost savings because of lower mine tonnage from Montana, and less waste stripping activity. Also the temporary suspension of mining activities late in March when we had to shut down for a week or so due to disruptions in the fuel supply caused by COVID-19. As we announced, we had the fleet up and running again very quickly. I should say when we shut down, we didn't cease milling operations, only mining activity, and we got it up and running again very quickly, and the mine's up and running again now. We also did see at Masbate, we saw lower than budgeted fuel prices, actual unit prices. They flow through quicker to that site. Otjikoto, $441 an ounce, which again, $64 under budget.
Really the lower costs were a function of lower fuel costs for both diesel and HFO, lower reagent costs, and a weaker than budgeted Namibian dollar. We saw the rand plummet in March. The Namibian dollar followed. We probably had foreign exchange saving of somewhere around $2 million just for later in March due to that decline in the currency. Just to comment on all-in sustaining costs, $721 an ounce consolidated, $695 from our three operating mines $721 if you include our estimated share of Calibre's cost. From our point of view, our operating mines were $110 an ounce lower than budgeted. That's a function of the lower cash cost per ounce of approximately $50. Really the other component is timing of capital expenditures.
We did see some significant capital expenditure underages at several of the sites, and also slightly lower exploration costs than anticipated due to the accessibility of some sites later in March. For the year, we expect those to reverse. Overall, just a comment on CapEx generally for the year, we're still budgeting the full CapEx that we've seen for the total year. We haven't changed our guidance or our budgeted number there. Let me comment on overall guidance, production guidance. We had guided milling to 955 consolidated guidance for the year, and that includes our attributable share of Calibre between 45,000 oz and 50,000 oz. Calibre announced late in March that they suspended operations in Nicaragua to proactively manage any COVID-19 related issues there. It's not clear at this point when the Nicaragua ops may come back up and running again.
However, given that we're 14,000 oz ahead, or 17,000 oz ahead from our own mines after already in Q1, we've retained our consolidated production guidance as is. We think we can cover any shortfall that might come if Calibre's not able to get its operations up and running in the near term. On the cash costs and all-in sustaining costs, just remind, we're maintaining the same guidance, $415-455 per ounce cash costs, and $780-820 all-in sustaining costs. Couple of comments maybe on the operations overall. Fekola, the expansion's going well, Bill, I think after this segment, Bill's going to give you a bit more detail on that, I'll leave that to him to give you the overall picture. Also, in Fekola Solar, we did announce that we were slowing down the solar.
We temporarily halted the activity there just to allow us to better prepare for any COVID related shift changes and people management at Fekola. That is temporarily suspended, but we expect that once we start that again, we'll be able to have that up and running and completed within six months of starting again. Otjikoto, just remind you the board has approved the development of Wolfshag Underground, and that's portal development expected in Q3 2020. Gramalote, Bill's going to give you an update on where we are there, but just a comment here that we had an obligation to sole fund, $13.9 million in order to earn our way back to 50/50 in the joint venture and to maintain our position as manager. By the end of quarter one, we'd sole funded $12.7 million, so we're almost back to that.
We've almost achieved that $13.9 million in sole funding amount by the end of the quarter. Maybe just a general comment too on fuel hedging. We've had a few questions on that. Fuel hedging, we've always had a fuel hedge. Well, certainly for the last few years, we've had a fuel hedging program. Our goal is typically to have 50% of one year's usage hedged out, and then 25% of the following 12 months covered by hedges. At the end of the quarter, we had approximately 40% of our one-year total hedged and 20% in the next 12 months. Subsequent to the quarter end, we've actually put on more positions, and now we're up to our target of 50% for one and 25% for the next. 50% for the first year and 25% of the next. We did put a bunch of hedges on.
We obviously started the year with some in place. You will see on the income statement there's an unrealized mark-to-market loss of $14 million. The majority of that is fuel as some of those hedges that we put on in earlier periods were hit by the decline in fuel prices. Overall, because our hedging goal is to never be more than 50%, we never overexpose ourselves to not benefiting from fuel price declines. Okay, just couple of comments maybe on the income statement. You'll see interest and financing expense significantly lower this year than last, and that's a function of us having paid down $200 million in debt last year and continuing to do so this year. We did announce in early April that we had, as a preemptive measure, drawn down $250 million on our revolver. That's money that was purely precautionary.
That was money that we don't need for our operations, or we don't have intended for any other purpose right now. It was just precautionary given the sort of economic environment that we saw around the world, and still see. That money was just reinvested, and is sitting there. It is our intention overall, as we'll note through the year, to keep monitoring that cash position, and we expect to be probably in a net cash positive position sometime later in this quarter. Certainly have the ability at some point during the year to be able to repay that debt if we see that the economic environment has settled a little bit and there's easier movement of goods and services around the world. Also comments on the current income taxes, $63 million, quite a big jump from the prior year quarter of $25.
That's a function of more profitable operations, especially at Fekola, and much higher gold prices. They're the primary driver for that. In that total was $47 million for Fekola, $37 of it is for current income taxes, and then $10 million is the priority dividend. That's that first 10% interest that the government of Mali own in Fekola operations, and that's reflected as a tax, just to remind you of that. Maybe just a comment on EPS too. When you put all the results together and where we got to on a GAAP basis, we have EPS of $0.07 per share and an adjusted EPS, taking out some of the large non-cash items, we came up to $0.10 per share.
Over in the cash flow, another quarterly record to highlight, $216 million in operating cash flows from operations. That includes as well any working capital movements. That equates to $0.21 per share of operating cash flow. Record operating cash flows. I should say as well what we saw as certainly later in the third month or the last month of the quarter in March, as individual countries were impacted by changes in airline schedules or international flights being canceled or banned. It certainly got more difficult to ship gold from sites. We were successful at all our sites in being able to continue to do that, using our own or shared charters with other companies where needed. We've continued to be able to ship gold. Also our refiners, who run the refinery in South Africa and Metalor in Switzerland, they've continued operations uninterrupted as well.
Sp, we haven't had any overall issues in being able to ship gold or refine our product and then have it available for sale. We've been able to take advantage of these high gold prices. One other comment on the operating cash flow. We guided for the year that we expected at $1,500 golds for the full year. We thought operating cash flows would be somewhere around $700 million. If we see gold stay where it is right now, around the $1,700 current ounce mark, for the balance of the year, we expect operating cash flows to be somewhere north of $800 million for the year. A few other comments just on some items in the cash flow. $25 million we repaid on the revolver. That was us doing that preemptive draw of $250 million in early April.
Like I said, it was always our intention to pay down that outstanding revolver debt of $200 million this year. We currently have $425 drawn with that preemptive draw. Again, like I said, we do expect to be generating enough cash flow that would be in cash positive territory, by the end of the current quarter. Certainly, our goal would be to monitor this and hopefully pay down the entire amount of that debt later in the year. First, dividends, just to comment. We did pay our second quarterly dividend of $0.01 per share. B2Gold pays its first-ever dividend, quarterly dividend, in the last quarter of 2019, $0.01 per share. We repeated that in the first quarter for a cost of $10 million.
As Clive mentioned, we have announced that we're doubling our quarterly dividend from $0.01 to 0.02 per share US, and we expect to declare the first $0.02 dividend later in June. Cash flow from investing activities, we spent $112 million on our investing activity. As I said, when I was discussing the all-in cost per share, sustaining cost per share, we have had some CapEx timing differences. There was some CapEx that wasn't incurred at sites, mainly some increases to mobile equipment and some pre-strip development. For example, in Namibia, the NamPower connection. We didn't get those things done in Q1 as we'd originally budgeted, but we are expecting that they will happen later in the year. Really, those CapEx are just timing differences.
To comment, too, that I think as we mentioned in our news release, we entered into a deal with West African Resources to sell our interest in the Toega deposit post period end, for total proceeds to us over time of $45 million, plus a small royalty. With that, I guess we ended the period with just under $208 million in cash. In very healthy situation cash flow and liquidity-wise, like I said, and looking forward to continued strong operations from the balance of the year. I think that winds up. Those are the main items that I was planning on commenting on.
Okay. Thanks, Mike. Bill, can you give us a quick rundown on what's happening in operations?
Yeah. How do you hear me, Clive? Mike was fading in and out when he was talking.
There was a bit of static when Mike was talking, but there's a bit of static now. Go ahead. You sound pretty clear to me.
Okay. Very quickly on the operations, Mike covered a lot of the stuff, so I'm going to keep it relatively short. I guess the key takeaways that I want to speak about are, number one, we do continue to maintain guidance at all of our operating mines, and our overall guidance for the year, as Mike said. Significantly impacted our operations. It hasn't significantly impacted any of our operations. B2Gold very early on got in front of the pandemic. Early on in February, we had made the decision that we were going to cease all unnecessary travel and have a stay-at-home order placed. That has helped in us being successful in implementing our operational requirements. Just going through the operation at Fekola, in Mali.
Mali has had a restriction on the country since the beginning of April. We've been able to continue to operate, and been able to continue to receive. We have expedited mining in phase 4. We currently have a very large stockpile to get us through not only the second quarter, but also through the second half of the year. We continue to maintain our guidance at 600,000 to 620,000 oz for the year. On the expansion, the expansion is kind of three parts. It's a full enterprise expansion. On the mining side, the mining fleet was ordered in June of last year, June of 2019. At the beginning of Q1 2020, ahead of the pandemic, that mining fleet has been put into operation.
As I already noted, we've advanced the mining rate and have a very large stockpile to support expansion from 6 million to 7.5 million tons per annum. That expansion continues to be on schedule for completion and commissioning at the end of Q3 2020. In addition to that, we talked about doing a double tailings lift, ahead of the rainy season for 2020. That project is almost finished, more than 90% complete now, and we anticipate that season of 2020. That'll give us capacity into 2023, that'll give us a couple years to design and develop the next lift. Additionally, as Mike indicated, the solar plant was put on hold. That solar plant expansion was not required to support the expansion of the mill. That expansion was designed to reduce costs.
As Mike indicated, once we bring the solar plant back in, we anticipate within six months, having the solar plant complete and operational. At Masbate in the Philippines, maintaining guidance of 200,000 oz-210,000 oz for this year. The pandemic has hit the Philippines quite hard with more than 9,000 shut down, not only international travel but had a stay-at-home order for the entire population. That has been reduced or lifted a little bit. Now, as they bring the economy back up. The island of Masbate does not have any cases of COVID-19, they're bringing our workers back from their self-quarantine and getting back to full strength. Our plan is we're currently mining in both Main Vein and the Montana pit and mining at full strength. We're not changing guidance there for this year as well.
At Otjikoto, early on decided to isolate the country they were concerned about the issues related to the population living in informal settlements with no power and no water. They went ahead and did a quarantine for the city of Windhoek in that region as well as all of the coastal region where most of the population is located. That has been very successful. To date, there's less than 20 cases in Namibia reported. Based on that, at last month, April, the government decided to start to release some of the restrictions and the quarantines. The Otjikoto mine is currently in the process of ramping back up to full production on the mining side. There, once again, we maintain guidance for the year and do not see any lasting issues related to COVID-19 at this time. Just Gramalote.
Gramalote is, we announced that when the pandemic broke out that we decided in consultation with both the community and the government, despite the fact that we were allowed to continue to operate, we made the decision to temporarily suspend exploration. The process there is we were supposed to complete a feasibility study by the end of 2020, and then make a decision in early 2021 with AngloGold. We publicly announced that that would be delayed until the end of Q1 2021, completion of the feasibility study. That's due to the fact that we suspended the drilling. In the meantime, we have continued to develop the feasibility study. The metallurgical testing has been ongoing. We're getting ready to do some work with our feasibility engineer or our mill engineer. The mining design has been ongoing.
On the engineering side, we continue on schedule, and we anticipate within six months of us getting back up to full speed, that we'll be able to deliver resource into the engineering group. Maybe sometime in the first quarter, maybe a little bit sooner. We're seeing what the schedule will be once the drilling gets up and running. Like I say, for me, it's hit and miss on what I'm saying because I can hear a bunch of background noise.
Bill, I think you got the gist of it. You were cutting in and out a bit. Are you done?
Yeah. I'm done. I was just asking if there was anything you wanted me to.
Okay. No, I think that's good though. Thanks, Bill. Just one thing I would add that I meant to mention at the front end. I think one of the keys, one of the reasons for our success in dealing with COVID-19 and continuing so well on our operations is our relationships with our employees and government. I think that we pride ourselves, as everyone knows, on our culture of fairness, respect, and transparency in the way we treat people. I think at times like this, the mutual trust we've earned and gained with our employees and the governments in which we work really comes to the forefront. We've had great cooperation. Our employees have been amazing. They wanted to work.
The unions and our employees wanted to keep working if they could be safe, and the governments in the countries we're in wanted us to keep working if we could be safe. We have had in the past, our critics talking about political risk in the areas that we are in the world, and we understand that. I think it's important to point out that there's some positive things to be in countries that want you to be there, and they want the tax revenue, and they want the good jobs if they can be safe and if you take care of the environment and if you're socially responsible, and do the right things and deliver on the promises you make.
The flip side of political risk sometimes is the fact that you're in countries where you're a very important part of the economy and you're an important part socially and environmentally in what's happening, and I think that's the case for B2Gold. I think a lot of our success in the normal times is due to that and our success in terms of crisis and crisis management comes from our vast experience in doing this around the world for years. It comes from the relationships we have with people. The governments where we are locally and federally trust us. We've built a trust relationship both ways with them, and our employees have a high level of trust that we're out looking out for their interests. I think those are some of the keys to our success.
I'd now like to get Tom to give us a quick update on what's happening in terms of exploration. We continue to successfully explore around our mines and are looking for major discoveries. The cheapest ounces are always the ones you find, and we've done a lot of that, and that continues. Over to you, Tom.
Thank you, Clive. Can you all hear me all right?
I can hear you well.
Okay. Good afternoon or good morning, everybody. Exploration for B2Gold has continued on at the mine sites at Mali, Masbate, and Otjikoto through this time. A lot of our grassroots exploration has been cut back to minimal field work or none at all due to limitations created by COVID. We hope to get back going in some of those areas later on in the summer. In terms of exploration at Masbate, we've drilled 7,000 m out of a 25,000-m program so far. The focus of the program has been on drilling near the base of the pits, as we see the pits have a great potential to get larger with the higher gold prices or continue the higher gold prices. We're focusing on the bottom of those pit areas. At Otjikoto, we've drilled 4,000 m of the 14,000-m budget.
The focus on Otjikoto has been to drill down plant on Wolfshag. As we're looking at the underground development coming into the area, we want to see what it looks like going down. We've had success so far in continuing the mineralization, now we want to get a better handle on grade with tighter space drilling. We're also doing some grassroots drilling near the mine site on several other parallel structures we see have potential. At Fekola, exploration has continued on through these times. So far this year, we've drilled about 10,000 m of diamond drilling and over 24,000 meters of RC drilling at the Fekola area. Focus has been mainly on two areas, the Mamba area to the north and related parallel structures at Anaconda and Adder. We've started to focus a lot more on the Cardinal area.
We're shifting our exploration focus, or some of our exploration focus, to the Cardinal area. Cardinal area is just a little bit west of the Fekola pit, within 500 m of the Fekola pit. It's an area that we originally planned for some waste area. We've had quite a bit of good success in that area and are starting to define a resource. We're refocusing the drilling in that area with infill drilling and testing out where the edges of this is to see how big it can get. That'll continue for the rest of the year. We will continue with at least one or two drills in the Mamba area also. We also plan to start doing some met testing on the Cardinal ore in the near future. I have no other discussion. Over to you, Clive.
Great. Thanks, Tom. Okay, I think operator will open it up for questions now.
Thank you. As a reminder, to ask a question, you will need to press star one on your telephone.
Okay, we currently have Ovais Habib, Geordie Mark, Kris Thompson, Josh Wolfson, Carey MacRury, and Lawson Winder.
Who's this? You're on the main line. Ian, you're on the main line. Hello?
Hello?
Hello, we're open up to questions for B2Gold.
Your first question comes from Ovais Habib.
Hi, Clive, can you hear me?
Sure, Ovais. Hey, Ovais, how you doing?
Good. Okay. Hi, everyone. Again, just wanted to say congrats on a good quarter, and also congrats on being able to maintain your guidance during these unprecedented times. Clive, just my first question is on Fekola. Clive, how should we be looking at Fekola in the second half in terms of production and costs? You've got the mill expansion kicking in Q3 or at the end of Q3. Do you expect this high grade that's coming from phase four to continue into the second half as well?
No, I don't think so. I'm going to pass it over to Bill.
Yeah, no. Basically, the whole concept is we pulled ounces forward to make sure that we had the ounces for Q3 and Q4. At this time, we're not comfortable in saying that we're going to continue the grade through Q3 and Q4, that we'd like to say that we're going to meet guidance at this time until we know what's going to happen with the mill extension.
Okay. What I'm trying to ask, Bill, is there low-grade stockpile that you guys have on site that you guys can blend through in Q3 and Q4? Are they just continuing to go through phase IV and then into phase V?
Yeah, there's a lot of low-grade stockpile on site.
Okay. Just moving on to Masbate, Bill. Obviously, the oxides at Masbate, I think we've talked about this in the past, that they were supposed to end in 2017, and you guys have continued to mine these oxides into this quarter. Are these transition ounces that have turned into oxides or were not tested as oxides, and then do you expect these oxides to continue into the second half?
Bill?
Yeah. There's the question of the day. The answer is, yes, there are some transition oxides which have turned into oxide, but a lot of it is that we're mining through surface dumps and some of the stock works from some of the old underground, which have been backfilled with material that's now basically considered ore. I can't answer that going forward. It's something that we continue to look at. What I will tell you is that some of it does come as a surprise, as upside, and that we continue to hold our guidance.
Got it. Okay. Okay, guys, I'll leave it at here and pass it on to others. Thank you again.
Great. Thanks, Ovais.
Your next question comes from Geordie Mark.
Good day, guys. [audio distortion] Ovais. Yeah, maybe some questions to Tom first. Just in terms of Cardinal, can you remind us, you did mention on Friday that it was away from the Just the type of mineralization there and its morphology as you see it now?
Good. Tom, you're kind of breaking up there, Geordie, but I think I got the gist of it about Cardinal, asking about Cardinal. Tom, do you want to comment on that?
I couldn't hear Geordie very well. In general, Cardinal is slightly different from Fekola. It's hosted within a combination of diorites and I guess you'd call them black shales, and they are mudstones. Multiple zones associated with very intense alteration, disseminated sulfides, a little bit of copper, and occasionally some visible gold. They're definitely a different style zone. They're more shear zone-related. It's been pretty widespread drilled so far. We're still learning about it. Was that your question, Geordie? I couldn't hear you very well.
Yeah, that was-- t hank you. Maybe just sort of follow on for Bill in terms of Fekola mining fleet and mining fleet capacity as you have today. Any thoughts in terms of changing with that mining fleet capacity, gold price where it is, changing effective strip ratios, stockpiling strategies, given your mining capacity that you've instituted?
I didn't get that question at all.
Sorry.
It's all right.
I was asking about…
I might just write these out and we can take that offline.
Yeah, that might be best. You're breaking up pretty badly. Thank you . Operator?
Your next question comes from Kris Thompson.
Hey, good day. Good morning, guys. Congratulations on an absolutely stellar quarter. As Ovais said, it's really good you guys are holding guidance through a tough period. Just I've got one question. I guess it relates to the Snake deposits, obviously within reach of Fekola there. Can you give us a sense of where we sit by way of the testing of the economics of these deposits?
Well, I guess I would say that, Kris, that we're looking at the saprolite. There's 800,000 oz in that resource, a little over a gram in the saprolite that has now gotten quite a bit bigger, it appears. We're getting bigger. Now we've been getting some very nice hits on the lower beneath, as you know, on the sulfide belts on Mamba, Anaconda. Right now we're waiting to see how big it gets, to be frank. I think we would need to, is this additional feed down the road for Fekola at some point in time in the mill? It's 20 km away, as you know. Is this a standalone scenario? We're really giving Tom the ability here or the time to aggressively drill these multiple targets that we've seen in the sulfides now and find out, one, how big does the saprolite get?
Secondly, are we looking at potentially significant deposit in the sulfide or deposits in the sulfides as well? I would think that as we go through the end of the year and into next year, we're probably going to start getting a bit of a better handle on that. Would you say that's fair to say, Tom?
Yes, Clive, that's pretty good. If I could add to that, you know, w e've had multiple hits in the sulfides, and certainly at Mamba, we've now seen at least two very good-looking continuous zones of mineralization that have a shallow plunge. We're working on trying to interpret those zones, and with the drilling that we're doing on saprolite, we continue to find other areas of saprolite mineralization. I would say it's still early stage, and as Clive says, they've given us the chance to try and figure out where it's going and how big it could go before we hand the resource over to the engineers.
Great, guys. Just one more quick question, maybe, just on Masbate. Can you give us a sense of steady state runway to the split between Main Vein and Montana?
Bill?
Steady state? Well, we're kind of changing that right now because originally we were projected to be into Main, or into Montana in February, and now we've gotten in there now, and so we're actually looking at that right now. I wouldn't want to come right out and just say what I think the steady state split's going to be for the rest of the year until we get our revised mine plan up and running.
All right. Okay, guys. Thanks a lot.
Okay. Cheers. Thanks, Kris.
Your next question comes from Josh Wolfson.
Thank you. Just a quick question.
You're Josh?
Yeah. Can you hear me? You cut out a bit there. Go again. Okay. We seem to have lost Josh.
Yeah. Hello, everyone. It's Ian MacLean here. We're obviously having a tough time with the line. If anyone has any questions that didn't get through, please email them directly to me, and I'll point you to the right direction of people who can answer that for you.
Any more questions, Operators?
Your next question comes from Carey MacRury .
Hi, can you guys hear me?
Yeah, I can hear you, Carey.
Maybe just another question on Fekola for Bill, you know, $251 in the quarter. Is there anything unusual in the quarter that we should expect to reverse in later quarters? Secondly, any color on the cost, mining versus milling, et cetera, in terms of where you're seeing the productivity?
No.
In terms of mining versus milling costs?
Well, no. Certainly, we don't see anything as far as production. We're basically we went a little bit faster on phase four and a little bit slower on phase five. We will see some of the capital expenditures that which were deferred in Q1, be pushed out. I think that Mike had already commented on that basically we're not adjusting our capital costs down for the year. We're going to stay on budget for that.
Okay. Maybe I think the question Geordie was trying to ask was, in terms of the mining fleet for the expansion, is that now fully deployed and up and running?
I didn't get what the question is. I'm sorry.
He's asking about the mining fleet. Is it fully up and running now, the new mining fleet?
Oh, okay. No. Sorry, I'm really struggling to hear on this line. The answer is no. Phase I of the mining fleet is up and running. Phase II is arriving at site right now. We actually literally within the last week have been receiving the next batch of 6040s and 789 trucks.
Carey, anything else?
I would now like to hand the conference back over to Clive Johnson.
Okay, well, thanks everybody. Ian, maybe you can talk to whoever set this call up and see if we can improve it next time or use somebody else. If we can put them out on the moon, we should be able to have a freaking conference call. Okay, thanks everybody for your participation. Stay safe. Have a nice day.
This concludes today's conference call. You may now disconnect.