Aurelia Metals Ltd

ASX:AMI

Earnings Call Transcript 2021-Q2

[Operator]

Thank you for standing by, and welcome to the Aurelia Metals Quarterly Investor Conference Call [Operator Instructions] I would now like to hand the conference over to Mr. Dan Clifford, Managing Director. Please go ahead.

[Daniel Clifford, MD, CEO & Executive Director]

Thanks, Hamony. Good morning, everyone, and thanks for your time. I have Ian Poole, Peter Trout; and Adam McKinnon online with me. I'll make some overall comments on the performance of the company and some follow-up closing comments with Peter covering our operations, Adam our exploration effort and Ian covering off on the financials.For the quarter, we're on track for the year, with the December quarter outcome in line with our expectations, resulting in a solid Half 1 for the company. Metal production run rates on a year-to-date basis put production well within or if not at the upper end of any guidance given.The same can also be said for mill throughputs at Peak and Hera, both resulting in quarterly production records for lead and zinc at either mine.Asset performance was strong, resulting in guidance for the group, excluding Dargues being revised down to $1,250 to $1,450 an ounce from the previously stated $1,500 to $7,950. I've spoken to reliability and predictability of the business a lot. Throughputs and cost per tonne for the quarter and the half reflect that work being on or better than target, and also underpinned by a year-to-date 26% reduction in our total recordable injury frequency rate.Although with that performance, COVID-19 complications, labor market tightness and the Peak shaft had provided some headwinds to that improvement in trajectory. The acquisition of Dargues was completed early and the integration well progressed.Individual asset guidance of 20,000 to 23,000 ounces at an all-in sustaining cost of $1,850 to $2,050 for the remainder of the year is given. I want to specifically note that the operation is in ramp-up in terms of grade and ore production with Half 2 run rates tracking well towards the long ranges provided in the investment presentation.This occurs as the underground volumes come up to mill capacity and grade improves with depth. Exploration has been both very active and very successful through, and is also now extended to the Dargues asset.And federation continues through exploration and the internal studies to get more and more exciting with the Scoping Study due to the company and the Board during this quarter. The balance sheet remains healthy post-acquisition and dividend, driven by the operational performance. Peter, can you now run us through that operational performance, please?

[Peter Trout, Chief Operating Officer]

Thank you, Dan. I'll first provide an overview of the group level and then more information for each of our operations. I'd like to highlight in the December quarter, those very strong base metal results, as shown in Figure 2 of the ASX announcement. Lease delivered record group zinc and lead metal production. The associated byproduct revenues maintained the group's all-in sustaining cost of circa $1,000 per ounce for the third consecutive quarter.This performance reflects our strategy of delivering value through the processing of higher-margin ores based on their net smelter return value and operating reliability, leading to consistent underlying production and unit cost outcomes.Our gold production halved relative to the September quarter due to a corresponding reduction in ore grades. The lower gold grades were consistent with our mining plans, and they are a function of the stoping positions and the inherent grade variability in our polymetallic ore bodies.Aurelia continues to actively manage the risk of COVID-19 with no COVID cases reported in the Cobar region nor at our sites. We have experienced attendance impacts from both New South Wales and cross-border travel restrictions. And these were exacerbated by a tightening of the labor market, which is most noticeable in our underground operations.Moving to each operation. At Peak, we again saw the benefit of the expanded process plant, which was able to treat the higher lead/zinc grades, particularly from the Chronos zone and produce separate lead and zinc in concentrates that realized revenue benefits. This delivered the record lead and zinc production out of the Peak operation. The lower quarter-on-quarter gold production was a function of the gold grade, as we progress through zones of higher base metals and NSR value. And this can be seen in Figure 5, with the focus for us being that margin between our NSR and our site unit costs. Our underground mining activities were focused around the preparation of the Kairos load for ore production. Notably, this involved an extensive infill drilling campaign to upgrade the mineral resource and then form the mine design, development of the upper and lower ore drives along the strike of the ore body in the first stoping area. And these development rates were restricted by squeezing ground conditions and some localized tough zones we encountered.We're also in the midst of raise boring a large diameter exhaust raise and putting preparations in place for an escapeway installation, and both of these required before stope production can commence.The first Kairos development ore was processed in January. And given the current development phase positions and conditions, we now expect first stope ore to be delivered early in the June quarter. Our site expenditure increased above the September quarter, mainly due to the higher underground mining activity levels and costs associated with the hoisting shaft rectification works.At Hera, the mine is transitioning towards ores with a lower average gold grade and higher base metal grades, and this is consistent with the ore reserve. This transition was evident in the December quarter as underground stoping progressed out of higher-grade gold zones into slightly better base metal grades.We're operating the Hera site to maximize the processed ore volumes and to reduce the unit costs as an offset to the lower gold revenue is, therefore, pleasing to report improved quarterly processing performance with an uplift in throughput contributing to record quarterly lead and zinc metal production.A number of low-cost initiatives have also enabled incremental improvements that delivered better metallurgical recovery outcomes and benefited our operating margin at Hera. At Dargues, we completed the acquisition in mid-December and welcomed a new asset to our group. The quarterly results reported from the Dargues mine are based on a half months ownership and are not at all representative of steady state operations. The underground mine is in a ramp-up mode. So our initial focus has been to smoothly transition the operation to our ownership and set up the mine to deliver 30,000 tonnes of ore per month to utilize the available processing capacity.Figure 8 in the quarterly results announcement charts the ramp-up in underground ore production that we expect to achieve by mid-2021. It also highlights the difference between the ore mined processed in Half 1 when underground ore was supplemented by the drawdown of low-grade surface stockpiles.Figure 9 in the announcement shows the higher gold grades and corresponding gold production that is forecast for Half 2, reflecting the improved gold grade at depth and more confident ground conditions leading to less dilution in our stoping areas.It was a very busy time for us in December at Dargues, and we focused on onboarding approximately 40 full-time personnel to Aurelia's employment. We've implemented the Alliance agreement with Pybar for underground mining activities. We're busy applying Aurelia safety and business systems to the operation, and we've embarked on-resource infill and geotechnical drilling to support mine planning. Another key focus for us has been the operation of the cemented hydraulic fill plant, as this will allow us to backfill our underground stope voids to support predictable stope cycling and sequencing to enable the ramp-up in ore production. We've also applied a robust maintenance regime in the process plant and are establishing an appropriate level of spare parts inventory for that asset.Moving to growth projects. The Federation Scoping Study has progressed well with the technical and economic assessments largely completed and the report preparation is now commenced. Encouragingly, the metallurgical test work conducted during the quarter supports a process flow sheet that recovers gravity gold, followed by sequential copper, lead and zinc flotation into separate concentrates to realize the greatest economic value from the Federation mineralization.The Scoping Study is on track for completion in the coming months, and it will present a subset of project configurations ahead of a decision to gate the project to a pre-feasibility study. We also expect to large permitting applications to allow the development of an exploration decline and expansion of the existing Hera accommodation village.I'd like now to hand over to Adam McKinnon, who will discuss our exploration activities across the group.

[Adam McKinnon, Group Exploration Manager]

Thanks, Peter. So this last quarter, once again, saw a strong investment in exploration and resource development with a total of 9 surface and underground drillings operating across our sites. The company's Federation discovery located along strike to the South of Hera has continued to go from strength to strength. The company released 3 updates on Federation during the period with the emerging high-grade gold potential being the standout feature. Exceptional intercepts from the period include 12.9 meters at 33.4 grams per tonne gold and 37% lead/zinc and 25.5 meters at 11.4 grams per tonne gold and 37% lead zinc. Drilling has also pushed high-grade base metal mineralization further to the Northeast, and new high-grade gold mineralization was identified as close as 50 meters from the surface.In the last 6 months, drilling at Federation is focused on upgrading confidence in the estimates following the release of the maiden resource in June last year.As previously indicated to the market, the release of an updated mineral resource estimate for Federation is imminent with the estimation in the final stages of review. Ongoing resource definition drilling will continue at Federation, although the company is now also testing targets near Federation, particularly along strike to the Northeast. Moving up to Peak. The December quarter saw the first Kairos infill results returned following the establishment of the underground drill platform from the lower decline.A number of very strong results were received, including 11.5 meters at 38.4 grams per tonne gold and 10% lead/zinc. And 18 meters at 14.3 grams per tonne gold and 23% lead/zinc. Drilling was initially focused on the first plant stoping levels at the base of the current reserves.Encouragingly, a number of the infill holes extended gold and base metal mineralization along strike to the north, with high-grade mineralization still completely open at depth.The December quarter also saw ongoing surface drilling at Great Cobar with 6 holes completed. These holes were designed to provide further confidence to the grade and tonnage of the copper-gold dominant mineralization in this deposit with full results still pending.Ongoing drilling in the current quarter is set to target extensions to the mineralization up and down-plunge. And finally, to our new Dargues gold mine site. In December, Aurelia's Board approved $3.5 million for an intensive surface and underground drilling program. The program will target mineral resource growth in high potential areas along strike and at depth, as well as providing additional confidence to the existing mineral resource estimates. Extensional and infill drilling from underground has already commenced. We're drilling from surface cements in the coming weeks, pending the receipt of necessary regulatory approvals. The full program is expected to be completed around mid-2021. Thanks, and over to you, Ian.

[Ian Poole, CFO & Company Secretary]

Thanks very much, Adam. The company maintained its cash balance for the quarter at $106 million. The movements in the quarter were cash flow from operations after sustaining capital of $33.5 million. Continued investment in growth capital of $11.2 million. Return to shareholders with the payment of the FY '20 dividend of $8.7 million, outflow of cash costs for the Dargues acquisition of $167.6 million, and Aurelia is still to pay a stamp duty of 11 -- $13 million, which is due this quarter and some other transactional cost of $3 million, which is due for payment this month.We also had the net proceeds from the equity raise of $125 million and that proceeds from term debt of $45 million. Aurelia refinanced during the quarter for the Dargues acquisition with Investec, ANZ and BNP. Following the Dargues acquisition, Aurelia now have a fully drawn $45 million term debt facility, which is scheduled to be fully repaid by September 2023, a $50 million bonding facility, of which $48 million is utilized and an undrawn $20 million working capital facility.During the quarter, Aurelia also initiated a 55,000 ounce gold hedging program with the company's finances for 12 months at an average forward price of AUD 2,441 an ounce. As outlined in the investor presentation in November, I really will be holding a general meeting for the shareholders to approve the whitewash provisions for the financial security arrangements for Dargues.The notice for the general meeting will be filled out -- sent out early next week for a meeting, which is planned for the 5th of March. I'd like to hand over back to Dan.

[Daniel Clifford, MD, CEO & Executive Director]

Thanks, Ian. I think it's appropriate to go to Q&A from participants in the call now. Hamony, if you could open up, please.

[Operator]

[Operator Instructions] Your next question comes from Dylan Kelly from Ord Minnett.

[Dylan Kelly, Senior Research Analyst]

Two questions for me. Just firstly, on the hoist outage and the impact on the business. Like last year, when this happens, it was quite a big set setback. But this year, you've somehow come out ahead. Can you just walk us through the moving parts with what happened, how you've managed to achieve it? And how much of this was -- how much of the base metals sort of increase was part of the plan and more built into that reliability equation that you've spoken about before?

[Daniel Clifford, MD, CEO & Executive Director]

Yes. I'll take that one, Dylan. I think the -- I mean the key learning for us from the shaft out is, if you remember, we're dealing here with, what, 35-year-old infrastructure. And it's a pretty complex piece of gear. We had some issues with it in the prior financial year. Since then, there's been a real emphasis on not only that hoist capacity but also our trucking capacity as well as stockpiles.So as we -- we're gaining control of Peak, emphasis has gone to risk management and having surface stockpiles or ore stockpiles is a key part of that risk management. So in essence, we didn't see -- it was a headwind. It wasn't a material impact on the business in the end, and we continued feeding the plant via trucking.I think that's the first -- I think that was the first question. The second one being the base metal increases. I'm going to answer that question and start with gold first. I think you're well aware, as I hope most of our investors are that we're dealing with polymetallic gold grades move as we move between stoping areas and we drive towards NSR, that's the primary focus and prioritization.And the September performance was strong in gold. It was probably a couple of thousand ounces better than we were anticipating at that point. December was, as you can see, roughly 50% of that. It was probably 1,000 or 2,000 ounces below where we're expecting, but in -- that's a plus or minus roughly 5% on an annual basis.So it's really -- we're well on track to our guidance. The base metal performance was expected for us. We did do some minor shuffling with ore fees as a result of the hoist outage in the year, any of the deviations washed through easily.

[Dylan Kelly, Senior Research Analyst]

Okay. That's clear. Just moving, if we can, to Dargues and the ramp-up there. Can you just through -- I appreciate some of the charts that you put in there on -- was it Figure 9 in terms of ounces and grade. What are the key deliverables here towards moving second half number towards that life of mine average target in terms of development and overall production rates? Could you just walk us through the different moving parts of that?

[Peter Trout, Chief Operating Officer]

Dylan, it's Peter Trout here. I'll take your question. A number of different moving parts. We flagged several of these in the announcement in November. So firstly, the mill has reached its nominal 30,000 tonnes a month capacity. It's a matter of the mine ramping up to be able to deliver that ore feed sustainably.So to do that, we're focused on the infill drilling to give us confidence in the stoping locations, development layouts, et cetera, as we form the mine plan. We're actively pushing hard on development and tracking well there at the moment to get our new stoping areas accessed and the decline extended.Importantly, we have to get the cemented hydraulic fuel system working reliably because that backfills the stope always allows us to take the next stope in the sequence. And that's probably the biggest lever that we're working on at the moment.We've also put the Alliance in plays with our mining contractor at Pybar, and that has key drivers focused on our whole of business performance, not just individual elements of the underground operation.So I think we're in good shape there to be working together towards the big game, which is getting up to 30,000 tonnes per month out of the mine. And you'll see those other metrics in the quarterly report around the 400 meters a month development, for example that we need to achieve.

[Operator]

Your next question comes from [ Roy Gillespie ], private investor.

[Unknown Attendee]

Roy. Yes, I just want to ask about Dargues. Initially, you estimated that all-in sustained cost would be $1,350 or thereabouts. I'd see now in the quarterly report, you're estimating it to be $1,850 to $2,000 something. Can you explain the reason why?

[Daniel Clifford, MD, CEO & Executive Director]

Yes. I'll take that one, Roy, it's Dan. Just noting the ranges provided in the investor presentation on $1,150 to $1,350 were long averages across a 5-year mine life. The cost guidance that we've given for the remaining 6 months of this financial year, after that, exactly 6 months, representing pretty much year 1 of the life of that asset. So it is clearly in ramp-up.The fundamental driver of the all-in sustaining cost, particularly for Dargues, unlike our other operations, there is no byproduct credits for Dargues. And it's purely related to gold being a denominator in that cost structure. The -- what is ramping up is not only the mine volumes to the mill, but also the head grade or the mine grade as we go to depth. And that is an expected trajectory for the asset and not too dissimilar to where we expected it to be roughly at this time of the year, give or take, probably $150 an ounce. So we're confident that as gold grade comes up, mining rates match the commissioned mill rates, gold production will come up, reducing that all-in sustaining cost as we go into FY '22, and we'll state that guidance for that year early in FY '22.

[Unknown Attendee]

Can I just have another quick question? Can you comment on the efficiency that you see in modifying the mill and maybe mining processes at Dargues?

[Peter Trout, Chief Operating Officer]

Roy, it's Peter here. The greatest leverage we have at the moment is through, firstly, the underground mine, getting it up to nameplate. That technically is pretty straightforward. It's a matter of execution. In terms of the mill, it already outstrips the mine in terms of its production rate.We've got a number of initiatives identified there, and we'll move through those in a stage manner as we can identify the value that each one of those will unlock. The third one, and this is a really important one, underlying the investment is the potential to extend the resource at Dargues. And as Adam has alluded to before, we've already commenced that work and we'll have more activities over the coming half year to give us information we need to reach a decision around that.And when you take the mine life of 5 years and use expanded resource base to extend it out by a couple of years, there's a tremendous leverage for us in the business. So they're really the key areas we're following through, get the efficiencies and the productivity from the underground mine, demonstrate the improvements we think we can achieve through the process point and execute those, and then build that resource base that underpins the mine life extension.

[Operator]

[Operator Instructions] Your next question comes from [ Jeff Oca ], private investor.

[Unknown Attendee]

At the heart of the drought, there was an announcement that there was going to be an extra cost relating to water, which I assume to recollect was around the impact on the AISC of about $50 an ounce. Just wondering with the improved rainfall, what the situation is with respect to that in terms of what was it in the first half of the year? And what's the likely future outcome likely to be?

[Daniel Clifford, MD, CEO & Executive Director]

It's Dan. I'll take that one. Anad there's -- obviously, we've got 3 operations now, the 2 in particular that were impacted during the drought, being Hera and Peak. You're correct, it was flagged for FY '20 at about $50 an ounce across the 2 existing operations at that point. We -- during that period, we developed and commissioned the dewatering from Great Cobar. That is in place and operational, if and when we need. In fact, we are using it, but not extensively.We have an RO facility within the group as well. So we're well positioned to handle any ongoing drought issues in terms of water self-sufficiency. At this point in time, we are not focused on that, and therefore, some of those -- the costs associated or part to those $50 an ounce aren't really being incurred certainly at Peak.The Burrendong dam, which is the high-security main water supply is currently at about 41%. At the height of the drought, it was at 1.5% to 2%. And we're very concerned about water security, particularly for the Cobar community. So in essence, that $50 an ounce isn't being fully incurred as we go through the course of this year. At Hera, though, we are bringing some water onto the asset as our bores are being cycled through clean, recommissioned and rerunning. But in essence, we think we are in a good position in terms of self-sufficiency of water security.

[Operator]

You now have a follow-up question from Dylan Kelly from Ord Minnett.

[Dylan Kelly, Senior Research Analyst]

Sorry, Dylan here again, guys. Just following up on Federation and Scoping Study and the resource. Could you just walk us through some of the comments around the different production scenarios that you're looking at? Are they going to be formed part of the release?Can you tell us about the breakdown of -- or sorry, if you've done any more analysis around the open cut scenario? Or are you targeting just a larger increase in terms of the underground? Sorry, just focus purely on the underground at this point?And just as an aside, in terms of the amount of detail that you're going to be able to release, I understand that ASX can get quite finicky around what you release in terms of how much materials inferred that you can discuss as part of the Scoping Study. Could you just give us an understanding about -- sorry, a rough order of magnitude of what would be, say, the inferred part of the resource that you're going to be able to talk to?

[Peter Trout, Chief Operating Officer]

Dylan, it's Peter here, and I'll answer your question and I'll try and do that in reverse order as I copy it to my memory. So in terms of what we release on the Scoping Study, I can't comment on that at this point in time. And I certainly can't give you an indication at the moment of the relative resource classifications that will be underpinning that.In the coming days and weeks, you'll see the updated mineral resource estimate. And it's fair to say for the purpose of the scoping study, we've been intensely focused on the upper portion of the deposit to get more drilling and hence, more definition around that area, given it will be the first area likely to be mined, and we want to put ourselves in the best position to convert across to an ore reserve in due course.In terms of the production scenarios we've looked at, we've essentially taken a range of scenarios looking at using existing Hera plant and then taking the upside is what a mining-constrained mill number might be. In conjunction with that, we've looked at various flow sheet options as the metallurgical test works come in.And the purpose of the Scoping Study is to assess those options and identify which subset of options gives us the best go-forward plan. And that's really where we're up to at the moment, and I can't disclose too much more until we finalize all that work and report it internally.You asked about open-pit mining, how we've gone back and looked at that? We have had calls to reconsider based on the gold grades near-surface that Adam has mentioned. But it's fair to say that when you put the volume of an open pit around that mineralization, it probably won't stack up in terms of strip ratio and economics. So our thinking is currently still with an underground operation, trucking the ore to our processing plant. And making use of multiple flotation streams and gravity circuit to get the best value out of that mineralization.

[Operator]

Your next question comes from [ Roy Gillespie ], private investor.

[Unknown Attendee]

I'm back again. Yes, just with regard to byproduct income. I would see the all-in sustaining costs for Hera and Peak have come down because of that. Can you sort of just indicate how much of an impact that has had over the last 12 months?And then where do you see it going in the future, you see metal prices going up? And what sort of impact will that have on income and profit?

[Daniel Clifford, MD, CEO & Executive Director]

It's Dan, Roy. I'll take that one. Look, I think byproduct credits are a combination of controllable and uncontrollable. And when I say uncontrollable, that is the metal prices for the purposes of restating or revising our all-in sustaining cost guidance for the existing assets or Peak and Hera, I should say, we have taken a look at what we're expecting for the next 6 months of pricing.Beyond that, though, what we are focused on is what we see as the highest value material and throughput rates. And it would be being able to predict or forecast what the metal prices are going through into next year and is probably a move we wouldn't want to be taking right now.I think that one of the net benefits of this has been in a polymetallic is that we also get a natural hedge against the gold here as well and that we can -- we'll see them move counter to each other. But what we're focused on is that highest NSR in priority and sweating of our mills to drive that profitability.

[Operator]

[Operator Instructions] Your next question comes from Russell Fountain from Curious Capital.

[Russell Fountain]

I was just wondering, how does your remaining Hera a resource blend with Federation? And what are the timing issues from going from one to the other?

[Peter Trout, Chief Operating Officer]

Russell, it's Peter here. I'll take your question. We're working through our life of mine planning process now. And it's an annual exercise we do, and that will give us an updated line of sight on the Hera mine life.Clearly, though, we see Federation coming in quickly after the depletion of the Hera deposit. The exact timing is to be determined as we go through further evaluation and permitting. But from our point of view, we want to try and maintain continuity through that processing hub, and that's certainly the focus of our efforts.

[Daniel Clifford, MD, CEO & Executive Director]

I might just add a little bit there, if I can. It's Dan again. With the stage that Federation is up to in terms of drilling and studies, particularly regulatory consents or stope development consents is pretty much the critical path for bringing on of that ore fee to a mill or to the mill in that area. That's not a 6 or 12-month proposition.That is several years. So 2 to 3 years from where we are now, if not perhaps a little bit less. But that's the sort of time frames we're talking, just to try and quantify there a little bit of Peter's comments. What we can see happening though is with -- and you'll note that the Hera performance in the first half of the year has been strong. It's -- if you look at its half year rates on throughput, it's well -- it's ahead of any guidance we've provided on that particular physical KPI, and that's good. What that does is have an impact on costs, and we're also seeing through plant reliability efforts. We're also seeing gold recovery improvements on the asset compared to FY '20 performance. All those go hard to margin and longevity of the operation to support that continuity that Peter talked about between the ore fields.

[Operator]

[Operator Instructions] Your next question comes from [ Stephen Hass ], private investor.

[Unknown Attendee]

I just want to know, despite taking on debt, will you be maintaining the $0.01 or so dividend this year?

[Daniel Clifford, MD, CEO & Executive Director]

I'll take that. It's Dan again. Look, at the end of the day, that's -- the dividend decision is a pending decision for the Board. We will take that view through the course of this year and with the full year results. I think back to what the strategy of the company is, we're definitely a company focused on returns. There's no doubt in that. But the dividend decision, balance sheet robustness is a decision pending through the course of this year for the end of the year.

[Operator]

[Operator Instructions] Your next question comes from [ Glenn Vison ], private investor.

[Unknown Attendee]

Yes, my question is to do to with the cash flow. I know basically the cash on hand is the same at the end of the quarter compared to the beginning of the quarter, and that seems to be a fairly large cushion. I'm just wondering any particular plans or timing on that?

[Daniel Clifford, MD, CEO & Executive Director]

It's Dan. Glenn, I'll take that one. Look, one thing I would like to point out with that, whilst it has been maintained at over $100 million, the end points is pertinent in this discussion is that there is still a $13 million in stamp duty to be paid and some other associated [indiscernible]. Look, Glenn, you might need to put your phone on mute, I'm getting a lot of feedback there, if that's convenient for you. So we will assess the use of cash. But most importantly for us, for the course of this financial year is the integration and trajectory for Dargues and the running of the both Hera and Peak as hard as we can.So at this point in time, we are comfortable with the level of cash on the balance sheet. Post these payments, we will be below $100 million. And for the size of business in terms of revenue and business footprint now with 3 fully operational cash flow assets at this stage in time, that cash will remain on the balance sheet.

[Operator]

Your next question comes from [ Anthony Wallace ], private investor.

[Daniel Clifford, MD, CEO & Executive Director]

Hamony, we're not getting any voice through -- from Anthony.

[Operator]

Not a problem. [Operator Instructions] There are no further questions at this time. I'll now hand back to Mr. Clifford for closing remarks.

[Daniel Clifford, MD, CEO & Executive Director]

Thanks, Hamony. In closing, I just want to point out, clearly, again, we're on track to guidance. In fact, have improved our cost guidance on Hera and Peak as a group, and we remain firmly focused on the Dargues integration, but really importantly, the operational performance KPI trajectory to bring that asset into the long ranges provided in the investor briefing on that acquisition.From a strategy perspective, we are very much focused on what we call the value levers. And I've stated the strategy a couple of times. And in summary, the way I'd like to close this session is to really point out what those value levers are and how we're executing those. Firstly, it's sweat and extend with a prioritization of the highest tenants out to the mills. I think the quarterly performance will clearly show the work that has gone into both Hera and Peak to get to that point.Investment with tension between exploration and other investments aimed at increased reserves and reducing our group all-in sustaining cost is the second key lever for the business. We've executed on the Dargues acquisition. We are, as I mentioned earlier, focused on bringing that in the improvement trajectory of that asset into our group. That does do both improve our reserve base and reduce our group all-in sustaining costs with those LOM run rates. And then thirdly, creating that long-term value and returns growth, importantly, returns growth by an asset portfolio approach and a commodity mix. These are, in summary, what we are focused on as a company and that execution of that strategy is unfolding in front of us. And we're looking forward to particularly the upcoming news flow of our activities on the ground over the next 6 months. Imminently is the resource update for Federation and that'll be followed by the Half 1 interim results during February. The various marketing pushes within the business commencing in earnest during the March quarter this year. And the group exploration updates there is becoming -- pending obviously disclosure around the exploration as we get critical mass in that news flow group exploration update during the course of the quarter and ahead of the March quarterly production report due in mid-April.So again, thank you for your time this morning. We're on track for our guidance and very much focused on the delivery of the company's performance through the course of the year. Thank you very much.

[Operator]

That does conclude our conference for today. Thank you for participating. You may now disconnect.