Alkane Resources (ASX:ALK) Q1 2027 Earnings Call

0:00 Thank you for standing by. This is the conference operator. Welcome to Elkhart Resources' first quarter fiscal year 2027 results conference call and webcast. As a reminder, all participants on the telephone are in listen-only mode, and the conference is being recorded. After management's prepared remarks, there will be an opportunity to ask questions. For those on the telephone, To join the question, you have to press star

0:33 1 and 1 on your telephone keypad. Participants on the webcast may take your questions on the Q&A feature on the webcast. Now, let me hand the call over to Natalie Chapman, Alkine's Corporate Communication Manager. Please go ahead. Hello, everyone. Thank you for joining our call today. Some housekeeping items to note. Please review today's press release for further details on our results and accompanying presentation for today's call is available for download from the company's website at alcres.com. For those on the webcast, please move through the presentation slides yourself as directed by our presenters.

1:22 Moving on to slide two. I'll remind everyone that this conference call contains

1:27 forward-looking information that is based on the company's current expectations, estimates and beliefs. Continuing on to slide three, today's presentation will use terms that are non-IFRS performance measures. Please review Alkane's disclosure materials for the risks associated with the forward-looking information and the use of non-IFRS performance measures. I will also point out that all dollar amounts mentioned on today's call are in Australian dollars unless otherwise stated. Another thing to keep in mind during our presentation is that Alkane's fiscal year ends 30th of June, so that the period ending 30th of September 2026 is our first quarter for fiscal 2027.

2:23 Please move on to slide four. Today's speakers from Alkane Resources are Nick Earner, Managing Director and Chief Executive Officer, and James Carter, Chief Financial Officer. I will now hand the call over to Nick Earner. Please go ahead, Nick. Hi everyone, and thanks for joining us today. This, I think we can all agree, is going to be quite an interesting day to be putting out a quarterly report and so I fully appreciate you all being here to listen and I expect you'll have one eye on Bloomberg as well. So let's get into the presentation. Let me start on slide five by providing some of the highlights of the quarter we've just completed. We've delivered a strong steady state first quarter and we hit our operational targets on the schedule we were after. So this generated nearly 41,000 gold equivalent ounces in the quarter, which is 40,000 ounces of gold and just under 400 tonnes of antimony.

3:22 Puts us on a pretty clear trajectory to meet our full year fiscal 27 production guidance of 163,177,000 gold equivalent ounces. Across the three operations, our throughput rates met our expectations, our recoveries held steady in line with plan, and our lower than previous grades were successfully balanced by high processing volumes, and this was as we intended. So, driven by our solid operational execution and our disciplined cost control, our three mines generated $102 million in cash flow for the quarter, which consolidates our strong financial foundation. So, with this cash-generating capability, we have a strong balance sheet, and we've ended the quarter with $459 million of cash volume and investments.

4:09 And as I've talked about, Previously on the last conference call, we're bringing that cash to work. 2027 is a year of positioning Alkane for fiscal growth, for future growth, as we're looking to invest $160 to $190 million of growth capital over this fiscal year, and we spent $37 million of it in the first quarter. And lastly, as we've talked about before, we're rewarding our shareholders who've supported our growth with the Shareholder Returns Programme. at the start of October 26 we paid our inaugural dividend of two cents a share and we announced a share buyback program of up to $50 million. So let's move on to slide six. On a consolidated basis in Q1, we processed nearly 741,000 tonnes of ore and an average gold grade of 1.83 grams per tonne and an average anthony grade of 1.11%. Recoveries of 89.6% gold and 89.1% anthony remained consistent quarter over quarter.

5:04 I've talked you through The three mines production of just under 41,000 gold equivalent ounces and generally as I said these results met our expectations for the quarter. And as I said it was consistent, it was reliable, it was steady. So we're on track, reiterate, to meet this guidance of both production and cost. And as well as the investment that we have to maintain Our production and expand and maintain cost control. We're also focused heavily on exploration to expand the resources and extend mine life across all of our mines. We're also continuing to de-risk Bode Kaiser, our large copper gold project. And to that end, on all of these plans, we're going to be investing $215 to $255 million collectively on everything.

5:53 So let me get into the detail of our operation and then, of course, we'll answer the questions at the end. So, Tommy Lee, on slide seven. In quarter one, we processed 344,000 ounces of ore, 6% more than in the same quarter last year. The difference being the extra crushing that I've spoken about previously that goes in before the circuit. The average grade of the processed ore was 2.16 grams per tonne, a touch lower than quarter four last year, and it's simply part of our mine sequencing. recoveries were over 90% as we get into our straps, particularly with the fine grinding circuit. So despite the slightly lower grade, the better processing rates, the higher recovery, all balanced us out to 21,500 ounces of gold, just a little bit more than quarter last year.

6:47 And our all-interest standing costs were $2,340 per ounce, or a touch lower than the same quarter last year. but please note this is just simply timing of our sustaining capex. We do still expect to be within our cost guidance for the site for full year. So the site's operating cash flow was $52 million for the quarter. Growth capital expenditure during the quarter was $25 million, primarily for the new hallway realignment project, which we expect to complete over the next six months. As I've stated before, this alignment allows us to access that 200,000 ounces in the and San Antonio Open Cup Deposits. Thereby obviously expanding our production sources and maintain the cost here on the site. So while it does take up, this is the highway project, takes up most of our site's capital growth project over the year, other initiatives that people should be aware of are purchasing mobile equipment and equipment rebuilds and we also have a scheduled replacement and upgrade of our carbon regeneration kiln.

7:50 Overall, a good quarter. Let's move on to slide eight, talking about Bjorkdal. In Bjorkdal we processed more than 355,000 tonnes of ore, higher than Q4 last year. Average grade of a gram a tonne and average recovery of 85.5, both in line with our previous quarter. This meant we did 10,500 ounces of gold, which is a touch higher than the quarter last year. When we compare the two, as in quarter one, 27, now to quarter four, 2026, The higher throughput rates, basically, we just scheduled a little better than we did last year over the summer vacation period and we have continued to do a little bit of crush for optimisation. So the capital focus on the quarters, growth capital, was on two initiatives that we expect to expand production and lower unit costs with time.

8:40 I've talked about this being our objective at the Octile. The first was pre-stripping of the Newlands open pit with ore extraction actually now commenced in October, not in the previous quarter, but now commenced in October. and the second was removing the till on the new portal to the storeheading deposit, which we expect to take our first cut in just a few weeks' time and we already have lateral development across the storeheading from underground occurring and we want that online within two years. And these initiatives, along with a substantial expansion of tailings down facilities as well as mobile equipment purchases like we're doing at Tommy and Costa Field, make up most of the $40 million to $50 million growth capex budget for fiscal 2027. The quarter one, all in sustaining cost of $3,012 an ounce, was significantly lower than the corresponding period in the preceding quarter, and this is just simply the fact that we just have more ounces over a pretty fixed cost base. Operational cash flow, therefore, ended up at $20 million.

9:43 So we had a very good quarter delivering to Planet Builds. I'm quite pleased with that. Moving on to slide 9 at Costaville, the Gold Anthony Mine. We processed over 41,000 tonnes of ore, which is more, quite a lot more, 14% higher than the previous quarter. Various initiatives have resulted in this. Slightly improved mill utilisation rates and blend control. However, also there, we are pre-crushing. Again, we have a pre-crusher to spread the load out of the crushing circuit and that gives us a better size feed which gives us higher throughput rates. In Q1 2027, the gold and Anthony Graves were 6.5g a tonne of gold and 1.1% respectively.

10:30 Now, yes, this is lower than we intended, particularly due to the overbreak in the hanging wall in the Ewell Shepherd area. but it's also just a scheduling issue as well with the higher grade nuggety ore body that we have at Costafield. So overall our gold and antimony recovery rates were 93% and 89% respectively, both slightly lower than the previous quarter, mostly due to the head grade. And as a result we produced nearly 8,000 ounces of gold and just under 400 tonnes of antimony. All in sustaining costs were $3,194 an ounce. and the preceding quarter. And this is primarily just due to the lower ounce production. But as well as that, just to be completely clear, when we talk in equivalence, the decline in the Antony prices also had an impact on ounce equivalence production contribution from Antony. And I'm sure we'll take questions on that, but roughly US dollar Antony price is about $13,000 per tonne at the moment on the Shanghai metal market.

11:36 Capital plans of $30 to $40 million at Costa Field throughout financial 2027 are focused on the development of Brunswick South as well as equipment replacement, and both of those things are occurring. And our cash flow, after all of the things I've said, was $29 million in quarter one. Going on to slide 10, the mineral resource and the ore reserve, people have heard me speak We're trying to drive organic growth by increasing our mineral resources, and we have quite an aggressive exploration program across the operations. So during the quarter, we released our annual Mineral Resources and Reserve Statement that showed the initial results of that plan. Our mineral resources increased nearly 8% net of depletion, measured and indicating are now starting to approach 9 million ounces of gold, so that's

12:24 8.7 million ounces of gold, a million tonnes of copper, and 42,000 tonnes of anthony. Inferred resources are nearly 4 million ounces of gold, 450,000 tonnes of copper, and another 13,000 tonnes of anthony. The largest growth has been at Bjorkdal, with the new store heathen deposit the largest impact there. And a reminder, the inferred resources, of course, include Vodokaiser. On slide 11, you can see the exploration projects at Tomingley for the Courtaulds expanding near-mine mineral resources, with the area between Roswell and Wyoming 1, which is bullet 1, as well as extending the newly discovered mineralisation west of McLean Resources. This is our bullet three on the picture. Crillin was also undertaking to further investigate a mineralised monzodiorite package immediately to the north of Roswell.

13:11 This is bullet two on the picture. Beyond the near-mine work, of course, we have a larger goal of finding the next million ounce deposit near Tommingley, focusing on El Paso and Peake Hill as well, bullets four and five. I'm going to take a moment Just very briefly, and obviously we take questions whenever people want, to discuss Peake Hill and the objective and results of the deep hole that we drilled at the Peake Hill Historic Gold Mine. As we announced on October 15th, the drilling was testing for a potential copper-gold porphyry system which we hypothesised to exist below the high-solidation system we previously mined. While the drilling didn't fully resolve this porphyry target, it did successfully intersect the continuation of the mineralised Hi-Solidation Epithermal System, approximately a kilometre below the proprietary open pit, historically mined by Alkane in the late 90s, demonstrating significant vertical continuity of this operation and mineralisation.

14:08 So key results, you can see there on the screen, 6.4 metres at 0.42 grams per tonne gold from 1,000 metres to 153 metres at 0.11 grams per tonne of gold from 1427 metres.

14:22 Look, the takeaway from this is this confirms this system remains open at depth and it may transition towards a deeper porphyrous source, but the results also highlight substantial exploration upside beneath the existing resource, so above these holes and above the existing resource. And we have a further 6,600 metres of follow-up drilling planned in this quarter, the current quarter we're in, to test the high-grade extensions and better define the scale of the mineralised system. Obviously, all with the objective of saying, can we put peak hill... into the potential feed future schedule for automobil. Let's go on to slide 12, exploration of Yorkdale. So the focus here at Yorkdale is to expand the resources whilst fully utilising the plant and thereby extend the mine life further and reduce costs by delivering higher margin ore.

15:11 So during the quarter, 29 diamond holes totaling nearly 16,000 metres were completed at the north zone and eastern zone near the mine, near our existing underground mine, drilling confirmed strong grade continuity, extensions of the mineralized vein systems, and several high-grade gold intersections were returned.

15:28 So the infill and extension drilling on the north zone, that's bullet 1, included over an ounce a tonne of gold at 0.85 metres, and the eastern zone, bullet 2, included 81.3 grams a tonne over 4.4 metres. Now, remember, here we're exploring narrow veins that we mine in bulk, and we have the expertise to mine this efficiently. So these results just simply show, as we've often communicated, the Yorkdale Mineral System remains open both long strike and at depth and supports ongoing resource growth and further mine life extension opportunities. So at current and planned exploration drilling, we continue to target a long strike and down the extensions of this non-mineralisation. And then, of course, we want to further expand the resources and find the highest grade feed. But exploration of the store-hidden deposit, Bullet 3, which is an exciting new prospect, 700 metres north of the Bjorkdal mine, which we are already developing to, as you heard me talk about cutting the portal and developing laterally,

16:29 still has very significant growth potential. 16 extensional diamond drill holes completed in early 26 extended this high-grade gold mineralisation and confirmed the mineralised system now is defined over 2.7 kilometres of strike length and a depth of 460-plus metres, with mineralisation open in all directions. We're going to aggressively explore this target. Let's move to slide 13 at Costafield. Similar to Bjorkdal, our goal is particularly here to extend mine life and also reduce costs with higher grade.

17:03 So during the quarter, close to the current mining operations from the Central Corridor, drilling was primarily directed towards extending the mineral resource at Kendal, Brunswick South and Coveley Deposit Sports 2, 3 and 4. And work also included follow-up testing of the newly discovered mineralised trend located to the west of Brunswick South. We are now calling this Bentley, because we're even confusing ourselves with the directions that we're talking about. And this continues to demonstrate potential for additional high-grade mineralisation. At True Blue, Bullet 1, we put 33 additional drill holes consisting of 19,000 metres there, and the high-grade intercepts confirm the continuity and economic potential of the system and as I've talked about last quarter, we've got greater structural complexity. So we're doing step-out drilling in and around True Blue.

17:57 So at the Brunswick South Deposit, which we're developing towards it at the moment, we did an extensive 91-hole infill and extension drilling program and there's confirmed continuity between two principal mineralised domains, an upper Antony-rich gold sheet and a lower... Gold Dominance Zone extending over approximately 400 metres in strike. And reminder, this is just 200 metres from existing development and we're commencing development before it would allocate a capital to it and we want it to be a primary production source of cost of fuel. So expression at Cuffley in the sub-KC system, which is bullet 4, we result in the discovery of another high-grade

18:38 mineralised domain between the previously mined high-grade panels at Cuffley and continued and the expansion of the emerging sub-KC deposit at depth. And so this newly defined coupling mineralisation, it's readily accessible from existing underground infrastructure, and we've incorporated this in our life at mine. And ongoing drilling at sub-KC continues to demonstrate strong potential for further resource growth and new mineralised repetitions along strike. And so we continue to do structural analysis to work out exactly where should we be drilling here, because it's quite tantalising.

19:09 North and east of Costerfield, We really recommend on the Northern Dykes, which is Bullet 5, and there we're targeting mineralised igneous intrusions similar to Sunday Creek, which you might be familiar with, owned by Southern Cross Gold, and depth extension testing at the Browns Deposit in Bullet 6. So slide 14, I'm just going to touch briefly on the Northern Molong Palfrey project that encompasses our Boda-Kaiser Gold Copper project and the Gamby. So at Boda-Kaiser... and the Northern Molong Portrait Project in general. We did soil sampling, which will aid in defining a planned 4km RC drill program. And there we're testing just scour potential in and around. And then other lower-cost activities, which are very, very intense but not costing us that much, include the continuation of environmental baseline studies. We're doing stakeholder consultations.

20:08 We're negotiating with property landholders. We're selecting sites for infrastructure. We've got the purchase underway of additional tenements in and around our prospects and we're negotiating our own infrastructure. So we're on path for a project approval application at the end of next year, at the end of calendar 2027, so midway through financial year 2028 and a subsequent investment decision on approval. And let me take a second to talk about the Ngambi project, where we have an earning joint venture. This project's 40k from Costafilm and it might play, hopefully, an important part of that future of Costafilm. So during the quarter, nearly 6,000 metres were drilled beneath the historic western pit of Ngambi, confirming continuity in the high grade of the Epizonal Gold Antony system.

21:00 We put out the results just earlier this week. and some highlights included a hole including 3.3 grams per tonne of gold and another with 2.5 cm Antony. Results continue to highlight strong similarities with the cost of your gold Antony system and they demonstrate significant resource growth potential

21:17 with mineralisation remaining open at depth and long strike. So we still have two drill rigs going there and that's focused on further defining the extended system and assessing further exploration upside across the project. and with that I'm going to hand over to Jim to provide a review of our financial performance. Thanks Nick and hello everyone. So here on slide 15, group revenue for the quarter was just under $206 million. That was on sales of just under 38,000 ounces of gold and 172 tonnes of antimony. Average gold prices of $5,128 an ounce. which is about 9% lower than the June quarter.

22:03 I think we're all familiar with the gold price movements. Average antimony price in the September quarter was just under 24,000 Australian dollars per tonne or just under 17,000 US dollars a tonne. And that was 22% lower than the previous quarter and Nick touched on that. early in the presentation around gold equivalent ounces, and perhaps people might have a question about those markets. We also delivered 7,800 ounces of gold hedges during the quarter, and that's at that average price of just under Australian $2,900 per ounce. So that only leaves us 21,000 ounces of gold to deliver to the rest of this financial year at around $2,850.

22:51 and a number of others. So all these sustaining costs for September quarter on the group basis were $2,805 an ounce, just over US$2,000 per gold equivalent ounce produced, and that was 7% lower than the June quarter. And operations at that mine operating level generated pretty good margins at $2,323 per gold equipment ounce over their all-in sustaining costs. Sustained capital during the quarter was $13 million. Most of that is expenditure across the three operations on underground, decline and other associated capital development.

23:42 Just turning to growth capital, that was $37 million for the quarter. and you know we've talked about this before but the major expenditure there really is at Tomingley on the new highway realignment project. Some mobile equipment purchases and rebuilds at Tomingley and Yorkdale and also that's the lifting and extension of the tailing storage facility at Yorkdale. Exploration expenditure about nine million dollars. Nick went through those slides earlier on the presentation. So we're still at the point where we expect to meet sustaining capital, growth capital and exploration targets for the financial year. And we had previously guided in FY27 that this really is a year of reinvestment to grow our business. And so naturally we should expect the timing of sustaining and growth capital and exploration spend to vary across the quarters.

24:35 So, you know, we do expect subsequent quarters. We're going to reflect that and you should, you know, see slightly higher all in sustaining costs. And that's why we haven't changed our full year. and a number of others. and some of that senior business development as well.

25:47 $2 million for Boda,

25:50 Lupin, $11 million of Lupin, so planned expenditure during the quarter there over the summer period at Lupin, which is going really well, and $4 million of interest revenue. And so we have a net inflow, which is a receipt of $8 million of cash returned from bonds, which we previously used to have cash back. and just a guide for the next quarter which everyone in this industry in Australia will have is that we should expect in our December quarter to make our final true-up tax payment for financial year 2026 of around $55 to $60 million as we just go through and finalise those tax returns.

26:38 During the quarter we launched a short share buyback program that was up to $50 million over the next 12 months. which I guess at a share price of around $1.70 represents about 2% of the shares on issue. To date we haven't initiated any purchase as part of that program but we do expect to opportunistically throughout the financial year or really the next 12 months. So at 30 September, financial position remains really, really strong. We've got $450 million of cash pool in enlisted investments. and if you include the undrawn line of credit facility, total available liquidity is just under $570 million. So yeah, that's a strong overall finance position, really underpins the foundation to continue to reinvest, which is what we're doing, and fund growth opportunities across the three operations, including the development of Oda-Kaiser.

27:38 It allows us then to, after all that, provide for shareholder return program with dividends and opportunistic share buybacks. But it's still got a lot of flexibility on the balance sheet. Should we see any opportunistic, strategic or value-accreted opportunities as they arise? So with that, I will turn the call back to you, Nick. Thanks, Mike. So leveraging that financial strength Jim's outlined, we believe we have a very good foundation to deliver on Our two-path strategy. Number one, continue steady state production whilst maintaining or ideally lowering costs to drive overall margins.

28:23 This increases our cash generating capabilities to fund growth initiatives and shareholder returns. And to this end, you know, I think people can see we're

28:35 meeting our production and cost targets, we're delivering our capital programs on time and Thank you. We will now start the Q&A section. As a reminder, to ask a question, please press star 1 1 on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star 1 1 again.

29:21 Our first question comes from the line of L Harvey from UBS. Your line is now open. Yeah, morning Nick and Jim. Maybe just starting off with the exploration side of things. Wanted to get a bit better understanding of that tenure increase at the Northern Molong Porphyry Project. Just trying to get a better sense of the strategy here and maybe how you're thinking about growth more broadly. I know you've kind of touched on exploration to extend mine lines at the existing ops, but thinking more about longer-term growth. Yeah, absolutely, mate. So we're in the process of picking up this document exchange, all this sort of stuff. Tanya from Alice Queen to the east and then curving around to the north of the tenement package. There's a two-part strategy here.

30:16 This is not so much looking for supplementary resources but making sure that the potential infrastructure footprint that we expand over, we can do sterilisation, drilling and all this sort of other stuff without impacting on other tenement holders. Yeah, that's, to be frank, driving this a lot more than, you know, looking for exploration potential up to the north, even though, of course, we will do that. Yeah, thanks, Nick. So just to be clear, is that an incremental, like incrementally you guys are thinking a bit more about, positively about, Boated Kaiser Development longer term.

31:04 Is that a fair read? Yeah, that's very fair, very fair. We are at the moment, you know, we have biologists on the ground doing all the flora and fauna studies across this summer. We have modelling occurring of different water supply and tailings dam options. We're back revisiting you know the pit designs in more detail all with a view to having these applications in next year so absolutely that is the read yes. Yep awesome that's yeah that's great and I suppose just thinking about the buyback I mean based on my valuation and consensus valuations it would be very accretive to buy back stock at current levels so I suppose How are you thinking about balancing that with those growth plans you kind of just mentioned?

32:03 Yeah, so we believe, I mean, and this is all assuming, you know, the gold price doesn't just completely collapse back another, you know, $1,500 an ounce US from where it is, right? But we believe that we're more than funded to meet the full $50 million buyback as well as meet all the growth programs that we have and maintain an incredibly robust cash position. So it will be the gold price and the free cash flow, particularly in the next financial year, that drives how much we look to increase those distributions by the two methods. But, yeah, we believe we're absolutely set.

32:45 Awesome, mate. And maybe just finally, before I queue up again, just to clarify that the peak hill high sulfuration, that'd be thermal mineralisation here, I just wanted to clarify, did you say that could go straight into the Tommy Lee Mill if you proved it up? Yeah, so thank you, that's a good clarifying question. So underneath Pee Hill, the ore that is there is refractory. So we will need, should we mine it, we will need to do some sort of oxidative treatment, be it pressure ox, biox, aldean, one of those type of approaches. So a potential scenario, of course, is establishing an underground, you

33:31 know, crushing and transporting up to Tom and Lee, which obviously we need all approvals for external losses, there's a fair way away from that, to then, you know, we'd have to do an oxidative step there, yeah. But just to be clear, is the plan still to kind of target the porphyry potential under peak hill or do you feel like it's moving more towards that high sulfidation?

34:03 Sorry, sorry, sorry, but both, both. Immediate obvious production plan to assess is what I just described. Long-term exploration potential, we continue to look for what on earth has fed this system. But one is an immediate... I think the first hurdle is $12.5 million how much of that through are you so far? I couldn't I'm sorry I didn't prepare that number to have but it's not Remark, a couple of million dollars?

34:51 Yeah, we've got two rigs running, so probably, that's 12 and a half over three years though, don't forget. Sorry mate, but we've only got two rigs running in our modest team there, so it'll be a couple of minutes. Yeah, no worries. Awesome, thanks for that Nick, appreciate it. Cheers. Thank you, just a moment for our next question please. Next we have David Coutts from Bell Porter Securities. Your line is now open. Thank you. Good morning, Nick. Good morning, James. Congratulations on a good quarter and thank you for the call. Just a couple from me. One will be technical. The low grade, or the low word grade, say, in the dollar fission that you had earlier

35:45 Are they low-grade sort of associated with softer ground or is that just a bit of a coincidence and something you're working your way through or should that be something we should be cognizant of in low-grade parts of the ore body?

35:59 Yeah, so it's not sorry Dave, it's certainly not something that I would I'm trying to steer or guide people toward being a continuing ongoing thing just that different points within Yule Shepherd are The all-body turns over sort of even 60 degrees, you know, in some very small sections, even 45. We can't effectively cable bolt that hanging wall in any kind of cost-efficient manner. And so we do get overbreak. And because our host rock is not mineralised in the slightest fashion, all overbreak is pure dilution. That said, it only happens every now and again in a couple of different spots of the ore body. So we had anticipated dilution, but we got probably a few thousand tonnes more dilution than we'd even anticipated.

36:57 Right, so it's more about the ore body orientation geometry than it's like the sort of... Yes, exactly. Exactly, yeah. Cool. And you were just chatting about the... Development Pathway to Boda Kaiser. Can you just run us through, I guess, what the pathway looks like to an FID? Yeah. Okay, so... Can you hear me? Sorry. Yep, yeah. Yep. Yeah, sorry. So the step one is baseline environmental studies. which we are doing and we are one year into those.

37:42 So you have to do two years of baseline studies. So we have a lot of people going onto the ground this summer because you don't get two seasons worth of data, you effectively

37:52 lose a year. We have groundwater monitoring boards in place, we have a weather station in place and we expect also across this summer we'll be doing our heritage surveys, Aboriginal heritage surveys, remembering of course that this is privately owned, privately owned land. So that's number one. Number two, and so that will finish, sorry, that will finish by this time next year. That'll be done. So number two, we are doing studies on where we're sourcing water, water licenses, the amount

38:24 of water, and there's an iterative step here with engineering around potential water capture, tailings, dams, locations and stuff like that. Of course, intertwined all of that is talking with landholders who actually own, we own some of the land, other people own some of the land, we're just negotiating, well, how might this look? How does this work with different individuals? And we shift and change where we could put infrastructure against that. We think we're on track to have all of that sorted by this time next year. So we would then most likely put out a pre-feasibility study because we're doing the work on mine designs and plant updates and new electricity costs and fuel costs and all that sort of good stuff with a view to having that application into government by the end of the year.

39:09 Then typically,

39:12 and we understand the vagaries of it, but typically a metaliferous project without too many objections has a 12 to 24 month final approval process. And that's been our history. Sort of our average as a company is around 14 months of approval for our three major projects that we've done over the last 15 years. So that would see us in the middle of 29 getting project approval, barring no legal challenges, that would see us making an FID later in 2029. We would obviously, as we were getting signs and we'd responded and, you know, we're interacting with the process, that would see us making, you know, making sort of approaches on partners and stuff through that late 28, early 29 period.

40:02 Yeah, that's broad point. That's great. So I hope that's where he goes. All right, perfect word for a massive deficit in the copper market, of course. Yeah, that's right. Yeah, it'll be, it's funny, mate, like you sit here on a day like today where gold's taking a hammering and you think, oh, come on, copper. That's right. In bed. Speaking of gold breaking and hammering, I imagine you guys kept a little bit of a watching brief on buying back your remaining gold hedges or not. How do you think about that at the moment? Well, mate, my pause and wait strategy has ended up being prescient yet again.

40:47 So look, no, at this stage, mate, we still just intend to deliver into those on schedule. That's our default plan and anybody putting in together a model should have that. Yep, okay, cool. And just while we're on the markets, you did make a couple of comments about Antimony pricing and the market. Did you want to share that? Yeah, yeah, yeah. Look, absolutely. So, you know, people have noticed the, you know, the US dollar gold price falling for Antimony. Like I said, it was, you know, 13,000 a ton. The main thing that we're seeing is, you know, internal demand within China for particularly The manufacturer of solar panels has fallen as a fundamental, and so the margins of the guys who are buying that have been squeezed.

41:35 And so, yeah, that's what's driving it, basically. So it's not so much global growth, because the flame retardant stuff is broadly similar. There's been a little bit of substitution in things like brake pads and stuff. But, yeah, we're seeing a contraction of that pricing. So, I don't see, unfortunately, I don't see really beyond, we'll call it geopolitical reasons, I don't see reasons for that market to rebound strongly in the short to medium term. Fair enough. Great insight. Okay, thanks very much. Thank you very much. Thanks.

42:13 Thank you. Next question comes from a line of Paul Kenner from Ord Manette. Your line is now open. Please go ahead. Yeah, hi Nick and Jim. Thanks for taking my questions. Firstly, just on costs at the Oakdale. Yeah, those mining costs came down quite significantly. Is there anything specific you can point to there? I know you sort of talked on the scheduling and and also the improved production piece which improved the denominator impact. Can you maybe just talk to mining costs on a dollar million basis there?

43:01 Yeah, yeah. Look, I mean, I don't want to over-egg the omelette, mate. We have had quite a steady focus over the last year of increasing our developed stocks. So we do have more production fronts open that are letting the tons flow more freely and letting us balance the grades. So that's good. We have also started to invest. We've seen new pieces of kit arrive. We've been steadily buying equipment with arrivals over the last six months New Bolsa Scala, that sort of stuff.

43:50 We're a little more immune from diesel pricing up there in Scandinavia, like we've referred to before, being really only the underground trucking fleet that does that. And we use a contractor with Scania Trucks, like the road fixed-body trucks that you might see around Sydney or Melbourne delivering rock to a site.

44:10 They travel much more quickly. They're quite very cheap on a dollar-per-tonne basis. So all of those things together with a more consistent performance across summer on a slightly higher grade have just led to this result. But like I said, I don't want to over-egg that omelette yet, mate. And so we do expect... you know, whilst on a dollar per tonne basis we expect to stay the same, you know, we are still very beholden to making sure we get the right grades and the right ounces out of built up. But, you know, I'm confident that we're steadily marching towards that 50,000 ounce per annum rate that we're looking for from there. Great. That's very clear. Nick, and then just moving to Costa Field, can you maybe just remind us on True Blue I guess when you expect that to come into the mill and sort of how that material differs in grade relative to I guess the existing mining fronts?

45:14 Yeah so in grade similar right so however it was smaller than we anticipated so we only I think have I don't have it right in front of me but you know sort of 50 odd 5,000 or something ounces like that we could bring into the reserve, so a year and a bit. We have it at the end of our life of mine because we have to develop two corners across to it. And if we find stuff similar to Brunswick South or Bentley that I referred to, we expect that it will continue to substitute and push True Blue out. What we're really looking for from True Blue is the step-out exploration. We're doing up and down a long strike across these 12 months. We're looking for that to, you know, give it more appeal to develop towards. But it is a very similar... Great in gold and it is higher in Anthony because it's higher up in the sequence.

46:05 Yep, too easy. And just staying at Costafield and just following on with Ngambi, can you maybe just talk us through what What the opportunity is there, obviously some good initial drill results, but how does that potentially fit into the mine plan at Costa Field?

46:29 Yeah, so in a massive, you know, arm-waving exploration excitable type fashion, in an ideal world there, we can expand that resource to be more substantial. So you can see there the grades are, you know, there are obviously these higher grade stuff but you know, 3-4 grams a tonne gold, 2.5% anthony it is slightly lower in gold than we have at Costa Field that's not saying it's going to remain that way but on the bits that we've discovered so in an absolute ideal world I would like to improve the reserve base at Costa Field based on the exploration we're doing in and around Costa Field and have Ngambi as a and substantial supplementary feed that we would justify the expansion of the milling facilities across the field.

47:22 That's my ideal solution. Failing that at the moment where we'll be fleshing it out and putting it later in the mine life but trying to understand, you know, the mining extraction rate we can get from it. So, yeah, I think, you know, I've got to admit, I think that Negandi's quite exciting and I don't think the market really gives Negandi, the company itself, the recognition that it deserves for the asset that I think it could well have. No, that's very clear, Nick. That's all from me, mate, so thanks very much. Thanks, Paul. Cheers, mate. Thank you. I see no further questions on the phone line. Natalie, is there any questions on the webcast?

48:11 We just have one question at the moment. It's what impact does the rising cost of oil and diesel have on your operations, particularly those in Australia? Jim, do you want to handle this one, mate?

48:28 Look, thanks, Nat, and the question for that one. Yeah, look, diesel fuel prices for us, they're around about 2% to 3% of our total costs. or less than $100 an ounce and that's really just because of our mobile underground fleet with the rest of our Australian operations powered off the grid powered by electricity. So it's immaterial and probably more pertinent to really follow through on that question is it's around about supply and we're not having any issues with supply. We're not a massive consumer of Diesel Fuel and we're not located in remote locations so yeah immaterial to us no issues.

49:16 We have no further questions so I'll hand the call back over to Nick for closing comments. Yeah look thanks very much everyone for taking the time to join us today particularly those who would otherwise be watching a quite interesting market open so as always please reach out you know info or mail at alkane or outgraves.com and so look, thanks everyone. Have a good day everyone in Australia and a good evening to those joining us in North America. Appreciate your time. This concludes today's conference call. Thank you for participating. You may now disconnect.