TRX Gold Corp (TRX) 2024 Q1 法說會逐字稿

As participants make their way in from the lobby, it's now my pleasure to introduce Christina Lalli, Vice President, Investor Relations with TRX Gold. Christina, the floor is yours.

Thank you, Gary, and welcome, everyone, to the TRX Gold Corporation First Quarter 2020 Results Presentation. As a reminder, all participants are currently in listen only mode and meeting is being recorded. After the presentation, there will be an opportunity to ask questions. If you wish to ask a question, please click the Q&A icon. On the left-hand side of the screen, you'll see the option to raise your hand to join the queue and ask your questions verbally or please feel free to writing your question via the messaging when you are introducing your pump that will appear on screen and we continue to confirm that we are ready for your line is open unless you you're dialed into the conference call may press one on your telephone keypad.

To wish you. Of course, we welcome everyone's questions and we'll do our best to answer all. And for anyone who may like to ask a question privately, of course, it may always reach out to us directly to myself for the gentlemen here, and we'd be pleased to answer your question. So aside from this call, Stephen, on the being at the conference over to Kip.

Thank you, Christina, for we've got a little bit of technical difficulties this morning. So you're hearing us from actually Mike Sipho. So you'll see me move the Icon across the table as a different people speak, and I hope everybody can hear us just fine this morning. So thank you for joining us for our first quarter 2024 Results Webcast. And we're at a very interesting point because right now, we can I mean our both Andrew and Mike are on line with the start to smell. Third is the new plant and when it's going to come online. So we're really getting through the crushing circuit that is now, I think around 60% to 65% built ourselves of having a lottery. So we are having a lot of rain. So we're hopeful that it will come online between the end of January, early to mid February, and that's all dependent on the weather. It rained a lot more than anticipated this year in East Africa, particularly Tanzania. And so that is exciting. And then at the same time, the ball mill components and stuff like that are underway is starting to get installed as well. So we're really excited for that because that enables us to really put on the drill bit towards the back half of the calendar year, given that the increase of cash flow should the should be coming through as that plant gets online. So we're really, really excited because it's a really exciting period.

So without further ado, Tom, obviously, as a public company, I have to refer people to the cautionary note and referenced the fact that there will be forward-looking statements in this presentation. And so I would then ask investors and any other people to go to a website to view the cautionary note.

So online today, we have myself, the Chief Executive Officer. Andrew is joining us from Tanzania and pursue these in Orange shirt. We'd like to keep them in the plant as much as possible. And in them, we have Mike here who's next to me and Kristina, who is next to me as well. So just starting off with some similar points that we make in all presentations, particularly for anybody who's new on this call, we are TRX full team of experienced leaders developing and rapidly developing a gold project in Tanzania. We have an operating plant has been achieving high margin, positive cash flow. We'll get into that in a few minutes. And we have a special mining license that has significantly significant blue sky potential for New Gold discount.

An overview of our property the 2020 resource statement had 2 million ounces in the measured and indicated category for deposit comes to surface, which enables us to do all of this on this 20 meters wide. We have straightforward metallurgical grade press CIL. for fully permitted under a special mining license or the license was 23 until it is completely renewable till the end of the life of the deposit. We have a processing plant has been online for just over a year at 1,000 tonnes per day. That is consistently meeting production guidance. We have a minimal environmental footprint. We recycle water. We have good tailings management connected to the national power grid. And as I mentioned before, and always brings a great smile to my face is the exploration potential around this property. Our business plan has been that has been communicated is to grow production to increase cash flow to eventually increase exploration. One of the things that we've been very proud of, and it's starting to really show in the numbers and they start starting to really grow is we haven't done a capital raise, and I believe in over two years down, Mike, correct.

Yes.

So when we originally got into the businesses, a lot of that historical investors are aware we had to recapitalize the business to do all the things that we're doing. So in that when we look at the net equity cash that was raised over two years ago and around $23.5 million. And then we look at what we've invested into the property since then and followed by from that, those raises as well free cash flow that's been generated by the asset the multiplier on equity now that was raised is around 1.7 times and growth. So this is starting to prove out that the business model is much different than and we're going to build as we go and increase that investment to increase cash flow. And you're seeing that in both the production numbers as well as the adjusted EBITDA and cash flow from operation numbers. So in fiscal 2023, which was August, we had sales of almost 38 million over 38 million cash flow from operations of over 70 million and adjusted EBITDA of around $40 million. So we're starting to really see it in the financial results of the Company's business plan working. We've done this while controlling our G&A expense at same time, which is a which is great. So we've grown from in that period of time from around, including by brief 30 35 employees and now including contractors that operate to well over 500 people while keeping our G&A in check Q1 2024 highlights and Mike will get into this in a second on the Frasers at a very high level and we have positive operating cash flow again in this quarter, which has been reinvested in the growth projects are completely invested, almost 4 million, as I mentioned earlier, we continue to have prudent capital management and we are on a third consecutive mill expansion. As of today, we have approximately three to $3.5 million to spend on that, which we generated cash flow from operations so that the sources we continue to have strong gross profit margins. We expect those to rise as new plant comes online if gold prices stay at the same level and we expect the new plant to come online towards the back half of the fiscal year and just prior to the end of the second quarter calendar year. And then thereafter, as that cash flow comes online, we will commence in much more depth drilling program and we're starting to plan it out now we could of Pheno used part of the kit up there for drilling, but it would slow down the plant expansion and it makes much more sense given the economies of scale that we should achieve from the new plant to really spend our capital on that plan. So we have a much more robust exploration program at the end of that plan. So that's really why we're doing the things with the sequential orders that were doing it. And we continue to have a great safety record at Buck Reef. We've again, for the second time achieved 8 million work hours, LTI free. So kudos to everybody appropriate for working safely.

I'd now like to hand the presentation over to Mike. As I said, I'm going to postpone over. So you won't hear too much from me on this, and Mike will go through our financial results for her.

Thank you, Stephen, and good morning, everybody. Thank you for joining us for our Q1 call today. Q1 was a fairly steady-state quarter relative to what you would have seen over the last three quarters. Your production was just under 5,000 ounces you look at the Q2 three and four of last year, that's consistent with the outlook we've been achieving and farmers out. We found that a plant operating at or near near capacity year over year. Production was down slightly from Q1 of last year was the first quarter where we were commercially operating and to get it up and running what we have done is we've prioritized a high-grade oxide ore, three gram plus material through that mill to get it up and running for the first quarter. And with that said, what you will have seen for Q1 of this year, we put through a head grade of almost 2.6 grams a tonne, which is still well above the average grade of the deposit and very robust for our open-pit operations. What you would have also noted operationally as recoveries were that were partly impacted and had an impact on year over year production. We lead recovery rate of on average, about 81%, which is at the lower end of what we're seeing from our met studies based on our current rock composition, which is which is roughly 50 50 sulfide and oxide ore material that we're putting through the mill as well as grind size and retention times and realizing through the through the plant. But as Steven touched on. We're very, very excited about the expanded and enhanced crushing circuit that we expect to come online in, and that's really expected to improve that Grand ability of the rock and the material and consequently expected to improve recoveries as we head into the latter part of this year. Yes.

So Mike, I'm just going to pause for a secretary and explain that. So in any mining operation, there's a balance between the recovery rate and your throughput rate. So what you do is trying to maximize cash flow from operations by balancing that. So we know it if there are or sits in the tanks longer or has a higher retention time, we'll get a higher recovery rate. We also know we grind a lot finer, we'll get a much higher recovery rate. And so that's lining up into the MAD studies that we have right now given the plant is a bottleneck versus the order we have available. We balance recovery rate and throughput rate in an attempt to maximize cash flow from operations, given that we're in a build-up phase. So we have a good handle on recovery rates and how to improve them when the new crushing circuit comes online is one of the reasons why we decided to go with the crushing circuit first versus the milling circuit of the ball mill crushing circuit is the bottleneck in the current system and in order to free up to be able to mill more it even in the current system. We need to have the crushing circuit up and running first, which provides in a much more consistent product to the mill to take a much more consistent client size and increase those recovery rates through the milling process for that growth, that even on the financial side, we sold just under 4,900 ounces for the quarter.

So effectively, all of what we would produce that gave rise to revenues of over 9 million. Again, you see the realized price in the screen. Gold prices are still at lofty and robust levels of realized 1942 for the quarter, we've been selling well north of $20 an ounce this quarter. So lots of upside potential on the on gold price, our gross profit was just under $4 million or 40%, as Stephen alluded to. So this continues to be a high-margin operation on adjusted EBITDA that we talked about as well as $3 million. So good proxy for that for cash flow.

In terms of cash costs, we recorded cash costs of just over $1,000 an ounce for the quarter. That's above the full year guided range of between eight and $900 an ounce. So this is largely in line with expectations as we talked about on our year-end call and as we touched on that on your end results, our year end and Q1 cash costs have been impacted in part by higher fuel costs associated with us having to run generators to keep the mill operating at capacity once new unfavorable and inconsistent grid power, as we talked about on the year-end call and since and reconnected to the substation far closer to site in November that we expect the benefits of things like processing costs as we head into the latter part of this year, we're now operating at roughly 80% power versus 20% generated power. So we expect that cash cost number to improve over Q2 three and four and get back to that full year guidance number of two and $900 an ounce.

And I guess finally, Stephen touched on it, but we've effectively done what we said we were going to do is be prudent capital managers and organically generated cash flow to invest in value accretive activities on growth. We generated operating cash flows of over $5 million. We put almost 4 billion of it back into the operation in part to that expansion, as Steven touched on, relative growth, things like our tailing storage facility to accommodate much larger growth as well as put pieces of capital equipment in place to allow for that growth profile. We've got a strong robust balance sheet with cash of over $8 million positive working capital and well poised to grow the asset from here.

Yes. So Mike, I'd like to touch on what you mentioned around cash cost for a second. Now on the mining costs, we're very comfortable where they are and we think we can put that down a little bit lower. But where it goes, cash cost will start to come down on the processing cost per tonne and with the expanded plant doesn't incur any more fixed cost or it's not a very, very little extra fixed cost. So you're going to get a lot more fixed cost absorption due to higher throughput rates. And really, we still have a relatively small plant for the size and scale of what upgrade can be. And in order to get those costs down, we need to continually expand, have that overhead absorption and better cost absorption in the processing plant. And that's really what's driving the higher cash costs. It's broadly flat versus minus.

So no, it's a good point, Stephen. I mean, the plant will have significant economies of scale. Exactly to your point, you're doubling your throughput from 1,000 tonnes a day to 2000 tonnes a day without any additional overhead. So in principle, your processing costs of say $26 a tonne that we reported in Q1 to roughly be half as we get that pipe expansion online. So lots of efficiencies and economies of scale?

Yes, exactly. So as we move on the 2000 tonne per day plant, as I said, I'm smiling given the progress that we're making here, you will see some pictures here of the new crushing equipment has arrived on site. I think you see our general manager by cone crusher. And then you see are a German truck near our new job crusher, you'll see the expanded tailings facility. There's another lift to go onto that. And you have then you started to see the conveyors being put in place in the concrete works and things like that. You will notice the soil fittingly myself, as I mentioned earlier, there's been lots of rain and in Tanzania, now a lot more than normal but we're managing through it. And the team is continuing because we're constructing on site. They're going both on day shift and night shifts at this point in time, constructing our new plant. So there's only so much labor capital available. And that's one of the reasons that you need to do the crushing circuit first, and then we'll move on to the grinding ball mill circuit in order to put it all together. But we're pretty excited with what's going on at our suppliers on the crushers is putting in place a we'll be putting in place, a critical spares and in critical parts warehouse in the WAN to pretty close to us in order to reduce a lot of the potential and breakdowns and things of that nature. So that looks to be turning out to be a very, very good relationship. And this is expected to drive a lot of cost savings and increased production and increased cash flow, which will hopefully end up Reno, spreading the value of this project through the exploration drill bit as well as an increased production profile over time. Anything that ever you need to come off.

I am just sitting here modeling and how both of you are doing an amazing technical description. Thank you very, very much. I'm assuming the mood here is very, very positive. I am back at sites have been here since the 2nd of January at the progress is I think you mentioned about 65% now and that crusher The key thing that is we were going to be crushing down. The sulfide dropped what I like to call popcorn size, and that will then greatly enhance what we're guessing about mills in terms of ground ability. So I think those are the only comment I'd like to add. The geologists are keen to see the money and we're keeping them busy in terms of fine-tuning the targets and they're still having them get out and about some of them continue to explore the SML around us.

So I'm just going to move the slide forward. And just continue on, Andrew, about why you should start to see the second half of the year and where you were, which was through the end of the year.

What I constantly remind people of is obviously the SML itself is in the red outline 16 square kilometers. You see the main zone itself, though, or the sort of red and pink and the magenta spots. That's what we're currently mining. And we're currently in the process of and sourcing pumps to dewater the South pit that will be dewatered in short order restart the mining there that in terms of exploration, the key thing for us now will be to drill that piece of ground between what we call the Eastern porphyry in that southern boundary where there's an adjacent to Chinese run operation that we have over three kilometers to go and test. But I'll just take the moment to Stephen to just remind our listeners that we it has some great results right at the end of our last drilling campaign in the Eastern porphyry. Obviously some of the better results, 14 meters at 3.5 grams a tonne. And I really do have to point out these are very shallow, 27 meters from surface lot, 25 meter width of 1.6 from 47 meters below surface and then about 1.5 kilometers southwest of that, we had three meters running at 13 grams a tonne in the Android indicated really shallow at 43 meters. So an awful lot of drilling. It's going to take us a number of quarters to get through that. But it's a great story for deposits, doesn't change the resource to the Northeast, I mean, to the Southwest and clear evidence with all those white dots of small-scale operational artisanal mining, which is none of that is active and has been picked up by a geological team. So it's a good thesis, hasn't changed. We'd like to drill it.

Excellent. Thank you, Andrew, for that. So as I get on to the next slide, basically what we're doing on this slide is reiterating our business plan reiterating production guidance around when that mill expansion should come online. The production guidance of 25 to 30,000 ounces I remarked that's at a run rate. That's what we expect for the full year with the thousand ton and then expand the 2000 tonne per day plant, 2000 tonne per day plant. Obviously, the output is greater than that, and we'll give that Market Guide, say at the appropriate time for that.

The cash costs, we're reiterating our cash cost guidance eight to $9 an ounce on and and what the increase in cash from the new plant will be used for will be additional capital programs. The CSRDS. gene programs. Obviously we are operating will have more employees and a increase in the exploration and drilling focus are around the property. So I always say we have Michael ESG. and we work with communities. We integrate our ESG into our operating cost profile. We hire a lot of local people, a lot of local bond contractors that build our assets starting to pay significant amounts of royalties and taxes as a result. And we always keep a good eye on making sure that people are happy as well as that the schools and medical facilities and such forth in the local communities around us are continually improving with regards to what to expect over the next three to four months. And that study energy OpEx that are coming to an end currently, we see no surprises there. So we'll be coming out. I'm with regards to we are consistently in that we'll integrate into a what I'll call a mine plan update. We are looking at long-term savings solutions to close things of that nature, and we'll come out with an updated study at some point in time that will detail a little bit more on what's known today as well as what the exploration program for tomorrow is in order to give the market and investors a much more guy. It is business plan around how Barclays is going to roll it over with regards to how markets have performed. I don't think anybody in this call likes the current markets. We are in Asia, a higher interest rate environment. And we have said in the last 10 plus years or so that is expected to continue, which means capital is much more expensive also see alternatives that people have for investing are also different. So we need to get out there. We consistently get out there and tell our story. We are now a self-funded growth story, which is good and our stock price, although we like to have it higher, we always like to have a higher I think, relative to peers, it's actually held in.

Okay, but certainly this is something that we are our consistently on it and expect to see ramp-ups in the investor relations program. And on that note here, some new pictures. Again, we're rapidly expanding it self-funded growth story, and we are excited for what the features of that kind of upgrade, particularly as this plant expansion that comes online. So gating I'd like to hand it over to any questions.

(Operator Instructions) Jake Sekeslky, Alliance Global Partners.

Thanks for taking my questions. Yes, thank you. Jay carrier. Good good thing on. So just Just starting with recoveries, and I think Mike touched a bit on them. They're in the low 80s this quarter in some of the work that you're doing to improve on them through network and an upgraded equipment and the like. Are those improvements something we should expect this quarter? Or is that more of a second half of calendar 24 type thing?

Yes. So I think it's more second half or will actually should be not second quarter, but third quarter as the grinding circuit, a crushing circuit comes online to get a much more consistent product going to the ball mills. So it is a balance with sulfide ore between throughput and cash flow and recoveries. And so we're not seeing anything that gives us concerns relative to the studies that have been done that operate. And we do know that an increase was an increase in grind size, making the grind tighter and we know longer retention times does increase recovery rates quite significantly where we put out the press release in August that has doubled their retention times. And we're while we are currently experiencing will get the throughput through and that had a much higher recovery rate as a result of these complete balance. Not seeing anything that's concerning at this point in time that recovers restaurants, operator.

Okay. That's helpful. On the or actually you actually take the orders you're acting the way we thought it would. So that's about a real point.

It's very similar to the very initial metallurgical studies. Steven Yes. But just to remind our investors that there is the very final days of the old the crushing circuit was here for the test plant, and we run our mining into the sulfides as expected. And we're just weeks away quite literally from having that new crushing circuit up and running. And as I mentioned earlier, we will have a very good product going into into the ball mills.

I'd just draw your attention also to the just to the bottom right-hand photograph there because Pascal, our Senior Manager, they're sitting on top of the high-grade zone this now into the sulfides, just fuel visual appearance.

Okay.

And do you think you might be able to get it back up to the 93 range or high 80s. Is that something that we should be expecting? Any color there would be helpful.

Yes. I think Jay Kale, yes, I would say yes, we'll get into the high 80s range there's ways to get it into the mid-90s but forward to require capital to do that. And we'll be evaluating that and trade-off studies at a further date where we've just grown so quickly, we can't commit to that at this point in time, but certainly mid to high 80s is achievable.

Makes sense.

Okay.

And then sort of in that vein on growth with the completion of the most recent expansion coming to an end here, Al, you've obviously got some options as far as how your capital growth going forward on. Can you just touch on sort of how you're viewing that in a couple of the routes that you're considering here, whether additional staged expansions or single large expansion arm? And I guess what that decision ultimately hinges on.

Yes. So as you rightfully said, what are your options or thought processes there?

So that's not something that's determined in at this point in time. I would fully expect it will be a I don't want to be a larger expansion, which say never doubling because I think we can we could do that. But the focus will be to step back at this point in time. With that increase in cash flow and make those capital allocation decisions, what's best for the business between the exploration program as well as a expansion. Ultimately, this project needs to get to 100,000 ounces plus for well over 10 plus years or even greater than that. We do with an exploration drill bit and that that's our ultimate goal. There's various ways to get there and we evaluate them after this expansion.

Okay. Very good. That's all on my end. Thanks again.

Okay.

Michael Young, H.C. Wainwright.

Hello, everyone. Thanks for taking my questions, Muhi. So what are you seeing with the 2000 tonne per day expansion with labor, we assume it's not really any outside. I'm pleased working on the expansion side. It's really just your staff.

Yes, it's a little questionable. So it's all 12 in some of our staff and in some outside companies as well. So like electrical, for instance, you bring in an outside contract for that and some of the welding and things like that, you'll bring some outside contractors yet. So it's a combination of both our staff and outside contractors that we manage.

Can you maybe give a bit of a breakdown of those?

Andrew was that roughly 50 50 during the construction phase just because we were bringing in contractors in terms of the civils that we bring in CSI energy for the ventricles, as you mentioned, and but we don't provide a lot of the, if you like, the nuts and bolts, the operations for them sort of putting it together.

So I don't think it matters because it puts.

Sorry to interrupt you, Andrew, is it fair to say the methodology, the approach we're taking to the expansion is similar to the first one, which is it's not sort of an EPC managed project. We're managing it to house them and sort of outsourcing trade does need be.

Yes, that's right. What we've done is we've brought Jeff developed Baxter's over here, if you like, of the capital projects, we've hired a capital project manager. That site was actually more. That's what investment cast on the let me see that. So but also high development idea behind it is if you keep that core team in the plant involved in the construction as well, and then they specialize contractors then fall away. But then you end up with a team that a site that can carry on but were the projects we're watching. Smart people do the work right now to fully answer the day. One of the things that's really crucial is to have that. You can say smart people when it comes to heavy electrical engineering, you want to have smart people who actually do use one of the best contractors in East Africa, some of best people I've ever worked with, and then they will see us I got to get that right in terms of speaking of staffing, what do you think we'll see with labor costs for the remainder of the year?

I mean, anything anything that you can maybe share with us in regards to negotiations or just what you're seeing with turnover, that kind of stuff?

Yes.

So we haven't before and to your question, yes, I think as you know, Michael, that that kind of question comes from more of a North America and European perspective about labor rate increases that we're seeing in our economies here. We're not seeing the same type of increases there as you would have seen in here in North America?

Yes.

So are not in the cost of inflation or inflation in terms it is approximately 5%.

And yes, so we're not we're not in negotiations now and you're getting a day and that's not unlike other emerging jurisdictions, you are getting some currency depreciation of the Shetland, but not to the same extent as other jurisdictions, U.S. crudes, those as a European who lives in North America.

I guess so just ask questions to fit the mold. Thank you all very much, and I'll get back in queue.

Thank you very much for your time.

Thank you.

Robert Paulson, Paulson Strategy Group.

Hello, everybody. And I'd like to say congratulations to Steve and Andrew Michael, Christine and the TRX team for transforming TRS. It's been around a while and doing one thing that really needs to be done to grow and be more successful.

And Mike, I appreciate the questions earlier about improvements, growth expansion.

Right.

All great questions. Great answers. And my curiosity probably similar to many is with gold steady, basically holding all-time high as 2000 plus volatility is really strong as far as being minimal companies, profitable cash flow positive, strong profit margins, solid team communities looking great central banks just keep increasing their exposure and de-dollarization is underway.

My question really is, is like it's more of like a personal question. Like what do you what do you believe needs to happen for TRS to reflect all these great things that are going on. Like is that an internal event, something going on for us with exploration or an external event? Or just wondering if you could elaborate a little bit.

Yes, that's a very broad question, and I'm trying to get to a down to a little bit more granularity, but thank you for your comments at the outset on the turnaround of the Company. Obviously, as you mentioned, the Company has been around a long time. I've been here just over three years, and I would say in other way, we like to phrase it here internally, we're probably in the sixth or seventh inning of what we're trying to do here. The original part was to stabilize recapitalize. We establish relationships and things like that and get the Company pointed into the right direction and then add thereafter, we started to expand.

So with regards to when will someone actually stand up and take notice of what we're doing, I think is essentially your question hub. You know, I we're on the road a lot marketing. What I like to say is what I'm seeing in current markets, and I don't think you're going to disagree with. It is a lot of companies out there doing a lot even more marketing than we are. So you can't market your financial results. So we don't have good financial results. Doesn't matter how much marketing you're doing, your stock price decline and a lot more than what we've experienced over the last couple of years. And so our focus has been really on turning around the operations that we are increasing that cash flow and then taking that cash flow and putting it into the drillbit, expand the resource profile to make this a very attractive mining project that creates cash flow and has blue sky upside. It's taken time to do that I think, as you know, in my former role, as things happen very quickly in a mining project, it happen slower than you would like, but you've got to keep an eye on it and keep your eye on the long-term price hiding what's necessary. Here's the continually execute continually do, as we say, on continuing to increase those financial profile, those financial metrics while at the same time growing the resource base, I think you know, the slow and steady approach that I just mentioned, it is what you have to do is you come along and you hit 100 grams a tonne and the drill bit because you're drilling more than Great that's always a catalyst in any mining projects. But you can't bank on it. You've got to get out there and continue to do what you do the nuts and bolts of the business and then make sure that you have that optionality in your business plan to spring it, if you can hit those drill holes, that makes sense.

Yes, it doesn't make sense. And then thank you for it respecting the question and you guys are doing a wonderful job. I think everybody can agree that the Company now versus where it was a short time ago, is a much different company, more grounded, more opportunity. You know, clean financials, like a lot of the things people are really looking for in a marketplace that's looking quite attractive. And my question really is, as you guys have your fingers on the pulse and see things that other people may not see it. Some of it is intuition saying like we're just doing all the right things and it's a patience thing or and are there things that we should be considering doing that were not there?

Yes. And look, we have these discussions every day around, okay. What's in our control? What's outside of our control because one of the things you have to take into consideration when answering the question that you just answered, I just asked that we believe that in consistently increasing that financial profile doing, as you say, being extremely prudent with capital with a lot of these things you could speed up, but is that in the best interest of shareholders?

So for instance, in making the decision, we could have just went out and raised equity last year and had spread expansion come online now nine months ago or six months, but is that in the best interest of the long-term value of shareholders. And so you have to keep that in consideration and we decided just to do it internally generated cash flow.

Yes, it takes a little bit more time, but the denominator now is that's great in share count. So those are the sort of things that we tried to get through and make capital allocation decisions on it in getting the best value for shareholders over the medium to long term.

Fair enough. If you would allow me to ask one more question kind of in line with what you were just discussing. Is there is there something that we could see in the future or something that's kind of close that down? Have you like like we're talking about obstacle wise, is there anything that we could see that in the way right now that would hold us back from from doing or being the things that we want to it be doing?

Yes.

Right now, I don't think so. We've built in a lot of redundancy. Our purpose into this business model, for instance, will lean on the uterine we describe new motors going down in August, but we had three mill ball mill, so production and go down and we were able to get through without any shutdowns and things of that nature, fee crushing circuit is very important and there's going to be redundancy built into that crushing circuit as well because I go through with the team, give me every piece of equipment that gets shut down the whole thing, 100% and make sure that that piece of equipment is on-site on. And so we go around and infill that and in the medium term, I would say we need to get a much better handle on tailings. We got a good handle on it, but we need to build it out we need to come up with a longer-term strategy on that. That's the only thing that I could see that could really slow us down and we got a handle on it right now in order to say and or we'll have a study on the go at some point in time here, too.

On secondary, I think it is really keeping all of it also built up for?

Yes, that's already kicked off a filter presses to get to dry stack. So we're out ahead of the stuff that we could see. I think that what you're really asking is, you know, it is hard to predict is what can you see that could trip you up that much, but my earlier question.

That's right.

Yes, yes.

Yes, I'm trying to figure out what we have known.

I learned this.

So yes, the unknowns, right and you get them.

They happen time to time.

But we take a philosophy there you build enough redundancy and you should be okay.

Yes.

As you know, we've often commented that it's a lot wetter. Whilst we were prepared there having the El Nino effect has really come up at the pump and the pumps are keeping the pit dry money there. But as river restore mining were not flooded.

Yes, yes. So for instance, one thing that I always look at is okay, say if something were to happen, we have a large stockpile on site and I think there's 12,000 ounces there now in stockpile and we need to get a much larger crushed stockpile, which we'll work on when we get the new crushing system up and running.

So I like that, I like to kind of think about.

Okay.

How do I build all those, what I'll call internal insurance policies into the Company?

Yes, it could maintain saying thank you for for for your run your quest for answering those questions. I know the very surface, the kind of questions, and there are some that around a while and are our fans of what you and Andrew and Michael and the rest of the team are doing and we've been at it a while, and we're certainly looking forward to what seems to be coming down the road.

So maybe where we started was congratulations, and maybe that would be a great place for me to, and congratulations and thank you.

Yes, Eric, appreciate my support.

I'd like to hand the meeting back over to Stephen Maloney, who will take us through questions submitted in writing.

And so the questions submitted in writing. So we have one question here on, I think, to 2025 because it's common slide for M&A opportunities and time line. So let's talk about it on the M&A for a second. I think it's just more along the lines of what M&A opportunities are out there. So we're always consistently looking at M&A opportunities that would make sense for our shareholders. And as you're getting the sense is we don't really mind situations where you got to have it in their wall, obviously, maybe a little bit messy on and create value from it. That would be similar to when I came into into this opportunity as well as a team. So we'll evaluate things that might make sense. Or what I would say is we're very prudent on making sure we do not cannibalize the growth opportunities at Buck Reef, Palm, cannibalize the clean balance sheet and bring on stuff that may upset that when we look at companies that typically are in trouble from an equity price perspective and a market cap perspective. Usually they have securities that rank ahead of equity on the balance sheets that are very problematic and that's very difficult to get out of because what ends up happening is your business becomes undercapitalized over time. In mining, it's very capital intensive business. So we will prudently evaluate opportunities. But given it has to make sense for shareholders. It also can't. And it also has to increase growth potential. These are the Buck Reef because Buck Reef has a lot of growth potential as well. It has better growth potential shareholders about brings us and in order to make sense, that's difficult to find. And so that's how we evaluate the M&A opportunity.

Yes.

I might just add to that briefly, even the other comments around 2025, 2026. So obviously, you've heard our focus for this upcoming year is getting your factories to the point where it's operating at 2000 tonnes a day consistently and predictably and effectively running itself before we start venturing to deepen the strategic Waters elsewhere.

Yes, we'd like we had people approach us all the time to what we're doing about briefly, can you comment how, but then you start talking to the equity holders of that and they're saying all it's worth this is work that were there and thank you, but no, thank you.

Saw among a lot of those opportunities.

The next the next question there, is there any plans, I guess, a long growth again, of the acquire additional mining mines, cooperation, small-cap miners in next two or three years?

I think I just answered that question. Yes, we will evaluate that. We've also look as we continually evaluate growth profile upgrades. It is an interesting landscape and there are quite a few high-grade, smaller deposits. And there are other companies out there that do have hub-and-spoke models and I think that will be something that will be evaluated further over time. So we have in Buck Reef learned how to build roads. We have learned how to build plants on very cost effectively sold if there are growth profile opportunities that will start to as we get through this expansion, which is where our focus needs to be today to really look at for longer term strategy, I think in order to serve people on our board that are very happy with the questions that's been asked by investors.

Yes.

And Stephen, maybe just to give a little bit of more color on that as you'd expect from our geological team, we do like to know who's around us and what they're doing.

Yes, at a very high. We don't spend a large percentage of time on it, but so we will just keep a very high level fact.

Yes.

So I think that's a good feeling that that is all the questions that are queued today.

That's right. Or would you like to give any concluding remarks before we conclude?

Yes, just one final remark. I think we said it. We're very excited for the future. We are moving through the business plan as anticipated, looking forward to the increase of cash flow from a from this expanded plant. And I could tell you and or the geologist team or no pun intended chomping at the bit. Thank you for have.

Yes, that's true. Thank you.

Thank you very much.

This concludes the meeting. You may disconnect. Thank you for participating, and have a pleasant day.

Thank you.

Okay.