Perseus Mining Limited

Thank you very much and welcome to this conference call to discuss Perseus Mining’s March, 2020 quarterly report that was released to the market about half an hour ago. I’m joined on the call this morning by Andrew Grove, Head of IR.

And Andrew will answer all the very difficult questions at the end of this session with me of course. Well, what a difference a quarter makes, who would have envisaged when we last reported in January, that three months later the world would be the place it is today.

A lot of change and you don’t need me to tell you what or why, but it is fairly well accepted though that businesses in all sectors and in all jurisdictions are feeling the effects of the COVID-19 pandemic and Perseus is no different, although I am happy to say that for the moment we are coping quite well. In fact, we’re in a relatively strong financial position and the business is continuing satisfactorily for the moment.

Now, whether that situation continues for the remainder of this quarter and beyond is not possible to say. As we separately reported to the market in the last couple of months, we have put in place a range of measures to secure our sites and to protect the health and welfare of our employees, these are included firstly establishing what we call island mode business model, where those areas of our operations that are critical for business continuity have been locked down and are accessible only after people have been suitably quarantined.

Secondly, we’ve worked to secure our supply lines and to locate alternative suppliers where our traditional suppliers are struggling to meet their contractual commitments. And thirdly, we have refocused our immediate assistance to our host governments and communities with the emphasis on providing goods and services to local health authority to help them manage the COVID crisis.

Now looking forward there are several key areas that continue to cause us a good deal of concern and these are as follows. Firstly, government imposed travel restrictions.

Now these impact us in several ways. For example, senior management is unable to attend sites at the moment and to talk directly to our people, but perhaps more importantly, Perseus is unable to bring in technical specialists to site on an as needed basis.

Now this is very important, particularly if mechanical specialists are needed in the event of equipment failure or to carry out essential tasks like mill reline or the like. We’ve also been prevented by the travel restrictions from changing over our rosters.

So for example at Sissingué, expat workers have been on site for about 12 weeks as it is and they look like being there for quite a while longer, given the travel bans. Now this has implications for productivity in the long-term, has implications for productivity, safety, fatigue management, et cetera all of which can go to production and costs.

Secondly, an issue of concern is the timing of reopening of our trading part in the countries. And by that I’m referring to countries where we currently procure our key consumables.

For example, we do source a lot of material from South Africa, which has been very tightly close to business recently, although the President of South Africa, his recent statement that they will shortly revert to Stage 4 lockdown from Stage 5, that lockdown is encouraging for us and may open up some supply lines there. Thirdly opportunism and price gouging by suppliers, although it hasn’t been too widespread today, we have seen some situations where the prices of goods and services have escalated overnight.

In such circumstances, we’ve sought out alternatives. But I can say we’ve certainly won’t be forgetting those who have tried to take advantage of the situation.

Fourthly at the moment, the issue of movement of freight in our host countries is something of concern. At the moment everything is running very efficiently and smoothly, so once goods clear the ports, getting, goods to our sites has been reoccurred reasonably unimpeded now.

If this breaks down for any reason, then that would cause us some issues. And in the event of infection spreading into the regional areas, away from the capital cities, it is something that we need to keep an eye on.

And finally, the health of our host communities, I mean this is fundamentally important to us because it’s the health communities that do provide – it’s the local communities that do provide the bulk of our workforce at each of our sites. And it is very, very important for us to the community stay healthy, the capacity of local health systems to cope materially increased numbers is not exactly clear at this stage, although I have to say they are coping fairly well for the moment, but who knows.

Now notwithstanding the fact that many in the developed world, in Australia in particular seem to believe that the COVID crisis is behind, the fact is that, Perseus’s future does remain uncertain, which makes it difficult for us to predict with any accuracy things that we can normally control, such as procurement of consumables, et cetera are no longer within our control. Now, Perseus, we placed a great deal of importance on doing what we say we’re going to do and in fact this is a core value of our company and we have lived by this for the last couple of years.

And accordingly, when we’re in a situation where we are now, where we can no longer save a certainty that what we’ve told the market will deliver then indeed we do need to take stock of that. And accordingly we have decided that it’s prudent for us to withdraw our market guidance to June, 30, that’s both for the half year and the full year guidance.

We will review the situation in three months time and chances are the world will be at quite a different place by then. Now, in the meantime, investors can be absolutely certain that we at Perseus are doing all we can to achieve our previously stated guidance, but we can no longer guarantee that this will be achieved.

Now turning to the body of the quarterly report, for those of you who haven’t yet had an opportunity to read the document, let me summarize it for you before diving into a few issues in detail. Firstly the two operations, Perseus’s two operations, Edikan and Sissingué, they continue to perform, during the quarter they produced about 50,000 – 57,993 ounces of gold at a production cost of $951 an ounce at an weighted average cost of $1,083.

Our average cash margin on each ounce of gold produced was $409 an ounce, which exceeded our strategic target of $400 per ounce and generated notional cash flow of approximately 24 million for the period from the operations. And our production for the quarter was lower than in the previous quarter and our all-in site inside costs are slightly higher.

And I will speak to the fact that gave rise to this later on, but it is worth noting that our December quarter results were historically one of the strong quarters that we’ve had since starting to produce gold. So any kind of comparison needs to be seen in that light.

At the same time, implementation of our strategy for value creation through developing mineral resources is continuing as planned, notwithstanding the coronavirus and the development of Yaouré, our third mine is now approximately 52% complete and it’s running on time and on budget and a stretch target of pouring first gold in December, 2020 continues to be within our capacity provided we don’t have any unusual delays coming out of the virus later in the year. And finally throughout the quarter, Perseus has managed to maintain its balance sheet strength through a strong cash flows and prudent management.

As I said with the cash margin of $406 an ounce, we generated as I said 23.7 million, 24 million from operations during the quarter. We also took a decision to fully draw our corporate cash advance facility, which meant that our debt position went from 50 million to 150 million, but at the same time our cash balance increased by $100 million.

Now this was done to ensure that we had operating flexibility in the face of certainty arising from the COVID pandemic. As we see it today, it’s very unlikely that we will need that cash to be used.

But we felt that hardly the cash on the balance sheet, given the uncertainty around us was in Perseus’s best interests, even if it does involve a small holding cost. Now taking all of this into account and allowing for the fact that during the quarter we invested about $29 million in the development of Yaouré, noting of course that about 83% of this was covered from operating cash flows.

We also funded exploration, paid corporate overheads. Our cash and bullion balance at the end of March was $162 million, giving us a net cash position of $12 million, positive.

Speaking of Yaouré to-date, we’ve spent about 129 million or 49% of the 265 million development costs for Yaouré, that means that there’s 136 million remains to be paid. Now, given that we’ve got 162 million of cash on hand, the cost to complete the development is fully covered before accounting for ongoing cash flow from operations, which is quite considerable at current gold prices.

So we’re in a strong position financially and although our operations didn’t perform quite as well as we would have liked during the quarter, they did run reasonably well. And so far in June, we’ve materially improved and they’re on a trajectory to exceed the elevated production of the December quarter, which I said earlier was one of the stronger performances registered by the company.

And if my calculations are correct, we’re about – this far into April, we’re about 20% – looking to be about 20% higher than December, actually, at this stage. So things are certainly looking up.

Very importantly, as you find ourselves in a strong gold market that, according to some experts, is going to continue rising, our growth profile in terms of gold production and cash flow continues to compare very favorable to those of our peers. So that’s the quarterly report in a nutshell.

But let’s dive into a few of the more detailed aspects of it, if we will. So looking first at operations.

I mentioned across both operations, we produced a combined total of 57,983 ounces, 38,019 came from Edikan and 19,964 from Sissingué. Production at Sissingué was above our targets, performing very well – performed very well across the board, while Edikan came in under the internal targets, we had set ourselves due largely to pull gold recoveries resulting from issues associated with the blend of ore fed to the mill.

Interestingly, the relative performance of the two mines was the – reversed the situation in the December quarter, which demonstrates the distinct benefit to Perseus of being a multi-mine producer. Now if we look at Sissingué in more detail, run time was 96% during the quarter.

Recovery is 95%, both of which are very strong and, in fact, ahead of our plans. The grade improved as the quarter went on.

We averaged nearly 1.8 grams per ton for the quarter. So far this month, we’re closer to about 2.5 grams a ton.

As we got deeper into the high-grade ore in the Sissingué stage 2 pit, reconciliations improved. But also, the rock got harder, and that did slow down throughput rates.

Nevertheless, it was a good result. And if we can maintain the run times, recovery, grade, et cetera, and if the initiatives that we put in place to increase throughput rates work as intended, then we should have an exceptionally good quarter at Sissingué.

While on the subject of Sissingué, we have completed an update of the life of mine plan for the operation. This is due to be tabled for consideration at our next Board meeting.

The updated plan is not materially different to our previously published plan, but it does incorporate current costs and operating parameters. We are in the process of seeking a new mining license for the Fimbiasso deposit.

This deposit will be mined as part of the new plan. And once this license is being granted and we have certainty on the way forward, then we published the updated life of-mine plan.

But I can say that there should be no great surprises for anybody in that. Now as we previously reported, at Edikan, we’ve made a lot of progress in turning the operation around over the last year or so by addressing challenges that we have previously experienced, including getting all through the mill due to the hardness of the ore being mined, especially from the Esuajah North pit.

We also established a far higher level of control over the processing circuit by adopting new mill monitoring technology. Now the benefits of this work was particularly evident last quarter with improved throughput rates around time recovery.

Now this quarter, the throughput rates continued to improve. So we had 923 ton per hour compared to 909 ton per hour last quarter.

Run time slipped a little due to some unscheduled maintenance downtime in January, but it was still not too bad when compared to December. So run time was at 88% compared to 90%.

Where we did come unstuck at Edikan this quarter, though, was on gold recovery, where we saw a material fall in recoveries from about 85% last quarter to about 61% this quarter. Now, the reason for this fall has been traced at the composition of the ore being fed to the mill.

During the quarter, we mined a relatively high-grade Bokitsi deposit. Now not only is this all much higher in grade than other deposits, so it runs at about two grams a ton, whereas, say, Esuajah North is 0.9, AFG is 1.09.

So it’s materially higher grade. And it’s also much softer and therefore materially improves our throughput rates.

And as I noted earlier, throughput rates went 909 ton per hour to 923 ton per hour and the average head grade went up from 0.98 to 1.05. So the presence of the Bokitsi ore certainly had an impact.

Unfortunately, the metallurgical composition of this Bokitsi ore is not perfectly suited to our plant. And we have discovered that if the composition of the ore feed blend contains more than about 15% Bokitsi ore, it impacts badly on recovery of all of the mill, not just Bokitsi, as it upsets control or both the flotation in the CIL circuit.

Now as I mentioned, we did have some maintenance issues early in January that impacted run time. Now when we shut down for scheduled mill reline, we noted that the mill opinions were won.

And we took a decision that rather than risk further damage, we would immediately repair that damage. Now this meant that the mill was down for a day or two longer than planned.

Now our team on-site is being very focused on hitting targets. They decided that in order to make up for the time lost through that extended maintenance period, we’d increase the percentage of Bokitsi ore and see.

Now remember, this meant higher grade and higher throughput rates. But unfortunately, in this case, the cure was worse in the disease as recovery rates fell, and it took us well into the quarter to identify the exact cause of the problem and then to implement a solution.

So production of Edikan was down for the quarter, but I am pleased to say that after the first 25, 26 days of April we are on track for a materially stronger June quarter. This is, of course, subject to nothing else going wrong or coming from left field associated with COVID.

Now if we look at the group’s costs for the quarter, our all-in site costs of $1,083 per ounce was higher than the group reported AISC last quarter. It’s based on cost at Edikan of $1,242 an ounce and cost at Sissingué [indiscernible].

Sissingué was actually down a couple of percent on the previous quarter. Now at both Edikan and Sissingué, we did bring to account some costs associated with preparations for navigating our way through the COVID crisis.

These weren’t huge in the overall scheme of things but included things like buying in additional stores, bedding, fencing additional consumables, et cetera, et cetera. Now quite obviously, at Edikan, the production shortfall for the quarter reflected directly in the higher costs, although, if anything, the rise in cost was proportionally lower than the fall in production, which reflects the continuation of the reduction of the cost base at Edikan, notwithstanding the COVID crisis.

Now during the quarter, our technical services team also completed an update of the Edikan life-of-mine plan, and their results are reported to the market. Now in summary, for those that missed the announcement, with the inclusion of the underground operation to mine the Esuajah South ore body and optimization of existing pits assuming a 3,900 gold price, gold production now averages 212,000 ounces a year over Edikan’s currently estimated remaining 6.2 years of life from July.

That includes gold production of approximately 231,000 ounces to average for the next four years. The total estimated gold production is 1.3 million ounces over the life of the mine.

That’s about 95% higher than the amount previously estimated in the last life-of-mine plan for the corresponding period. Forecast weighted average all-in site costs are in the range of 870 to 890 ounce over the remaining life of mine and this represents about a 5% decrease in average costs over the life of the mine.

They do include sustaining capital including the cost of site rehabilitation. All up, we’ve allowed about $37 million or $28 an ounce for that, and that is, as I say, included in the cost.

The forecast, the life-of-mine forecast are very strong after-tax cash flows, totaling about $356 million or about A$0.51 per share per at a $0.60 exchange rates that’s, in effect, assuming a flat price of $3,800 an ounce. So assuming that we can correct the shortcomings of the March quarter and based on the results this month, I’m very confident that we will.

The future of the Edikan mine is looking fairly positive, and we expect that it will be a material contributor to the group’s production and profile and cash flow for quite sometime to come. Now turning to financial matters.

During the quarter, we sold 60,015 ounces of gold at a weighted average price of $1,491 an ounce generating positive cash flow at both of the mines. In fact, at this average sale price of $1,491 and the average all-in site cost of $1,083, we generated an average cash margin of about $409 an ounce, as I said earlier on.

And when we multiply that by the ounces produced, we come up with the notional cash flow from operations of $23.7 million. And that came 57% from Sissingué and about 43% from Edikan.

And interestingly, as said, these proportions – proportional contributions are the reverse of the contributions made last quarter. Now as I said, during the quarter, we spent about $29 million Yaouré CapEx.

We also admit corporate costs are about A$4 million and exploration costs for a similar level movements in debtors and creditors. But after all these things have brought into account at the end of the quarter, as I said, we had cash and bullion of $162 million on hand and that I do note was clearly boosted by the fact that we’d withdrawn an additional $100 million under our corporate cash advance facility.

And it did also mean that at the end of the quarter we had a net cash position of about $12 million. Now, when other financial matter that we’re frequently asked questions about by investors is about gold price hedge book.

During the quarter, we have continued to actively manage our hedge book in line with our clearly articulated corporate policy on hedging. And at the end of the quarter, our total hedge position involves the forward sale of 317,345 ounces of gold at a weighted average price of nearly $1,400, $1,393 in fact.

Now these sales provide us with downside protection for about 22% of our forecast production over the next three years. So 78% is exposed to the gold price and clearly at the moment that’s well over the $1,400, but in the event that the price falls back for any reason, we are covered on 22% of our production.

Now turning to development of our third mine Yaouré now. This quarter, this has been one of the very bright lights for us.

We’ve continued to make very strong progress on all fronts at Yaouré, and at the present time, as I said early, we remain on track to achieve our stretched target of first gold in December this year. For those of you who are keen to see the progress with Yaouré mine.

So I do note that each month, at the end of the month we put a video footage onto our website, www.perseusmining.com, and this literally gives you a bird’s eye view of what is happening on the ground. And I do recommend that you look at this footage, there’ll be a new clip posted there in the next couple of days, certainly by the end of this week.

And there are also some photographs in appendix, I have the report that tell the same story. I should say also at this point that in making this excellent progress that we have, we’ve done it with a very good safety record.

So, over the weekend, we clocked up 2 million man hours on the site and that’s without a single lost time incident. So this is the record that our team takes a lot of pride in and I’d like to publicly acknowledge the very good job that they are doing in the area.

So well-done guys, it’s a great effort. Offsite engineering is now 100% fleet and procurement, including deliveries to site is about 85% complete.

So during the quarter, we saw delivery of a lot of Structural Steel tanks, the Ball mill and SAG mill are on-site, the electricity transmission are all on-site, the transformers are expected on-site in May and switchboard shortly thereafter. I mean the switchboards are coming from South Africa, so we are dependent on the port sector down there for those.

The pleasing news is that notwithstanding the COVID virus, et cetera, cargoes are being efficiently cleared through the port of Abidjan, when they arrived and transported to site without much delay. So as I said before, on-site, we’ve made a lot of progress and that’s clearly evident from the videos that I mentioned.

I won’t go through the details of progress chapter and verse. You can read all of this in the quarterly report itself.

But suffice just to say that the very strong progress is being made on all fronts across the site. And this project certainly has been one of the real highlights of a quarter, which really positive news has been in a little bit of short supply.

Now, I did mention earlier at the end of the – by the end of the quarter, we had capitalized about $135 million of Yaouré expenses and paid $129 million or 49% of the budget to suppliers of goods and services. We’ve also got commitments of $165 million in place, so that’s about 70%.

So we’ve locked in quite a lot of the budget and materially reduced the prospects of cost over runs there. So as I said earlier, no further delays and at this stage we can’t see too much on the horizon, although it is possible, that’s for sure.

Our stretch target of first gold in December is achievable and both we and our contractors are certainly doing everything within our power to deliver on this milestone. It is a very important project for Perseus and it does underpin our future growth.

So we are looking forward very much to deliver in further progress on that. Now turning briefly to exploration.

Last call, I reported that we had renewed our commitment of exploration as a means of organic growth, generating organic growth, and we’d allocated a budget of approximately $15 million to be spent on exploration over the next 12 months. The majority of the budget is to be spent around Yaouré, where we see an almost potential to add materially to reserve inventory there.

The balance will be spent around Edikan and Sissingué, where we have existing infrastructure and we’ll be aiming to add mill feed to both of the inventories there and extend the lives of both operations. Now, around Sissingué, we’ve drilled a number of targets during the quarter.

Zanikan that looked very promising early on, turned out not to hang together when we set about estimating a resource and trying to optimize a pit around that resource. We are in the progress of drilling several other targets at Tiana and Kanakono.

So far the drill results are interesting, but not spectacular. We still have quite a few targets left, so we’re definitely not ready to credit Sissingué just as yet.

At Edikan late last year, we announced that we’d entered into an option agreement on a mineral lease called Agyakusu, it’s located adjacent to the ground at Edikan. Government approval for this deal was received from the government early in the quarter and we moved to start drilling the prospect during the quarter.

Now, unfortunately, this brought us into conflict with local farmers and artisanal miners, and the situation is now resolved as best as we can tell. And we’re intending to move bulldozers onto the site in the next day, I think it is just certainly by the end of the week.

And this is a very interesting opportunity for us as success on this tenement could unlock thinking on several other regional opportunities and could also materially extend the life of Edikan well beyond what’s – what is envisaged in that recently published Life of Mine plan that I referred to few moments ago. At Yaouré in the December quarter, we drilled three deep diamond holes targeting the structure that we expect will host a material underground mining operation for some years to come off the side of the CMA pit.

Now all holes hit the target, hit the targeted structure at or near the targeted depth, I must say though that the third of the holes, we did have to go back in and extend that hole to get to the structure. But since, as I said those holes, the results weren’t spectacular.

But the fact that the structure was hit, it was very, very important and we do intend to revisit these holes in the future for the purpose of doing downhill – downhole, seismic testing to assist the interpretation of the 3D survey that’s now been completed across the site down from the CMA pit. I should say that, that 3D survey did involve us stopping work in the tailings dam for 10 days during the quarter in order to get that work done.

But we’ve managed to recover most of that time on the development of the tailings dam. And at the same time, we got the 3D seismic data that we were seeking to get, so there were some very good results.

The work was completed just the other day, we also did an additional 2D survey line while we were added over there and that work finished right last week and the guys will be leaving site in the very, very near future. The hard work starts now, of course in analyzing the data that has been acquired.

This does take a fair bit of processing and we envisage that we should have some usable data towards the end of the year, if not before, and that’ll be used to inform a targeted drilling campaign. And obviously, as news comes through from each of the sites, we’ll be sharing that with the market.

So look, in conclusion, as I said at the outset of the presentation, we’re living in pretty uncertain times. I mean the pandemic is creating some serious challenges for us that so far we’ve met these head-on and we are ahead of the game.

What happens from here remains to be seen, but we are confident that by remaining vigilant and being proactive, we will successfully see this crisis through. Operations-wise, the June quarter should be a lot better than the March quarter in terms of both production and cost.

Sissingué is already running well ahead of budgets for the month of April and Edikan is getting back on its feet as well. And I think Edikan’s June quarter will definitely be a lot better than the March quarter we’ve reported on today.

In terms of development, Yaouré is well and truly on the right path forward, excellent progress being made on both on the ground and off the ground and we look forward to being able to just continue to showcasing that through the video footage that we put on the website. And we’re looking forward as I said earlier very much towards hitting that stretch target of producing gold by the end of this year.

Exploration-wise, as I said, we are accelerating our efforts to not only extend the life of the existing operations, but also hopefully discover our next mine. And, we are certainly [indiscernible] interesting targets and hopefully we’ll have some positive news on that front before too long.

Now, I’m sure that everyone on the call has noted the recent strength in gold price and probably noted some of the very bullish assessments about the future gold price made by analysts from some credible banks. Now whether they turn out to be correct or not, time will tell.

But one thing is for sure, Perseus has put itself in a very good position to take advantage of market strength as it happens. In several respects, the quarter that was not what we planned it to be.

But look, in this business, sometimes things do go awry, not withstanding the very best of intentions. But we do remain optimistic about the outlook for the company, having successfully addressed the challenges of this quarter.

And one thing, as I say, shareholders can be absolutely certain that no matter what does happen, we’ll be leaving no stones unturned to ensure that Perseus’ enormous potential is fully realized. Thanks very much.

I’m now happy to take any questions that you may have and if I can’t answer them, I’m sure Andrew will be able to. Thank you.

Hi, good morning guys. Just wanted to maybe flesh out those met issues at the Agyakusu a little bit more if I could.

Just reading the statement obviously, you’re working on improving those ore blends. But should we expect lower recoveries over the next six months or the work you’ve done today has seen recoveries improved back up to budgeted levels?

Yes. Recoveries have certainly improved, since we implemented the changes.

So we’re running pretty close to our targets right now and like, it’s – we’re not there every single day, but most days we are up there. We have the odd day where things dropped down a bit where we need to control it.

But by and large, we’re in control of the process and recoveries will come back.

Okay. So this is very much a one-off one looks at things in the…

That’s certainly the way we see it, Reg, it did catch us a little bit by surprise and I have to admit that, our enthusiasm got the better of us. We were chasing the targets, having had a delay due to the repair works that we did and we overcooked the goods as it were.

So that was our mistake and we shouldn’t have done it, but we did. But it was done with the best of intentions.

And as soon as we got on to the real cause of the issue, we acted to fix it up. And I don’t think there’s much more that one can do under the circumstances, but certainly, things are coming back.

And as I said on the – just a few moments ago, we’re expecting a much better quarter coming up.

Okay. Great.

And just lastly around Yaouré. So given the uncertainties presented by COVID, you’ve withdrawn your guidance, but yet you’ve maintained the Yaouré timeline.

You’ve identified the movement of people as perhaps being a key risk. Just wondering, if you could maybe outline to me why you’re still comfortable with the Yaouré timeline versus withdrawing your guidance.

Yes, look. Yaouré, it’s a little different.

We’ve got – it’s not only our people, we’ve got contractors and the like. And we’ve got very large number of our people living in the local areas.

Now, I have to say the infection into the community is a risk because if the community gets infected and our workforce go down and then this is going to make it fairly difficult to hit that target. And I did say that we’re on track to deliver that subject to not getting knocked off course.

I mean, I did make that qualifier in there. Look, at Yaouré things actually are going really well.

And what we did do, we got out into the community very early on in the piece in terms of the providing assistance to the local health authorities. And at this stage of the game, look, there are no incidents of infection anywhere near us.

I think the closest infection to us was about 100 kilometers now and that turned out not to be an infection anyway, a person was put into an employee of a beer factory was put into current team, but it turned out not to be positive. So we are being very proactive there and we’re pretty confident that we’ll stay together.

Now, in terms of our employees on the site, I mean our guys, I said to them when the virus started kicking in, I offered them the opportunity to return to their home countries, but almost to a man, they said, no way, we’re staying through this and we’re going to see it right to the end. So what will happen is that, if the local workforce do start getting infected, then we will close down the site to the extent we can and continue doing what we can continue to do and we’ll be working hand in glove with our contractors on that score.

So Lycopodium and ourselves are very much in sync on this. And as I say, we’re working very well together to achieve that target.

Both of us are highly motivated to do that.

Okay, excellent. Thank you.

Good morning, Jeff. You’ve been very clear on the challenges presented by COVID.

And I’m just wondering, how much of that is an impact to current production rights versus more you’re calling out potential risk from here? Just trying to get a sense of what production could be possible in the June quarter if there – those disruptions don’t come through versus that bottom of the guidance range you’ve suggested, excluding any COVID impact.

Yes, look, Nick, it will be quite ingenuous of me to blame COVID on our production this quarter, to be perfectly frank. It has had an impact, but I couldn’t really quantify it.

I mean it has to have an impact when you’ve got people who are working longer shifts and when they’re anxious about what’s happening at home and things of that nature. It’s inevitable that, that would be the case.

And there’s also some incremental costs, which have come in, which, as I said during the call, they’re not massive, but there has been some incremental costs. So I would say I’m not going to hide behind it and blame COVID for the issue we had at Edikan this month.

That’s simply not the case. So the opportunity for us to get stuck in and to lift the result is there.

Got. Understood.

Thank you. And then do you mind just providing a bit more of an update on consumables and critical spares?

If there is an issue getting those to sites, I guess, what could that look like in terms of potential sort of full-mill shut in this quarter? Do you have sort of…

I am going to say pretty nil. Pretty much nil.

We’ve got – on all of the key space, we’ve got at least three months, probably more, in fact, ahead of us. So I don’t think mill shuts will necessarily come in.

Where it could impact this month, I think, is things like mill shutdowns or if we have a breakdown. We have had some trouble, for instance, with the crusher at Edikan.

Again, we’ve been having troubles with the crush since day one. Bringing in specialists to deal with those issues is very, very difficult.

So it’s that sort of thing that we can’t predict, which could have a material impact on us. But the thing is this, we’re not saying that we’re definitely going to be impacted by it, but what we are saying is that there is a risk because of these things that we can’t deliver and rather than make false promises and mislead people, it’s prudent on our part to withdraw that guidance.

And – but at the same time, as I said quite clearly, we will be going hell for leather to try and achieve the targets that we did set ourselves previously. There’s no motivation for us to put the tools and go soft on the situation.

We’ll be out there going flat out. I can assure you.

Okay, great. Thank you.

And then finally, just an extension of Reg’s question, then that Bokitsi ore contribution. What was the original planned contribution versus that 15% that’s been optimized to now?

And does that present any additional challenge for you guys, if there was to be gap sort of seeking that all from alternative sources? Or is that all sort of…

There’s no problem seeking from alternative. It was about 20% and previously in the blend.

And we overdosed beyond the 20%, frankly. And we think that 15% gives us a high level of control.

What we will be doing over the next period of time is gradually edging that up because it does carry higher grade. But if we see any sign whatsoever that as we edge it up to 16%, 17%, if it starts having negative effects, we’ll back it off again.

It is very much a – it’s an inexact science – it’s one a bit of a dark art, to get that blend exactly right because not only are we putting Bokitsi ore in, but we’re also putting in ore from – well, we just actually finished mining in Esuajah North this week. Actually, we’re doing a good buy cut on that now.

We’re bringing ore from Fetish, and we are bringing it from AFG, and we’re bringing it from stockpiles. So there is variability from the ore sources.

And so just getting that blend right absolutely on a day-to-day basis is quite a challenging exercise. Now we have managed it in the past, and I’m confident that we can manage it again in the future so long as we don’t get carried away by chasing the higher-grade Bokitsi ore in a single go.

Now the Bokitsi ore itself, I think we’ve run out of Bokitsi ore in about – I think it’s in the September quarter. So it’s not like this is a permanent problem for us.

And that’s why we’re very comfortable with that life-of-mine plan that we put out, that what we’ve seen this quarter won’t impact that because that life-of-mine plan is based on ore coming from AFG and from Fetish and both of those and then Esuajah South. And both of those – Esuajah South is very similar to Esuajah North.

We’ve processed that material in the past. We know the properties of the material, and we’re very comfortable that we’re not going to get any big surprises.

I should say also to that, particularly from AF Gap, which is the biggest ore supply, it’s a large granitic ore body. It doesn’t involve the sheer posted material or metamorphic, which comes from Bokitsi, which is a little bit more metallurgically complex than the big granite hosted material.

So in terms of the impact on the life-of-mine plan, we think that there will be any negative impact. And that plan, as presented, stands, and we’re looking to deliver to that.

All right. Thanks very much, Jeff.

Hey, guys. Just on Sissingué, unfortunate to see Zanikan didn’t meet the hurdles to be included in the life-of-mine update.

Just wondering if you could remind us exactly what the current mine-life is ought to?

As it stands today, it’s about three and half years, I think from now about that. And that’s assuming no other satellites come in.

If you actually – in doing the life of mine plan recently, I looked back at to see what how that compared to the feasibility plan that we put out, right, we started off. And we have each year incrementally increased our reserve base, so we’d be putting the ore through a lot faster than we thought we would do, but where we’ve got more tons, more gold, et cetera, et cetera.

And I think that, we will be seeing some incremental extensions, but at this particular time we can’t say where they’re coming from exactly. But certainly Zanikan was a little bit disappointing to us, but we have actually benefited from that work, there’s other deposits along strike from those and we – I think we understand the structure in that area a lot better, and that’s Tiana and Kanakono and I think that the next couple of months will be fairly interesting in terms of the drilling that comes from there in terms of being able to potentially identify satellite deposits.

And if we are unsuccessful in that area, then I guess what we will need to be doing is to looking to see what else we tend to do regionally to find some other alternative suppliers. But, certainly we’re not overly pessimistic about the future there.

I mean, it will be very nice if that mine had a five or a 10 year mine life ahead of it, because it’s performing beautifully and running ahead of targets in every respect that it would be a real money spinner for us, but let’s just wait and see what comes off the drill bit over coming quarters.

Right. And just secondly just on your staffs, what’s the percentage of expats on each site?

Generally, what’s the most common country that they’re coming from? I think you mentioned that some Sissingué staff have been on site for about 12 weeks now, just what’s your thinking there and what’s your plan to kind of get some new guys in and out from those sites.

All right, well Edikan staff, Edikan, because that’s the easiest. We’ve got about 400 direct employees and we’ve only got two expatriates, one is onsite and one who’s not.

So one the guy who’s onsite is an Australian bloke and the other guys in South African, so it’s pretty, there’s not a big issue there at Edikan. I mean, it is a big issue for the guy who’s onsite, but he’s pretty comfortable with the way things are going and he’ll stay at the distance.

At Sissingué, we’ve got all up less than 10%, I think it’s about 9% expatriates. So there’s probably all up about 20 odd guys up there.

And where did they come from? Well, they come from everywhere, they come from South Africa, the UK, Australia, the U.S., so they’re all over the place.

And what we are doing there is, we have actually backed-off we give the guys a day-off a week to give themselves a break and I should say, actually at the same time, the local fellows too, the local Algerians have also gone on to longer shifts as well, but rotating the Algerians off, we don’t think he’s going to be that big a problem because what we will do is to take them, put them in quarantine for two weeks in a facility that we’ve established at the [indiscernible], take them up to site, they will have six weeks on and then they’ll have four weeks-off and then they’ll go through the routine again. So I think the local fellows should be okay in terms of replacing.

With the expatriates, the problem at the moment is that the airports are locked down. There are – we believe there are one or two flights going to open in May, so I think if European airlines starts to fly in May and we’ll be looking carefully at opportunities to get people on those flights and bring other people in as we go.

But in the event of crisis, like for instance a medical issue, medical suppliers successfully have done repatriations already, so we believe that can be handled. But we are watching very, very closely on the airline schedules and look, in an emergency situation or in a situation where it become completely intolerable, we would simply charter an aircraft from somewhere and take all the guys out in a single day.

But look, we don’t envisage that is going to be the issue, our people are there, because they want to be there. When this crisis opened up, we said to them anyone who wants to leave, we’ll get you out now, and we did.

Actually a couple of people from Sissingué for various reasons did have to leave with the things that they had going on at home and I think there might’ve been one or two at the Yaouré, but by and large, the team was very determined to get through this issue. Now, whether they have the same level of enthusiasm, if they’re there for another three months remains to be seen, but that’s one of the things that we do need to be cognizant of and be aware that if we have to put a lot of effort into managing fatigue and boredom and things like that so that it doesn’t flow over into productivity.

That’s all from me, thanks.

Thank you.

Hi, guys. Yes, Adam’s questions covered up what I was asking.

So, thanks.

Thanks very much. Look, as I said in finalizing my earlier exercise, I mean it has been a challenging quarter, but we are very optimistic about the future.

We think that the challenges of this quarter can be successfully addressed and I look forward to reporting back in July, I guess there will be and I’m very sure that, we’ll have a much more attractive story to tell at that particular time. Thank you very much.