Hi, good morning. Welcome to OZ Minerals' Q4 ASX Release Report.

I'm joined here today -- my name is Andrew Cole, I'm the CEO of OZ Minerals. I'm joined here today by Luke Anderson, our Chief Financial Officer; and John Penhall, our General Manager Operations for Prominent Hill.

I'd like to start out as a summary, if I could please, just by saying that I'm very pleased with the performance of the OZ Minerals team over the last 3 or 4 months. I think they've delivered a very strong quarter at the end of 2016, just helped finished the year off on a nice high note.

I think our people have done well on many fronts, especially considering that they faced a number of significant external events, including a number of severe weather events and, as you all know, a whole of state grid power failure, which hurt us for a couple of weeks in the start of quarter 4. The team delivered copper guidance, and this has been done now for the second consecutive year in line with our operating strategy.

They delivered gold production to -- in line with the revised full year guidance. Notwithstanding that, we had 15-day power outage at Prominent Hill in the second half, 12 of those days were in Q4.

So achieving guidance on both of these, I think, is an excellent outcome. Our focus on being lean continued with 2016, whole-of-year C1 costs finishing at about $0.74 per pound, which were within guidance.

And our procurement savings program saw us save more than $40 million in annualized costs. On top of this operating discipline, the growth team continued and increased the number of participants out of our partnerships in our growth pipeline, and we increased our Prominent Hill underground reserve by 40%, which extends our Prominent Hill mine life out to 2028.

We delivered the Carrapateena pre-feasibility study and started the decline into the resource. So Luke and I are going to cover these details in a relatively high level today.

So we'll go through the presentation first. And at the end of this, we'll open up to questions, which I will ask Luke and John Penhall to assist me on.

There are 2 pages of disclaimers in here. Please take note of these as we do make forward-looking comments throughout the commentary.

So let me just touch on our strategies I do on each and every call. I think we are delivering against our strategy.

This quarter's strong result, our result, with the OZ Minerals team understanding and delivering against this, we're all committed to building a lean and agile business. And as part of this, we continued to simplify our systems and processes.

We launched new policies and a new delegation of authority through the second half of last year. We've rebuilt simpler and more agile and leaner performance standards, and we're about to launch these out through the business in this quarter.

We're now working on simplifying the rest of the underlying standards that sets the minimum expectations from our assets, and these will be launched in the second half of 2017. We completed the transition to a new ERP system, so we now have -- it's running in the business.

This implementation was done exceptionally well. It was done on time and under budget.

We also rolled out a new interactive Intranet and are now all using new internal collaboration tools. We've also done all of this while keeping our overhead costs down and continued our procurement savings program.

With the devolved model using discrete accountable people, the team also delivered on all of the guidance measures. We increased the Prominent Hill life of mine to 2028 with a 40% increase underground reserve.

We delivered the Carrapateena pre-feasibility study and updated resource reserve statement. And we signed 2 new earn-in agreements in the quarter, one with -- on the West Musgrave project with Cassini Resources and one at Intercept Hill with Red Tiger Resources.

Within our strategy, we're focused on 5 pillars. So these are the 5 pillars that represent the way we are organized and the way that we focus our activity.

So today, Luke and I will touch on all of these. However, with Carrapateena, given we are only halfway through our feasibility study, we will keep our overview and commentary relatively brief today.

So let me move into some more detail on the summary. We achieved 2016 copper guidance with Q4 copper produced at about 30,000 tonnes of copper.

This was just over 3% higher than Q3. We achieved a revised 2016 gold guidance with Q4 at about 32,000 ounces, which is just over 10% higher than Q3.

These were achieved despite the 2-week state power outage in half 2. This, in my mind, does demonstrate excellent operating discipline at Prominent Hill and their ability to be agile and deal with crisis.

We ended 2016 with a stronger cash balance of $656 million, and Luke will take you through the details of this buildup. Whilst quarter 4 C1 cost was at $0.77 per pound, our annual C1 cost was at $0.74 per pound and well within guidance.

The higher Q4 C1 cost was in part due to the power outage we experienced. But as you can see, even with this, we remain very competitive.

Our procurement savings program achieved the target we set out of saving more than $40 million, which is a recurring saving now built into our contracts. Prominent Hill mine life was extended to 2028, underpinned by a new mine strategy and an updated resource reserve statement, which saw underground ore reserve increase by more than 40%.

On our growth pipeline, importantly, with Carrapateena, I can tell you that we are on schedule with the board expecting to see an update on the feasibility study in early quarter 2. We entered 2 new earn-in agreements in quarter 4, bringing the total number of earn-in agreements now to 6.

West Musgrave project, which we signed in October of last year, has commenced with a revision of the scoping study. This will examine the possible pathways to commercialization.

And more recently, in December, we signed a new deal with Red Tiger Resources at their Intercept Hill project adjacent to Carrapateena. On safety, our total recordable injury frequency rate, unfortunately, increased to 6.7 from quarter 3 when it was 6.3.

The prime contributor to this increase was the Prominent Hill underground operation. Whilst the total recordable injury frequency rate has slightly increased, the improvement plan we launched in quarter 3, focused on improving leadership capability, has made good progress.

Byrnecut have engaged external support to assist them, principally focused on behaviors and engagement. As a result of this program, we have seen a reduction in high potential incidents and total injuries, but this improvement hasn't yet flowed through to the injury frequency rate.

We expect to see this improvement as we move into 2017. On a more positive note, many OZ Minerals departments and contractors at Prominent Hill ended the year recordable injury free.

And I'd just like to call out a few of these in recognition of the good work that they are leading. These companies include Thiess, Cube Bulk that includes Boart Longyear, Sodexo, SGS and Orica.

And of particular note, Orica has achieved 10 years working recordable injury free at Prominent Hill, a fantastic achievement. Additionally, the Carrapateena project has got off to a solid start with 0 recordable injuries recorded in the quarter.

More broadly, across other projects, the community consultation for Carrapateena continued in the fourth quarter. We signed a landmark partnering agreement with the Kokatha Aboriginal Corporation, the traditional owners of Carrapateena, witnessed by the South Australian Premier at Carrapateena.

So I'd now like to hand over to Luke to take us through the cash position, and then I'll come back to the operating elements.

Thank you, Andrew, and happy New Year to everyone on the call. I'm happy to announce a significant increase in our unaudited cash balance from $509 million last quarter to $656 million as at the end of December.

As indicated at the last quarterly announcement, the large trade receivable balance has reversed in the December quarter to more normal levels. Ore inventory increased for the quarter by $54 million with accelerated mining at the open pit, as planned.

On an annual basis, our cash balance increased by $103 million, reflecting a strong net cash generation of $230 million. And in addition to the increase in our cash balance, we have also invested significantly in executing our growth strategy.

Prominent Hill ore inventory has increased by $209 million, of which $73 million reflected a direct cash investment, with the balance being the capitalization of noncash depreciation cost in the inventory. $46 million was spent on developing the Carrapateena project, with major expenditure on the pre-feasibility study, the decline and some long-lead items.

As previously announced, all Carrapateena costs were capitalized from 1 July 2016. We incurred $14 million on exploration and corporate development to expand our growth pipeline.

And we also paid $61 million in dividends and spent $30 million on the share buyback. A total of 4.8 million shares have been bought back at an average price of $6.23 per share.

An additional 10,000 ounces of gold were hedged in the quarter, bringing the total amount of gold in the ore stockpile hedge to around 200,000 ounces at an average price of AUD 1,713 (sic) [ AUD 1,731 ] per ounce. These contracts mature in the period beginning quarter 3 2018 through to quarter 3 2021, which matches the period over which the ore stockpiles are expected to be processed and sold.

Looking forward, we will shift into a tax payable position in 2017, with cash payments to commence in the second half. Cash tax payments in 2017 will reflect both the 2016 full year provision, including a part reversal of the deferred tax liability and a half year installment for 2017.

As a result of these cash tax payments, we will have the ability to pay fully franked dividends in 2017 should that be decided by the board. In summary, 2016 has been a very successful year where capital discipline and a focused operational approach has delivered a stronger cash position while investing significantly in the future of the business through the Carrapateena project, the growth pipeline and the buildup of ore stockpiles at Prominent Hill.

Now moving to the sales performance. During the fourth quarter, we sold 29,098 tonnes of copper and 25,637 ounces of gold, which brings the total copper and gold sold during the year to around 112,000 tonnes and 110,000 ounces, respectively.

2016 unaudited net revenue is expected to be around $820 million. Net revenue generation benefited from a high copper price in the last quarter, with our copper hedging policy locking in the copper price at the time of shipment of concentrate.

We continue to experience strong demand for our concentrate from existing long-term and new customers. Our concentrate parcel customization strategy, utilizing multiple ore sources, continues to work well, with specific concentrate parcels being made for our customers.

This ensures that the concentrate quality is matched with customer requirements and seeks to optimize our realization cost. I'm pleased to report 2017 and 2018 sales are fully allocated under long-term contracts.

Now I'll hand back to Andrew.

Thanks very much, Luke. At Prominent Hill, open pit generally performed well throughout the quarter.

The team displayed very good capital discipline, with all the key physical and cost guidance metrics achieved for the year. The strip ratio decreased from the prior quarter with a full year ratio at 1:1, as per the guidance we issued over a year ago.

Waste material movement of 2.9 million tonnes was in line with the prior quarter. As an improvement initiative, which I'll touch on, on the underground, the open pit team moved an additional 233,000 tonnes of underground ore and waste, which they rehandled at the bottom of the open pit, and I'll touch on that again shortly.

In Q3, we installed and tested life of mine pit dewatering infrastructure, which we successfully used in quarter 4 to minimize the impact of the high-volume rainfall event that we had in December, which saw some nearly 90 millimeters of rainfall in a short time. Implementation of a single-lane ramp is now underway as part of the pit design changes we announced in the Prominent Hill 2016 mineral resource and ore reserve.

This will enable open pit to access an additional circa 2 million tonnes of ore that is now built into our base plan. Looking forward, we are planning for the next open pit fleet demobilization, which is expected to occur in the second quarter of 2017.

We will see 5 open pit trucks demobilize, leaving a final fleet of 12 trucks. The open pit will also start using a smaller-scale primary excavator.

The team's commitment to continuous improvement will continue. We are going to trial a small-scale powder factor trial to improve mill throughput rates.

In the quarter, underground operations delivered high-grade copper ore of 597,000 tonnes at 2.13% copper, with annual ore production within the guidance range. This was slightly lower grade than last quarter, which was 2.29%, but above what we guided last quarter.

Annual ore production achieved guidance with 2.14 million tonnes. Ore tonnage mined was the highest on record for the underground, despite the power outage impact.

This is partly due to the utilization of the third decline we installed in the bottom of the open pit. This third decline, however, has now been converted to provide long-term ventilation infrastructure for the underground operation.

The team's agile response to the power outage limited the impact on the production profile. Now the few initiatives that they used to do this included rerouting site power, installing temporary power generation and a focus on ore production and short haul to open pit.

The longer permanent second decline is progressing well, with just over 700 meters now developed, with completion scheduled for quarter 3 this year. There were a number of continuous improvement initiatives completed in underground in this last quarter: our process improvement in stope blasting, which saw a number of firings per stope reduced, and fragmentation improved; the paste plant infrastructure augmentation was successfully implemented, which saw an 18% reduction in cement needed.

As I've already mentioned, the third decline established in the bottom of the open pit late last year also allowed us to dump underground material short and haul this with the larger open pit fleet to improve efficiencies and reduce costs. Looking forward, a number of infrastructure improvements and cost-reduction initiatives are planned for 2017.

Shotcrete costs should reduce by sourcing an alternate aggregate, for example, and the design of the underground pump station has improved, which will -- should see us a 10% reduction in expected capital, which is planned for implementation in the first half of this year. On the processing plant, the plant performed well, with metal and concentrate guidance achieved, supported by increased head grade and recoveries.

Quarter 4 copper content in concentrate was about 48.9%, which was higher than Q3. The recovery rate at 87.5% for copper and 74.6% for gold were both higher than quarter 3.

We milled 2.3 million tonnes of ore in the quarter, slightly lower than Q3, which can be attributable to the power interruptions which saw us lose almost 300 hours in quarter 4. For perspective, for us, while the power outage is not good by any means, it presents more a lost revenue opportunity than anything else.

We're able to turn our plant off and on relatively quickly without major remedial cost implications such as those experienced, for example, by our smelter. Our team at Prominent Hill responded quickly, and we're able to mitigate the effects safely, effectively managing the site and the ore that we ultimately did process.

The area of most significant impact for us was processing where we lost a total of 15 days over the half, 12 of which were in quarter 4. Whilst we're talking about power, we spoke recently about developing our power strategy, and that is taking shape.

It does cover price and it does cover security of supply. We are currently working with one preferred supplier, and we will provide more information on the power strategy once it's vetted down.

For the quarter, the plant run rate was in excess of 10 million tonnes per annum, just after adjusting for the power loss. Separately to this, we also completed an independent plant maintenance audit.

This highlighted strengths associated with safety, organizational structure and long-term planning. It did also highlight some opportunities for us, including on procurement, work planning and the use of technology.

We also completed the corrosion audit, which identified an opportunity in preventive works and flagged some minor trade reductions. The repaired SAG mill girth gear has continued to perform well, with ongoing monitoring programs in place to confirm sound performance of the repair.

A replacement girth gear is stored on-site, with contingency plans in place should a change-out be required. Over the 2016 annual ore tonnage mill was lower than 2015, reflecting the impact of the 2 events that I've already mentioned, one being the power outage, the other being the SAG mill girth gear.

I'm now going to hand over to Luke to take us through cost performance at Prominent Hill.

Thanks, Andrew. Despite a number of challenges throughout the year, which Andrew has already discussed, we have successfully delivered a C1 cost of USD 0.74 per pound, being within our full year guidance of USD 0.70 to USD 0.80 per pound.

Our Q4 C1 cost of USD 0.78 per pound reflects a consistently strong performance despite the power outage, where we managed to largely mitigate the cost impact. However, the result was higher than quarter 3 due to high mining costs reflecting increased activity, a smaller waste deferral due to lower stripping ratio, which was partially offset by a larger inventory adjustment with more ore mined.

Processing costs were lower as there was no planned plant shutdown incurring maintenance cost during the quarter. In managing the power outage, we maximized copper production from stockpiles to the detriment of gold production, which resulted in lower gold by-product credits and high C1 costs.

The old lane produced a concentrate which did incur higher commercial and transport costs due to the custom mix supply during the quarter. We have achieved a year-to-date all-in sustaining cost of USD 1.15 per pound, which keeps us well in the lower end of the cost curve.

Open pit mining unit cash cost in quarter 4 of $6.25 per tonne was slightly lower than the prior quarter, with an increase in tonnes mined, reducing unit fixed cost component and reflecting better improvement in efficiency being achieved. The stripping ratio was lower at 0.7:1 compared to 1:1 in quarter 3, and we have continued to mine ore at low cash cost of around $11 per tonne.

Underground operating cost of $50 per tonne mined were lower than the prior quarter with more tonnes mined. The full year cost of $53 per tonne was within guidance of $45 to $55 tonnes mined.

Our cash -- our cost-savings initiative has locked in excess of $40 million of the targeted annualized savings communicated previously. The full impact of these savings will be realized this year.

Ongoing cost-savings initiatives will be embedded in our lane culture and procurement processes. So this ongoing cost focus at Prominent Hill is well-positioned to continue to operate in the lowest quartile of copper producers going forward.

So with that, I'll hand back to Andrew.

Thanks, Luke. Let me turn briefly to Carrapateena.

Carrapateena, as you all know, is our internal growth project. In summary, the project studies and decline are going well and are on schedule.

Through the quarter, we released the PFS with project metrics improved or in line with the scoping study. And just to reiterate, the PFS increased the annual production rate to circa 61,000 tonnes of copper and 63,000 ounces of gold per year with a mine life of 20-plus years at an annual estimated run rate of 4 million tonnes per annum.

Our confidence has grown in the project economics. The feasibility study is underway and will deliver increased level of detail and definition for the project.

The CTP is undergoing a parallel study process. We also upgraded the mineral resource estimate to a 46% measured classification as a result of the 2016 half 2 drilling program.

This updated mineral resource forms the basis for the feasibility study, which is currently underway. Tender packages for the engineering, procurement and construction of the processing plant were issued in Q4 with keen interest shown by the market.

Feasibility level engineering of the CTP continued and has now progressed to the cost estimate phase. We've also preserved optionality and flexibility for the final location of the CTP, which we'll talk more about going forward.

Following the release of the PFS and in line with the agile approvals methodology we have adopted, the board will make a decision on the next phase of the project in early quarter 2. At the Carrapateena site itself, we held an official opening of the Tjati Decline with the Premier and Kokatha in early November.

The decline is well underway now with 450 meters completed. The team's commitment to safety is yielding positive results with no recordable injuries in Q4, as I mentioned previously.

The unaudited expenditure for quarter 4 relating to the Carrapateena project is about $19 million. As previously mentioned, all Carrapateena expenditure is being capitalized from the 1st of July, 2016.

Lastly and importantly, we signed a partnering agreement with the Kokatha Aboriginal Corporation late last year. This is a landmark agreement for us both and defines the way we will work together going forward.

We've also held community consultation sessions on Carrapateena in preparation for the mining lease submission, which were well-attended and well-received. The preparation of the approval submission to the state and federal governments are progressing very well.

Let me move now to other aspects of our growth pipeline, starting with West Musgrave project. So West Musgrave is one of our newest joint ventures with Cassini Resources, which we signed in October of 2016.

The project encompasses 2 resources, Nebo-Babel and Succoth, and many exploration targets. We committed AUD 3 million over 12 months to determine a pathway to commercialization.

The work we are undertaking currently is largely focused on the metallurgy and the operation scale, which will also look at infrastructure such as transport, power and water costs. An initial 670-meter, 5-hole PQ metallurgical drill program was completed in the fourth quarter.

Metallurgical test work will commence this February aimed at optimizing metal recovery for both nickel and copper to the various ore types present in the Nebo-Babel deposit. It will also focus on optimizing flowsheet options and updating the metallurgical model.

Field activities are due to recommence in late March on-site, with infill and extensional drilling at Nebo-Babel, which is an immediate focus to enable further resource delineation as part of the scoping study review work we're undertaking. Some exploration drilling was also undertaken in the core fourth quarter.

We started at the Babylon prospect, which forms part of the Succoth deposit, and at One Tree Hill prospect. Drilling at the One Tree Hill targeted an off-hole EM conductor and intersected a significant sulphide zone hosted in magmatic style mineralization, similar to Succoth and the Nebo-Babel deposits.

Mineralization remains open in most directions, and further geophysics and drilling is warranted. And on the slide, you'll see the types of lengths and grades, which we hit in these drill holes.

It's these types of results which suggest to us that we are in a new district and that if we can commercialize the Nebo-Babel resource, we will likely see other resources defined. At Babylon, a 792-meter deep hole was drilled to test for the primary source of remobilized nickel intersected in near-surface historical drilling.

However, this hole failed to intersect the mineralized host rock, suggesting a change in the plunge of the host intrusion. The source of remobilized nickel remains unanswered, so downhole geophysics will have to more than likely assist us in further targeting.

Let me just touch on a couple of our other partnerships. At Mount Woods, 5 drill holes have been completed with our partner, Minotaur, targeting ISCG style mineralization.

At 2 prospects, Jupiter and Bellatrix, we did see this style of mineralization present in drilling. We did not see similar mineralization at the Orion prospect.

The results overall were mixed with no compelling follow-up targets identified. Further analysis of the exploration database is required before we can agree next steps, which we will come back to you on further.

Our partnership with Minotaur in Queensland at the Eloise project has been quite encouraging. We drilled 6 holes to test the Iris copper-gold system.

All holes intercepted sulphide rich breccias and stringer zones. And infill EM program was also completed in parallel.

It defined a significant conductor at the Electra deposit. The next steps in late Q1 or early Q2 2017, after Queensland's wet season, we plan to drill the Iris copper-gold system further and test the Electra EM anomaly.

On a couple of other projects, at Coompana in southwest South Australia, target generation will be undertaken by our partner, Mithril Resources. We're focused on re-logging drill core located in South Australia core library and interpretation of existing geological data sets.

This work will be further refined when the high-resolution geophysical surveys sponsored by the South Australian Department of State Development and the 12-hole drill program sponsored by the PACE Copper, in conjunction with Geoscience Australia, is completed in the first half of this year. At our Yandal One project with Toro Energy, we drill-tested a 2.4-kilometer-long target, testing historic shallow drill holes that intersected what appeared to be nickel-bearing ultramafic grading up to 0.45% nickel.

Our drill holes confirmed that the rocks are ultramafic and that the stereotypical spinifex textures are present. We will share more on this project once the data has been analyzed.

In Jamaica, lastly, in line with our commitment to capital discipline, we withdrew from all our exploration interests in September and in Q4. We continue to work with our partner to ensure the smooth transition of ownership of the project.

So before I wrap up and move to questions, let me just recap the key messages. The copper guidance was delivered for the second consecutive year.

Gold production was delivered on the revised full year guidance. Notwithstanding that we had a 15-day power outage at Prominent Hill in the second half, I think the team have done exceptionally well to achieve these outcomes.

Our focus on being lean continued, with 2016 whole-of-year C1 cost finishing at $0.74 per pound, which was within guidance. And our procurement savings program saw a stable $40 million in recurring annualized costs.

On top of this operating discipline, the growth team continued and increased the number of partnerships in our growth pipeline. We increased Prominent Hill underground reserve by 40% and therefore the Prominent Hill mine life out to 2028.

We delivered the Carrapateena pre-feasibility study and started the decline into the resource. This leaves us with a stronger balance sheet now with cash at $656 million and, of course, no debt.

In the release and the webcast, you will note that we have given guidance for 2017. I don't have time to go through all the details on this, but you will see the details contained at both packs.

As you can see, we have maintained 2017 copper guidance and increased copper guidance for 2018 and 2019. As I have mentioned before, we prioritize high-margin copper so that copper increase will come at the expense of low-value gold ore.

You will see that the 2017 guidance C1 cost has also slightly increased, which is largely driven by volume [ph]. You will also note that we are, for the first time, providing guidance to all-in sustaining cost.

You will find some additional information on depreciation and how all-in sustaining cost is calculated at the back deck. So we'll now move to questions.

And I've got, as a reminder, John Penhall, the General Manager Operations at Prominent Hill; and Luke Anderson, our CFO, here with me. Operator, can you please remind people how to ask questions?

I've got a few small questions, please. First of all, with respect to guidance for calendar '17, what are the underlying parameters that have changed that have seen gold guidance actually reduced and copper not increased?

I understand that you've got a fixed milling capacity, but implicit in that reduced gold is, I guess, a lower copper grade than you previously assumed. I'm just trying to understand what those parameters might be that drove that change.

Yes, Mike, I'm going to ask John to cover off on some of the details. There's a few contributing factors here to do with plant assumptions and just sequencing and timing.

But I'll throw it to John here to give you more details.

Thanks so much, Andrew. Michael, obviously, at the end of last year, we announced a new mine plan for the underground, and that came in new resource reserve.

We've also obviously changed their design in the open pit, and that's allowing us to leave us an extra ore tonnage over the next 18 months into our processing plant. So there's going to be, obviously, that new inputs into our plant.

We obviously then have a new milling profile, a new marketing plan that's associated with those -- that new building plan. So it's going to be a combination of those 3 things that come together, which gives us some of those changes in parameters.

And obviously, we are going to keep prioritizing our copper ore, which, in turn, will mean that as we do that, then that will be where our focus is in optimizing our plants. So that feeds into the guidance in golds for next year.

Okay. I'm not sort of any clearer really.

Has your expectation of throughput changed or your expectation of grade changed, or is it both?

Look, most of our expectation around the change will be through around a little bit in throughput, but it's mostly around how we're focusing our plant on recovery for copper and on the blast site for gold. So that's where most of our change comes in our thinking for gold for next year.

Okay. Second question, with respect to the underground CapEx, when we sort of think beyond this year, recognizing that there's -- a portion of your underground CapEx is development decline and so on.

But when you go from that 2.3 million to 2.6 million tonne rate to the 3.5 million to 4 million tonne rate, how should we think of that CapEx compared to guidance for this year of $45 million to $55 million?

Michael, we're not guiding capital at that level. What we've said before is that we have front-ended our capital reasonably substantially last year to actually start developing our Malu Underground to get the infrastructure in place.

So that's what we said before to you. And I think that largely holds true.

So without giving guidance on capital for future years, we don't expect to see big increases in that because we did front-end the development to get us up to that 3.5 million to 4 million tonne rate. So in a nutshell, we'll see the numbers coming down, but I can't give you numbers.

Okay. And then finally, I guess you alluded to the power situation in South Australia.

Can you give some sort of indicative guidance, perhaps what the delta is between the rate you're paying now and what market rates are, so we can get an idea of what the cost impact might be when power is reset?

I'll just see if -- I don't have the number off the top of my head. Look, we've actually -- it increased a lot.

So when we released the guide, Michael, and to give you a point there, when we released the PFS for Carrapateena, you will note that the plant operating costs went up. That was entirely driven by our power assumption.

So we increased the power assumptions of Carrapateena substantially, and we have done exactly the same thing for Prominent Hill. So I can't remember the number exactly, but it's almost twice, I think, is the assumption we've used.

So I think it's almost double what we were paying for power. It's our new base case assumption to maintain some conservatism, if you like, over the longer term in our strategy in place.

And also, Michael, it's Luke, just to confirm that we don't have the impact of that until the second half. So we have pricing fixed in the first half of the year.

My first question is just carrying on with the guidance theme. Just with 2019, could you talk about why copper guidance is up 25,000 tonnes?

That was the first question.

Well, I'll talk -- I'm going to hand it to John. But you need to remember, Lyndon and Michael that the mine plans that our previous guidance was set on is completely different to the mine plan we issued as part of the new resource reserve statement in the last year.

So if I -- we increased the underground reserve by 40% at the end of last year. Now that required a complete re-sequence of the entire underground mine.

So it's actually -- this is not an incremental change; it's a wholesale change in the way the mine is designed and built and operated. So that's the context.

You're not looking at incremental changes. John, is there anything you want to add?

Probably also a little bit more detail into that. Obviously, with the change in mine plan, what we're seeing is that our copper ore will continue to grow over the next year or 2, and we see that flowing to 2019.

So on relative terms, we'll process more ore through the plant than we previously would have, and our goal will push it there. And our head grade for copper ore and our copper head grade in 2019 increases in relative terms.

So that drives up some of that copper guidance.

So I think what we also said before, Lyndon, with the previous reserve, we could not hold the 3.5 million to 4 million tonne run rate very long at all. We just didn't have the mining inventory to hold it.

So we actually saw stockpiled material coming in much sooner. With this new reserve, we actually hold the 3.5 million to 4 million tonne run rate for the life of mine.

So we pushed stockpile ore out further, which means that lower grade, so we actually get the benefit of higher grade underground material for a much longer period of time. So that has a material bearing impact on your -- the guidance we issued, I mean, the copper we produce.

And those come at the expense of gold because we're not pushing through the gold ore as quickly.

Okay, great. And the next question I had was just on West Musgrave.

I think there's a $36 million potential program there. Can you talk about the time frame and sort of what the works program looks like?

And generally, how you're feeling about the feasibility of the operation at this early stage and a bit more detail, if that's possible?

Yes, sure. So right now, all right, I think it was November last year, we satisfied the CPs on the earn-in agreement.

During that stage -- so what that bought us was 12 months, and we were obligated to spend $3 million reviewing the scoping study that Cassini has built for the Nebo-Babel project. So that project is currently underway, and that is -- the work we're focused on there is metallurgy and annual throughput rate, effectively, for project scope.

And sitting underneath that, of course, comes infrastructure, et cetera. At the end of this year, I think it's November, we need to make a decision on whether we opt in to a pre-feasibility study or not.

If we don't think there's a project there, we opt out, and we will have spent $3 million on assessing the opportunity. If we decide to opt in, we will be committing $15 million to a pre-feasibility study.

That pre-feasibility study then has another hurdle at the end of it. If we want to opt in, I think the PFS buys us 51%.

So at the end of the PFS, we have 51%. At the end of that, if we decide to opt in, we will then move to a feasibility study, and that will give us 70%, and I think that will take us up to the full $35 million.

So there's 3, from memory, stage cases in here where we have an opportunity to opt in or opt out for a total spend of $35 million to get us 70%. And I think that takes -- that's a 3-year time line, I believe, to get us to the end of that.

Luke, anything else you want to add?

No.

Is that clear, Lyndon? Sorry, I waffled a bit there.

Yes, that's a great. And then I guess the final question was just, in terms of the buyback, it seems like you guys have spent maybe less than what I was forecasting.

Is there any reason that's sort of slowing that down?

It's not so much slowing it down, Lyndon. It's more of dodging blackout periods.

So there are blackout periods which you know about, which are very public. They are a part of quarterly releases and announcements, et cetera.

There are also other blackouts which we still can close when we get advanced on conversations around partnerships and DD and things like that. So it's more just making sure that we can do this cleanly and that we don't have knowledge that we shouldn't be buying our own stock in.

So our commitment is to become -- to make complete the buyback program. It's just picking the time we can do that.

Just wanted to understand a bit more about how exactly you achieved from the throughput rates within the mill. It appears that you've concentrated less on the high grades and more on mill throughput.

Can you just walk us through how the team managed to get the result that it did during the period, first of all?

Sure. I'll ask John to talk you through that, Dylan.

So obviously, during the period, the key focus was on two-fold [ph]. Certainly, as you'll see from the mine grade that's gone through, there certainly was an emphasis to make sure that we had appropriate copper grades going through.

And when we're running the plant, obviously, what we're trying to target is to make sure that our throughput is maximized in all facets. So we did a few things in that space.

We trialed doing some pre-crushing in December for some of the harder ore types to see what they will do to our throughput. And that just flowed on there, went to a trial in our open pit in Q1 in regards to a powder factor trial for one of those ore types as well.

That's about our continuous improvement program ongoing into the future. But again, it's been about our team coming together and recognizing the different ore types working in with our ore sources and maximizing efficiency of our plant.

Dylan, can I just add one thing to what John said? The run rate the mill has been operating at in the last quarter, excluding the power outage period, is about what the mill was running at previously.

It's just that in the middle of this year, we had some challenges with the girth gear, which we did slow the plant down to make sure we didn't do any catastrophic damage to the mill. So I'd say the mill is back up and running where it has been historically and where it should be.

It's just that we have slow spot in the middle of the year. But the work that John just described, I think, is pretty innovative in a way.

We know we've got some harder ore types, so pre-crushing relatively cheaply some of those harder ore types actually allows our mills to work more efficiently and increase our throughput rate. So I wouldn't call out the throughput rate now as being exceptional.

I think it's just where it should have been before and it was before we had the mill issues.

Okay, that's great. Do you mind if I'd just move to the costs?

I can just see that your underground guidance for '17 is, what, $50 to $60 a tonne. Just want to get more of an understanding around how some of these cost initiatives that you're flagging of $40 million in procurement sort of moving through the underground and where exactly we can see some savings.

Andrew, you mentioned some of the lower shotcrete rates moving into next year. Just want to get a bit of a handle on how you've come to that guidance range and where some savings might be?

Who wants to answer that, John or Luke?

Look, I think, firstly, on the cost savings, so they're sort of right across the business, so right through from the commercial end and right through the mining operations. So they are just sort of broad in nature.

In terms of the underground unit mining costs, I think there is increased activity happening in the underground. And also, at the beginning of last year, we also reviewed the way we were splitting operating and capital costs underground operation.

And what that tended to do was push more operating costs to the underground versus capital.

You'll see that the capital numbers have come down compared to where they were to help -- so you need to look at the capital and the operating together to get a full picture for the underground. We maintained, Dylan, a long run sheet of opportunities that are not baked into our numbers because we don't have the data or work done to actually quantify the benefits, if you like, to build into our guidance.

So -- but that's just an operating discipline that we need to have. So there are a number of things that I played earlier that's on John's list to improve.

I can't give you numbers yet for what they will mean because we haven't done the work to actually do that. But as Luke said, the $40 million, there is a whole raft of contracts, some of which benefit the underground, some of which don't, which they have come from.

And we're going to continue that program. So we haven't actually set a number or set a target this year, but we are going to continue our cost savings program.

Okay, cool. Sorry, just in light of your annual mine planning cycle and life of mine valuations, when was the last effective cut of that run for the underground?

That was last year as part of the process to release the updated resource and reserve figure. So when we released the 40% upgraded underground reserve that was a bottom-up complete process.

Okay. And so these numbers are all reflective of exactly that cut?

Yes, that's exactly right. Yes.

I just wanted to turn to Carrapateena. Just in terms of the CTP site selection, what time frame are you expecting that to be bidded down, like in terms of how much can we delay that decision until it starts delaying the overall project time line?

Yes, sure, Sophie. The CTP location is not critical to the work that we're doing on CTP.

We're actually running a couple of options in parallel. So keeping the optionality for the final location of CTP open is important to us.

And we're certainly nowhere near the front where we need to make a call on location to ensure we deliver the schedule for CTP. So keeping some parallel studies going so we can weigh our pros and cons for the various locations is important to us.

And some of these locations are still in commercial negotiations as well, so we need to protect the commercial sensitivity of these. So right now we're fine.

And we'll probably bring you another update on, say, in early quarter 2 when we talk about feasibility study. That's the next logical time to do that.

Just a question from me on grade, pretty good feed grades for the quarter. Just how -- I'm just wondering how you reconcile that with what you mined.

I understand there's likely to be some stockpile moments in there as well. But now if we're looking at 3.2 million tonnes at sort of 0.96% from the pit and then another 600,000 tonnes at 2.13%, if I kind of weight those together, I get a number about 1.1%, 1.15%, yet you treated 1.46%.

Just wondering if there's some extra high-grade stockpiles or something around or if it's just a quirk of the numbers. Can you reconcile that cost for the grade for us a little bit, please?

Yes. John will answer first.

Absolutely. So Paul, look, it is purely simply the availability of the ore we had at the time.

So with our focus during the blackout period, we're able to push out stocking ore, which meant that we're able to certainly bring out a lot of our higher-grade underground ore during those initial couple of weeks. We weren't able to do much development at all, which meant that there was a real kickstart for our processing plant once we got that back up and going.

That, combined with the highest-grade elements that we're mining out of our open pit, offer our stockpiled produced the result that we see.

Right. And if that's what you mined during the quarter, though, that will be captured in that 2.1% copper grade underground material, right?

And like I said, if I put those 2 numbers together, I'm a long way short on -- to suggest there must have been high-grade material coming off a stockpile somewhere?

There's always the element of some of our stockpile material that we have. But as we say, when we're looking to push our material through, what we do is we obviously feed the highest grade we can in line with our marketing plan to deliver what we do for each quarter.

So that's certainly what we went through and did during that period of time. I'm not quite sure where else I can take you with that, Paul, at the moment.

Paul, perhaps, what we can do is give you a call after this to help you reconcile the numbers. But what I think when we talked about the power outage and the implications of that last time, we did put in, as John said, a number of actions to help set us up for success once the power restarted.

And that included pulling out higher-grade ore out of Malu and bringing it in to the bottom of the open pit and stockpiling that, which we then used to get us up and running quickly after the power outage. So if you haven't quite got the numbers working, perhaps we're going to call after this and we can take you through it.

Yes, you better.

Luke, 4 questions. Firstly, thanks for your update on tax.

That's very helpful for 2017. I just want to ask about franking.

You commented that franking was available from 2017. So do I take it that the second half dividend, if there is one for 2016, no franking is available?

So any dividend that we declared in this year can be franked or has the ability to be franked.

Got it. Great.

Secondly, in the guidance sheet, Page 24 of the presentation pack, the Carrapateena study costs are captured where? Is that in exploration line?

No. So we haven't separately -- I mean, we basically assume Carrapateena is announced separately, so -- and that will obviously continue to evolve as we progress the studies.

So it wasn't included specifically in the guidance table.

That's okay. And next question, the comment about the cost reconciliation quarter-on-quarter and the bar there which nearly is the biggest negative quarter-on-quarter for TCRCs and transport.

Just want to understand your comment, you said there was just more about the different economies of scale or the packages that you sent than any specific change in TCRCs?

Yes, look, it really goes back to the customer mix that we delivered during the quarter, so the ore and the concentrate that we have available. And so that then affects the location of the customer and some of the other commercial costs that we realized on that ore concentrate.

Okay. And lastly, probably more accounting quirk.

And if it's too minute, I'm happy to move on. But the depreciation comment you made about the ore from the open cut in the inventory this year, just how that plays out in the financials this year, is there anything that we need to know about that?

Or is just the details in the text sufficient to get a grasp of that?

Look, we'll probably give you some more guidance on depreciation as part of the annual result presentation, given it's quite complex. But generally, the depreciation number is being capitalized into inventory as we stockpile more ore, and that alone winds as the stockpile is processed in 2018 and beyond.

So as a general thesis, that's the case. But we did -- there is a Page 31.

We did give you a little bit of a guidance for depreciation specifically for 2017.

All right. Thanks very much, operator.

That brings us to the end of the hour. Thanks to everybody who joined us on the call.

If you've got questions after this and you'd like to get some answers, please come in to Tom Dixon, and he will pass the questions on the relevant people who'll get some answers as quickly as we can. Thanks very much, everybody.