OZ Minerals Ltd

ASX:OZL

Earnings Call Transcript 2020-Q4

[Andrew Cole, MD, CEO & Director]

Good morning, and Happy New Year to everybody on the call today. Thanks for joining us for our Q4 2020 report. After the year we've all had, I hope you all managed to take a break over the Christmas, New Year period.Today, I've got Warrick Ranson, our CFO; and Andrew Mooney, our Carrapateena expansion project director, joining me on the call today. We're going to take you through a summary of our fourth quarter results, our 2020 full year operational performance, and we will cover our forward-looking plans for 2021, including guidance. So there's a lot to cover today. But we do need some time for Q&A, so we're going to keep our commentary at a fairly high level.Firstly, I have to say that I'm really proud of the team, the way they've looked after one another this last year and the results that they produced. I think the combination of our culture, our company strategy and the quality of people has really enabled us to exceed our 2020 goals in a very complex environment.So I'd like to draw your attention first to our disclaimer slides, and then we're going to move on to our Q4 highlights. I think a true test of the company's culture comes during the tough times. And I think the value of that culture is being demonstrated by our team's many achievements throughout this last year.We started the year strongly, responded to COVID-19 well, we upgraded our guidance and then we delivered it as well as advancing our strong pipeline of growth opportunities. We achieved copper guidance for the sixth consecutive year. We delivered on gold production. We met our cost guidance, all of which were upgraded during the year. We reduced our injury rate by nearly 20%. Our full year revenue was $1.3 billion. And our closing net cash position was $32 million, which is unaudited after growth investments with significant liquidity available.I'm also really excited about the decision our Board has made to approve the Block Cave Carrapateena Expansion, which will now formally see our sub-level cave operation transition into a higher-output, lower-cost block cave mine. This decision follows a very successful sub-level cave ramp-up and shows confidence in our mining capability, case development and our increased orebody knowledge. It now allows us to take a whole of province development approach, unlocking Carrapateena's potential to be a multi-generational, lowest-quartile cash cost producing province, but more on this a bit later.In the Prominent Hill province, the mine cemented its position as a low-cost reliable operation, while demonstrating the potential to increase underground production and extend mine life by accessing a deep ore with a shaft haulage system. With sustainable annualized rates now at or above 4 million tonnes per annum, we brought forward future decline development spend to further consolidate underground ore movement and increase mining rates to between 4 million and 5 million tonnes per annum from 2022, which will be prior to the previously released 6 million tonnes per annum from the Prominent Hill shaft enabled expansion, which we're currently studying.In the Carra province, the Carrapateena mine ramped up to its 4.25 million tonne per annum run rate, 6 months ahead of original expectations. The sub-level cave is performing well. Mine development rates are on track. The underground ore crushing and conveying system is performing as expected. The plant is performing well after a fairly intense year of fixing commissioning issues and debottlenecking, and our customers have been very pleased with the quality of the concentrate we are producing.The Carrapateena expansion progressed to the next study phase mid last year following the release of a study update that showed the value uplift of converting the bottom half of the sub-level cave to a block cave, forming the basis of a multi-generational mining province. And as I've mentioned earlier, given the sub-level cave ramp-up success and the mitigation of the main block cave expansion threats, we now have Board approval to progress the Carrapateena block cave expansion as our base case. We expect the block cave extraction level decline to begin in Q4 2021 after we reach the sub-level cave crusher to substation.In the Musgrave Province, the West Musgrave project increased the value over the course of the year with the pre-feasibility study update showing a larger 12 million tonne per annum mine with the same 26-year mine life, powered by 70% to 80% renewable energy. We also acquired our project joint venture partner, Cassini Resources, which gives us 100% of the project, providing us with flexibility regarding development and funding options.Our Brazil team continue to operate while managing a much higher concentration of COVID-19 than we see here in Australia. Their robust processes, limited cases on-site are low numbers at any one time, and their tests, trace and isolate regimes prevented widespread infection. Throughout this, the team have kept the main activities operating.The Carajás Hub is now taking shape with Pedra Branca ore being trucked to the Carajás East processing home.In the Gurupi Province, we made some progress, though not as much as we would have liked, towards removing the injunction on the project with further support received from INCRA just prior to Christmas, which now enables us to progress with other authorities before seeking court approval to lift the injunction.Creating value for all our stakeholders, shareholders, employees, communities, governments and our suppliers is at the heart of our strategy. This concept of value creation has been embedded into our governance systems throughout our process standards and how we assess risk. It drives us to deliver on our purpose of going beyond what's possible to make lives better.In 2020, we described OZ Minerals' future-state aspirations. These aspirations and the acceleration priorities we identified through Project Beyond, challenge us to realize our full competitive advantage in a very dynamic world. Together, our strategy and its embedded aspirations support achieving our purpose, which is a collective vision for the business to work towards.We also further hardwired value creation for all stakeholders into our governance framework and developed a set of metrics, which will have the dual purpose of being a performance assessment tool and focusing our work and behavior. We plan to publish this metric set for the first time with our full year results next month.Let me just touch on a bit more detail on our aspirations priorities here. These strategic aspirations and the project beyond acceleration priorities will help modernize how we work, fast-track our ethical and sustainable aspirations and refine and prioritize the fundamentals of our business. We now need to progress delivery of these priorities towards our aspirations during the year ahead. Some of these are about our environmental performance, some about how we work.Culturally and strategically, we want to advance in a number of areas. Firstly, we want people to be able to work flexibly with individual customized work-life plans that enable people to organize their work around their lives, not vice versa. To name a few others that you see on your screen, zero carbon emissions and zero waste while minimizing water use; being agile within the OZ way of operating to ensure we can adapt quickly to threats and opportunities; making innovation easier where our people are encouraged to develop ideas and collaborate with others in the business, across the sector and across industries; being data-driven, where we gather and use data; and create insight into our business for faster, better and more creative decision-making that also reduces manual processes.We will continue to embed the OZ way of working across the business through 2021, so we can align around our purpose and create value for our 5 key stakeholder groups.The company's snapshot slide is an overview of our projects and their geographic location. In 2020, most exploration activities were on hold, but we resumed some activities in the last part of 2020 within a COVID-safe framework.On the asset time line, notably, in Q4, we completed an update on the West Musgrave PFS, and it showed an uplift in value and scale. We also made the decision to progress the Prominent Hill shaft expansion study and saw some positive drilling results. You will note on the header of this slide that we have grouped all study work into studies, which reflects our agile approach to project delivery, where we focus on risk and value, mitigating or realizing risks, maximizing value and maximizing future optionality. This methodology has served us well over the past several years, and we expect to continue strengthening and embedding this approach in the OZ way.I spoke to some of the 2020 results in the preceding slides already, so I'm mainly going to focus on looking forward into 2021. Firstly, on the how. We will continue to maintain a persistent focus on improving and maturing our safe and healthy approach to work; improving people's choice in how and when they work; continuing to build our modern mining company culture through the OZ way; and aligning all our decisions to the creation of value for our stakeholders.On the what, this year is going to be a pivotal year for OZ Minerals with material milestones at each and every asset, all of which have the potential to transform the company as we advance into our next phase of growth.The focal areas include the Prominent Hill shaft enabled expansion that could unlock much of the 150 million tonnes of resource of which roughly 2/3 are currently not in our mining inventory nor the current 2031 life of mine. It also has the potential to keep the operation well within the bottom half of the cost curve with a final investment decision expected mid this year.At Carrapateena, with the main SLC ramp-up complete and the Carrapateena block cave expansion now improved, it enables the Carrapateena team to get as much out of the sub-level cave as they can, whilst accelerating the transition to the block cave and culturally setting up the province as a multi-generation asset.The West Musgrave project final study phase will continue to optimize the design and progress all enabling activities readying for -- ready to build investment decision next year.In the Carajás East, with the new Pedra Branca underground mine now starting to ramp up, we turn our focus to defining mineral resources and completing enabling studies on possible new additional satellite mines at both Clovis, just 4 kilometers from Antas Processing Hub; and Santa Lucia, just 40-odd kilometers from the Antas Processing Hub. If successful, these could give us 3 separate high-grade satellite mines all feeding the Carajás East Antas Processing home.In the Carajás West, drilling at Pantera and an initial enabling study will determine whether this is a region which we wish to invest in to create a new Carajás West processing hub or not.Lastly, whilst our project pipeline has held us in good stead in recent years, we expect to leverage our exploration program to help add new opportunities to the pipeline to give us more future optionality and growth potential. I'm going to provide more details on our 2020 performance projects and planning for '21 shortly. But first, I'm going to ask Warrick to provide an overview of the financials. Thanks, Warrick.

[Warrick R. J. Ranson, Chief Financial Officer]

Thanks, Andrew, and good morning, everyone. So cash flow from operations continued to remain strong, even with a significant uplift in trade receivables this quarter with all operations making final shipments in the second half of December. Pleasingly, as Andrew mentioned, we completed the year in the black with a net $32 million in cash.Despite the ongoing COVID global restrictions, our supply and customer chains operated uninterrupted once again. Our last scheduled shipment to China was in October, and we do not currently have any additional shipments scheduled for delivery there. The majority of our production in 2021 is allocated, and we maintain a small amount of opportunistic flexibility to respond to market conditions, as usual.The net valuation of ore inventory across the business changed marginally quarter-on-quarter with a further valuation uplift on our low-grade gold stockpiles as a result of changes in the processing schedule and a review of our gold price assumptions into 2021. These offset the physical reduction in higher-grade gold ore, which we processed through the quarter. Most of that stockpile has now been processed. And Prominent Hill begins to move into this low-grade gold material, reducing both comparative gold production and by-product credits for '21. We also added about 2 million tonnes of previously written-off gold mineralized material into inventory, given those higher price assumptions. Trade payables reflect normal year-end invoicing.$81 million was invested into Carrapateena, with $44 million of this in mine development expenditure, where we are now extracting on the third sub-level. Mill enhancement projects and work on the new Western Access Road also added to capital. This took our total capital spend for the year to $225 million, excluding the final tenement payment that we made, which was below the lower end of our initial 2020 pre-COVID capital guidance of $270 million to $310 million, with some activities being deferred into 2021. And as alluded to last quarter, we saw an uplift in exploration spend as field-based activities recommenced. We'll see additional investment into West Musgrave next quarter with the team back on-site and resource drilling underway.We continued to maintain our strong focus on capital allocation and ensuring we create long-term value growth across all key stakeholders. Pleasingly, the year reflected a strong performance against our 2020 market peer set, reflecting the combination of production delivery, operating margins and project development pipeline.$110 million was spent on development activities during the quarter, funded through operating cash flow. As a result, the drawdown of our revolving credit facility remained unchanged at $100 million. Whilst we have a solid pipeline of new and evolving greenfield opportunities that this quarter had a particular focus on our approach to maximizing our brownfield potential and the outcome -- with the outcome being acceleration of expansion options at both Prominent Hill and Carrapateena, as Andrew mentioned.The release of the West Musgrave study update in early December, continued to support the robustness of that project and the allocation of an additional $67 million to progress the study ahead of a final investment decision expected in 2022, subject to regulatory and other approvals. And we had a 6% uptake of equity through the reinstated dividend reinvestment plan with our interim dividend. Andrew?

[Andrew Cole, MD, CEO & Director]

Thanks, Warrick. Turning now to some of the details. Firstly, at Prom Hill. It's been another strong year, as I said before, of delivery with the team achieving both copper and gold production guidance, making this the sixth consecutive year that the team has delivered on guidance. The team also set an ore movement annual record with the annualized run rate of 4.2 million tonnes per annum sustained for the second half of 2020. In October, we started the accelerated decline development with an advance of 600 meters achieved to support increased mining rates of 4 million to 5 million tonnes per annum from 2022.On the Prominent Hill expansion, as previously mentioned, the study update confirmed the feasibility of a vertical hoisting shaft to access deep ore and potentially extend mine life. To support this, we commenced mineral resource infill drilling to improve our confidence of the mineralization with over 15 kilometers of resource drilling completed during the quarter, results to date have been very encouraging, reaffirming our geological interpretations and past resource models. We've also made good progress on activities that support the project, including the appointment of a new project director and several critical roles within the execution team.Full year C1 costs of negative USD 0.54 per pound and all-in sustaining costs of USD 0.15 per pound were within guidance, which we reduced earlier in the year after a strong operational start and gold price changes. This maintains Prominent Hill as one of the lowest cost producers in the world.Back to now, if you please, Warrick, take us through the Prom Hill's costs.

[Warrick R. J. Ranson, Chief Financial Officer]

No problems, Andrew. So this will actually be the last time we graphically present the Prominent Hill costs by themselves. We have carried now achieving nameplate production. We'll take the opportunity to present a group view of our cost performance from Q1 this year.More specifically, though, another strong C1 cash cost performance, despite Prominent Hill's significant Q3 performance being pulled back somewhat as a result of the lower gold production towards the end of the quarter. Underground mining rates continued to perform well, once again, above 1 million tonnes for the quarter. And the nearly commissioned Malu Paste plant continues to enable improvement in backfill performance and stope availability, increasing our level of broken stocks and underground production flexibility.We experienced the usual quarterly timing variance on processing costs with a major plant shut down in October. And incurred an additional $0.16 per pound in power infrastructure leasing and operating costs relating to the new hill-to-hill power infrastructure, which we touched on last quarter. But which importantly now provides us with expansion capacity at both Prom and Carra, which was not previously available. And obviously, that feeds into the expansion opportunities that we've mentioned.These changes are currently weighted to Prominent Hill. And at a group level, we'll see approximately a $0.12 to $0.14 per pound C1 cost addition at full production. But that will be offset by a circa $0.05 per pound reduction for our new electricity supply contract, which commenced on the 1st of January.At Carrapateena, operating costs per pound are starting to approach normalized levels as underground production ramped up to nameplate and despite being marginally impacted by a couple of adverse weather events across the quarter. We had our first major shut in December. And the mill generally ran in line with the rate of ore being supplied, despite ongoing tailings, pumping constraints, which are going to be rectified in February when we tie in our new displacement pump. The mill actually achieved an annualized daily run rate above 5 million tonnes on a couple of occasions during the quarter.In the Carajás, we batch processed 2 runs of Pedra Branca ore, providing higher grades albeit at marginally lower recovery levels. The team continues to work there on optimizing the flow sheet for this ore as the underground mine moved out of precommissioning and added to mining and transport costs.All-in sustaining costs of Prominent Hill followed the C1 trend. Sustaining capital for the quarter included work on the north and west wall remediation projects and the fifth wall lift for the Tailings Storage Facility. Andrew?

[Andrew Cole, MD, CEO & Director]

Thanks, Warrick. Now on to Carrapateena. The Carra team also achieved copper and gold production guidance. Underground development continued to perform well, and we completed ramp up with a production rate of 4.25 million tonnes per annum achieved consistently during November, despite a short COVID-19 South Australia-wide lockdown in the period. The team has completed the planning for a processing shutdown in February 2021, which will see plant enhancements, including new SAG and Ball Mill liner designs and expansion to the concentrate filter press, the commissioning of a new Jameson cell, and of course, ore stockpile capacity increase, all aimed at continuing to debottleneck the system to enable greater annual rates in the future.Carrapateena C1 cash costs for the quarter were USD 0.317 per pound, with an all-in sustaining cost of USD 0.592 per pound. I opened today's call with the news about our Board approving the progress of the Carrapateena block cave expansion, and we'll now touch on it in just a bit more detail.As a recap, the premise of the Carra block cave expansion is that by converting the lower portion or second decade of mining in the Carrapateena sub-level cave to a block cave, we increase the overall value, we decrease the risk and further unlock the potential of the whole Carrapateena province. The pre-feasibility study released in June last year demonstrated that conversion of the lower portion of the current sub-level cave to a series of block caves significantly increases value. It increases reserve and mine life, it increases production to 12 million tonnes per annum and average copper production to 110,000 to 120,000 tonnes per annum, with gold production increasing to 110,000 to 120,000 ounces. It unlocks Carrapateena's potential to be a multi-generation, lowest-quartile cash cost producing province, and it creates a world-class opportunity considering its scale, production, mine life, cost base, and of course, the jurisdiction.The status of the block cave study has until now largely been dependent on the performance of the sub-level cave, including learnings from cave propagation and cave management. So with a very successful ramp-up of the sub-level cave, and the key threats to the block case study now addressed, the Board took the decision to approve the block cave transition and merge these 2 into a single accelerated plan. So for clarity, this constitutes a final investment decision. The block cave is now approved in line with our agile approach to work. Whilst there is still some study and design work to do on the block cave, none of this is expected to materially change the design or the economics.On the back of this approval, we will commence some early works, bringing study block cave -- bringing some block cave capital forward to enable the team to continue debottlenecking the sub-level cave operation so it can reach its full potential whilst bringing forward the block cave transition, which we expect to come on circa 6 months earlier than that stated in the PFS. We expect the block cave access declines to begin in Q4 2021 after we reach the sub-level cave second crusher chamber. These will remain critical path activities for the transition to the block cave. This approach will allow us to maximize the overall value of the orebody, simplify planning, simplify execution, increase optionality and reduce overall risk.Turning now to the Carajás in Brazil. Pedra Branca transitioned to an operating mine during the quarter with preproduction ore processed from November at the Carajás East hub processing facility at the Antas mine. Mining and development activities have continued, while also managing the effects of COVID-19 cases from time to time amongst employees and contractors. We have containment controls in place, which are supported by an isolate, test and trace regime and precommunication regarding social distancing and hygiene expectations. The number of cases remains low, but we are keeping a very close watch to ensure the safety of our people and the community.C1 cash costs were USD 1.40 per pound for the quarter, with an all-in sustaining cost of USD 1.60 per pound. Production costs increased during the quarter with the inclusion of the start-up, low-volume operating costs for Pedra Branca.And finally, at West Musgrave, we released an update to the PFS during the quarter, which demonstrated greater value with a value-maximizing annual throughput uplift of 20% to 12 million tonnes per annum. We also started critical path procurement activities for the next stage of study, and we commenced infill reserve drilling activity earlier this month. At this stage, we expect to make an investment decision on the West Musgrave project early next year.We have seen some movements in our growth pipeline as we exited some exploration projects and advanced others. I expect these to mature and evolve over the course of this year, and I expect to see more activity as we all learn how to operate around the world within a COVID-safe environment. As I also mentioned previously, we will also be focused on adding new future options to this pipeline to ensure we maintain a healthy organic pipeline of optionality.I'll now move on to detailed guidance over the next couple of slides here. And I'll start off with the overall guidance before talking to Carrapateena specifically. I'm not going to go through all the numbers, but I thought I'd cover off on just a couple of the high-level context elements.For production, there will be an uplift for copper production in 2021 from last year in excess of 20%, with Carrapateena's ramp-up completed during 2020, providing its first full year of production in '21. Group all-in sustaining cost and C1 costs are expected to increase this year with the reduction in benefit from by-product credits as gold production reduces at Prominent Hill, reflecting a depletion of the higher-grade gold stockpiles, which is partially offset by the reduction in all-in sustaining costs and C1 unit costs at Carrapateena on the back of a full year of production at nameplate capacity.On capital, we will see an increase in both sustaining and group capital in '21. The higher capital reflects increases in underground ore movement at Prominent Hill up to the 4.3 million to 4.6 million tonnes. There will be significant growth capital investment at Carrapateena, which will include capital spend that we have deferred due to COVID-19 earlier last year, enabling capital to move above nameplate capacity from '23 onwards and funding for the delivery and acceleration of the Carrapateena block cave.There is also growth capital attributed to advance in Carajás Hub strategy with Pedra Branca now moving into operations and an increasing production profile with mining from ore stopes commencing shortly in '21. Also, we will be supporting the progress of the next stage of study for growth options across Prom Hill, Carra, West Musgrave and the Carajás.Moving now to the 5-year guidance table for Carrapateena. We published this table for the first time last year. I'll just call your attention that all the figures are an annual average, except for the total capital expenditure, which reflects the total for the 5-year guidance period. This 5-year guidance table for Carrapateena has been updated to now reflect the integrated sub-level cave and block cave.Capital expenditure has been updated to reflect investment to derisk SLC ramp-up to 4.7 million to 5 million tonnes per annum and transition from SLC to block cave and commence blockade early works. This guidance includes $750 million of the $1.25 billion of incremental block cave capital, including decline development, early works, detailed design and long-lead procurement items.The capital line also reflects deferrals from 2020 due to COVID-19 and incremental CapEx in SLC areas of the mine to embed optionality for the block cave and projects in both the mine and processing plant to increase SLC production rates and improve cave establishment.We see a lower all-in sustaining cost due to reduced sustaining capital as a result of growth-focused activity. And finally, expansion capital funded -- will be funded from operating cash flows with Carrapateena remaining net cash flow positive.Looking at our key milestones for 2021, which is set out on the last slide. Per our regular cadence, we will update our resource and reserve statements in November. We are expecting the investment decision for the Prominent Hill expansion study in Q3. We will begin the access declines for the Carrapateena Block Cave in Q4. And to close 2021, we'll see us moving into our next phase of growth. We'll be focusing on the safe delivery of work across our assets, projects and exploration, progressing the Carrapateena block cave expansion; advancing the project studies at Prom Hill and West Musgrave; developing the Carajás Hub strategy further in Brazil; strengthening exploration activities to create more project pipeline opportunities; and continuing to embed the OZ way to build an agile organization where growth is enabled by our culture.Our financial position remains robust with $32 million net cash at the end of the year, with significant liquidity available, while our capital management framework provides a strong platform for accessing finance to fund their operations and considerable growth pipeline. And we will stay true to being a modern mining company with value creation for our stakeholders at the center of everything that we do.So that wraps up the introduction to our summary of our performance for 2020 and our look ahead into 2021. Very happy to take questions now or after this call separately. Operator, can you please remind people how to ask questions on the call?

[Operator]

[Operator Instructions] Our first question in queue is from Paul Young from Goldman Sachs.

[Paul Young, Equity Analyst]

Andrew and Warrick, a few questions on the guidance. And of course, a lot of moving parts and data to get through. But I just had a few questions on, first of all, the CapEx guidance attached to Carrapateena on the '21 to '25 time frame. First question is the lift in CapEx on the sub-level from $700 million to the $1 billion when you include the deferred CapEx. Can you just explain that, what's the move there? Is that just the larger operation? And also, are there any -- you're seeing any cost escalation within the new estimates?And actually, that then leads to the second question on the block cave expansion CapEx of $750 million. You said there that there's another $500 million of spend beyond '25 to make it the full $1.25 billion. But then you make a comment about that you've made an allowance for cost increases associated with market conditions. Can you just step through what the magnitude of that is and how you feel about the $1.25 billion? Did you have enough contingency in there, et cetera?

[Andrew Cole, MD, CEO & Director]

Yes. Paul, yes. So let me start, and I'm going to ask Warrick to add a bit of color just on some of the details on here. So we're quite comfortable and confident in the $1.25 billion from the pre-feasibility study that was published for the Carrapateena Block Cave Expansion. But we are obviously pulling some of that forward as we believe there is value in accelerating the transition from the sub-level cave to the block cave, which is -- and now that we've effectively dealt with all of the material threats to the block cave, we're comfortable and confident in making that decision and pulling the capital forward. So that's -- so the $1.25 billion number stands. But as we've said in the guidance table, we've pulled some of that capital forward. I might just ask Warrick. Do you want to talk a little bit about the capital items and the current guidance table for '21 and the 5-year period?

[Warrick R. J. Ranson, Chief Financial Officer]

Yes. So as Andrew mentioned, certainly, in '21, we've got some of those deferral items coming forward around the Western Access Road, new Jameson cell, the displacement pump, et cetera, that we're putting in. We're also doing some work on groundwater and drilling activity. So there's just -- there's really, I suppose, ongoing growth works that are rolling into that number.In terms of the additional spend, we really, I suppose -- as we continue to progress our way through the orebody, we're continuing to understand what sort of opportunities we have there. And some of it's related to better estimation of the design aspects and estimations. And then also throwing in, I suppose, some additional innovation projects around underground automation, autonomous loaders and those sort of aspects. So they're all sort of rolling in there effectively, Paul.

[Paul Young, Equity Analyst]

I might just also ask Andrew, if you don't mind, just talk a little bit about some of the capital works that we're putting in over the next 5 years that actually produce future optionality for us.

[Andrew Mooney, Project Director]

Sure. So with the expansion for the block cave, our capital is within that $750 million. Within the sub-level cave, it's called out there for the capital there, the $250 million that's potentially mentioned, is not only about refining our capital estimates and what we're putting in as the base there. But putting in that optionality to make sure we're maximizing the value of the sub-level cave as we move towards the block cave as well, so not just setting and forgetting. And there have been certain additional ventilation, cooling from drill system, drive motors and tail pumps. Just to make sure that as we go to the block cave, we're maximizing the options that are within the sub-level cave.

[Paul Young, Equity Analyst]

Okay. Yes. So if I interpret that, it is an increase in capital. But you expect to extract value from that investment.

[Andrew Cole, MD, CEO & Director]

We think -- there is some increase in value. So there's pulling forward of capital, Paul, from the Carrapateena expansion PFS number, that's $750 million, if you like. There are some projects, as we've said in here that were deferred from last year as a result of COVID and some deferrals. And then the rest is as guided, there's an extra $250 million in here. Some of which is cost inflation, but it's actually fairly small, I think, in the scheme of things. Most of it is about enabling future expansion. Remembering that we are working to get Carra sub-level cave up to the 5 million tonnes per annum by 2023. Some of the infrastructure that we are putting in potentially could enable rates above that, but there's a fair bit of work to do before we can start suggesting that's in our base case.

[Paul Young, Equity Analyst]

Okay. I'll leave that one there. Just one final question. Just on the cost front, again, gents, is around the C1 costs. Obviously, everyone's modeling different currencies and different gold prices, right. So it's obviously difficult to reconcile unless we look at absolute costs and dollar per tonne cost, and that's actually the question. Just on the mining cost assumptions. Obviously, you haven't disclosed those. But I'm just curious about Carrapateena in '21. I think your DFS mining costs were $23 a tonne. How does your guidance look, you might not have had that number, so I appreciate that. But if you do, how does your guidance -- what's embedded in your guidance? Is it a number which is in line with the fixed DFS of $23 a tonne or a bubble below?

[Andrew Cole, MD, CEO & Director]

I don't know that number off the top of my head here, Paul. Can I come back to you with that number. We'll come back to you with that number after the call. We obviously don't guide on that specific detail, but let us come back to you, mate.

[Paul Young, Equity Analyst]

Yes, that's absolutely fine.

[Operator]

[Operator Instructions] Our next telephone question is from Sophie Spartalis from Bank of America.

[Sophie Spartalis, Vice President and Senior Resources Analyst]

Just a few questions from me. Firstly, in terms of the 5-year Carra guidance, are you able to provide some insights as to the profile of when that would be, of how we should model that over the 5 years?

[Andrew Cole, MD, CEO & Director]

Yes, Sophie. Look, in the absence of any detail, I would just use -- I would spread the number over the 5-year period. That's probably the best thing to do. We don't want to break it down into too fine a detail, I think, because we do keep moving these numbers as we can find ways of creating more value. If we can delay stuff, we will. If we can bring it forward, we will. But in the absence of that detail, I'll just average it.

[Sophie Spartalis, Vice President and Senior Resources Analyst]

Okay. Sure. And then just in terms of West Musgrave, you said here that investment decision by '22, but there is also a study update midyear. What can we expect in the study update? And then also in terms of your thoughts around nickel market, strategic partner, et cetera. Obviously, the world has accelerated towards a more greener thematic since we lost spoke?

[Andrew Cole, MD, CEO & Director]

Yes, for sure. Let me start. I'll answer the first question first. So we've mobilized infill resource and reserve, mainly reserve drilling already at West Musgrave. So we will expect to have an updated reserve model by the middle of this year, which will help us with the refinement of the study detail, which will give us further confidence in the study parameters, of course, and the economics of the project. So that should enable us to produce a study update. And then we'll inform what the final half of the study phase will look like. So that's what we'll come back to you later on this year with.In terms of the market more generally, I would say, as I mentioned I think on our last call, actually, we are getting more confident with the electrification thematic overall, of which copper obviously, is absolutely critical, but nickel is also critical, especially sulfitic nickel. And there really aren't all that many, if any, good sulfitic nickel projects readying for development around the world. So I would say our confidence level in nickel is growing as we further understand the value chain, and we're watching other mines deplete effectively over the coming years. So our confidence behind the West Musgrave project, backed by the economics, backed by the growing macro focus on electrification and the aspiration of all of us to reduce emissions significantly is adding support to our confidence in the project. So I would say our focus is to optimize a build-ready project. Now whether we build it or not is a decision for later, but that's certainly our focus.

[Sophie Spartalis, Vice President and Senior Resources Analyst]

Okay. And then just in terms of a strategic partner, it seems as though, if I'm reading between the lines correctly, that you're quite happy to put nickel in OZ portfolio? Or do you think that it's best to find a strategic partner and keep OZ as a pure copper play?

[Andrew Cole, MD, CEO & Director]

Well, Sophie, at the moment, we're, what, 75% copper roughly with the rest being gold. If we added West Musgrave to OZ -- to our portfolio at 100%, we would still be, vast majority, a copper producer. So I don't think the addition of the West Musgrave nickel byproduct, if you like, is going to materially change who we are as a company. So that's the first thing. So I think if we see the value committing to develop West Musgrave 100%, it's still within -- keeping within our strategy.But secondly, we don't need a strategic partner for technical reasons, for financial reasons or for any other reason. The only reason I think we would bring on a partner is there was value there. And there are many ways of creating value, of course. But we'll be open to discussions with strategic partners on the project, but we don't necessarily need it to progress the project if we can get it to the next stage and demonstrate that it's economic and the risk can be managed.

[Sophie Spartalis, Vice President and Senior Resources Analyst]

Okay. And then just a final one for me. Just in terms of your growth pipeline, you touched on this quite a bit in your remarks. The priority on gathering is looking across the existing portfolio in terms of brownfield opportunities. And then would you be open to greenfield opportunities as well, i.e., through M&A? Where do you see the company at the moment?

[Andrew Cole, MD, CEO & Director]

Yes, Sophie, look, I think we've been reasonably successful bringing early-stage projects through the optimization, getting them build-ready and taking them through the builders. We've just done with Carrapateena, and we're actively doing with West Musgrave. And I think we've done it quicker than the industry average, and it's proving to be quite successful. And that's a capability that we've built in the business that we would like to keep.I -- so we will be looking for new projects, if you like, that we can add into the pipeline to follow West Musgrave so that we can preserve the capability in the company that post West Musgrave, we can move on to the next project.I'd also suggest that the end market generally doesn't value the long-dated projects all that much. So you can enter these projects at a much lower cost than buying an operating mine. So that's certainly one of the focal areas for us.We will be looking at other assets through our M&A processes, but finding value-accretive operating assets to add is very difficult. It's not to say we won't look, but the probability is low.

[Operator]

Our next telephone question in queue is from Rahul Anand from Morgan Stanley.

[Rahul Anand, Equity Analyst]

Look, first one's on Carra, if I can perhaps continue from the question that Paul asked. The extra $250 million and sort of where the CapEx budget sits, I guess if I were to ask the question a different way, are you able to break down sort of potential impacts from the currency moves that we're seeing in the AUD? Does that impact CapEx? That's the first one. I'll come back with the others.

[Andrew Cole, MD, CEO & Director]

Warrick, you want to tackle that?

[Warrick R. J. Ranson, Chief Financial Officer]

Nothing significant, Rahul. So, no.

[Rahul Anand, Equity Analyst]

Okay, because just to put it in context, we were speaking to Fortescue yesterday, and they flagged circa 80% AUD exposure. So I was just wondering if there's any sort of crossover here?

[Andrew Cole, MD, CEO & Director]

No, no. Not on input cost, Rahul. On commodity -- on commodities, obviously, but not on inputs.

[Rahul Anand, Equity Analyst]

Okay. Perfect. Look, am I understanding -- then moving on to Prom Hill, am I understanding the costs increase into next year from transmission here that you've added this period would be offset by a 5% benefit? So we're looking at about $0.07 to $0.09 in addition next year?

[Warrick R. J. Ranson, Chief Financial Officer]

So there's a weighting -- there's a slight weighting here. So if you're looking at a group level, that's -- it's in that vicinity, Rahul. If you're looking at it on an individual basis, that obviously depends how we're sort of allocating across -- we allocate the power cost on a production -- comparable production basis. So there's a little bit of difference between them. But yes, at a group level, that's correct.

[Andrew Cole, MD, CEO & Director]

And that's built into the current guidance.

[Warrick R. J. Ranson, Chief Financial Officer]

We've built into the current guidance. That's correct.

[Rahul Anand, Equity Analyst]

Yes. Okay. Perfect. And just one more for Prom Hill, if I may, please. Just wanted to understand if you're able to provide a bit more color around the guidance for production. Underground mining tonnes, are they sort of running at similar levels as the 4 million tonne level mark? And then the stockpiles, are they going back to reserve grade now? Or are you still able to high grade them somewhat?

[Andrew Cole, MD, CEO & Director]

So in terms of stockpiles, we've pretty much depleted the high-grade gold stockpiles now. So we're now down to the next stockpile, which is a lower grade copper stockpile, which you've got a reserve published for, Rahul, so you can use that as your feed.And your first question, in terms of mining rates, as I said in the initial call, they've basically delivered, what, 4.2 million tonnes per annum in the second half of last year. We've guided 4 to 5 as that ramps up to the next year. And I think we've said 4.3 to 4.6 for 2021. So we will see a slight increase over the second half of last year. And I'm fairly comfortable they can do that based on their current run rate.

[Operator]

Our next telephone question is from Kate McCutcheon from Citi.

[Kate McCutcheon, Assistant VP & Metals & Mining Analyst]

Congrats on the quarter, Andrew and team. Great that Carrapateena picked up this quarter. Can you just talk through your expectations for '21? Can we expect those to start to check to reserve grade? And any comments on how mining dilution and recover -- and recovery are performing versus your expectations, noting that you are only 3 levels down at the moment?

[Andrew Cole, MD, CEO & Director]

Yes. Kate, thank you. Yes. So the grades coming out of the sub-level cave are improving. You may recall, last year, we hit an unexpected vertical fault that had some copper depleted from that fault as a result of paleo-weathering, if you like, at the top of the orebody from a long time ago.We are progressively working our way down that fault, and we're slowly seeing the grades pickup and the metal return into that fault. But it won't -- probably won't be until early next year that we sort of see the end of that fault, if you like, in that depletion. So you'll continue to see the grades track up, up to reserve grade starting early next year.In terms of the way the material is handling through the plant, it's actually going quite well. Some of the projects, which I flagged in my narrative, will also look to help throughput rates and recoveries of copper and gold through the plant. So I would say it's performing as or better-than-expected in terms of metal recoveries that we flagged previously.

[Kate McCutcheon, Assistant VP & Metals & Mining Analyst]

Okay. But in terms of ore, like in terms of mine grade, you're not getting any extra waste rock dilution in the cave that you weren't anticipating?

[Andrew Cole, MD, CEO & Director]

No, no, not at all, Kate. No. So we won't -- we wouldn't see any waste rock dilution in the cave for many years. In fact, it probably won't be until end of the block cave now with the block cave approved. So the sub-level cave is progressing well. We're not seeing any dilution come through that sub-level cave ore blanket that we've now created on the top, and we don't expect to for many years now.

[Kate McCutcheon, Assistant VP & Metals & Mining Analyst]

Okay. And can you just talk through some of the block cave milestones, i.e., when are you expecting first copper production? And I'm also interested in how you're technically planning on managing commencement of the block cave? You're in interaction with the SLC. After the undercuts established, is there going to be ore gap per se during the transition? Or how will that work?

[Andrew Cole, MD, CEO & Director]

Yes, sure, Kate. Good question. I might ask Andrew just to run through the high level. Noting, I think the time -- the chart in the presentation is actually the PFS chart. So we're looking at a 6-month -- circa 6-month acceleration of that timing at the moment. So maybe you could just talk through the key milestones.

[Andrew Mooney, Project Director]

Thank you, Andrew. If you want to have a look at the milestones or the overall schedule, the best one to refer to at the moment is that from the PFS report put out a few months ago, and then the time shift that Andrew Cole is just mentioning before, which is really around that phase of the declines starting for a couple of years, starting later this year. Then the setup of the block cave, underground infrastructure at the block cave levels, as you mentioned before. And then after the cave is starting to ramp up, the construction of the processing infrastructure and the like on the surface.With the sub-level cave to block cave transition underground, the intent is to get down to the block cave level as we outlined in the PFS and start to set up the establishment of the level. And then as the block cave starts to ramp up, that would be the time that the sub-level cave production ramps down. And there's a continuity of ore and production where the SLC ramps down, the block cave ramps up. And then there's a time gap between the block cave ramping up to the SLC area. So there's that ability to manage any risk in terms of the cave interaction in both time and also production continuity.

[Kate McCutcheon, Assistant VP & Metals & Mining Analyst]

Okay. Yes. So there is no ore gap -- yes, sorry.

[Andrew Cole, MD, CEO & Director]

I was just going to say, does that give you enough detail? Or would you like to have a call afterwards and we can run you through that schedule as well?

[Kate McCutcheon, Assistant VP & Metals & Mining Analyst]

Yes. I can take that off-line. That's fine. And then just maybe a final question for Warrick. Can you give a guide of the inventory adjustments you expect to incur in this half through the P&L?

[Warrick R. J. Ranson, Chief Financial Officer]

Going forward?

[Kate McCutcheon, Assistant VP & Metals & Mining Analyst]

Sorry, for the half just gone. And yes, and also going forward, if you have that color through the P&L statement.

[Warrick R. J. Ranson, Chief Financial Officer]

I haven't got the -- I'll come back to you with the total numbers for the half, Kate. So we picked up 30 -- $20-odd million in terms of inventory -- if you're talking about the net realizable value adjustment.

[Kate McCutcheon, Assistant VP & Metals & Mining Analyst]

Yes. What you're going to record through the profit and loss statement.

[Warrick R. J. Ranson, Chief Financial Officer]

Yes. Let me come back to you off-line on that one, just so I'm clear on exactly what you're asking. We can do that. Yes.

[Operator]

Our next telephone question is from Nick Herbert.

[Nick Herbert, Research Analyst]

Just a couple of simple ones for me on Prom Hill, please. That remaining low-grade gold stockpile, should we just assume a flat grade profile there to depletion? Question one.And question two, just the shaft haulage. Are you able to provide an indication of development time line, how long that will take post an investment decision?

[Andrew Cole, MD, CEO & Director]

Sure. In terms of the stockpile, I think, yes, it's probably a safe assumption, Nick, just to assume a consistent number for the whole stockpile for now. It's relatively low-grade stockpile, and there is some variability in it, but not enough, I don't think, to worry about in terms of your financial model.In terms of the time line for Prom Hill, I don't have that at hand. Nick, can I -- how about after this call, I'll get Travis to send you the study release for Prom Hill, the expansion study, which has got that time line in it. But -- I mean initially, we're looking at an investment decision in mid of this year. That will be based on all of the infill resource drilling and what we're currently doing, which will hopefully boost up the amount of reserve that we can use in that calculation.We will then have decline and lateral development taking us right through to '22. The shaft sink will probably start at the end of 2021 and that wouldn't be done until 2024 thereabouts. So we wouldn't actually start seeing production from the expansion shaft from -- until '24, probably start of '25 thereabouts. But there is actually a time line in the study report that you can use, I think, which I'll get Travis to send to you.I should also add, Nick, that this last -- this current round of study, obviously, is looking at the optimization of that schedule in -- that we published mid last year.

[Operator]

Our next telephone question is from Daniel Morgan from UBS.

[Daniel Morgan, Director and Analyst]

Firstly, just recoveries at Carrapateena. They've been consistently exceeding, I guess, what -- the plan should be on what is lower grades running through the plants which is pretty good. So the -- for -- particularly on gold, I mean you did over 80% on gold versus 73%, which is the mine plan. Just wondering when can you give us, I guess, greater guidance on whether these are sustainable? Or is it because the plant is running at less than full capacity?

[Andrew Cole, MD, CEO & Director]

Yes. Look, Daniel, it's a really good question. We're grappling with the same question. I don't think it will take a lot longer. I would hope by the midyear, we can be a little bit more definitive on what future grades are looking like, what recoveries are going to look like. We have got a fairly extensive underground drilling program underway now that's looking at future sub-level cave and parts of the block cave which will also help us, remembering that the plant really only reached full capacity a couple of months ago.So we'd like a little bit of time to make sure that the plant is going to be consistent, reliable, and we're not seeing any nuances in this. But I would hope by midyear, we could be more definitive and change those if indeed they do need changing.

[Daniel Morgan, Director and Analyst]

Okay. And then a simple question. In some respects, on Brazil, I mean you're planning to spend almost $100 million of CapEx this year, the midpoint of guidance. Just wondering if you could talk about, is this mainly Pedra Branca and Antas? Is this one of the other projects? Just wondering, what is the business scale costs like? What are we getting and, ultimately, when are we going to get free cash flow out of Brazil?

[Andrew Cole, MD, CEO & Director]

Yes. Look, good question. That's what we're working on. The bulk of the capital right now is getting Pedra Branca up and fully running with mobile fleet and equipment. The 2 peripheral work. So our expectation is that Pedra Branca will effectively be at full capacity in an operating underground mine a bit later on this year. And that by the end of this year, we will have initial economic studies and resources on Santa Lucia and Clovis.Once we've got those 3 things in place, that will tell us what the full potential of the Carajás East province will be. And if -- sort of philosophically, if you've got those 3 satellite mining operations feeding the Carajás East Antas hub, that's quite a sizable metal output. So we've talked about 50,000-plus tonnes of copper coming out of that if we can get all 3 of these actually up and running.So that's the target for a relatively low capital investment. I don't think there's any other capital in that number, is there, Warrick?

[Warrick R. J. Ranson, Chief Financial Officer]

No, it's Pedra Branca. Yes, in terms of free cash flow, will we -- we're targeting free cash flow on the base case. So without those additional satellite deposits in '22 and then it will run into '23. Because the capital expenditure on those 2 deposits is actually quite light because they're both open pit and very close to surface. So there's not a lot of overburden removal. So between '22 and '23 there.

[Daniel Morgan, Director and Analyst]

But you'd probably need to expand the plant in order to unlock that 50,000 tonnes?

[Andrew Cole, MD, CEO & Director]

Not necessarily. So our current base case at Pedra Branca is to put an ore sorter. So we've currently got 2 ore sorters. One ore sorter at Antas which is proving the concept of preconcentrating run-of-mine material. We're going to -- our base case has 2 ore sorters at Pedra Branca which take 800,000 tonnes of ROM down to 400,000 tonnes of preconcentrated ROM, which we truck to Antas. So using that philosophy at Santa Lucia and Clovis, should the met test obviously allow it, we potentially can use the existing Antas plant with some slightly increased crushing capacity at the front to do that.

[Operator]

Our next telephone question is from Hayden Bairstow from Macquarie.

[Hayden Bairstow, Analyst]

Just a couple for me. Just firstly on -- just back on Brazil, Andrew, just on CentroGold. And if I look back to the last few years, I mean the injunction was supposed to be listed in feasibility study all done and dusted by 2020. This keeps sort of slipping and slipping. I mean do we -- how do we think about that project now? Or you sort of just take it out of your mind until you get those injunctions lifted? You sort of -- do we have any real idea how long that will take? And then just one on Carra. Just interested in your comments around the optionality that some of this additional capital provides. Is that about higher throughput rates out of the existing block cave? Or is it bringing in free adopter, these sorts of things? I mean what are those sort of options that you're potentially bringing forward?

[Andrew Cole, MD, CEO & Director]

Yes, sure, Hayden. Look, on CentroGold, look, it's a very good question. That's one where we talk about a lot. We were on track to getting the injunction removed in 2020 and COVID threw a spanner in the works, unfortunately, with that whole process and took us backwards a fair way, I would say.We are still confident that the injunction will get removed. In December, we did reach a major milestone where INCRA, the federal body that zones land, effectively formally approved and gave us in writing the permission to have the land rezoned and then reapplied for our permits, which was the major milestone. We're now just going through finalization of the community relocation plan, which is what they want to see before they will remove the -- or recommend the removal of the injunction completely so we can then take it to the court.So we are making progress there, which gives me the confidence to say that eventually the injunction will get removed. It's certainly taking a lot longer than we would like it to take. We've effectively stopped spending at CentroGold with the exception of care and maintenance activities of the facilities we have there and making sure we stay in touch with the communities whilst this process is going underway. But the project still exists. Obviously, study is still there. We are doing some work to update and upgrade the study. The key question is when can we get the injunction removed.So we have said, I think, in our milestones Q3 this year. I'd like to say I'm confident it will be done by then, but I'm pretty sure I've said that before. So I'm a bit nervous about saying that again. But the indicators are positive. I wouldn't take it out of your mind. But I wouldn't necessarily put a high probability of that occurring as quickly as we'd certainly hoped.In terms of Carrapateena, the optionality that we're talking about. So firstly, between sub-level cave and block cave, we maintain optionality to keep the block cave as our base case going forward, as we've outlined. We also reserve the optionality to flip back to sub-level cave should we find a fatal floor, which I seriously doubt will occur because the infrastructure is common for the next couple of years, really, mostly. Most of the optionality that we are building in now is about system throughput rate, so total system throughput rate and metal recovery. These are 2 primary drivers.So as examples, our Tailings pumping system, which we are working on right now, has a lot more capacity than 5 million tonnes per year. The underground crushing and ore haulage system, which we're working on now, has more capacity than 5 million tonnes per year. But the mine will still be the constraint of the 5. So we are slowly debottlenecking the system here to allow us to do more than that, but there's a lot of work to do before we can actually declare that we can get above 5 million tonnes per year.We're also doing work on recovery. So I think as somebody asked a little bit earlier, forgotten who now, around when can we lock in the higher recoveries we've seen. We are doing work in the plant to improve and sustain higher recovery rates. We just don't have enough time or data under our belts to lock those in yet. They are the sorts of optionalities that we're building in, Hayden.

[Operator]

Our next telephone question is from David Coates from Bell Potter Securities.

[David Coates, Resources Analyst]

Just a couple of quick ones. One, with your CapEx profile, can you just remind us of the terms of your current finance facility? And if you guys see that as a fit-for-purpose going forward? And if any new options you're looking at around that? That's my first question.

[Warrick R. J. Ranson, Chief Financial Officer]

So $480-odd million goes out to April '23. And as you said, our intention is basically our current profile is funded generally out of operating cash flow, David, and with a bit of flex for that facility. So we don't expect to use that $480-odd million, so -- in terms of those existing approved projects.I think one of the things to remember is that -- particularly with the Carra spend, it's progressive. It's over a number of years. It's not a lump sum from that point of view. So we still consider it manageable within our existing operating cash.

[Andrew Cole, MD, CEO & Director]

Perhaps if you could just talk about the exception to that's West Musgrave [indiscernible]

[Warrick R. J. Ranson, Chief Financial Officer]

Yes. West Musgrave is obviously an additional aspect to the portfolio. That still got some way to go in terms of the study outcomes. We've still got decisions about power infrastructure in terms of our level of participation in that, et cetera. So there are things that we -- that we're working through in this over the next 6 or so months in terms of how we actually might move forward with that and what that looks like from the project point of view. And that will then obviously influence some of those -- some of that thinking going forward, and we'll come back to the market when that -- when we're getting into that position, obviously.

[David Coates, Resources Analyst]

Perfect. And then just another question. Maybe -- I don't know if you can give us a bit of sort of characterization on this, but Carrapateena, big mill shutdown in the first quarter. Can you give us a bit of a feel for what impact that may or may not have on the production profile for Q1 '21?

[Andrew Cole, MD, CEO & Director]

David, I wouldn't assume necessarily any impact above and beyond the guidance we've already given you. We're running some experiments through that process. We're also -- the mill liners, for example, are looking at [indiscernible] helping us with availability, helping us look on the effectiveness of the mill. But David, I wouldn't assume any different outcomes to what we've already guided on for now. We'll report on the shutdown and the success of some of those experiments or not in the Q1 report.

[David Coates, Resources Analyst]

Okay. So a pretty even production profile through the year?

[Andrew Cole, MD, CEO & Director]

Yes. For now, I'd assume that.

[Operator]

Our next telephone question is from Lyndon Fagan from JPMorgan.

[Lyndon Fagan, Analyst]

So I appreciate the guidance on Carra for -- out to 2025. I was hoping you might be able to touch on Prominent Hill out to 2025 and maybe give us some color on the grade profile underground as things change there. And just to double check that we're keeping the mill full through the end of 2024. Any color there would be helpful.

[Andrew Cole, MD, CEO & Director]

Yes, sure, Lyndon. So firstly, in our base case, the mill runs out in 20 -- what is it, '23? -- in '23 I think it is.

[Warrick R. J. Ranson, Chief Financial Officer]

Stockpiles?

[Andrew Cole, MD, CEO & Director]

Stockpiles. Yes. So the stockpiles run out in '23, thereabouts. Now in terms of what the profile of spend at Prom Hill looks like, it's obviously completely dependent on the outcome of the block expansion study, which we will bring to you in the middle of this year.If Prom Hill -- if that does not go ahead because we cannot see the value in installing a shaft and expanding Prom Hill up to the 6 million tonnes, which we previously flagged, then Prom Hill will be a lean trucking operation running at that 4 million to 5 million tonnes until we can no longer run it viably, in which case the capital expenditure of that asset will be relatively low. It will be enough to foot the bill for the development ahead.If, however, the expansion study proves positive and we do go ahead with the expansion of Prom Hill with the shaft, the capital profile is going to look more like what we discussed in the study release for the block expansion. So we can't really be definitive on the outcome of that. So that's something that you'll see in a few months' time, Lyndon.

[Lyndon Fagan, Analyst]

Yes. I guess [ I was more looking for ] grade profile over the next few years for the underground mine before the sort of expansion happens?

[Andrew Cole, MD, CEO & Director]

Okay. In terms of grade profile, we obviously don't give -- we don't want to give multiyear guidance for Prom Hill because we continually optimize the plan that changes, but you just need to use reserve grade. I mean it will approximate the reserve grade. I appreciate it's a bit higher than that now, but it will come down to reserve grade.

[Warrick R. J. Ranson, Chief Financial Officer]

Sorry, Lyndon, I just checked the production schedule. With that additional mineralized waste, et cetera, we should be able to keep the mill full to '24, and then will drop off.

[Lyndon Fagan, Analyst]

So okay. So the end of '24?

[Warrick R. J. Ranson, Chief Financial Officer]

Yes.

[Lyndon Fagan, Analyst]

Yes. Great. And just a final one. Just on CentroGold. How quickly, once the injunction is removed, then commencing the building and broadening the product, if you could just remind us there?

[Andrew Cole, MD, CEO & Director]

Lyndon, remember, CentroGold is currently at the PFS level of study. So we are reviewing that pre-feasibility study at the moment. So the next phase of study would be a feasibility study, if and when the injunction is removed. So I don't know how long that FS would take. Typically, studies like that take a year, 12 months thereabouts. And then it would be a build decision after that.

[Lyndon Fagan, Analyst]

And roughly 2-year build do you think? Or…

[Andrew Cole, MD, CEO & Director]

Yes, maximum, I would say. It's a fairly simple operation. It's not super large facility. So you have to say maximum 2-year build if it went ahead.

[Lyndon Fagan, Analyst]

And aside from the community relocation, are there any other big challenges that we need to be thinking about? Or…

[Andrew Cole, MD, CEO & Director]

It's the things that -- yes, pretty basic. The single biggest challenge out there is the local community. So it's a relocation -- the community relocation program. There will be a training and skilling program, almost certainly, and we've started some of that work already, bringing local people from the CentroGold project area across to the Antas area and building skills and capability.Outside that, it's pretty flat topography. It's very accessible. I don't think there'll be any other material threats to the project of the same magnitude as the community relocation program.

[Operator]

There are no more further questions at this time. I'd like to hand the call back to speakers for closing remarks. Please go ahead.

[Andrew Cole, MD, CEO & Director]

Yes. Thank you very much. I'm sorry, we run over time here a little bit. As usual, if you've got any questions, please follow-up with Travis, and we'll make sure we get the right people in the room to help walk through those. Thank you very much, everybody.