Good morning, and welcome to everybody who's joined us on the teleconference and webcast this morning. Today, I'm joined by Luke Anderson, our CFO; Bob Fulker, our Chief Operating Officer; and Brett Triffett, who is the Project Director for the CTP project and formerly, the Carrapateena project.

Today, I'm going to cover two broad topics. The first thing I'm going to talk about is our quarter 1 progress report on the core OZ Minerals activities, and then I'm going to continue talking about the Carrapateena project.

And today, we have brought forward the announcement which was previously scheduled for the 28th of April. So on Carrapateena and CTP, I want to take a moment to outline why we brought this update forward.

The Carrapateena project is proceeding quickly on many, many work fronts, and I'm pleased to say that the non-mining work packages are largely at feasibility study level of definition, and we've identified a way to accelerate them into the commitment phase using the ECI methodology, which I'm going to come back to a little bit later on today. But the mine design and mine scheduling package, which is probably the most complex piece of work, is not yet this mature and requires further optimization.

I'm pleased to say, the project economics and schedule, which has commercial ore production in the second half of 2019 scheduled, remain as published in the pre-feasibility study which we issued in November of last year. And given the board's confidence in the project, the board has approved further funds, taking the Carrapateena and CTP project expenditure up to $90 million as of from the first of July 2016 through to the next expected board review and commitment phase in quarter 3 of this year.

By quarter 3 of this year, we expect all Carrapateena packages to be at a feasibility study level of definition and ECI packages ready to execute. On our last call in February, I did say that in line with our agile and lean approach, we are going to make changes to our projects and plans where we see a better way, a cheaper way or a safer way of delivering them.

Our decision to move to an ECI process is entirely consistent with this. And due to requirements of commercial sensitivity in the ECI process itself and with the mining study optimization work still required, we brought forward and abbreviated the content of the announcement previously scheduled at the end of this month.

So today, I need to cover a lot of ground. So I'm going to be my comments on some of the topics here quite short so we can leave time for questions.

There are two pages of disclaimers, so please take note of the disclaimers on the forward-looking statements. Let me turn to our growth strategy.

Delivering against our strategy to create value by leveraging agility as one of our cornerstone focuses is very important to us. This last quarter, we rewarded shareholders with a $42 million franked dividend and built additional ROM and concentrate inventory.

Prominent Hill recovered very well from a wet first couple of months. In fact, I think they had half their annual rainfall in just a couple of days.

They've also delivered the metal expected in line with our internal budget. The team also celebrated two months injury-free, demonstrating that the improvement plans they've put in place last year are effective.

Development of the underground continued, with the second decline on track for commissioning in Q3 of this year. We rolled out simpler performance standards to help make the workplace simpler, safer and eventually more productive.

We published a combined annual and sustainability report and are on track to develop a fully integrated digital report for 2018. On Carrapateena, in addition to what I've already mentioned, we significantly reduced the top three project threats, which were namely, power, water and capability.

And on CTP, in line with our focus on local benefits and customer focus, we've now settled on a new CTP location near Port Augusta. Within our strategy, we are focused on five pillars.

These five pillars represent the way we are organized and the way we focus our activity. Today, Luke and I are going to touch on all elements of these five pillars to varying degrees.

The new addition to this slide are the two earn-in agreements that you see highlighted in the red box on the right-hand side. As a summary to our quarter, Prominent Hill operational performance is on our internal budget and on track to deliver annual guidance.

Production was impacted by heavy rainfall, but most of that lost ground has already been made up with copper and gold and costs back on track. Additionally, our internal budget has production ramping up from Q3 as the second permanent decline breaks through to give us 2 permanent underground haul routes.

The current restriction of 1 underground haul route we think about is bottleneck we have in the underground mine. On our power strategy, we're making very good progress, the detail of which Luke will take you through shortly, but just a couple of highlights.

We've signed an 18-month power pricing agreement for Prominent Hill from mid-2017 and we've signed a Transition Connection Agreement that secures transmission of power for Carrapateena from the grid. I've mentioned the ECI process now adopted for Carrapateena.

We've also made considerable progress in many other areas, which I'll cover in the Carrapateena section of this presentation. I'm also very pleased to say we've signed two new international earn-in agreements this month, one in Portugal and one in Mexico, bringing our earn-in pipeline now up to 8 projects, and I'll summarize both of those a little later in the presentation also.

On social performance, this is a new slide that we're going to use going forward. It covers safety, it covers our people and our external stakeholders, and it's meant to be more holistic than just a safety slide, but let me start with safety first.

Pleasingly, our TRIFR rate has decreased, and I'm also pleased to say that Prominent Hill celebrated two months injury-free recently, which I was very pleased to see, and I think is a good result given the hard work they've put in last year, putting in place a new safety improvement plan. With regard to our people, we have increased our focus this year on building leadership capability with a significantly increased focus on behavior.

This is a journey that we believe will help take us at the next level of delivery. On external stakeholders, discussions with the Kokatha people are progressing well and we are well-progressed on agreeing an NTMA for Carrapateena.

The Carrapateena formal approvals process has also commenced, which we'll come to again shortly. But for now, I'll hand over to Luke and ask him to take you through our cash position.

Please.

Thanks, Andrew, and good morning to everyone on the call. I'm pleased to advise that we've maintained a very healthy unaudited cash balance of $594 million as of the end of March.

The end of quarter cash position represents our ongoing disciplined capital approach focused on customers and the continued commitment through investment in executing our growth strategy. The waterfall chart highlights the significant events that explain the movement in the cash balance during the quarter.

So we paid a 2016 fully franked dividend, final dividend, worth $42 million in March. $21 million was a spent in Q1 on developing the Carrapateena and CTP projects.

This includes the development of the decline and study works. And as previously announced, all costs have been capitalized from 1 July 2016.

Prominent Hill ore inventory has increased by $44 million, of which $19 million reflected a direct cash investment, with the balance being the capitalization of noncash depreciation into inventory. Concentrate increased by $39 million, measured at costs compared to the December quarter due to the timing of shipments with only 43,000 tonnes of concentrate sold.

This was impacted by shipments to realize $40 million planned at the end of March slipping to the 1st of April. The sales profile is scheduled to increase during the remainder of the year and result in increased cash generation.

An additional 19,170 ounces of gold were hedged in the quarter, bringing the total amount of gold in the ore stockpile hedged to around 219,000 ounces at an average price of AUD 1,733 per ounce. These contracts mature in the period beginning quarter 3 2019 through to quarter 3 2021, which matches the period over which the ore stockpiles are expected to be processed and sold.

As noted by our last quarter, we'll shift into tax payable position this year with payments to commence midyear. Tax payments in 2017 reflects both the 2016 full year provision of $69 million and half the year's installments for 2017.

So to summarize, this has been another solid quarter where capital discipline and a focused operational approach has delivered a healthy cash position, while continuing to provide returns to shareholders and invest significantly in the future growth of the business. As Andrew said, there's been significant progress in the development of our power strategy during the quarter.

We signed a power purchase agreement securing OZ Minerals' energy requirements at Prominent Hill for the next 18 months. We signed a transition and connection agreement with ElectraNet securing energy transmission for Carrapateena.

We also signed an energy solutions framework, which sets out how OZ Minerals and ElectraNet will work together to develop new transmission infrastructure. Both agreements significantly de-risk the Carrapateena project in terms of security of power supply.

OZ Minerals is also involved in two further power initiatives. We supported a submission by Energy Developments in response to the South Australian Government's request for an expression of interest for the provision of grid-connected battery storage to be located at Prominent Hill, and we submitted an application to an energy productivity audit grant, which is part of the South Australian energy productivity program to identify ways to reduce our energy consumption and to identify cost-effective energy management solutions.

OZ Minerals is also among a group of large South Australian electricity consumers sponsored by the industry body, SACOME, to receive interim authorization from the ACCC to collectively negotiate long-term supply contractors -- with long-term supply contractors. So looking forward, we are continuing to investigate all opportunities to secure long-term power supply in this ever-changing energy landscape, and we're working with strategic partners to develop sustainable and cost-effective solutions, including exploring opportunities for on-site and off-site generation.

I'll now hand back to Andrew.

Thanks, Luke. So I'll turn to Prominent Hill.

I'm going to move through the section fairly quickly and leave you to read the numbers. There's a couple of large wet weather events we had at Prominent Hill at the start of the year resulted us -- in us having about 65 mega liters of water in the bottom of our open pit.

So this has all now been de-watered and it did slow the open mining at the start of the year, but the team have already regained much of the ground lost and had plans in place to recover the rest through this quarter. As we've mentioned before, we are planning for the next open pit demobilization of one excavator and associated truck fleet, which is on schedule for this quarter.

This will reduce cash cost again in line with the demobilization. On underground, the underground delivered just over 0.5 million tonnes of 1.8% copper, plus or minus.

This was the slightly lower than Q4 of last year, but that's because we had the benefit of a temporary haulage access from the bottom of the open pit last quarter, which is now reverted to a long-term ventilation infrastructure. Grade is also lower than Q4.

However we expect this natural variation as part of normal schedule variance when viewed on a quarterly timescale. We did stockpile through this quarter some quite high grade gold ore, which provides us with the opportunity to flex gold mill feed grades through the rest of this year.

The second permanent decline is progressing well and is scheduled to bring through next quarter. Looking forward, two additional haulage trucks will be mobilized to assist with increasing the underground production profile.

Processing plant has performed quite well. The plant produced 2.4 million tonnes of ore, 3% higher than the previous quarter.

Scheduled contractor shut down was completed safely on time and on budget, which was a big success for the operation, and the plant recoveries are high at circa 87% copper and 72% gold. So I'll now hand back to Luke just to talk you through costs.

Thanks, Andrew. C1 costs have increased to USD 1.00 per pound compared to USD 0.78 per pound the previous quarter.

However, costs remain on track to be within our full year guidance of USD 0.85 to USD 0.95 per pound. Our C1 cost for the quarter USD 1.00 per pound were impacted by a number of items: less favorable copper produced had the largest impact; higher mining costs predominantly due to increased stope filling versus last quarter when stope filling was impacted by the power outage; lower deferred mining costs with the decline in strip ratio; higher processing costs with the planned plant shutdown incurring maintenance costs during the quarter, and there was no plant shutdown in quarter 4; a larger ore inventory adjustment reflecting more open pit material being milled; and lower commercial and transport costs reflecting the customer mix and ore blend produced and supplied during the quarter.

So all-in sustaining cost of USD 1.35 per pound for the quarter was up from USD 1.15 per pound versus the previous quarter, which reflected the increase in C1 costs, which I've just explained. Open pit mining unit cash costs in quarter 1 of $6.74 per tonne were higher than the prior quarter $6.25 per tonne, with less tonnes being mined due to two significant wet weather events already mentioned by Andrew impacting productivity and fixed costs.

The strip ratio was lower at 0.6:1 compared to 0.7:1 in Q4, as a result of which, we have continued to mine ore at low cash cost of around $11 per tonne. Underground operating costs of $65 per tonne mined were higher than the prior quarter of $50 per tonne, with less tonnes mined and significantly more stoped filling completed.

Moving forward, the completion of the second decline scheduled for quarter 3 will enable increased metal production, which will positively impact unit cost and production in the second half of the year. As Andrew had said earlier, the next planned demobilization of the open pit remains on schedule for quarter 2.

These increases the demobilization of a further five open pit trucks to a final fleet of 12 trucks and utilization of a small -- smaller primary excavator. As a result, total cash cost will reduce but unit costs will rise in the future as total tonnes reduced, and the fixed component of cost is spread over less tonnes.

Prominent Hill remains on track to deliver full year guidance of $7.25 to $7.75 per tonne. So a solid first quarter performance has Prominent Hill well-positioned to remain on cost guidance for the year.

I would just like to point out that we have provided a further guidance on net depreciation out to 2019, which has been included in the Appendix of this presentation. I'll hand back to Andrew.

Thanks Luke. Let's now turn our attention to Carrapateena, and as I mentioned before, this will replace the originally scheduled update we had scheduled at the end of this month.

We are not going to be releasing new financial data with this release, but we are confirming that the financial metrics provided at the PFS in November last year still apply until such that time as we release an updated set of financials. On the schedule, when we released to the PFS in November '16, we included a graphic of the schedule which is captured on the slide that you're looking at now.

Today, we're not going to release the final feasibility study as stated in this diagram for two reasons. Welcomely, all packages are at feasibility study level of definition.

The mining scope is not yet at this level of detail. We are also progressing an ECI contractor engagement methodology for all non-mining packages, which requires commercial sensitivity during the process.

Our decision to use the ECI methodology engage contractors earlier in the process will provide us and the board greater overall project certainty when we make long lead item commitments. It will also bring -- potentially allow us to bring forward the project commitment schedule, which was scheduled in the PFS to complete at the end of this year.

Our current approach is not expected to negatively impact scheduled first commercial ore production in the second half of 2019. So by employing this engagement methodology, we essentially cut out the formal post-feasibility study tender process, which typically takes three to six months, and blend the feasibility study with the project commitment phase.

The tender process we have already run over the past several months has given us and the board sufficient confidence to move to this engagement methodology. This ability to adapt is a strength of the agile process and allows us to take advantage of the identified opportunities quickly and maximize value and minimize risk quickly.

I appreciate that it might make it harder to follow from an external perspective, but this approach is about maximizing long-term value and is a core company strength, which we are building. On next steps, we expect to be able to release an update on the project in quarter 3 that will contain a summary of all work packages at feasibility study level, details of the ECI packages, a forward schedule and updated financial metrics for the project.

The board will be asked to make a further expenditure commitment in Q3 based on this information. I will step through each section of the project, starting with the site operational activities.

So the decline development rate -- development is going well and the development rate is on budget, but it did start a few weeks behind schedule, so we are now working to increase rates beyond budget to not only catch up for lost couple of weeks of start-up delay, but also increase overall project value. We've already started the transition to developing twin parallel access declines.

These declines have a smaller profile with one being for a conveyor and one for main mine access. In the short term, this approach will give us more operational development headings, which will facilitate fast development rates.

It also removes feature event rises and provides a safer working environment, it lowers overall operational risk. And once built, it will also facilitate faster operational ramp up as we can build and commission the conveyor faster.

We are now preparing for the execution phase of this project. And just this week, our new operational General Manager, Myles Johnston started in his role.

Myles' role is to ensure operational readiness and be the primary customer for the project team. We also commenced our new Technical Services Manager this week.

Andrew will lead the mining optimization work from here on in, and then transition to site to lead the technical services function. These appointments are early, but they demonstrate our belief in the project and we believe, early preparation for operational readiness is critical to its success.

With regard to project studies, many aspects have moved forward significantly. We have now engaged KBR as a strategic partner to perform a joint OZ Minerals-KBR project management team.

KBR brings significant international expertise and experience. They also bring mature systems, relationships and very recent experience on projects just like Carrapateena and the ability to flex skills and capabilities as we move into construction.

KBR undertook a 6-week due diligence exercise before starting in their role. So between KBR, our Advisory Committee and the OZ Minerals team we have in place, we have significant independent verification of the details behind the project.

Let me turn to mining studies. These are not yet at a feasibility study level of detail.

We were not happy with the work done on this in late 2016 and earlier this year. So earlier this year, we changed external providers to redo a large part of the work.

This is now being overseen by our new OZ Minerals technical services manager. This new round of mining optimization work will now include the second decline, a surface crusher relocated underground and removal of the need to truck in the first few years.

This work will be at [ indiscernible ] a feasibility study level in quarter 3. Whilst unfortunate, I believe that it demonstrates good capital discipline to ensure that all key aspects of the project are rigorous and auditable.

All other key passages have progressed well and at a feasibility study level of detail. We're now going to employ the ECI model, which I'll talk about in a minute, to accelerate the project commitment phase, lock in more certainty on project economics and schedule and make the whole commitment more certain.

Pleasingly, the top three risks we've flagged as part of the pre-feasibility study have been significantly reduced. Those three risks were, power, water and capability.

On power, as Luke has touched on, we've signed a 55 megawatt TCA agreement to secure power from the Mount Gunson line. On water we, now have sufficient water for the construction and operation with no expected impact on copper recovery due to quality.

By our future work, we'll try and find more water closer and of better quality. Capability, studies have confirmed that the sedimentary cover above the resource will cave with sufficient preconditioning, very similar to what is done at East Cadia today.

Let me just talk about the ECI approach. One of the specialty areas of expertise that KBR brings to this project is the use of the ECI methodology.

With KBR's experience in this space and our fairly extensive market testing over the past year to build the PFS and FS, we believe that moving to this model will allow us to shorten the project commitment phase and lock in cost. Under an ECI model, parcels of work are apportioned to experienced head contractors who submit a fixed maximum price and time line for each parcel.

Successful contractors are also responsible for delivering local content and traditional owner involvement in line with our expectations. The opportunity to move to an ECI model was enabled by our agile approach to developing project, which identified the opportunity to improve cost and schedule outcomes by locking in contractors earlier than previously anticipated.

This process reduces risk and provides increased project certainty and will make it a much easier task for the board to commit capital in quarter 3. On approvals, the Environmental Protection, Biodiversity and Conservation Act referral for Carrapateena was submitted in March.

Following a 4-week consultation and assessment process, the project was declared a controlled action with the FA Mining Act nominated at the assessment part going forward. So processes are now underway to formalize any bilateral agreements between the state and federal governments prior to formal submission of a mining lease, which we expect to lodge in the coming weeks.

NTMA discussions with the Kokatha people are going very well for Carrapateena, with the last 3-day workshop held on-site with both the Kokatha board and the OZ Minerals' executive committees participate in focusing on what long-term success will look like. Let me now turn to CTP.

The CTP project is being managed as a separate but interdependent project led by Brett Triffett, our former combined Carrapateena and CTP Project Director. At this point in the Carrapateena and CTP projects, both projects will now benefit from dedicated managements, specific skill sets and contracting styles.

So the CTP is moving towards an FS level edition, but it's not quite yet at this stage. Work is underway to optimize the flow sheet with some opportunities to simplify the process identified being tested.

Engineering and test work for new CTP flow sheet is underway, and the optimization work being done is to build on the successful rates -- results seen today. We are pleased to report that we have now purchased a parcel of land just outside Port Augusta, which is now the preferred location for the CTP, with waste returned back to Carrapateena.

While the other sites, including Carrapateena and Whyalla, have not included these possible options, all planned work, including baseline tests, community consultations, will be focused on the Port Augusta site. The CTP study is progressing on a different development time line to that of Carrapateena and as a result of collaborative detailed engineering optimization work required for CTP.

As I mentioned, we are working on some optimization improvements for the process. Options analysis is expected to be completed in the second half of this year, with the preferred option progressing to final design for completion in quarter 1 of 2018.

The schedule for CTP component could change depending on the results of the studies over the next few quarters, but we'll update you on this in quarter 3. It should be noted though that the first commercial concentrate from Carrapateena in the second half of 2019 can be sold directly to international customers without treatment via the CTP, and that all metallurgical testing work undertaken at Carrapateena to date have demonstrated a significant and consistent downgrade of uranium through the flotation process.

Whilst this is the case and we can easily sell high copper flotation concentrate to the international market, we still plan to produce direct from Carrapateena. It is still OZ Minerals' vision to produce the cleanest and highest grade concentrate to our customers, and CTP will enable this.

Given the board's confidence in the Carrapateena and CTP projects, the total approved budget from 1 July 2016 through quarter 3 2017, has now increased to $90 million. As of the 31st of March of this year, $53 million has been spent, but we have underspent our board-approved a budget by $31 million due to a combination of cost savings, timings and project scope changes.

So the remaining $37 million, splitting what we have spent to date and what we now have approved, will cover the required work to get us to quarter 3. It will include the continued development of the dual access decline, it will include mining optimization studies to take that package to FS level, it will include CTP studies, additional water exploration and infrastructure and final scope definition on the key Carrapateena ECI packages.

In quarter 3, the board will then consider the next phase of expenditure pending the regulatory approval process. At which time, we expect all packages to be at FS level and key ECI packages ready to execute.

So let me just quickly -- I'll talk a little bit here about West Musgrave. And whilst I'd like to talk a lot longer, I'm running out of time, so I'm going to keep my comments fairly short here.

The on-site camp has now been reopened in preparation for upcoming drilling programs, and the project is advancing well. All the heritage and environmental approvals have been obtained, allowing the drilling program to commence this month.

We visit -- we being the EXCO team, visited the site last month and met with the project team, the community -- neighboring community in Jameson and the local traditional owners. So there are a number of studies underway.

Looking forward, our resource extension drilling program will commence this month led by the Cassini team, and it's going to test Nebo and Babel for high grade potential extensions. The program will consist of about 1,800 meters and test a number of zones supported by coincident EM anomalies.

Just quickly on exploration and growth, I'm just going to touch on a couple of things here. I'm not going to go into too much detail.

I'll just focus on the two new additions, the one in Portugal and the one in Mexico. There are slides in this deck for the other opportunities, but I'll leave you to read those.

Our new earn-in agreement in Mexico is called the Oaxaca project. It's located in Salina Cruz in southern Mexico.

This is an earn-in agreement with Acapulco Gold, which is a privately owned exploration company based out of Canada, and they have a lot of experience in Mexico and a demonstrated discovery record. The sites we are targeting have potential for shallow high-value VMS-style mineralization, so we're going to make our first year in-ground expenditure of about USD 450,000, which will cover geological mapping, geochem and geophysics.

We will be able to earn up to 78% of the project by spending USD 6.8 million over 6 years if we opt-in at each of the milestones. Exploration is going to commence immediately with drilling expected in the second half of this year, and our partner will be leading the on-ground work under our supervision.

On the Portugal earn-in, we're exploring copper and gold mineralization in southern Portugal, about 60 km southwest (sic) [ southeast ] of Lisbon. It is also an earn-in agreement, but with Avrupa Minerals, a Canadian-listed explorer.

We will be able earn 51% interest in the tenements through spending a minimum of AUD 1 million in the first year. We then can earn an additional 24% interest by spending another $3 million through September 2019.

Look, I think I'm going to leave my company update here given the time. As you can see, a lot of good progress has been made over the last few months to set ourselves up well for the rest of this year.

This is a fairly complex quarterly and I've tried to hit the highlights. But in summary, Prominent Hill is on track to deliver guidance, and the second permanent decline breakthrough in Q3 will certainly help enable this.

Carrapateena is progressing well, with PFS economics still applying. All 3 PFS critical risks are now well-managed.

The non-mining work packages are at PFS -- non-mining work packages are at PFS level of definition and accelerating -- accelerating the ECI process. Mining is progressing, with 3rd optimization underway now incorporating the second decline and a new underground crusher which is going to relocate from the surface as assumed in the PFS.

And we're aiming for a Q3 forward review at which time we'll have all packages at FS level and non-mining ECI packages ready to execute. Our growth pipeline has expanded overseas, and we're now up to 8 earn-ins.

And our refocus on our strategy and leveraging our agile approach to maximize value is becoming entrenched in the business. So with that, I'm going to call a stop, and I'll ask the operator to remind participants how to ask questions, please.

I've got two questions on Carrapateena. So firstly, in terms of your comments about de-risking the capability, could you maybe provide some more color.

So for example, you're now talking about additional preconditioning to what you've previously discussed in regards to the overlaying quartzite? And then the second question is just in terms of the comments you just made about the CTP timing.

I mean, obviously, by deferring the project, you'd enhance the overall project returns. But maybe, could you expand on what actually really drives the potential timing of the project in terms of the Carrapateena ore types?

So are we talking potentially it could be deferred maybe 3 to 5 years or even longer? And maybe, what really drives your thoughts there?

Okay, sure, Dave. Look, I'm going to break that slicker[ unverified text ] two questions between two different people here.

So I'll ask Bob to talk a little bit about the capability of the overlying sediments, and then I'm going to ask Brett to talk about CTP and the current schedule, if you don't mind. So Bob, you do the capability?

Thanks, David. The capability assessment that's been done in the last couple of months has come up with the fact that with normal preconditioning, it will cave without an issue.

When I say normal preconditioning, it's the same as been done at other caving operations throughout Australia. And actually, not -- there's been no additional money put into anything at the moment because put our money in the PFS already for that level of preconditioning.

So what's being done in the eastern states is exactly the same thing as what we're talking about. And it's only a couple of the sequences that we need to actually be concerned about.

The shales are not a concern obviously. The quartzite kind of concerns more the -- when we're [ indiscernible ].

So basically, the [ indiscernible ] are proven that overlying sediments will cave with hydrofracking preconditioning as -- the same is being done in East Cadia, correct? And the money do that is already in our PFS.

Correct.

Hey David, this is Brett here. I'll answer your question on CTP.

As Andrew said during the presentation, we've done a lot of test work on the flotation aspects of Carrapateena, and what we've been able to determine is that there's a consistent and fairly significant downgrade in the impurities reporting to the concentrate at Carrapateena, and we're able to produce a higher copper grade as well. So what that has done, it's allowed us having the flexibility in terms of timing with respect of Carrapateena and the commissioning of CTP.

And so while we're pushing forward to make sure this happens as quickly as possible, we do have a fair amount of flexibility around when we can actually commission the CTP.

Listen, Brett, in terms of schedule -- I mean, David, you mentioned 3 or 5 years. That's not what we're talking about with potential impact on schedule in CTP.

While I can't tell you what the delay might be, if there is a delay, because we're still working on that, but it'll be quarters, maybe a few quarters, not years, if there is a delay in commissioning CTP.

Okay. But I guess it sounds like the studies are, I guess, devaluing the upside you get from the CTP if the impurities to the concentrate are now lower than what you've previously thought.

Nope, I don't see that what we've previously thought has not changed. We've just got more data through met testing in the process recently to confirm what we previously thought.

So there's no input assumptions that have actually changed in CTP. The process Brett's going through now in the CTP is really just about optimizing individual cells and it's optimizing above what we have previously had in our model for CTP.

The other aspect of this is working through how we could apply CTP to Prominent Hill concentrate. So one of the pieces of work Brett's working on is what the optimal size the CTP could be or should if you look at concentrate feeds from both Carrapateena and Prominent Hill, and it's all after [ unverified text ] the trade-offs you need to make around size and cost, et cetera, to get an optimal site, if you like.

So that's where he's at, at the moment is looking at with the total plant CTP size and he's looking at a couple of pieces of the flow sheet which have alternate solutions which we potentially could use that help speed things up and make a cheaper build.

I think about three little ones. First of all, Luke, the comment about lower TC/RC in transport reflecting customer parcels, what does that mean?

Michael, it's Luke. Look, that's just we have different commercial arrangements with each of our customers.

So depending on which customer you're delivering in each quarter, that will vary.

So is that a batching of production? I mean, if you're getting lower TC/RCs by that particular group of customers, why not sell them all the concentrate.

I guess, I'm trying to understand how 1 quarter you can have a better result because of the selection of customers, and other quarters you can have a worse result.

Look, it's in our TC/RC line, Michael, we have TC/RCs, of course, we also have penalties and we payables, so it depends on which customer we're selling to as to what the commercial conditions are for that parcel. Some commercial conditions are very favorable and some are not so, so it does depend.

And we do batch process. We've talked about this many times.

Every parcel we produce is different, different levels of copper, different gold, different uranium. And what comes with that is a different value proposition for each parcel.

So last quarter, you would -- that one was quite high because we batch processed for specific customers, so this line does move around in time depending on which customer we're producing concentrate for.

Okay. I guess that leads into Carrapateena when -- your conversation earlier about without the CTP being still able to sell the concentrate.

So how would the concentrate quality compare to Prominent Hill's average concentrate quality? And without the CTP, would you anticipate higher penalties than what you're incurring with Prominent Hill on average?

So at a high level, the Carrapateena concentrate quality is quite a bit better than the Prominent Hill concentrate quality. So that's the high level.

If you go down to the detail, the copper content in the Carra con, I think, runs about 35%, thereabouts, so lower than Prom Hill, but the uranium content in Carra concentrate is much lower than Prom Hill as well. So we can sell -- and I've said this a number of times, we can sell Carrapateena concentrate before you get to the CTP to all of our international customers currently.

So my understanding, historically, and maybe I'm wrong, was that the ore body itself at Carrapateena had a higher level of uranium than Prominent Hill. So is it -- is there something around the plant or the metallurgy that enables that higher in-situ level of uranium to end up as a lower percentage of the concentrate compared to Prominent Hill?

Michael, it's Brett here. Look, that's correct.

The mineralogy is different for the uranium compared to Prominent Hill, so we get a significant downgrade through the flotation process at Carrapateena for the Carrapateena concentrate.

Okay. Then finally, the twin decline and the smaller profile, what I'd like to understand, please, is at commercial production or when you commence production the second half of '19, how far -- down the mine, how far vertically will you be developed?

What I'm trying to envisage, I guess, is the hauls of crushing, conveyor loading, and how many times you have to replicate that, that step, adding crushers at depth, or will you be sufficiently advanced at day 1 that there's not so many repetitions required?

Michael, look, an excellent question. And some of what you've just asked is exactly what's part of the optimization work we're doing right now.

As you probably recall, we only introduced the second decline at the very end of last year, the beginning of this year, so it was after the original mine tunnel was built for the PFS. So the optimization work we're doing now is including the introduction of the second decline.

And what the introduction of the second decline allows is a faster construction of the conveyor and to take what we used -- what we were assuming in the PFS, which was a surface crusher with ore being trucked to surface and crushed at surface. We can now more quickly put the crusher underground and eliminate the need for trucking, so you can actually crush underground.

So do you want to add anything to that, Bob?

No, the work we're doing at the moment, Michael, is about the sequencing and making sure that, that schedule is incorporated into the next release.

So Michael, it's a good question. I can't answer it specifically because we're still waiting for the optimization work to be done.

But in concept, we will have three underground crushers. The one I've just mentioned.

So the one that used to be on the surface is now underground right at the top of the ore body effectively. There are then two other longer-term crushers, one halfway down and one at the bottom.

I doubt the two bottom ones will change all that much, but the exact position of the top one and the timing of when it goes in, et cetera, is what's being worked on right now.

Okay, terrific. And all that's captured within the capital guidance, the future crushers and crusher chambers and so on?

The surface crusher, I think, was in our operating cost piece of the PFS, and I suspect it will now go into capital because it will be a fixed infrastructure piece, if you like. But at the same time as that might go up we'll take out a truck fleet, which is operating cost, so there will be some swings and roundabouts here, Michael.

But all three crushers I just mentioned were in the PFS numbers. They might have been in operating cost or capital cost so...

Yes, okay. And then very finally, the comment about the power generation being considered on-site and off-site as one of the options.

How does that fit within the sort of, again, operating cost or capital cost? Is that consideration because of lack of availability of power, so as insurance, or is it just a further optimization to say that might be a lower cost between capital and operating, a lower cost -- total cost solution than what's otherwise available?

Michael, we just see it as an upside opportunity at the moment. So our base cases assume good connected power, and we've got pricing in both Prominent Hill guidance and in the Carrapateena PFS, which reflects roughly the 18-month agreement we've just signed for Prominent Hill.

And our base case assumes grid power being connected from Carrapateena to the grid, so all the transmission build, the construction cost, et cetera. Anything that we do that looks at on-site technologies, whether it's solar or wind or turbines or wherever else is all upside and will need to demonstrate that, that creates value.

It's just that there are a lot of mines and a lot of towns and all sorts of things around the world that do this very successfully, so I think there are opportunities here that we can actually -- we need to explore, but I can't say what the answers are.

Two questions, one on the power at Prominent Hill, and second on the optimization study. So firstly, when it comes to the purchase power agreement for the next 18 months, was that an extension to the existing contract with your existing supplier?

And why is it only being for 18 months? Can you give us some details around how does that compare relative to your existing guidance that you provided in terms of the short-term increase in power cost expectations?

So Dylan, just on power, we went through a process to find the best commercial arrangement for power for Prom Hill, so it's not a renegotiated power agreement. In terms of 18 months, I guess our view is that South Australia is in a point of transition, and now is -- we're right in the middle of that transition point.

So we don't want to walk into too long a term power arrangement given we're at a fairly sensitive point at the moment. And I think that things that the South Australian government is doing and the federal government are doing, and the way the market is responding, I suspect we will see stable long-term prices.

So we want to wait and see that play up before we lock into long-term power arrangements.

Okay. So -- and relative to your existing guidance, what you've agreed to with this latest agreement, that is consistent with your guidance expectations?

Yes -- yes, we've built those pricing assumptions into our guidance and we issued this last year. So we don't need to change our cost guidance based on this.

Okay, fair enough. And in relation to the power -- sorry, the power options for batteries, could you just give us some more details about what you plan for that with -- I couldn't understand that from the presentation on Slide 9.

So you've got to be potentially installing something for Prominent Hill or Carrapateena with the batteries?

You might be aware, Dylan, that the state government initiated a grant. I think it was $115 million to fund the installation of batteries in the state to help with power reliability, and they put out a request for interest, if you like.

And we supported one party in the application, so we went in as basically a joint application to the state government as one of -- as a contender, if you like, for the battery installation. And so I probably can't tell you more than that because it's now up to the state to evaluate those submissions and decide where they want to install batteries.

And look, it's like the Prom Hill thing. So this is not really for Carrapateena.

This submission was for Prom Hill or thereabout installation.

Okay, fair enough. Now in regards to the optimization, just if I'm reading correctly, there's been submissions around the mining segment of the optimization study for the face, and this is something you happen to revisit.

Can you just explain to me what's happened in terms of a delay? You've mentioned -- or what exactly needs to be redone.

You mentioned a contractor or a third party doing the work. Are you having to -- bringing that back in-house?

Could you, please, just walk us through exactly what the issue has been there and why that's caused the issues that it has?

Look, I can summarize it pretty quickly. When we got the mining module, which is a fairly complex model, it was effectively unauditable.

We could not audit it. We had two external parties trying to audit it and they couldn't audit it, and we were not prepared to bank such a complex and important piece of work on an unauditable model.

So we have changed external consulting groups that we've been working with. And one of the reasons we appointed our Tech Services Manager early was to be much more ingrained and integrated into this review.

So we are revisiting that model, rebuilding the model. The second thing that we are doing, which we couldn't have done before, was the integration of the dual decline access, because that does change the way you schedule and ramp up the mine in the first phase.

So that's basically what we've done. So we've got an in-house team supervising an external consultant who is halfway through the redevelopment of the mining module to an FS level.

Okay. And in terms of exactly how that's working.

So you originally, you were targeting to have a bankable feasibility study by midyear, and you're going to go to the nth degree of taking this to a -- sorry, a PFS stage or -- I'm sorry, I've got my terms on rather the wrong way, you're going to go spend the additional cash to get this to a very high level of detail, that's still the case, but you've simply changed the -- or effectively extended the timing that the study will occur for the mining to fulfill that time line. Is that right?

Yes. So in summary, we'll have the mining package to an FS level of detail in Q3.

So when we go to the board, we will have the mining package at a feasibility study level, and we will have all of the non-mining packages beyond that. And one step further, we'll actually have the principal build contractors appointed and have been involved in the ECI process with our cost lock down.

So it will be more than a feasibility study, if you like, by the time you get to Q3 because of the ECI methodology. But look, I just need to point out, it won't be bankable.

What we have said is that we're going to keep the project process bankable right through this, but I suspect bankability will come towards the end of the year, early next year.

Look, I'm still just not particularly clear on the TC/RCs going forward and how they change as the impurities change if the CTP is pushed out. So I guess, I'm just trying to marry out the comments that if Carra produces a really good concentrate and that you can sell it anyway.

So therefore, well, I guess, why build the CTP for $150 million? Now obviously, there's a return on sort of saving some sort of penalty on TC/RCs to justify that CapEx, but can you perhaps maybe give us a bit more color on when, in fact, the penalties really start to escalate?

Is it 5 years out or is 1 or 2 years out or is it -- I'd just sort of be good to get a bit of color there. And I guess you've mentioned again that it would be perhaps useful to use the CTP for Prominent Hill, and then again it sort of raises questions about if you don't use the CTP for Prominent Hill, when TC/RCs really start to escalate there sort of -- I guess after today's call, I'm not particularly clear on how all that stuff plays out.

Yes, Lyndon, no worries. Let me break this up into 3 bits.

So firstly for Prominent Hill, the TC/RC and the penalties that we're currently paying will be fairly continuous. So there's not an escalation, per se.

So we will see these continue through time for Prominent Hill, and that's just the nature of the ore body. And we're mining a lot of underground material now, so what you're seeing now is what we're going to get going forward.

For Carrapateena, the profile through the life of mine for Carrapateena is a little bit different. So through the first number of years, probably 4 or 5 years, there are no penalties because of the mineralogy at the top of the resource.

So we can sell internationally at Carra without penalties. Once you get out of that, there are [ indiscernible ] some, but nothing like what we see at Prominent Hill.

So it's a different concentrate and a different concentrate quality than Prominent Hill. With the CTP, the value proposition for CTP is built up by 3 things.

One is, you pay less -- no penalties because you've got a clean concentrate. So that's a contributor to the financial model, if you like, for CTP.

You pay 40% less freight. So there is a large freight piece that contributes to the financial value proposition for CTP.

And then the third thing, it's a strategic differentiator, so you minimize risk to the business completely and you end up producing a really clean high-grade concentrate that is pulled very strongly into the market and into currently the countries that we don't sell to. So it's a strategic differentiator and you produce strategic opportunity for the company.

So there are three drivers behind building CTP. I can't tell you yet what the CTP schedule is because that's the work over the next quarter, a couple of quarters, if you like.

So I can't give you an answer to what is the value of building CTP or delaying CTP. But right now, I'm not expecting it to be a material number, if you like, based on what we're seeing today.

I guess, just a sort of follow-up then. Isn't it worth saving $150 million of CapEx if you're for not going to get a penalty for 5 years?

It sort of seems like you have to have an awful amount -- lot amount of freight or some seriously high penalties to sort of get a payback on spending $150 million in that time frame.

Well, we still have Prominent Hill to think about, Lyndon, so we're not trying to think about Carrapateena specifically and only for CTP. We've got Prominent Hill in here as well.

So I guess whether we decide to build CTP or not will be based on those three things I mentioned. It will be about penalty equation, we've got the freight equation and the strategic value option we'd have with having a processing plant like this.

And that's got value in itself. It will be hard put dollars onto it.

But differentiating ourselves in that way, we'll have strategic value opportunities, and that's something we'll need to take into account as well.

And sorry, just one last follow-up. So just to recap on Prominent Hill, I might have missed you there, but did you say when penalties really start to escalate?

You sort of -- I guess...

Yes, okay Lyndon, I said they don't. So current TC/RC penalty lines stay flat.

Now there will be variability every quarter depending on the customers we're selling to, where we're mining in the mine, it will go up and down. But by and large, it will be flat.

So then why send it to CTP just to save the freight or...

How about -- Lyndon, how about we take this offline, and I'll walk you through the components, if you like. We'll give you a call after this.

Gents, just to follow up, again. So you made the comments on just about this mine optimization.

So you don't have an auditable model. You've had two audits from external parties to come through to review it and they can't necessarily make it work.

Can you just explain to me, where you'll start and what points you're at now in terms of developing the mine plan and the -- both in the short and the long-term sense, and what exactly has been salvageable from the process? I'm just trying to get an understanding of what you were given and what you bought and where you are now in terms of that level of detail that you need to actually get this to a level that you can physically work with?

And I'm just trying to keep this in mind when you're developing -- you're developing the decline at a rapid rate and this is potentially like a big issue to have if you're not necessarily complete from that front. So I'm just trying to get a bit of understanding from that.

Yes, sure. So we've got the PFS model and we're about halfway through the FS level work, if you like.

So when I said it's not auditable, I didn't say it doesn't work. I just said it's very hard to follow and audit all the pieces in the model.

So we think that the design that we've got works. We think the costs are about right based on the model that we've got and work we've done on it, but it can be optimized, and we don't think the optimization work has been done sufficiently.

So it's halfway between PFS and FS.

Okay. And would you say, in terms of this auditing process, is this a software issue, is this a logic issue with how they've developed the platform and all the schedules here?

What exactly is falling down there in terms of that audit failure?

It's exactly fallen down. It's just -- look, I'm not...

Perhaps we can take it offline. I think that's -- if it's complex, that's fine.

Yes, look, we will take offline, Dylan. But I'm to chat to you about it afterwards.

But the long and the short of it is the quality of the work that was done does not meet our expectations. That's the long and short of it.

And we saw many things in there that we just didn't think were the right things, so we're redoing it, effectively. So rather than go ahead with a model that we do not feel 100% comfortable with, we're going to redo it because we think there's opportunities in there.

Okay. Look, we've come to the end of our time, so we reached right at the end of the hour.

Thank you very much for your time this morning. If do you have questions, please send them through to Tom and get the right people on the phone to help answer them.

Thanks very much.