K92 Mining Inc.

Thank you, operator. And thanks to everyone for attending a K92 Mining Second Quarter 2021 conference call.

We hope you and your families are doing well. In addition to myself, we have on the line John Lewins, Chief Executive Officer and Director, and Justin Blanchet, Chief Financial Officer.

I would also like to remind everyone that after the remarks for management, the call will be followed by a Q&A session. As we will be making forward-looking statements during the call, please refer to the cautionary notes and risk disclosure in our MD&A in slide 2 of the webcast presentation.

Also, please bear in mind that all dollar amounts mentioned in the conference call are in U.S. dollars unless otherwise noted.

Now, I'll turn it over to John to provide you with an overview.

Well, thanks, David. And welcome, everyone.

So I'm actually pleased to be joining you today from our Kainantu Gold mine in Papua New Guinea. We're witnessing firsthand the impressive progress that we've made on-site over the last quarter in the last 6 months in fact.

And really, I think there are many exciting areas where we're progressing, and that includes opening up another sublevel in Judd, ramping up the mine process plant, advancement of the twin inclines to drill at Kora, which now includes Kora South and moving into a new phase of drilling at Blue Lake, where we're looking to drill some deeper holes targeting that Potashnick core. The second quarter saw Papua New Guinea and its resource sector facing some fairly major challenges with an unprecedented surge in COVID-19 cases, which really commenced in the First Quarter of the year and increased significantly in the Second Quarter.

Now, that resulted in the Australian government suspending all FIFO movements by the resource sector, so the entire resource sector, in and out of PNG, from late in the First Quarter through until the second half of May. As an industry, we responded by enhancing our COVID-19 protocols, mitigation measures, which included things like offsite testing, quarantining personnel, etc.

And as a result of that, an agreement was reached with the Australian government to restart our FIFO operations. And really, very, very supportive of the Australian government want to get things restarted as quickly as possible, but also obviously making sure that we were not bringing COVID into Australia.

Having faced that challenge overall, I'm also pleased to say that we operated continuously during that whole period and during the entire quarter, and certainly delivered a strong second-half performance where we produced over 16,000 ounces gold equivalent from mid-May until the end of June. And that really reflects the efforts of our entire team on-site to set us up.

Not only did we have that stronger second half the quarter, but that really sets us up for the second half of the year where we expect it to be significantly stronger than the first half of the year, and in the case of the fourth quarter, we're certainly looking at potentially -- a record quarter. Moving on and starting with safety.

In the second quarter, pleased to report there were no lost-time injuries, and we continue to operate with one of the best safety records, not only in PNG but in the Australasia region. And that's really been since the start of operations.

This is an area where we focus on, I think quite relentlessly, the whole occupational health and safety and that obviously includes [Indiscernible] gold equivalent and the operation delivered a record mill throughput, 75,667 tons process head grade of 10.3 grams per ton. Head grade was about 2% below budget despite the fact that we treated a significant amount of low-grade stockpiles.

Certainly more than we anticipated, and that really was due to the COVID surge and the impact that had on our mining rates. If we compare that to the year previously, the second quarter of 2020 mill throughput increased by 53%.

If we look at the key operational physicals, processed planned, as I mentioned, delivered record throughout. Underground developments, total mine material obviously declined.

All three metrics were really impacted by that surge in COVID-19 during the first half of the quarter. And that, in turn, caused a shortage of staff in most of our areas of operation, and that was related to COVID-19 absenteeism, suspension of the FIFO flights, which I've mentioned, for effectively 2 months, increase in the quarantine duration that we're looking at some of our enhanced control measures as well.

As I mentioned, in the second half of the quarter we saw a fairly significant improvement, not just in the plant throughput, but also in those other metrics as well. In terms of COVID-19, I'm pleased to report that we've significantly increased our operational resilience and our ability to deal with the ongoing impacts of this pandemic.

From mid-May, as I mentioned, the Australian government lifted the restrictions on the movement of personnel, and we now have a specific exemption that exempts us from the restrictions that the Australian government put on the movement of international people in and out of Australia. And this is not only for K92 but for the whole resource sector.

And that's recognition by the Australian government of the importance of the resource industry to PNG. We're over 30% of GDP, and we're over 85% of all exports.

I [Indiscernible] that these enhanced protocols over the past 3 months that we've instituted certainly appear to be working very well and operationally, we've gone I think from strength to strength since we instituted these. And we've also obviously restocked enough [Indiscernible].

In addition to that, our vaccination program is well underway. Almost all of our expatriates are now fully vaccinated, and vaccinations are also underway for PNG nationals.

And today, we've had a very solid uptake in that. That uptake in terms of vaccinations is also line as to look at relaxing some of those quarantine restrictions.

For instance, I was in the first group. I came in on Thursday, the first group that's being alive to come in from Australia and not required to quarantine in PNG normally is to have a week of quarantine.

And in fact, for the first time for anyone who is fully vaccinated and no quarantine is required. So these things obviously can significantly improve our operations and our efficiency.

Going forward, the mine site does however continue to operate at a COVID-free level, and we believe none with that increase rates of vaccination, in many of these controls that we've now established. Our resilience to the pandemic has increased.

It's strong, it's improving. Now with that, I'll turn the call over to our Chief Financial Officer, Justin Blanchet to discuss the financial results.

Thank you, John, and hello, everyone. During the second quarter, K92 had a revenue of 35.5 million.

Despite higher production in Q2, 2021, when compared to 2020, our 26% decrease in revenue, was due to a decrease in the feed grade of 10.3 grams per ton compared to 17.6 grams per ton last year. This was partially offset by an increase in the realized selling gold price of $1,754 per gold ounce, compared to $1,631 per gold ounce in 2020.

In addition, as of June 30th, 2021, K92 had 5,456 gold ounces in concentrate inventory that was sold in July. An increase of 3,077 gold ounces when compared to March 31st due to the timing of sales.

In the second quarter, the cost of sales was 20.9 million, only 14% higher than Q2 2020 despite having increased operational activity as illustrated by the 91% increase in ore mined, and then 53% increase in ore processed. In addition, the Company incurred costs related to the COVID-19 pandemic, including additional pay for employees completing longer rosters at the site, additional costs related to the movement of personnel and supplies, quarantine costs, and additional safety medical-related costs.

The quarterly cash flow from operating activities before changes in working capital was 15.2 million, compared with 30.3 million in Q2 2020. As of June 30th, 2021, we had 56.2 million in cash and cash equivalents, while spending 4.9 million in expansion capital and nearly 8.5 million in income tax installments for the quarter.

The Company fully repaid the outstanding loan from Trafigura in early 2021, leaving the Company with no debt. As John mentioned, for the quarter, the Kainantu Gold Operations produced 22,153 ounces of gold, 1,098,370 pounds of copper, and 14,914 ounces of silver, or 25,015 ounces of gold equivalent.

We sold 18,939 ounces of gold, 862,407 pounds of copper, and 12,472 ounces of silver. We incurred a cash cost of $736 and an all-in sustaining cost of $1,057 per ounce, which was significantly below our realized gold selling price of $1,754 per ounce.

Our Q2 2021 cash cost per ounce increased to 736 from $560 in 2020. The increase in cash costs was due to a lower feed grade despite increased production due to the successful ramp-up of the 400K expansion, allowing the Company to achieve better economies of scale.

In addition, the Company incurred costs related to the COVID-19 pandemic. It is important to note that after commissioning the stage 2 plant expansion in the late third quarter, we have seen a significant compression in our total unit cost per ton processed approaching $24 per ton.

We continue to see downward pressure on the costs via the economies of scale as operations ramp up. I will now turn the call back to John.

Thanks a lot, Justin. So when we look at the Twin Incline development that resumed the second half of May following that 2-month hiatus after the COVID-19 restrictions enforced by the Australian government.

Considerable progress really has been made in that area upon resuming that redevelopment. And as of July the 30th, the furthest of the two inclines had advanced approximately 530 meters, and the other was about 10, 15 meters behind that.

On the exploration front during the quarter, drilling was underway at Kora, Kora South, Judd, and also the Blue Lake porphyry. As previously noted, COVID restrictions did result in a number of personnel that was on-site for the majority of the quarter being significantly reduced, and that was in order to, obviously, reduce the potential of COVID issues on-site.

In order to reduce the impact of that on the Kora resource drilling, the focus has been maintained on manning the rigs underground. And when you look at the results of that, what that meant was that processing of coal was given a lower priority.

As a result of that, by the end of June, end of the quarter, we had an excess of 50 drill holes that had not been processed. Now, this has been reduced to currently around 40.

And in late July, we announced the results of 43 of those holes, and they consisted of both the infill and the step-out drilling to the site for updated resource, which is targeting late in the fourth quarter. The results delivered multiple high-grade intersections, including 3 meters at over 70 grams per ton gold equivalent in K1 Vein and 6.3 meters at 32 grams per ton in K2.

The hit rate, as I think everyone has come to expect, was again very strong, all holes intersected mineralization, 45 intersections above 5 grams per ton, 20 intersections exceeding 10 grams per ton, and 9 intersections exceeding 20 grams per ton. If we move on to Judd, we're ramping up both development and drilling activities.

As many of you are aware, Judd is very unexplored and it has been shown to have very similar geology to Kora with similar grades, thickness, and a max strike length of over 2.5 kilometers running parallel -- sub-parallel to Kora in about 200 meters away. The focus that we've had to date is on what we call the J1 vein, although there are at least four known Judd's veins.

As an outcome of the positive development drilling and metallurgical results that we've seen a Judd to date. Judd has been integrated into our 2021 mine plan, targeting production.

A stock production that is by the fourth quarter or within the fourth quarter. And that will provide a boost to our operational flexibility.

And with the grades we've seen, will also bring in some high-grade. Development is already underway at the second sublevel, the 1265 level, which is going in both North and South directions.

The drive to the side for [Indiscernible] was approximately 10 meters below JDD0006, which intersected 7.25 meters at 258 grams per ton. To date, we've developed approximately 80 meters along with the J1 Vein on that 1265 level.

Results should be inconsistent with our expectations, and we'll be looking to provide an update on actual results in the near term. Drilling is also well underway, targeting both measured and indicated, as well as inferred resources.

Eliminating that backlog of holes from assaying, coal logging, et cetera, at Judd and Kora is one of our tops focuses currently. And we do expect to announce results in the near-term from Judd, and also obviously for the -- from Kora.

Additionally, when we're looking at Judd's end of this quarter into the fourth quarter, we do actually anticipate that a larger portion of our drill fleet underground will actually be targeting Judd. Over the past weekend on-site, I've been able to go underground, and one of the opportunities I had obviously was a priority, quite frankly, was to go in and have a look at the 1265 Judd development.

Geology -- as I think some of you who were aware of the geology of Kora, the geology of Judd is actually very similar to that of Kora in terms of thickness and mineralization. And when you look at the 1235 level, we reported average thickness to 3.7 meters at 11.6 gram per ton gold equivalent over almost 300 meters to strike best grades being towards the size, and that included 3.7 meters at 15.4 gram per ton gold equivalent over the last 175 meters to the strike reported.

And certainly, from what we're seeing in 1265, the geology looks pretty similar to Kora, and I think geotechnically, we'd probably say it's better than we see at Kora. Moving on to Blue Lake, our copper, gold, porphyry target, that Phase 2 drilling that has been underway for some months has made significant progress.

We've completed quite a number of shallow [Indiscernible] drilling and we've recently commenced some deep drilling targeting that potassic core, which we believe to be the, obviously, the higher grade zone. I'd say the performance capabilities of the drill rigs have been strong and in hole KDD0020, we hit a record drilling depth of 1,400 meters.

The hole is pending cole logging and assaying. Point out our exploration people are currently focused, together with the mine geology people, on catching up on underground drilling from core in Judd.

Well currently we've got two drill rigs, drilling at the lake, and we will be providing a more detailed update to the market in due course. I think both the vein field and the porphyry drilling are really at quite exciting times, and they really highlight the significant big system and near-mine upside potential of Kainantu.

We still are sitting with something like only 20% of the vein field strike that's being drilled with the majority, obviously, still to be drilled, and still, very much open a debt. With that, Operator, I think we'd like to commence the Q&A session.

Thank you.

Hey, good morning, guys, or afternoon, I guess, and I'm not sure what time it is there in PNG to you, John. My main question here, actually a very simple one first.

Justin, you mentioned something about $24 a ton, I just missed what you were talking about. Can you reiterate that comment, please.

That's our processing costs per ton at the mine site.

Okay. Is that your target?

Is that the number you guys want to get to, or do you think there's room for improvement there?

It's definitely moving in the right direction, and it's a number that we're happy with right now.

Okay. My main question here is just on Judd, could you guys quantify for us a little bit just the potential contribution for Q4, and I guess longer-term 2022, in particular?

And just maybe give us a little bit of color on any incremental cost to mine and add that ore to the mill.

Thanks, Alex. It's 10:51 PM here, by the way if you're looking for the time, so it's a little dark outside Judd, we would anticipate somewhere between 20,000 and 25,000 tons will come from Judd in the fourth quarter.

Grade-wise, that will be somewhere around the -- between 10 and 15, probably more than 12 to 15, but there will be some higher-grade cautions over that -- overall. I was underground at Judd on Sunday, I'm going to say it looks -- the Phase 7 look very good.

And as we mentioned, we'll put us some results on the development that we've done there. And then, of course, go see quite a bit of drilling, we're in the process of catching up.

In terms of contribution next year, I really can't give you that figure yet, that's something that we're actually still working on, Judd really is very much a work in progress. Remember that we are actually going to be producing material from Stopes when in fact we haven't actually issued a resource yet on Judd.

There will be a resource coming out on Judd as part of the results updates that we're putting together. So, we're putting up in the -- in the fourth quarter, there will be a resource coming out for an updated results, coming out for Kora.

And there will be a first resource coming out for Judd. So, it is still very early days and until we've got that and can put that into our planning.

Can't give you a figure for next year, but certainly, I would anticipate it'll provide a significant amount of what we've produced next year. Certainly, a month or 2 months material.

In terms of costs, really would see it similar costs to what we're getting from Kora. Geotechnically, it looks very similar to Kora, if anything better than Kora.

In fact, geotechnically, and so we will see any issues in that area. And of course, we're coming off the development that we've already got in place for Kora to get into Judd.

So, it's not that we're sort of developing out and it's not like developing a new ore body that you've found and you have to go off and develop to open up. So, cost-wise, we don't -- we don't think it's going to add anything to the cost.

Depending thing potentially. It can help target cost down slightly.

Okay, that's great. And one more quick question if I may.

Your guys' target of 1,100 tons per day, what's the bottleneck in that? With Judd opening up here, you're going to have additional mining phases available.

Is that 1,100 ton a day mine-constrained, or is it more mill-constrained? Any color on that would be helpful.

Thank you.

I think at this point in time, the 1,100 tons a day it's about getting the mine to produce that consistently. The COVID issues that we had during the first half of the year in the first quarter and for the majority almost of the second quarter.

One of the big issues really was that we -- our numbers on-site came down quite dramatically. And obviously, the mining side of things is significantly more labor-intensive in terms of numbers than the plant and so in a number of areas, just know that the guys got behind simply because we didn't have all our people, we didn't have our full complement of ex-pats able to come in, and they're quite key to upskilling all of our locals and what have you.

Remember we're trying to expand our labor at the current time, and then we get the constraints of COVID and all the rest of it. We've -- and when you think about it, every single person that comes to the site for a roster has to quarantine.

Some of that is done on-site, and some of it is done off-site because we've set up off-site to quarantine. We simply couldn't operate if it was all on-site.

So, if you're bringing somebody in for a 6-week roster and they have to do a week of quarantine, then you actually need obviously, 15% more rooms. If -- it's a full-week roster in our domestic guys are on shorter roster, is 25% quadrant.

So, you need a heck of a lot more rooms, and in fact like all operations in PNG, quite a number of our rooms, so share rooms. And when you're doing quarantining and all the rest of it, of course, you can do anything like that.

So big focus, we're just bringing on an extra 100 rooms in the next week to 2 weeks that have been installed during the last 3 months, for instance. And we've got another 100-200 that will be done by the end of the year.

We're -- we've -- as you'd focus on expanding the camp. But of course, in order to expand the camp, that means that you need to bring in contractors, you need to go through quarantine, and then be on-site taking up some of the rooms that you actually want for your operations people, so it's been a real balancing act to get this.

And that's why, for instance, we were behind on logging of core because we focused on having the people on-site that could do the drilling. The limitations on accommodation, so that we kept the drilling up as much as possible, global had accepted that we have to do a catch-up in terms of our logins.

And as we've ramped up the numbers on-site, we've been able to do that. And in fact, our exploration people are actually -- right now are focused on -- not surface logging, but I see logging at all the core from underground so that we can catch-up all-over Kora and Judd for our cutoff -- for our resource updates on Kora and the new resource for Judd.

Sorry, long-winded answer, but I was --

Yeah.

-- trying to give you a bit of flavor for that.

No, it's great to put that into context. That's it for me.

Thank you.

Thanks for taking my questions here. Hopes just on the Blue Lake switching gears a little bit to the regional drilling.

Obviously exciting to see hole -- I think it was hole 20 down to that 1,400-meter level. Just a couple of questions around what the program looks like.

First of all, how deep are the holes plan? I mean, it's 1,400 meters that planned or was that hole terminated for some other reason?

And then maybe more on the spacing, are you planning to step out from that hole and how far away are your step-outs planned?

Thanks, Tom. Look, Blue Lake, 1,400 meters was actually beyond where we were looking to take it.

And in part, it was driven down by -- we were going to see what the week could actually achieve. The -- we've got some other holes that are planned.

I don't recall any holes right now that are plan need as deep as 1,400, but we do have some holes that are certainly are going to go over 1,000 meters over the next few months. They are consistent with the fence lines that we've been doing currently, which has been the fence line giving 200 meters apart.

There will be, obviously, targeting a deeper potassic core that we've got vectors on from the drilling that we've done to date. As I said, unfortunately, we've had to make a call between some of our exploration holes and our Kora and Judd.

And right now, Kora and Judd are taking priority from a logging perspective because we've got a cutoff in terms of getting a resource update completed right now, all of the guys are focused on getting all of the backlog of Kora and Judd out. That should be done pretty much by the end of this quarter.

We think we should have caught up all of those holes and obviously be a lot more results coming out probably towards the end of the quarter, early next quarter on [Indiscernible] I think it'd be fair to say the deals remain excited by Blue Lake and what -- certainly what they're seeing at Blue Lake in terms of Kora, etc. that's coming.

We do have -- we do have protocols in place which actually limit our interaction as well with our exploration sites. So, we support the exploration sites from Kainantu, but if anyone actually goes on to the site, then, of course, they got to quarantine before they can come back on site.

So, I was around today actually, Tom with Chris Miller, just going around the sites in the chopper. But we weren't actually landing and going in to talk to the guys and have a look on the ground.

Because we do that and now, we have to come back and go into quarantine for a more limited 3 days because we're vaccinated, but nonetheless, we still have to go into a quarantine situation. Chris, for instance, does that every 2 weeks.

Every 2 weeks, he actually gets up and goes around all the sites, spend some time there, comes back to site, has to do 3 days quarantine. So, it does give you a few challenges, but I think what we've got in place is making that extremely manageable and certainly the meters that we're getting are fairly reasonable.

I think what we're getting both at Blue Lake and Kora, Judd on the surface as well because we're also doing some drilling on Kora, Judd cabin at surface.

Very good, John. Just to clarify, what are the number of rigs on-site, including the stuff underground, the surface drills, and the Blue Lake drills?

Just to get a tally.

We have 11 -- I think 10 are operating right now. Four on the surface and 6 underground.

Great. That's it from me.

Thanks very much.

Yeah. Good evening, John.

Just some follow-up questions there, mate. Just looking at the ramp-up that you're having through the mill.

Just wondering when you get to the nominal nameplate capacity, expect to evolve on a fixed cost basis, and what proportion of short costs are going to be unfixed? And this is say, consumers.

I haven't got it off the top of my head. But I think it's around 60% is actually a fixed cost, as I'm sure you are aware from a plant perspective visit.

People, for instance, say power is a variable cost. 90% of power for plant is not a variable cost.

It's a fixed cost. So, our fixed costs are obviously our labor.

Our plant assaying also thinks and there are the majority of our -- certainly, there are the majority of our costs are fixed as opposed to valuable.

Thanks [Indiscernible] When you looking at -- in terms markup for exploitation [Indiscernible] just hoping, what dimensions are you looking at for restocking to basically comparable costs, ultimately the unit carry across to Judd on a per ton basis relative to Kora or are you looking looking at --

It's still pretty early days. I'd have to say.

But having said that in relation to the -- with the average width that we saw over the entire 300 meters strike length of the 1235 level was about 3.5 meters, which is consistent with what we see in both K1 and K2. Obviously, it does vary.

It does get thicker and it does get a bit thinner both in K1, K2, and in Judd, so actually very similar in that context. Geotechnically, as I said, the ground is very competent, so there may be a potential to look at larger stopes.

But of course, that might not necessarily be the possible given that you're coming into Judd off the same systems as as you're going into Kora, so we may actually be constrained by what you're doing there. But certainly, we'd anticipate that the costs should be very, very similar.

Where you potentially pick up obviously, is that your development costs are already being carried effectively by Kora. So therefore, overall, your cost comes down because you're getting more tons out of the major development that you're doing along strike and vertically.

Okay. Thanks mate.

And in terms of you looking at development costs with the integration of operations flexibility at Judd, are you -- looking at capital costs is sustained basis? Are you looking at that level staying the same and operating at Koran and Judd?

Or are you looking at quarantine in total capital costs? In-kind of the question again, [Indiscernible] to capital cost also to trade-off between where you allocate capital between the [Indiscernible]

I think there's always that trade-off where you allocate the capital. It's certainly not a science.

After we careful say on this one because my CFO [Indiscernible] me sit on it. There's always that debate on where is your capital, where is your sustaining capital and what have you.

Overall, Judd should bring down your sustaining capital cost simply because you're able to get more tons out of those -- out of a lot of that capital developed. Not all of it, because obviously you've still got capital development coming off of your main Northside developments, and what have you that come to the east for Judd and therefore, you'll pick up some costs there.

But overall, you'd have to say you expect that your capital component should come down. Because really, you've got a vein system, 3.5 meters wide.

It's like -- it's almost like a K3 that's 200 meters away from K1, but on the other side of [Indiscernible] north site development. So that north site development, all of that pivotal that you are putting in number, pivotal development you are putting in is also there unable to support Judd [Indiscernible] Same for you reticulation and certainly quite a bit of your development for ventilation amongst other things as well.

Okay. Thanks.

And maybe one last question there. Once you've completed, I guess, the quantum of drilling for in-fill at Kora required for the upcoming study, where within the plane of the Judd mineralization where is focus is underground drill rigs, given the [Indiscernible] to initiate production?

Sorry, I didn't quite understand the question there, Geordie.

So, once you finish your quantum drilling, I guess on Kora, the circles street rates that you using for that for underground drilling. What area are you going to focus within Judd with those rigs?

Within Judd --

Yeah, yeah.

I think if you look at the long section, you'll be focused on going from around 50 -- hopefully around 59,200 to the size. So that's a nodding.

In terms of vertical, I would expect that we'll be targeting basically 1,000 meters RL up to basically surface.

Okay.

That will be our initial. And a lot of that basically already has -- all of it basically, already has the drill cuddies in place.

It's basically in some cases going back into those drill cuddies and instead of drilling to the west, drilling to the east, turn the rigs around 180 degrees from what we've been doing in the past. We don't have to go on open up -- or we don't have to go and develop new drill cuddies or whatever else.

The drill cuddies are all there, have already been previously developed for the drilling of Kora. I would make the point to have Kora drilling will continue to the south primarily.

There will be more infill drilling, I think, being done as well. We don't, at this point in time, plan on trying to do any of the deeper drilling.

We're really waiting for the twin incline to come through and start during the deeper drilling off the twin incline. I mean, it's sort of 300 meters below any level that we currently have operations on in the current mine.

So, between the Twin Incline is obviously going to give us the access that we want to extend at depth and keep pushing that [Indiscernible] at depth and obviously be able to actually generate a whole lot of measured and indicated from 1,000 meters down to 700 over that window. And over about 1,000-meter strike line that you're effectively trying to duplicate what you've already done, which is centered around that 1,200 RL level.

Okay. Thanks, John.

I appreciate.

Hey, John. Thanks.

I'll be quick with this one. You mentioned some incremental progress on lateral development rates on the Twin Incline, right?

Both subsequent to quarter end-to-end since May. I'm just wondering, if you have at your fingertips your outlook on CM meters per month basis on those development rates.

I'm just trying to get a sense of now versus the target rates in the PEA. And also, are you where you need to be on the number of development jumbles operating?

In terms of number of jumbos. We've got the numbers that we had planned that included getting a brand new one for the Twin Incline development.

We've -- well, we haven't obviously submitted our capital yet to the board. But there is 1 or 2 twin room jumbos for the coming year as part of the capital.

I don't think it's 2 twin room is really as part of the capital. We're looking for around 200 meters a month as the meters that we're looking for right now from the twin incline.

And we're getting back up to that having really had to stop the twin incline for the best part of two months, again, because of this COVID situation. Twin incline s themselves are looking very good.

One of the areas that we are really focused on is actually expanding our capacity, for instance, on chalk reading because we use a lot of chalk reading on the ground now. We're finding that's really effective for us internally, support and timing and everything else.

And obviously, the hole of the two Twin Inclines are in shock created. So that's the scenario I think we're actually looking to double our shock creek capacity, and we put in a big cement facility late last year -- early this year.

One of these automated batch plants. So that if I see got sufficient capacity.

I think that. We could -- we -- in looking at the next phase of expansion, we've got enough capacity on-site to actually be producing our own concrete for the installation of the plant.

So, it's a big batch plant. But I think I see just signed the CER for a new agi -- sorry, Agitated around cement trust.

People call them AG'S while I've been here. So, we'll have another one of those in the next six weeks, I believe.

That's helpful, John. Thanks.

Good -- sounds like good progress.

Thanks.

Hey, John. Well, most of my questions have already been asked.

I was about to get to the twin incline and Ralph also asked that. Maybe if you can just talk about when do you expect the twin incline to be completed, I guess that will be helpful.

Thanks.

I don't know. Is that okay?

Yeah, no. I understand --

Because I don't know how long it's going to be --

--development rates, yeah.

Look, right now, the development on the 1,200 level, or 12 just over 1,200 level, we call it 1,200, the North size development on the 1,200 level has actually gone. Right side of the mining lease.

And we're developing into exploration license. And so, we're actually setting up.

Next dual cutting actually, it's outside of the mining lease and we're already drilling some of our holes and part of our resource will be outside of the mining lease. And as we've said in the past, we believe that something like a kilometer of strike length is still outside of the mining lease that we need to be drilling.

We are looking to start drilling from the surface shortly, in the next few weeks, quite literally. But a big focus is actually to drill that from underground, and that's because the surface ounces actually don't come into a mine plan anytime soon, whereas obviously, underground ounces can.

And that's why I said I don't know, because I'm not sure how long that twin incline is going to be. If you look at it in the context of, what do we need for the next phase of expansion, Then we'll be getting to the areas that are -- Judd or Kora we'll be getting to those areas, I think by the end of next year, beginning of the following year, probably into the following year.

But then we still got another, almost 2,000 meters to get to the end of the mining lease. So, it's going to continue developing for certainly the next 4 years.

Being continually pushed further and further to the side. Obviously that contingent upon getting additional mining lease to the south, but that's certainly our plan at this point in time.

Alright, thanks for the update John. That helps.

Thanks, man.

Thank you there, Operator. Appreciate everyone's time this morning in the main part, I suspect.

From our perspective it's a great opportunity to communicate with people, tell them what -- give them some idea about what's happening on-site and give an opportunity to ask questions. This is the time of year than in previous years we've looked to have analysts and I think several of people asking questions of may have had the opportunity to be unite here or possibly would've unite here, if not for COVID.

So that ability to connect is important I think for the Company, and we certainly appreciate -- we appreciate the interest and we appreciate the questions. That's it.

Said I'm on-site and I have got to say coming on-site and seeing progress in so many areas is cost selling. And for the people who analysts who have been here in the past, and hopefully, we'll be here next year.

I mean, you just won't be able to recognize the place. It's changed so much.

development underground, the hole areas have opened up on the ground quite stunning really, the number of operating levels that we have, far larger team, fleet of equipment that just so much going on in every single area. Warehouse just up the road being tripled in size.

It's going through everything. It's the camp, all of our infrastructure, everything underground, the mining fleet, the plant.

And we got a few ideas on the plant and actually looking at another potential incremental expansion there on the plant, which we think is pretty exciting. All of this is really made possible by the team of people that we've got on site.

We've made [Indiscernible] about what we think is a -- we've got a really low turnover of people, which given the challenges of COVID, given the quarantining and all the rest of it is quite exceptional. And a team of people is what makes this Company and as what's made this mine.

So, I would like to make note and recognize really the contribution of the team of people. Support of PNG Government has been quiet outstanding over the last few years, actually, especially during this COVID.

So, thanks all for your attention. I do hope to be able to catch up with many of you.

After a week in Port Moresby, I'm heading over to Canada, and I'll be around Vancouver and I hope and looking to you into Toronto as well. So certainly, I appreciate the opportunity to catch up with people and give them a bit more detail and a bit more color as to what we've got going on.

But thank you again. Thanks very much for your time today.