Earnings call: Caledonia Mining reports strong Q2 with increased gold production

Caledonia Mining Corporation (NYSE: NYSE:) has reported robust financial results for the second quarter of 2024, with a notable increase in gold production and a significant rise in net profit for shareholders. The production of gold rose to nearly 21,000 ounces, compared to 17,500 ounces in the same period last year. The company’s revenue exceeded $50 million, and the gross profit was close to $23 million. Caledonia’s preliminary economic assessment of the Bilboes sulfide project and the revision of the mineral and resource estimate for the Blanket Mine have both indicated promising prospects for the company’s future.

Key Takeaways

• Gold production increased to just under 21,000 ounces from 17,500 ounces in Q2 of 2023.
• Revenue surpassed $50 million with a gross profit of nearly $23 million.
• Preliminary economic assessment of the Bilboes sulfide project shows potential for 1.5 million ounces of gold over a 10-year life.
• Mineral and resource estimate revision for the Blanket Mine doubles reserves, extending mine life beyond 10 years.
• Net profit attributable to shareholders saw a significant increase.
• Production costs were reduced.
• Caledonia remains focused on achieving production targets, completing the sulfide project feasibility study, and continuing exploration at Motapa.

Company Outlook

• Caledonia Mining is concentrating on reaching targeted production levels.
• The company is working on completing the sulfide project feasibility study.
• Exploration activities are ongoing at the Motapa site.

Bearish Highlights

• A rock fall incident at the Eroica mine affected July’s production.
• The company experienced foreign exchange losses recently, contrasting with historical gains.
• Skepticism from suppliers regarding the future of the Zimbabwean Dollar (ZiG) and the development of a parallel market.
• Water shortages in Zimbabwe could pose operational difficulties if the rainy season underperforms.

Bullish Highlights

• The new Tailings facility allows for more water recycling, which is beneficial for operations.
• The government’s release of USD 50 million into the market to stabilize the ZiG currency.
• Ability (OTC:) to export 75% of gold production offshore has been successful, with revenues typically received within two days.

Misses

• Production grade at the Blanket Mine is lower than previous years, though it is improving.
• Capital expenditures for the second half of the year are projected to be $31-32 million, delayed due to lower cash flow.

Q&A Highlights

• BlackRock (NYSE:)’s shareholding in Caledonia is due to its role as a passive investor managing an index fund.
• The company does not plan to sell a significant stake to BlackRock.
• Caledonia Mining receives payment for the RTGS component of revenues within 7 to 14 days.
• The company will sell the solar plant but will keep a long-term power purchase agreement for energy needs.

Caledonia Mining Corporation’s second quarter of 2024 has been marked by a strong financial performance and strategic advancements in its operations. The company’s production increase and the positive preliminary economic assessment of the Bilboes sulfide project, along with the doubling of reserves at the Blanket Mine, have set a solid foundation for continued growth. Despite facing challenges such as a rock fall incident and foreign exchange losses, Caledonia’s strategic focus and operational improvements, including the new Tailings facility, provide a positive outlook for the company’s future. The next earnings call is scheduled for mid-November, where further updates on the company’s progress will be shared.

Full transcript – Caledonia Mining Corporation (CMCL) Q2 2024:

Camilla Horsfall: [Call starts abruptly] Yes, we are starting.

Mark Learmonth: Yes. Okay. Well, good afternoon or good morning, depending on where you are. Thank you for joining this presentation to review Caledonia’s Results for the Second Quarter of 2024. I’m Mark Learmonth, Caledonia’s Chief Executive. I’m joined by Chester Goodburn, our CFO; and also Victor Gapare, who is another Executive Director. James should have joined us but he’s traveling somewhere in Zimbabwe. And I suspect he’s got — suspect he’s got communication difficulties. Okay, should we — we’ve got a relatively short presentation to run through. So Chester’s driving it. Chester, could you move through the rights of overview? It was an excellent quarter. Production up, the gold price up, costs down and that all flow-through, as you’ll see into a very strong financial performance. In terms of production, we produced just under 21,000 ounces of gold in the quarter, comfortably up from the 17,500 that we achieved in the second quarter of 2023. So a very substantial improvement there. Also during the quarter although not a focus for this presentation because we’ve already discussed it. At some length, we published a preliminary economic assessment of the Bilboes sulfide project which reiterated the fact that it has got very strong underlying economics. And it will produce 1.5 million ounces over a 10-year mine life. All-in sustaining cost of below $1,000 an ounce, so highly cash generative. In addition, we also published a revised mineral and resource estimate for Blanket Mine which effectively doubled our resource base, our reserves by — doubled our reserves. It means that now we have a life of mine based on reserves of Blanket out beyond 10 years which is a very healthy position for a mine of our nature. Based on our internal life of mine plan which includes some inferred resource as well, we’ve got a life of mine plan now out to 2041 which significantly underpins the business going forward. It’s also worth noting that the increase in gold ounces was a result of not just more tonnes but also higher grade which is very healthy. Just as a matter of administration, some of you may — if you see it in the — in the MD&A and the news release that we published this morning, for administrative purposes, we’re rescheduling the declaration and hence, the payment of our quarterly dividends to bring it in line with the quarterly Board processes to approve and review the quarterly financials. It’s just purely administration, there’s nothing else, nothing else to it apart from that. Okay. So just turning to the results summary, stable in terms of safety. Clearly, there’s always more that we can do and this continues to be an area of management focus but it’s pretty much the same as it has been in previous quarters. As I mentioned, production up quite significantly. Clearly, as we all know, the gold price is higher. So we realized exactly $2,300 an ounce, substantially higher than the $1,949 in the comparative quarter. All of that flowed through to a significant increase in revenue, just over $50 million for the quarter. And as you’ll see in a moment, lower online costs means that gross profit more than doubled, up from approximately $11 million to nearly $23 million in the quarter. And that flowed through to a significant increase in net profit attributable to shareholders which was nearly $8.4 million for the quarter compared to a loss of $0.5 million in the corresponding quarter, loss of that then flows through to an increase in earnings per share. I think we’ll move forward now and I’ll ask — sorry, Craig — sorry, James was going to join us. Unfortunately, he has communications issue. This is a slide that we’ve used many times. It just shows the long-term development in terms of tonnes milled grade ounces produced and recovery. And during the quarter, pretty much everything went as or slightly better than planned in terms of better tonnes, better grade and the recovery remains very efficient at sort of 93%, 93.5%, that then flows through into better ounces. So frankly, there’s nothing funny to explain here. It was a good solid quarter and hopefully, we can see a repetition of that in future quarters. Okay. I’ll ask Chester to run through some of the financials in a bit more detail. Chester, if you could do that for us, please?

Chester Goodburn: Yes. Thank you, Mark. Very good quarter and pleased see to share these results with our shareholders. Our revenues were up 35.4%. That’s on account of additional ounces as well as higher gold prices as we’ve received. Royalties up, that’s due to the higher revenues. Royalties remained flat at 5% of revenues. Production costs in absolute terms, that is down on a consolidated basis. And in our online cost at Blanket, it’s reduced to $906 from $915 per ounce in the previous quarter. Depreciation has increased due to our exact cost base. And it was good to see our gross profits increasing by 110%. That’s $12 million up from the comparable quarter. Other costs are down by $1.6 million due to lower foreign exchange losses. It was good to see that the volatile RTGS was replaced on 5 April of this year by the ZiG that has so far been more stable. And should that continue, we should also see lower foreign exchange losses. Our net finance cost is lower. That’s due to additional cash in the group. That’s reduced the interest charge. And our tax expense is normalized to in between 30% to 33% of the — of our effective tax rate. That’s due to higher profits and less proportion of non-deductible expenditures. It was also good to see our EPS up to $0.43 and adjusted EPS of $0.51 for the quarter. That’s all produced in the 3-month space. Looking at our production cost balance. That’s come down significantly on an online cost basis due to the Bilboes Oxides cost has come down. That’s reduced our online cost by 13.7%. Power and labor is up. Power mostly due to consumption and higher maximum demand charges. We’re seeing higher maximum demand charges due to succeeding some of our limits on the electricity use in certain times of the day and we are working on that. We’ve got some power factor correction equipment that’s in the budget that should help with that. But we’re also looking to create some efficiencies when it comes to labor overtime and the power consumption. I was quite pleased to see the consumables coming down by 3%. This is a time where you see your consumables increasing and you see a lot of inflationary pressures across the globe. But at Blanket, we’ve managed to curb that and actually reduced our consumable costs due to good procurement practices. On an all-in sustaining cost, that’s come down mostly due to the online costs coming down. And what you’ll see in that other costs would be the royalties and that’s due to higher revenues that we’ve generated over the quarter. We maintained production guidance at $870 per ounce to $970 per ounce for online costs and we also maintain our all-in sustaining cost guidance between $1,370 and, $1,470 per ounce. So it’s good to see our costs being in check while we are producing more ounces and also at these record gold prices. Administrative expenses are approximately $3 million down. That’s due to $3 million of expenditures that we expended last year to complete the finalization and the acquisition of the Bilboes sulfide steel, that added 3 million — 3 million ounces of resource and reserves to group but it’s good to see us going en route to becoming a multi-asset gold producer. Employee cost has also increased and that’s by about $500,000 that previously was accounted for as oxides’ operating expenditures. We’ve moved those employees and those resources over to the feasibility study. And we’ve also reallocated some of those resources to the Motapa drilling. So it’s good to see spending some costs of furthering our business and our strategy of becoming a multi-asset gold producer. Revenues being up, cost being down and in check, it’s good to see our cash generation increasing. We’ve generated just over $20 million in the quarter. And that’s more than we’ve generated in any quarter over the last 2 years. So really good cash generation. And overall, on a net basis, we’ve added $12.8 million worth of cash during the last 3 months. So, I’m already pleased with these results and the cash generation that comes with that. Over to you, Mark.

Mark Learmonth: Okay. Look, I mean this presentation focuses on the financial results for the quarter. We’ve discussed in separate calls the work of the PEA at Bilboes and also the upgrade in the reserves and resources. So really, these results are very clean, very good, quite easy to talk to. In terms of our immediate strategic focus, we are continuing to run Blanket to achieve our targeted production range of between 74,000 and 78,000 ounces for the year. And then thereafter, similar levels from 2025 onwards. Also making good progress on completing the feasibility study in respect of the sulfide project. And in parallel with that, we’re refining our own internal work that we’ve done on funding structures for that asset. Initially, we’re focusing on refining our understanding of the debt capacity of the project. But given the fact that it is so high margin and such a quick payback, we are confident that a high proportion of the overall funding requirement will be capable of being funded by debt. And then in parallel, we’re also continuing with our initial exploration of Motapa, that exploration work started in the second quarter, right at the beginning of the second quarter, will be finished towards the end of the third quarter. And then subject to the capacity of the assay labs, we’d expect to get those results out before the end of the year. It is fair to say that the work to prove Motapa is about 5 years behind Bilboes in terms of exploration so it will take a considerable period of time to do sufficient exploration at Motapa to prove up a significant resource. But so far, it’s all looking very good. So with that, it’s a brief presentation but I think it’s on point. We’ll open it up to questions. Typically, we prefer questions spoken. If they’re typed, the risk with a typed question is that we don’t really understand the nuance and we may answer a slightly different question from that which you actually wanted answering. So please, if you are able — if you could just open the line and ask questions verbally.

A – Camilla Horsfall: I’m going to start unmuting people.

Mark Learmonth: I do see one typed Q&A. Let me just go to that one.

Camilla Horsfall: Nathira [ph], you are unmuted.

Unidentified Analyst: All right. Thank you. Can you hear me?

Mark Learmonth: Yes.

Unidentified Analyst: Okay. I’ve been noticing over the past few months that there’s been an increase in, I think, the U.S. asset manager BlackRock’s shareholding in the company. And I wanted to find out if the — your company is going to continue with selling a significant stake of the company to BlackRock and what their increased stake in Caledonia will mean in the long term?

Mark Learmonth: Just to clarify something that we’re not — BlackRock’s participation in Caledonia is as a manager of a passive fund. So it’s an index tracker investor. So we’re in the something called the Russell 3000 Index in the United States. That means BlackRock run a fund which tracks that index, okay? And so to make sure that the fund mirrors the performance of the index, they have to buy shares in the underlying companies. And because there actually aren’t that very many gold companies, if any, other than us in the Russell 3000, BlackRock have to buy and sell our shares from time to time depending on whether — what our weighting is within the overall index. So that’s the first thing. They’re not active managers. They’re purely passive managers. And typically, you’ll see that as our market capitalization goes up, they’ll have to buy more shares to increase the weighting of Caledonia in the overall portfolio. Conversely, when our market cap falls, they’ll typically sell shares. They’re only buying and selling shares in the market. There is no — where they’re not having shares issued to them. So I hope that answers the question. Does that answer your question?

Unidentified Analyst: Yes.

Mark Learmonth: Okay. So before I move on, I can see a typed question. Modest increase in planned CapEx spend for ’24. What led to the $700,000 million [ph] upward revision in planned CapEx for the Tailings facility Phase Ib against the expected 4.7 billion [ph] in Q1 2024. Chester, are you able to — I’ve got a detailed question, are you able to answer that?

Chester Goodburn: Yes, I am. It’s comprehensive as we’re planning to implement a Blanket just to improve the pneumatics underground.

Mark Learmonth: Okay. And the second part of this question relates to water at Blanket. For those people who aren’t in Zimbabwe, Zimbabwe is suffering from a very, very bad drought situation. The rainy season normally is sort of November to February. And last — the last rainy season was extremely poor and so there is a big shortage of water. And the question relates to what the impact of that water shortage has been on Blanket. One of the — I’m happy to say that one of the unexpected but very welcomed side effects of the new Tailings facility is that because it’s an aligned Tailings facility, it means that the water it goes into the Tailings facility doesn’t escape underground which means that we can now recycle much more water from the Tailings facility than we could from the old one which was unaligned and therefore, the water used to percolate into the ground. That’s the first thing to say. Second thing is that we are or we have taken measures to reduce our water consumption. But for the time being, water has been released into the Blanket dam from upstream. And at the moment, we’re not seeing — and we don’t expect to see over the course of the next — before we get to the next rainy season, any adverse consequences. Clearly, if the upcoming rainy season is as disappointing as the last rainy season, that may cause difficulties. We do have boreholes which we’ve — what’s the right word, sort of not renovated but we’ve got them going again and we could look for other boreholes but it is a risk and it is one that we recognize. One further question, how is the production grade profile playing out at Blanket. The grade profile is lower than it has been in previous years. The grade at Blanket is lower than it has been in previous years but is improving. I don’t see Blanket as getting significantly above 80,000 ounces a year. I’m comfortable giving guidance for Blanket in the range of 75,000 to 80,000. The range — the grade will improve as we move forward. But I think to it I can’t really give guidance that Blanket will be producing substantially above 80,000 ounces a year. Any — I can see — sorry, someone got a hand up, Camilla?

Camilla Horsfall: There are a few people with their hands up. So Ian Joslin [ph], you’re unmuted.

Unidentified Analyst: About foreign exchange which you briefly mentioned and the role it plays in adjusted EPS. Obviously, adjusted EPS is something that says this is — these are the earnings you would normally expect and the difference between the adjusted earnings and the IAS earnings are one-off pluses or minuses that won’t be incurred. But a comment you made as part of your presentation implied that because of the volatility of the currency, you tend to systematically lose money on FX. And I just wondered how you can relate that to basically stripping it out when you put your reports [ph].

Mark Learmonth: Okay. That’s a very fair question. Historically, we have actually incurred, let’s be clear, the Zimbabwe currency, formerly the RTGS, now it’s ZiG, has been very volatile. Historically, we had actually incurred very substantial foreign exchange gains. There was 1 year up — the 1 quarter, I think, Chester, was it like tens of millions of dollars where the deferred tax liability devalued. And so as the tax — as the dollar tax liability in dollar terms became much smaller, we had a gain. And so initially, we started — we thought that was — whilst it would have been great fun to keep that in the adjusted EPS calculation, it was kind of misleading. So initially, we went into adjusted EPS to try and remove things like that which were outside management’s control. You’re correct that in the last 2 quarters, particularly in the first quarter of this year and to the lesser extent, the second quarter this year, we have reversed our substantial foreign exchange losses. So in the first quarter, the foreign exchange loss was $4 million. In this quarter, the foreign exchange loss was $2 million. And let’s be clear, that $2 million loss in the second quarter was incurred in the first 5 trading days of the year because the RTGS was discontinued on the 5th of April. So that $2 million was incurred at the — in the first 5 days of the year. Since then, with the introduction of the ZiG, the official exchange rate has been very stable. And if it continues on this basis, the incidence of foreign exchange gains and losses will become, if I say immaterial, I don’t mean like in an accounting way, it will become not such a — it will become a much, much less noticeable factor, okay? But it is clearly disclosed every quarter and there is a full reconciliation in, I think, note 10.2. Is that correct, Chester, 10.2?

Chester Goodburn: 10, yes, in the MD&A.

Mark Learmonth: Yes. In the MD&A, you’ll see a full reconciliation between IFRS, EPS and the adjusted EPS. So I hope does that answers your question.

Unidentified Analyst: I was just — I mean, it sounds — I mean, clearly, you’ve got different elements on your balance sheet that will be affected in different ways, as you pointed out with your deferred tax. I guess it’s all about whether the government in Zimbabwe intends to try to run a firm money policy or whether it will back to what it historically has done is obviously devalue the currency. And this is just an opinion, I’m asking of you. Do you think the government in Zimbabwe is less likely to devalue the currency to nothing as it has done in the past, has it turned over a new leaf with the ZiG.

Mark Learmonth: Let me come to that. The elements of the balance sheet that crystal [ph] — that give rise to foreign exchange losses are the RTGS receivables which is the relatively small proportion of our revenues which we sell in local currency and where we received the cash sort of a week or so after the date of the transaction. And then the other component is the refund of VAT. So it’s both of those two things that drive foreign exchange losses. All I can repeat to you is the conversations I had with the Deputy Minister of Finance with the incoming Governor of the Reserve Bank, the Governor of the Reserve Bank changed at the end of March. And with the permanent representative of the IMF in Harare, all 3 of whom we’re very confident that the Zimbabwe having broken the RTGS, there is a clear determination not to make the same mistake with the new currency. That’s all I can repeat. I can’t give a view as to whether they’re going to stand behind that or not.

Unidentified Analyst: No, I understand. Just a view on what you think.

Mark Learmonth: Don’t forget, nobody — the collapsing of the currency doesn’t help anybody, it doesn’t help us. And the government ends up chasing its tail as well. So it’s in everybody’s interests to maintain a stable currency and the government and the various — and the Governor of the Reserve Bank seem absolutely determined to maintain that. That’s all I can say.

Unidentified Analyst: And do you think the timing of those — the VAT refunds was timed to coincide with the collapse of the currency?

Mark Learmonth: I don’t think so. No. No, we’ve not seen any blow out. We haven’t seen any sort of untoward lengthening of credit, no, no. No, we haven’t seen them.

Chester Goodburn: You don’t see it the timing either. Our timing of our VAT receivables are between 60 and 120 days and they’re very during those days, curate [ph] and it’s been doing so for the last couple of years. So it’s been very constant in terms of how regularly we receive those VAT refunds.

Mark Learmonth: The bigger one, the one that’s got more volume would be the payment of the RTGS component of our revenues and that’s a much short — I would hate people to think that’s 120 days for that, Chester, that’s much shorter, isn’t that.

Chester Goodburn: Yes. For the bullion receivable, it hovers between 14 to 7 days that we receive a strong delivery at Fidelity. And that’s just for the 25% portion of our gold sales.

Unidentified Analyst: Okay. And in that portion, you have to sell, that’s a standard requirement for you to do, is it?

Mark Learmonth: Yes, we have to sell 25% to government. The balance, 75% of the remainder, we export ourselves and we sell that offshore for dollars. That actually is a relatively recent development. The ability to export our gold is only something we started doing in April 2023. So we’ve been doing that for just over a year now and that works extremely well. We’ll deliver a bar of gold or several bars of gold into Dubai on a day, say, a Monday morning and we get sort of 90%, 95% of the revenues that day and the balance 2 days later, it works very nicely. I see a question from Nathira [ph]. Hand up.

Camilla Horsfall: There’s Nic [ph]. I’m just unmuting.

Unidentified Analyst: Okay. Just there was a follow-up question to that earlier question by Ian. It’s not really a question but it’s an observation that obviously, your suppliers are skeptical about the future of the ZiG. And I see that black market ZiG’s are now trading between 20 and 22. Does this — is this an early indicator of a robust parallel market starting to develop?

Mark Learmonth: Victor, do you want to talk about that? I mean I would say that clearly, our visibility of an illegal foreign exchange market, Nic [ph], is, by definition, zero, I would just say that. But Nic [ph] — sorry, Victor, are you able to help with Nic’s [ph] question.

Victor Gapare: Yes. Thank you, Mark. Nic [ph], I mean, basically, let’s just focus on what we as Caledonia do. Number one, we get the ZiG from the Zimbabwe government for 25% of our gold production or our sales. So basically what we do with that ZiG is we make the bulk of it with the payments we have to make to government because government has set in place payments to it which are paid in ZiG. So basically, that you are making in terms of the exchange rate. The balance which is a very small amount, we actually buy local products. So in terms of having visibility, what’s happening on the parallel market, we don’t really feel it that much. We don’t — we don’t see that much at this stage other than maybe when we talk about the exchange losses when the ZiG officially devalues or something like that so I would say we don’t have visibility on that. We couldn’t comment on that.

Mark Learmonth: Sorry, Victor, could you just talk about the measures the government took to put liquidity into the market recently.

Victor Gapare: Yes. Okay. When there was a bit of pressure on the market about I think it’s about 2 or so weeks ago. We actually did see the government releasing about USD 50 million into the market, right? Because what they basically say is that ZiG is backed by gold and some foreign currency. So all they did this, they converted the gold which they are keeping which is the gold and currency which they have. The gold, they get it out of 50% of the royalties we pay. We pay in physical gold and also the other producers give them money so they can have reserves. So what they’re doing is they’re going to manage it in the sense that if they think the ZiG is on the market it’s present. They’re actually releasing money through the reserve bank onto the market. So you see the currency — the rate coming down naturally.

Mark Learmonth: So I mean, Nic [ph], I’m not an economist by any means but if you have a currency which is backed by something, gold or U.S. dollars, you should, in theory — when people want to sell your currency, you should, in theory, be able to take those ZiGs off those people who want to get rid of those ZiGs and give them the asset backing, give them whatever it is, the gold or the dollars behind it. Until you get to such a point that the money — the supply of the ZiG is so restricted that the ZiG exchange rate has to strengthen. And that’s the theory. Now, I don’t — I’m not an economist and I’m certainly not a central banker, so you’ve kind of exhausted my understanding of how currencies work. But I think what we saw in the last couple of weeks, where in recognition of the movement in the parallel market, government did release dollars. I think it kind of suggests that they really are running this currency as an asset-backed currency.

Unidentified Analyst: Okay. Excellent. One or two other little questions, if I may. So you had a rock fall in Eroica. Is there a read-through into a broader picture of what’s happening on the mine? Or is this an isolated incident?

Mark Learmonth: It’s an isolated incident. It did have an adverse effect on production in July, as you’ll have seen from the MD&A, production in July was about 6,000 ounces. We’ve now got all the crews back to other areas and they’re now working in productive phases. And the area that has been affected by the fall of ground will be recovered. So it’s not symptomatic or systemic of any broader problem with the have — of any broader problem, Nic [ph].

Unidentified Analyst: Okay. And then last question is that you’ve obviously got quite a bit of CapEx lined up for H2. That’s still going to amount to $31 million, $32 million by year-end?

Mark Learmonth: Yes. So to be clear, what we did is we — having seen disappointing production towards the end of last year and a slow start to the beginning of this year, the first 6 weeks of this year. We put the brakes on CapEx because we can’t — we’ve seen this movie before where production promises an increase that it will get back on track in terms of production. And in the meantime, could we please carry on spending on the CapEx plans. And having been bitten by that before, this year, we said, well, the production is not there, the cash isn’t flowing as it should be, therefore, we will defer CapEx. Now as clearly, our cash generation has improved, that planned CapEx will be released in the second half of the year.

Unidentified Analyst: Sorry, one more question, Mark. There’s a commentary about additional studies to enhance this solar power — panel project, the capacity there at the same time you’re talking of selling. Is this adjunct to or will the study disappear once you sell?

Mark Learmonth: Yes, it’s part and parcel of the same thing. So the idea is that we will — well, not the idea, it’s more than an idea, it’s happening, is that we will sell the solar plant in terms — in risk that we’ll have a long-term power purchase agreement on the same terms as we currently enjoy. And in addition, the new owner will construct a second phase. We’re selling it to someone whose core business is building and developing and running solar plants. It’s not our core business. We don’t need to own this.

Camilla Horsfall: There is another question from Albright [ph].

Mark Learmonth: Is there another question?

Camilla Horsfall: Yes, there is. Albright [ph]. I’m just trying to unmute. Albright [ph], you’re unmuted.

Mark Learmonth: Is someone asking me a question because I can’t understand or hear properly.

Unidentified Analyst: [Indiscernible].

Mark Learmonth: Sorry, I really can’t understand.

Unidentified Analyst: [Indiscernible] the production you have.

Mark Learmonth: Sorry, Victor, can you help me on this because I really can’t hear this properly.

Camilla Horsfall: Albright [ph], it’s now unmuted, I think.

Victor Gapare: I think they’re having a background conversation among themselves.

Mark Learmonth: Yes. Okay. Well, when they’ve decided the question, we’ll try and deal with it but I couldn’t hear that properly. Any further questions coming, I can see some.

Camilla Horsfall: There are some written questions.

Mark Learmonth: Let me see.

Chester Goodburn: There is a question here from Albert [ph].

Mark Learmonth: Just a minute, I’m working through them.

Camilla Horsfall: From Justin bearing [ph], that’s the next one.

Mark Learmonth: Can you comment on the proposed changes, the FX regime. I think I’ve dealt with that. The expectation is that for Bilboes. Bilboes will operate on 100% U.S. dollar basis anyway. So, I think we’ve dealt with that. I hope Justin, we were dealt with that question. I think we’ve dealt with another question about the July production issue. Again, I think we’re dealt with that. It was a fall of ground affected, Eroica which is a high-grade area of the mine. It affected us in July. It’s been sorted out. And the mine in the last week has been running within 1% or so of plan. So it doesn’t — it’s not a long-term impact. A question on inflation. I don’t know what the monthly inflation rate has been recently. Victor, do you know what the monthly inflation rate is?

Victor Gapare: Yes. actually, in the last few months, when the reserve bank has released something or rather the Zimbabwe statistical offices has removed — has released something. It was actually very minute because the ZiG has been very stable in the last few months since they introduced it. So I think it was almost like 2% or something like that.

Mark Learmonth: 2% a month?

Victor Gapare: Much less than that, Mark, annualized.

Mark Learmonth: Annualized. That’s better than a lot of other places. Any further questions? Could you see anything there? Camilla do you see anything?

Camilla Horsfall: I don’t see anymore.

Mark Learmonth: Okay. Well, look, that’s relatively brief but I think the numbers speak for themselves. So, thank you for your attendance and we’ll do the same thing, again in mid-November after we’ve released the third quarter results. So, thank you all very much for your participation.

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