Centamin PLC

LSE:CEY

Earnings Call Analysis

Earnings Call Transcript 2024-Q2

[Operator]

Good day, ladies and gentlemen and welcome to Centamin's Half year 2024 Results. [Operator Instructions] I would like to remind all participants that this call is being recorded. I will now hand over to Martin Horgan, CEO, please go ahead.

[Martin Horgan, executive]

Thank you very much, and good morning everybody and welcome, as was mentioned, to our half year results for Centamin, here July 2024. As mentioned, Martin Horgan, CEO. I'm delighted to be joined today by my colleagues here Ross Jerrard, CFO; and Michael Stoner, Head of Corporates. Moving on to the next slide. Thank you, [ Rich ]. The standard disclaimer which I'm sure everybody will read at their leisure. Then moving on to the first slide, please. So our integrated pipeline there, something that we show at the start of every presentation, just indicating that, of course, we do believe that we have an organic growth pipeline driven by the success of Sukari, the emergence of Doropo, excitement of EDX, and across the emerging potential of ABC as well. So I'd like to say, I think it was a pretty good second quarter, and hence, first half of the year right across that portfolio, and puts us in a very solid position as we head into H2. And by focusing on delivery, both ounces and cost, we've been able to take advantage of those strong gold prices at Sukari. In terms of Doropo, delighted with the progress there. I think, in 3 very short years, we've taken an exploration project. I'm delighted to say that during the first half of the year, we've been able to not only get an ESIA approved, but release what I believe is a robust feasibility study for that project that really allows us to think about taking that project forward to the next stage now and starting to deliver into that model of a diversified multi-asset gold producing platform. At EDX, our exploration projects in Egypt, we've been busy with an aggressive follow-up campaign to some of the success that we announced back in January around the initial discoveries of Little Sukari and Umm Majal. I'll talk a little bit about that later on. And ABC, there's been some renewed interest there. We've done a reevaluation of the projects. I'm delighted to say that some new drill targets have emerged. We will look to evaluate those starting in the dry season later this year as well. So some emerging potential there at ABC project as well. So, I think in terms of that first half of the year, excellent progress right across our portfolio as we continue on that journey, as I say, to a multiple assets, multi-jurisdictional producer. Maybe one thing to mention as well, during the first half of the year, we've done some internal promotions. Delighted to say that, we now have a chief operating officer again. In terms of the business, as we look at Doropo, as we look at EDX, as we look at projects at Sukari, I think it was time that we also brought a COO in now to start helping us to plan to deliver this growth that we're demonstrating. I'm delighted that Gustav, who was formerly the General Manager of Sukari has now stepped up to become the COO. And even more pleasing here as well, that in terms of filling the positions that we've looked at our internal pipeline of management talent and availability, I'm delighted that our Deputy General Manager, Gavin Harris has become General Manager of Sukari. I'm delighted that Islam Al Ashker, who is our Process Manager, a longstanding Egyptian employee, has been made Deputy Manager -- General Manager for Sukari as well. So I think that really just starts to evidence the sort of the intent of the business to take this company forward. I'm delighted with the sort of the talent pool available in the business and those internal promotions, as we start to look to leverage the full potential of that portfolio. Next slide, please, [ Richard ]. So maybe just looking at, first half performance at Sukari. I think after a slightly softer Q1, delighted to say that, that Q2 came through exactly as planned, and really sort of rounded out the first half of the year for us in a very good way. In terms of production at 120,000 ounces that we produced in Q2, brought the first half of the year to just under 225,000 ounces and pretty much bang on plan as we started at the start of the year. And while we still have, what appear to be slightly unusual cash costs, and AISC, there's very good reason for those, both positive. But they look slightly out of kilter in terms of the full year guidance. But I think importantly, I will explain those later, the key factors that as we look at the halfway year and we look forward to the balance of the year, we'll maintain guidance across all of those 3 key metrics. So guidance for 470,000 to 500,000 ounces remains on track. Our $700 to $850 cash costs, and our $1,200 to $1,350 all-in sustaining cost all remain on track after what I believe is a solid first half of the year. Next slide, please, Richard. In terms of safety, you've heard me say multiple times. I do believe that a safe site is a good proxy for management capability. We did unfortunately have our first LTI quite considerable time back in Q1 at Sukari. We announced that as part of our Q1, sort of, production update. I'm delighted to say that no further LTIs during the second quarter at Sukari. That did bring to end our 12.5 million hour streak of LTI manhours, free hours worked. And that is, in fact, a site record despite that single incident in Q1. Glad to say that Q2 is back on track as we continue to focus on reducing harm and ensuring a safe workplace for all our employees. We did have 2 LTIs at our EDX project during the second quarter. We have established a small exploration camp in the desert, and a single contractor unfortunately managed to rack up a couple of LTIs in the period. It's one of our contractors, therefore one of our responsibilities. And we'd look to sort of get on top of that and ensure that doesn't roll going forward as well. But broadly across the group, happy with the performance, and management focus remains in this area. And if we look at that, TRIFR, see that trending quite nicely to that 1.45 against that target of 2.11 for the year as we go forward from here as well. I would just note, of course, as well that our Sustainability Report was issued in the in the first half of the year. That's our 2023 report. And that has been conformed in line with GRI around ESIA reporting as well. So, that's available on the website. I'm happy for everyone to have a look at that and look at some of the work we're doing as well. But, it's generally, a good performance and happy with the safety performance. But it remains, as ever, something we remain focused on and built around as well. Next slide, please, Richard. So we take a little bit of a deeper dive now into Sukari, have a look at that, first half operational scorecard. And we start maybe with the open pits. So total material moved, on plan, and a good performance by the team there. I think one of the highlights for the first half of the year, of course, was the completion of Capital Limited's waste stripping contracts, the fixed volume portion of that, where we contracted them to move a 120 million tonnes of waste to allow us to bring the open pit back into compliance with a long term plan around water to waste ratio movements. And also importantly, delivering increased flexibility and contingency within the plan as well. So delighted that work was finished ahead of schedule. It was done safely and efficiently, and that -- with that now behind us, moving back towards a more normalized level of strip ratio as we move forward for the balance of the mine life as well. And I think, of course, there, the key is around compliance to plan, making sure that we do in any given period what is required to be done, and that stays in conformance with the long term requirements of the operation as well. And from that, we certainly delivered that in the first half of this year, as I said, our total material moved. We did benefit from some waste or conversion. In certain areas of the pit where we have some steep terrain, at this stage, were areas that we had assumed to be waste. We had a little lack of drill coverage in there, actually turned out to be low grade ore. That's around that Stage 7 areas to the north end of the pit, resulting actually in more gold recovered, or mined, as I should say, and that will be recovered in the future as well. So a nice positive benefit from the operation in the first half there. And importantly for me, we moved the tonnes as planned in the right volume. The dollars were spent. And actually from that, we actually benefited by finding additional gold within the open pit as well, which we can recover down the future. Unfortunately, that does make things a little bit more complicated for Ross from an accounting perspective. Ross will take you through the impact of that change in strip ratio. As I say, it's a positive benefit to the operation, but does have some flow on impacts for how we account for CapEx, OpEx, and sustaining CapEx and so on as well. But, operationally, very happy with that as a as an outcome. In terms of the underground, you know, Q1 into Q2 saw the completion of ventilation upgrades and the arrival of our, teleremote, bogging Cat Command system. And that's enabled us to push on very strong Q2 underground volumes, both in terms of ore and waste and now hitting the daily run rate as required to meet both this year's plan and in the longer term as well. So I think an excellent performance by the underground team there. We expect at the second half of the year that the ore grades mine to return back towards that life of mine reserve average that we'd look to mine to. In terms of processing, good performance by the processing team. We did benefit from some additional oxide and transitional material in Stage 7. That allows us with that softer material, to push the throughput slightly. Hence, you'll see a good performance of 6.4 million tonnes. That oxide material did come at a slightly lower grade and with some sort of clay materials, so there was a slight knock to recovery. But all-in-all, when we round out the increased throughput with a slight reduction in met recovery allows to deliver those ounces to on plan as we said as well. So I think a good performance around compliance to the long term plan, a good performance in terms of ounce delivery. And Ross will take you through some of the cost performance, which is also similarly good as well. So I think a very good -- a good first half of the year, sort of evidenced by a strong Q2 as planned. And just moving on to the next slide. Maybe what we'll do here is just have a slightly deeper look at the or closer look at the strip ratio point. I think, as those of you who are regular listeners will know, that sort of the mantra over the last 3 to 4 years has really been around compliance to plan, making sure that we run the operation both in the short term, in terms of making sure we get access to be able to maximize cash flows and take advantage of these gold prices, but ensuring that we do so in compliance with that long term plan. From an open pit perspective that means focusing on making sure that we're doing the requisite stripping in the period to ensure the long term viability, operability of the open pit mining operation. So within that, as you'll know from this chart here, in terms of the first half of the year, effective, the total material mined was pretty much on plan, slightly ahead of where we thought we'd be. But, generally, we moved the right amount of tonnes and the right volumes within the period. We had budgeted for a strip ratio of 5.3x to 1x, at waste tonnes to ore. But as you'll note that, when you look at that, we actually end up at a strip ratio of 3.7x. So I think when one looks at the strip ratio of 3.7x versus 5.3x, one might potentially think that we were somewhat gaming the system and reverting to sort of their previous misdemeanors around sort of under stripping. But actually that is the material moved, not absorbed. We did the right thing in terms of the period. And what, of course, drove that sort of, if you like, fall in strip ratio was that waste to ore conversion, about 2.5 million tonnes what was completed to be waste ended up being ore. When you take a slight mining additional ore tonnes with that waste to ore conversion that obviously has quite a sort of significant impact on the strip ratio. When I look at that ore within the period, though, the 6.1 million tonnes that we planned to go to the ROM was done, was mined correctly, at about that ground that we target from the open pit. So that was pretty much on plan as predicted. And, of course, the ore that was mined to dump leach, that's where we had a significant sort of uptake in terms of that ore to waste conversion. So that did bring in additional tonnes at that lower grade. So when we look at the total for the period, that 13.7 tonnes does appear to be a slightly lower head grade of 0.65. But recognizing within that, the lower grade dump leach material, which will recover through the facility and the ore to ROM as planned as well. So as I say, headline figures look slightly misleading around the strip ratio. Actually, on a physical basis, tonnes mined, dollars spent, more gold refined, I think that was a good outcome. But, of course, with that strip ratio change there are some implications around cash costs and AISC as well with cross and trading through as well. But, overall a good performance from the open pit team there. Next slide, please, Rich. Maybe looking at the projects at Sukari now. I did mention that dump leach material, and as having some success in finding additional material that wasn't, originally in the plan. And the dump leach has been operating quite well for us now over the last sort of 6 to 12 months. With that additional material being found, we've taken the decision to expand the northern dump leach. We've got a larger area that we've identified that we could use, depending on how large the facility would like to be. We are putting a starter, sort of, pit dump leach in place for that material head pit. That will start to be constructed over the second half of this year, and we anticipate starting to contribution from that during 2025. Relatively minor, sort of 3,000 to 5,000 ounces per annum, but there will be additional ounces. They're ounces that are being mined part of the open pit plan in any event. So therefore, we're bringing -- to bring that gold production forward. And of course, by only handling it once rather than sending it to stockpile and rehandle, we're doing so in a cost -- more cost effective and cheaper manner as well. So we're very happy with that little opportunistic project there to take advantage of the dump leach and bring that through. In terms of grid connection, obviously, one of our flagship projects. So the tale of 2 sides there. On one side, good progress around EPC contract, a detailed engineering, design and planning, and that's moved along as planned very nicely. We have been somewhat hamstrung by changing cabinets. There's been a number of ministerial changes within Egypt with the presidential elections last year that led to President Sisi being reelected. And then he reappointed a new cabinet in April of this year and that did see some governmental changes. One of those changes was the Ministry of Electricity. And with the new ministry in place now and a new team being put in place, some of the permitting work streams have somewhat slowed down. No issues with them. It's just waiting for the right people to be at their desks once appointed, and we'll pick that up from there as well. That does mean that we were planning for energization of that project by the end of this year. And, although we're working hard to try and catch up on that, that may well slip into the first half of next year in terms of be that project coming on stream for us as well. But -- so nothing untoward. All of the work streams are working well, just a function of the government change or the government reshuffle taking place through sort of April, May, June this year in Cairo. Gravity and mill upgrade, obviously, the gravity is something we've flagged in the past. Work has continued on that initiative. But actually now we've identified a few other areas where we can possibly sort of, at the same time as doing the gravity circuit, look at some, sort of, upgrade opportunities within the processing facility. We're in the process of chasing those down with an engineering group out of Perth, and we'll look to update you second half of the year. But I think there's some interesting work to come around that opportunity within the mill, and has some good potential for future production and cost base as well. And finally, in terms of our tailings facility, unfortunately, tailings remain as a headline for our sector, and it's something, obviously, that we take incredibly seriously. We have, of course, committed to gin GISTM compliance by the end of 2025, something that we're working on and made great strides over the last 12 to 18 months. During the half, we retained a senior independent adviser to the company as part of our GISTM sort of management infrastructure and oversight. And that work continues around the compliance by the end of next year as well. So it's a good progress as we look to operate in world-class tailings facility designed to ANCOLD, ICOLD international standards as well. In terms of the TSF itself, work in terms of the next raise is well advanced. We're at 65% complete at this stage versus a budget of somewhat around 56% as well. So slightly ahead there in terms of the projects. So that really we'll just pause there in terms of the operational review at Sukari itself. As I say, a very sort of, good Q2 as per plan, and good delivery by the team, everything on track as per planned. In fact, some upsides around the waste to ore conversion and ability to accelerate the dump leach, bring some of those projects forward as well. So I think an excellent Q2. And I'll pause there now, and I'll pass over to my colleague, Ross, who'll take you through some of the financial metrics. And I'll finish off with an update around EDX and Doropo from there. So thank you, and over to Ross.

[Ross Jerrard, executive]

Thank you, Martin, and good morning, everyone. If we turn to our financial scorecard, please? I'm pleased to report the material improvements across many of our financial metrics after a really solid first half performance by the ops team, particularly that delivery in the second quarter, which gives a really good momentum into the second half. So as you can see from our standard financial scorecard that we report, revenue is up 9% year-on-year at $465 million. This is driven by the increased average realized gold price, which was up at $2,218 per ounce, up some 15% year-on-year. But offset by some lower gold sold ounces during the period, which were down 5% year-on-year. The timing between ounces produced and sold have had a large impact on the unit metrics than normal for the period, but we do expect these to stabilize over the second half. Adjusted EBITDA was also up 9% driven by those better revenues and lower costs, but mostly impacted by having significantly less cost capitalized that we had expected. These costs were waste-stripping costs of our own feet, which were reported to operating costs rather than being capitalized as they were under the strip ratio. Post-tax profit to shareholders of $83 million was down 8% year-on-year, driven by the factors that I've just mentioned, but also the fact that we continue to pay profit shares to both partners during the period while we finalize some outstanding cost recovery audit periods. These factors all had a flow-on impact and resulted in a 9% decrease in our basic earnings per share at USD 0.0719 per share. But it's important to note that from a cash flow perspective, the good performance meant that we finished the half with increased liquidity of $350 million. This is up from $311 million in June 2023 and includes that $150 million undrawn revolving credit facility. So notwithstanding the accounting nuances of what's capitalized or what's not for that waste stripping, the cash generated is the most important metric to me. And we're very pleased with the results of the $43 million of free cash generated during the period, which is up 121% from last year. So if we talk a little bit more about the cash, moving to the next slide. The free cash generated was a strong performance and the strong operating cash flow up 19% to $203 million for the year, really meant that we closed the year with that liquidity of $350 million. It's comprised on the left-hand side, you can see in the chart there, the breakdown. But our cash and cash equivalents of $110 million. It was bullion on hand waiting to be shipped valued at $52 million. Gold and silver sales debtors of $38 million at an undrawn last year of $150 million. I do note that, that cash and cash equivalents balance is higher than normal, particularly that bullion on hand due to the timing of gold [ pause ] versus shipments and also the elevated gold price at the end of the period. So with the strong cash flows generated, we've been able to fund investments from cash flows and that RCF remains undrawn. I just want to talk a little bit more about the unit rates that Martin had mentioned. And this is our standard metrics across the various parts of the business. And importantly, it shows the trend line over previous periods, which shows good trends. So starting with the open pit on the top left. Costs have continued to trend down on a unit basis, driven by better feed productivity, cycle times and other operational initiatives in the open pit. I must highlight that we have come to the end of the waste mining contract. And in doing the necessary reconciliations, we had incorrectly been allocating some explosive and blasting costs to our mining feed grade rather than allocating those costs related to the waste mining contract material to their contract. So this has resulted in a reallocation that has been rectified, and that's why you see that divergence in the first half. This is the final reconciliation. And now that the waste mining contract has been finalized, there won't be an impact going forward, but I do highlight that in terms of the divergence. Our process unit grade has dropped with the increased total ore volumes. But as always, the fuel price has a significant impact on the processing costs given our current diesel power station. But you can see the trend over 2023 and into 2024, with the full impact of solar power, which coupled with a lower diesel price, running at just under $0.80 a liter, and a continued focus on the consumable consumption rates has meant that costs have been able to be well managed and actually decreasing year-on-year. On the right-hand side, you can see the decrease in the cost profile of the underground following the transition from contractor to owner mining, and the lowering trend continues. The change-out of the contractor had a twofold benefit of lower costs and also increased productivity. More material mined at a lower cost per tonne. And you can see that trends continued as material movement has increased. And the overall mine G&A costs were also well managed under challenging global and local inflation environment, which you can see on that bottom right-hand chart. We had benefited from an EGP devaluation to U.S. dollar, which is largely countered inflation, but that unit rate is a function of the processed ore, which increased during this period and showed some volatility. But you can see the impact over the back half of -- back half of 2023 and into first half of 2024. But overall, we see that stabilizing as we go forward. Our focus has always been on the bottom line. So moving on to the next slide, where you can look at our stringent cost management and taking a little bit of a dive into cash costs and all-in sustaining costs. You can see on this table the absolute cash costs and all-in sustaining costs, which were well managed across both 2023 and 2024, but importantly, aligned with our budgets and what we had forecast. What is not shown on this table is the unit metrics. And when you look at the unit metrics against absolute spend, our cash cost metric is divided by our ounces produced, and our all-in sustaining metric is divided by ounces sold. So the impact on the unit metrics has been impacted by the timing of those final ores that I mentioned and the shipping and sales dates. And we've already discussed the impact on the bullion, but you'll see the impact on the abnormally large bullion held in the safe. So if we normalize this, all-in sustaining cost is under that $1,300 mark, which is well within our targets and sets us up well for the rest of the year. We do have a variance against plan, where a significant portion of owner waste mining stripping was not capitalized to CapEx as we had anticipated. And this is due -- this material is -- was originally budgeted as waste has now been reclassified to ore once it is mined and the impact of these costs has been -- that they've been reported to mining costs during the period and they've effectively remained within the P&L and therefore not capitalized to the balance sheet. This distorts the increased cash cost metric but has no overall impact on our all-in sustaining costs. On the right, you can see the breakdown of the all-in sustaining cost split for the half, and the pie chart is very consistent with what we've seen in the past with that mine production costs sitting at around 75% or 76% of the total, very similar to the charts that you would have seen for the full year 2023, which is pleasing. Moving on to the next slide. So working in partnership with our stakeholders, we have a very stable, transparent and long-standing flow of funds, which while very simplistic, has worked well over the years. You can see on the left-hand side of the chart, the structure of our funding and distributions, that's per our SGM Concession Agreement. We're after a 3% top line royalty to government and after recovering any cost recovery due from those Centamin funded projects, any remaining net proceeds are paid to both partners on a 50-50 basis. These distributions all made in U.S. dollars. It's important for the Egyptian government, but also for us, and it's important to note that those distributions are made weekly. You can see how on the right-hand side of the chart, how those distributions have been made for 2024, where the $162 million worth of distributions were paid $14 million across the royalties to our government partners. No cost recovery was paid during the period as we finalize those audit periods. But $74 million worth of profit share we paid both to EMRA and ourselves. So the end result was $88 million received by government and $57 million worth net contribution was received to Centamin after funding those growth projects of $17 million, as you can see indicated. This mechanism has worked very well over many years, and the regular distribution in high currency U.S. dollars is very important to both sides. Moving on to the next slide, you will see that cumulative effect of what it has meant for cumulative distributions were $1.96 billion cumulative distributions have been paid. Royalties and government profit share shown in the gold and the gray bars of $262 million and $793 million, respectively, and our side, our own shareholder distributions of $907 million shown in the blue chart. This is in addition to local procurement spends in a country, where you'll see on the left there, for last year was $631 million. So a very important distribution. And you can see the distribution is working really well. Talking about our own shareholder returns. If we turn to Page 16, I'm delighted to talk about our own dividends as this is our 11th consecutive year of dividend distributions. Centamin's dividend policy is to use group free cash flow generated and applying a first 30% or a minimum 30% priority payment of dividends to those cash flows calculated before growth project CapEx, which we fund either from debt or from surplus cash flows that are generated. Thereafter, there is an assessment made against both balance sheet requirements, capital allocation and further application to shareholder returns. So you can see in this chart the steps taken in the dividend policy by taking group free cash flow, $42 million, adding back our growth project CapEx, creating cash flow available for dividends, applying our first 30% minimum distribution per policy and then assessing the surplus discretionary cash flow for discretionary allocation. So there was a Board supplement of $11 million that was applied to our interim dividend of $26 million. So overall, in summary, the Board discussion and recognizing balancing shareholder returns with capital growth investment and also looking ahead for our requirements for Doropo, the first 30% of free cash flow was calculated. And then another 1/3 of those surplus cash flows rounded up to USD 0.0225 were taken as part of the dividend declaration. And the dividend payment date, as you can see here, is 27th of September. Basically, 53% of available cash flows were distributed. So in conclusion, and moving on to the next slide. You can see as we exit the reinvestment phase, we're in a very healthy business, having maintained both a very robust financial strategy and delivering on our continuous improvements. We finished the half with a strong balance sheet with liquidity of $350 million, still allowing pure exposure to the gold price, but also funding all that CapEx from treasury and cash flows. Our balance sheet position, both in cash and undrawn RCF allows us that additional flexibility, and as we move forward over the next financial year. And it means that we can really focus on the business and drive our margins and free cash flow and invest in the future. We've continued to deliver on those cost savings initiatives, and we are on target to deliver our annual guidance as we enter a stronger second half. Our budgets are on scheduled and the key projects are on scheduled to be delivered, but it's been another strong year of strong free cash flow as we go through this final period of reinvestment and exit the reinvestment phase. So with our treasury and strong cash flows, even during this reinvestment phase, we've been able to finance all our projects, pay our partners, EMRA, and continue with our shareholder returns without drawing on that RCF. So a very, very pleasing result for everyone. And it's a strong delivery against our stated plans and very excited as we enter into the second half. With that, I'll hand back to Martin.

[Martin Horgan, executive]

Thank you very much, Ross. And as you say, great to see the cost control at Sukari there as those unit rates and total spend, a real focus on that and through focusing on delivering those ounces and delivering those costs have enabled us to take advantage of that as good gold prices and deliver those cash flows. And so we just move on next slide, please, Rich, in terms of -- what I will do -- like to do now is take us through the EDX sort of update. Maybe just as a preface this before we step in. I had the great pleasure last week to attend the Egyptian Mining Forum, the third event, and as part of that delighted to say that was able to get some time with the new Minister of Petroleum, who has just been recently appointed within Egypt. His Excellency Karim Badawi is an ex-Schlumberger man, had worked pretty much all his career with Schlumberger, a number of both onshore and offshore senior positions. And he joined the government to take up the role of Ministry of Petroleum and Natural Resources, and therefore, of course, is responsible for the mining sector within Egypt. He held a keynote speech, he gave a keynote speech and then, rather wonderfully, stayed around the conference for the entire day and took an opportunity to host a networking lunch, hosted one-to-one meetings as well. So we had quite a bit of exposure to the new minister. I found him very engaging, very sincere. He was very honest and noted that the progress that was made around the new mining code for Egypt had stalled a little bit, recognizing those presidential elections and then the cabinet reshuffle had sort of meant a little sort of stalling from the government process of delivering those changes. And he openly acknowledged that. And he openly acknowledged and stated his desire to put that momentum back on the table to get his government to deliver into those negotiated terms and then really get that framework in place to enable to sort of kickstart the Egyptian mining sector as well. He made a important point about being unified with the minister of finance, which I thought was very good and so much so. Minister of finance actually came and joined a panel session at the Egyptian conference as well. So I think it was a very impressive and honest and earnest display from the minister. He said all the right things in terms of recognizing, didn't duck any of the issues and then made that commitment both publicly. And then also privately we met again around his desire to see that kicking up as well. So we wish him the very best with that. And as ever, along with other colleagues, remains sort of there to work with him, get this legislation in place. And then really, I believe, enable us to kickstart the Egyptian mining sector and all this potential. And potential is a key word. And I think, moving on to the next slide now. Delighted to say that we're starting to realize some of that potential here now. And I think the best thing we can do to demonstrate to the broader world of the potential of Egypt is to do that work. And obviously, Sukari speaks for itself in terms of the ore body. We've had a long sort of belief and Centamin certainly in the last 4 years under my watching and other team before we, of the geological potential of Egypt's Arabian Nubian Shield. And with that, obviously, we started to do the work a couple of years ago, focusing initially on the areas adjacent to the Sukari mine. You may remember. We'll recap here from January. We gave some initial drilling results of some of the targets that we'd generated during 2023. And then drills of the second half of '23. And out of that, 2 emerging areas that we believe quite a good interest that came to the fore. Little Sukari and Umm Majal, both within sort of 20 to 30 kilometers of the existing milling facility. And as you might remember from January, some of those widths and grades there that we were seeing at both those projects certainly indicate the potential for mineralized sort of widths and grades that could support resource and then ultimately reserve growth as well. So that gave us a good bit of confidence at back end of last year, sort of proof concept around the sort of the prospectivity of EDX and also the potential for not just small skinny vein sets that are interesting to artisanals, but those sort of bulk resource targets that could be of commercial interest to a company like ourselves as well. Just moving on to the next slide, please, Rich. So with that, we set up a fairly aggressive campaign to go back to Little Sukari and Umm Majal. Initial work focused on mapping just to do some more detailed structural work there and some ground based geophysics, some IP work to try and understand the sort of potential target zones we were looking at. And then initially we put together a 15 kilometer core and RC program to test both targets with the intention of some infill to be done in certainly Little Sukari where we had a few gaps in the initial drilling phase, the sort of scout drilling we've done. But also then start to try and understand the potential depth and strike extent of these targeted areas as well. So that work commenced towards the end of Q1. As I mentioned before, we've established a field camp now at Little Sukari and the teams are really busy. And off that initial 15 km, we're about 13 kilometers into that. That has all been focused on Little Sukari and we haven't yet gone to Umm Majal. And the intention now, based on that success, is that that 15 kilometer program now, in fact will become about a 20 kilometer program over the balance this year and it will all be focused on Little Sukari. We will move to Umm Majal probably later this year, early next year. But given the success we're having at Little Sukari, hence the decision to stay focused there and extend that program than 15 to 20 kilometers of RC work. And the infill is coming very nicely. Starting to really sort of test the sort of depth extents of that. And we have little sort of schematic on the right hand side there. You can see that with some gold -- visible gold particles, giving us a good indication of where that's going as we look to test that depth extent. And I think importantly on that plan view on the right hand side there, as you can see, as we start to move sort of west from the initial discovery points, can we have some success from there? The mineralization does look most interesting to the west and that's gone very well for us. And starting to see that strike extent sort of extending up to 400 meters plus now from the original area as well as that depth extent as well. And really pleasingly for us is what appears to be more recently the emergence of a parallel southern zone to the main zone of mineralization as well. So still relatively early stages, but what we're seeing is some real encouragement and excitement around the potential Little Sukari and to build on the success we had in January and take that forward from there. Work for the second half of the year, obviously we'll focus on the continuation of that drill program to round up at 20 kilometers of drilling. We'll, obviously, do a little bit of metallurgical test work program as well. We should be getting assays and the like back towards the end of this year, which we'll update you on this assumption that all comes together. Looking to put a main resource together for that during 2025 as well. So I think in terms of a relatively short space of time, I've been able to, one, identify and now quite aggressively look to expanded the Sukari with some pretty interesting results coming through there now and really starting to shape up as being interesting for Centamin and interesting for the Sukari milling infrastructure, but also a clear demonstration of the potential of EDX to yield more discoveries within the eastern desert of Egypt as well. So watch this space. I'll look back to you later in the year as we start to round it out from there as well. Next slide please, Rich. And if that wasn't enough, we've talked in the past about an integrated pipeline of organic growth opportunities. Obviously we've focused on Sukari. In the past, the geological extensions and the addition of over 2 million ounces of reserves over the last 3 to 4 years at Sukari, focusing on some of those cost initiatives to take costs out of business that Ross highlighted very well before. The growth of Sukari. We're now starting to see the growth emerging at EDX. But, of course, the West African portfolio is something that's been emerging over the last 2 to 3 years as real growth potential. I'm delighted over the last 6 months, the first half of this year that we've been able to deliver both an ESIA and a full for Doropo as well and this is really exciting. As I joined back in 2020, this was an exploration project, about 5 million ounces at 1 gram per tonne mainly inferred material and no real direction. And I think in the last 3 years when we got hold of that project, put some real focus and momentum and drive into that. And in a relatively short space of time, leveraging off the previous work done, been able to deliver scoping, pre-feas and now a feasibility study as well. So we're going to have a look at that now from here. Next slide, please, Richard. So just as a recap, Doropo in Northeast Cote d'Ivoire, adjacent to the Burkina Faso border and just north of the Comoe National Park as well. So a fairly rural area with limited development, both infrastructure and industry. And certainly the government has indicated it's a key area for investment for them and they believe it's something like Doropo is a very good example of a project that can deliver work, it can deliver revenues, it can deliver employment and skills to people, but also infrastructure as well. So some real government support for this particular project. I think the PFS that we completed last year, I think we were very clear that it showed a relatively technically simple project, multiple pits around the central processing facility that looked like it could deliver about 10 years of mining. Some good only for cash flows in the first 3 to 4 years and then a sort of CapEx in the order of about $350 million. It did have for us the key area of focus was around social impact. Initial plans had us having to relocate between 2,000 and 3,000 impacted persons over the mine life. And importantly, some of those had to be sort of engaged with and moved prior to construction starting. And really the DFS that, as we looked at that, was to take that concept and look at how we could obviously increase the accuracy of the estimates through the DFS stage. But also importantly, could we lower the risk profile of the projects and within that focusing on the social aspects of the project's impact as well. So lots of work done over the DFS as you can expect, a big geological infill program. It went very well for us, enabling us to look at a grade uplift and bringing some oxide material and generally be confirmatory of the work done through the PFS. I think just interestingly to note that in terms of our assumptions, the PFS have been run at $1,500 gold reserve price. Taking this back to $1,450. Quite a bit of geotech work, both in terms of the pits and also the infrastructure. So quite a lot of work done there. A really comprehensive metallurgic test work program. We've got 8 pits, we've got 3 ore types of oxide, transitional and fresh material. And then, obviously, we've got sort of spatial sort of compliance within those 8 pits as well. So a very significant test work program has been done. That has broadly confirmed the outcomes of the PFS. We've been a little bit prudent around layering this into the DFS, but that's fine, we're happy with that. And we see opportunities for further improvement down the track. And then, of course, we've looked at the infrastructure planning around power supply, TMF or water dam and access. And obviously we've looked to effectively have tighter pricing from the mining contractors, from the CapEx estimates of bills of quantities and so on and so forth as well. So a really comprehensive feasibility piece of work, focused on confirming the PFS outcomes, but really focusing on that social impact and to look to improve that and therefore lower the overall risk profile of the project as well. And broadly, the DFS confirmed the PFS configuration, which is very pleased to see as we move forward. So just stepping on to the next slide please, Rich. So as I mentioned, this was a key area of focus for us, noting the impacts as did deals in the PFS. Generally, the hierarchy that we look to employ when it comes to social and environmental impacts is well, firstly is avoid. Can we avoid any impact? If we can't avoid it, can we minimize it? So it's avoid then minimize. If we can't minimize then can we mitigate? And the final piece of the jigsaw is then if we can't either avoid, minimize or mitigate that issue, then we're going to look for compensation as the final and least preferred option as we go forward. So lots of the philosophy was looked at the or that policy was looked at the project configuration as things around sequencing of the pits to ensure no more than ever 2 pits are open to minimize impact were maintained and held over. And I'm delighted to say that there's some clever thinking and some smart work by the feasibility and ESIA teams is that we've been able to have a significant reduction in impacted persons within the project life. And that sort of 2,000 to 3,000 individuals that were going to be impacted from the PFS is now going to be less than 500. And that's a huge change in the risk profile of the project in terms of implementation. And I think really importantly as well is there's now no requirement for upfront relocation ahead of construction. And in fact, that relocation negotiation or relocation impact only starts in year 2, 3 of the operational life as well. So I think that is a significant benefit to the project to really enhances the overall project risk profile and returns effectively as well. I did mention the Comoe National Park as well. There is no formal sort of buffer zone to the park within Cote d'Ivoire. We have, however, decided to impose a voluntary buffer zone to the Comoe National Park to the southern end of our license package as well. So we've lowered the social risk considerably and we are imposing a 5 kilometer voluntary buffer zone around the Comoe Park as well to minimize any potential impacts on that park as well. So overall, I think some excellent work done by the ESIA team. I think it really enhanced the project. And with that, we submitted the ESIA to government, which you always do ahead of the mining license application. And that, obviously, was then sort of risk assessed and some community engagement done by the government. And I'm absolutely delighted to say that our ESIA was approved during the first half of the year. So a very quick turnaround from government. Public consultation was broad-based and supported and delighted to say that our environmental compliance certificate was awarded to that and gives us a big tick in terms of our plans for the ESIA and those impacts as we go forward as well. So I think that's a real sign of the quality of the work done. I think it further underpins the government's desire and willingness to see this project move forward as well. So that's a huge element of derisking to the project from there. Next slide, please, Rich. So really with that significant body of work done through the DFS phase, all those areas looked at with that environmental improvement and social improvement we've been able to leverage into that. And now an approved project from an ESIA perspective, very happy with the positive outcome of the feasibility study. So from the -- I mentioned the infill drilling, we saw pretty much a nice pickup in grade. So that just over 1.5 grams from just about 1.4 grams. So a very nice pickup. And despite that reduction in reserve price applied to the project with 15% to $1,450 per ounce, a very similar total probable reserve of 1.9 million ounces. Giving us about a 10 year mine life from start of production as well. So very much a good mine life there. We do think there's further geological potential within the area. We took the decision not to sort of continue to sort of drill out geologically additional ounces of known target areas that we have from mapping sort of geochemical soil programs and known sort of artisanal areas. We do believe that they will add years 11, 12, 13, 14 in due course. However, with enough ounces in the tin to support the capital investment decision, we took the decision that we'll do that further exploration of cash flows once the operation is up and running as well. So a good 10 year life of just under 2 million ounce reserve and a good pickup on grade from geology. But we stress that we do believe there's good potential for life extension as well -- beyond that as well. In terms of the mining, same as before. 8 discrete pits mined in sequence. No more than 2 open any one time. We gone the contract to mining option again for the purposes of this feasibility study. We did see some nice improvements in contract mining rates offered. They sharpen their pencils. Was offset a little bit by the strip ratio going up on basis on that geotechnical work, and laying back some of the slopes in the oxide and transitional material. But ultimately out with a good solid mining schedule on that basis. The metallurgical processing work, let's say, very comprehensive program. Confirmed the flow sheets that we were looking at previously with the deletion actually the shear reactor at this stage. And with that comprehensive program, we've taken slightly more prudent approach to the metallurgic recovery. So we've seen a slight dip on net recoveries compared to the PFS, which kind of bounced out by the increase in reserve grade that we've seen from the improved geological understanding from there as well. And when we pull that together, what we end up with is a very nice project, delivers north of 200,000 ounces for the first 5 years at less than $1,000 all-in sustaining costs as well. And what that tells us then is obviously a very strong sort of initial payback period on a derisk basis for that project as we go. And when we think about that payback, it just pivots into the CapEx. As I mentioned, a lot of work went into the infrastructure design. A lot of work went into some smart thinking around the overall sort of project configuration, much more accuracy in terms of bill of quantities, the earthworks, steel and concrete and so on. And obviously, what's very beneficial to us is a number of projects recently taken place and constructed in Cote d'Ivoire. So very well informed and up to date pricing available for in country contractors. And a combination of (inaudible) and let up saw us actually just move the CapEx up to $373 million, from that $350 million in the PFS, exclusive of contingency. So actually less than a 7% increase in overall CapEx, despite over sort of 15, 18 months since the last CapEx estimate as well. So inflation alone would account for that. But delighted with the approach to that as well in terms of the sort of keeping a careful eye and not letting that blow out ahead of itself. That leads to about a 20 month build from real sort of FID as we move forward from there. I think importantly for us, when we look at the metrics using our $1,450 gold price long term, that gives us that IRR north of 15%. But when we look at that on a more normal, if you like, sort of market consensus, street consensus, they long term $1,900 gold at an 8% discount rate, which is important. We've got a nice post-tax NPV of north of $400 million and importantly north of that development CapEx as well, and a pretty strong IRR. So what we see there, or what I see there, is a very robust project that will have some meaningful contribution to the Centamin Group in terms of ounces and cash flows. A faster, rapid repayment period, and a project with a significant reduced risk profile given the work done around the social environmental aspects as well. Probably one final thing to note in terms of the feasibility work itself, I think we've approached it with a sense of prudence when we think about potential of future construction funding for this. Very much aware that it's likely this project will be subject to independent engineer review and diligence. And with that in mind, we've not looked to effectively dial everything up to 11, we believe with the right side of prudence. And this project will very much withstand external scrutiny and validate those inputs, as well as part of any financing due diligence process as well. So we think it's a very real project, it's a very real set of numbers, and it's something that we're very happy to stand behind and take forth on that basis as well. Next slide please, Rich. Just talking about CapEx. Clearly, one of the points for us is around capital intensity in terms of that number. I would say a couple of things is that we believe that actually it's about rights. And there's a couple of things that we point to at that basis. Foremost is that we had one particular engineering group that did the pre-feasibility study. We moved to a different engineering group to do the feasibility study. So 2 different engineering groups both came back to very similar outcomes. So that gives us some -- we don't have too much (inaudible) there. We've got 2 different engineering groups coming up with a similar number. And then on top of that as well, we look to do a sort of a benchmarking exercise to our peers within the region as well. And again, we believe that that indicates of the project, it's not the cheapest, it's not the most expensive and sits in line with its peer average as well. So I think that gives us -- from the bottom up, first principles, CapEx derivation to come up with that number. When we then look extremely to benchmark that and the basis of that estimation, we believe it's a very real number. Next slide please, Rich. So next steps from here. Well, clearly license application that we'll be going in. We'll make our submission to government for our mining license. And that obviously will take a number of weeks and months to work through the Ivorian system. While that's happening, we'll look at some early works. So, obviously, kick off the feed, select a contractor and get into the feed from engineering design. We'll look at maybe some potential sort of cheap, but very cost effective early works around things like existing camp upgrades and infrastructure. We'll do a little bit of the grade control work to get out of that towards the dry season later this year to starts to do some infill around the early years of production. And of course, one of those work streams we're looking at finalizing now, the financing structure for that. So with all those work, we'll be looking to do through the second half of this year, leading to an FID, I believe, in the early part of 2025. And on the assumption that rolls through and that construction timeline leading us to first gold in early 2027. So very happy with that. I think that's a great outcome for the company. I think that's a great outcome for Doropo. And I think it's a very real project making meaningful contribution to us as a business. And I think they're very real improvement numbers which we would hope to beat as we go forward and improve on from there as well. Next slide please, Rich. And again, please. So to summarize in terms of our 2024 guidance. I think, you know, the headline cash cost and AISC noise somewhat sort of confused a little bit around the stripping, sort of, changes in the strip ratio and then the gold sold versus gold produced. I think what you can see if you look through that sort of cash cost and AISC noise is that the ounces are where we planned them to be. That $0.0225 was a good outcome, a good strong Q2 which is planned off the back of that Q1 has brought the ounces in on plan. I think as Ross showed you, those unit rate in terms of right from the open pit, the processing and the underground and the G&A, strict cost control means that the unit rates are moving in the right way. And then ultimately, if we look at then the cash flow derived from that by delivering ounces at the right costs, enable us to participate in these stronger gold prices and drive that cash for the first half of the year. And with that cash enabling us with the confidence to give us that $0.0225 dividend as well. And I think as Ross mentioned from a liquidity perspective, the ability to hit those ounces at the right costs through the first half of the year and to participate in those gold prices has allowed us to continue that reinvestment process of cash flow. And we remain under an RCF and strong balance sheet as we go forward as well. So I think a little -- I might joke about the sort of the noise around cash costs and AISC and those gold sold versus gold produced. But I think actually the underlying message is very clear. A good first half, ounces delivered at the right costs, good cash flows generated through the period, supports the divi, supports the strong point of liquidity, and positions very nicely to deliver that organic growth within the business. And as we mentioned before, when we look forward to the balance of the year, good momentum into H2 and guidance maintained for the year. Next slide, please. Rich. And really, of course, I've seen this slide a few times. Now we put it up there. When I joined in 2020, I talked about the desire of reset in Sukari and using that as the foundation to build a multi-asset, multi-jurisdictional producer. With Doropo coming through now, we've taken a big step with that feasibility work now to actually sort of realizing that vision of a reset to Sukari at that sort of plus/minus 500,000 ounce level with the Doropo coming through to give us that multi-asset, multi-jurisdictional producer model. And of course, what's not in this sheet now is the potential from EDX to further enhance that profile as well. So I think a big step forward in the first half this year to start to really realize that vision and deliver Centamin as that producer we know it can and want to be. So maybe I'll pause there and thank you for your time and sort of say that we're now open to the floor and happy to take any questions that you might have.

[Operator]

[Operator Instructions] Our first question comes from the line of Yuen Low from Panmure Liberum.

[Li Low, analyst]

Just a few questions. Well, I guess 2 to do with Sukari's cash costing. First of all, shouldn't you be raising the cash cost guidance by roughly $100 per ounce? Secondly, is there going to be an additional $46 million of sustaining CapEx, because that's what's implied, which presumably will be for the additional work that you're giving to Capital Drilling and so on.

[Martin Horgan, executive]

Thanks, Yuen. So, look, I'll pass to Ross in a second to tackle those on, of course. But congratulations in your new shop with the merger across there as well, so I hope that's all going well. Look, always a tiny change is always challenging, but hopefully that's going down well for you. Look, I think outside of the accounting treatment of it, I think when I think about the sort of the physical plan for the year is we're basically where we thought we'd be, or even slightly ahead of it. So in terms of actual dollars spent to do the work, we're at or better than we thought we would be. In terms of volumetric mining in the open pit, mining in the underground processing grades and so on, we're at where we wanted to be. We've found some additional gold through the dump leach, so on a pure operational basis, is that we are at or slightly better than we thought we'd be for the first half of the year as well. So I think that's a really important thing that everyone just needs to understand. There's a lot of noise around these numbers, but ignoring the noise, we are at or better than where we thought we'd be at the half year point as well. So I think that's a very, very clear. In terms of then the allocation of CapEx to OpEx, to AISC, with this IFRS 20, this one wonderful sort of allocation of costs --waste stripping costs of future production, I'll let Ross talk to that in a second. That does sort of muddy the sort of cash cost versus the AISC picture, and obviously the CapEx as a result. To me I look at the all-in sustaining cost. If things transfer from sort of cash cost to AISC, or vice versa, is ultimately it also gets captured in the AISC and makes sure that's where we are. So on that basis, when I look at the AISC and I look at it on an ounce produced basis rather than ounce sold, it's actually we're well within our AISC guidance as well. So I'm very happy with that as an outcome. And that gives us that confidence as we roll forward to basically meet that guidance both in terms of ounces and AISC costs as well. In terms of capital. I would also stress that we put it under RS last week, the total material moved for the year isn't changed. Well, it's a percent up. So we plan for about 120 million tonnes to be moved this year in the open pit. It'll be about 122 million tonnes. So for all intents and purposes, total material moved stays on track. And what we're looking to do, of course, here is redeploy some of our fleet to go and do some work to allow us to do the dump leach. So that's going to bring those ounces forward. That means that there's more gold coming out at good costs, more cash flow for the business. So very happy to divert some of our fleet to go and get that dump leach pad ready. That means that we can opportunistically leave capital to move some tonnes that our fleet was going to move anyway. So there's no additional tonnes in the system in that sense, it's the marginal cost of capital doing those works rather than our fleet doing it. In terms of their contractor rates. In terms of the truck delivery. Again waiting for some 785s to arrive from Caterpillar, there are few weeks delay. Nothing untoward there. It's a busy time in the market right now. And again, while those trucks are being delivered in the next sort of 6 to 12 weeks, Capital is on site, let's use them. They can mine tonnes -- those trucks would have mined had they been on site. So again, compliance to plan, no additional tonnes to be mined. Those tonnes were already in the budget. So again, it's that marginal cost above and beyond that from there as well. So what we see is that by giving Capital those few extra tonnes, it allows us to diverse, so project will create more revenue in future. And it will also allow us to basically maintain long term compliance to plan. And it's not -- it's not coming at the cost of any additional tonnes to the original forecast at the start of the year. It's just that additional small margin on top of their rate versus our rate for those contracts. But we think the benefits we get from the dump leach and the benefits we get from maintaining compliance to plan more than outweighs a marginal cost in increase by having Capital to do that. And when we look at the first half of the year, we looked at diesel prices from $0.75 to $0.90. We're probably trending sort of $0.78 to $0.79 to dollar per liter for diesel. So within our sort of, if you like, operating budget for mining costs, because we've had a reasonable sort of diesel price over the period, we've got a bit of headroom in there as well. So even those capital costs get -- those additional costs that we pay by doing the work, they're absorbed within effectively the range of headroom that we've got based on diesel price level as well. So I think the thing -- I'll say lots of noise, Yuen, in, but I think the thing to think about, plans are on track or slightly ahead of where we thought they'd be physically. We've actually got more gold than we thought from the dump leach opportunity that's come through from the open pit on that basis. You've seen the cost controlled charts. The total dollars spent are better asset or on track as planned. And when we think about gold produced rather than gold sold, AISC where we want it to be, and cash flows where we want it to be, and we've got an ability to pay that dividend as well. But Ross, in terms of that comment around cash cost being up by $100, I'll defer to you there, Ross, in terms of how that shakes out for H2. But ultimately sort of the plan for H2 remains within the sort of overall plan for the budget of 2024.

[Ross Jerrard, executive]

That's right. Thanks, Martin. And hi, Yuen. Yes, Yuen, this allocation, you're right. Sort of like if we adding back that CapEx, we will be trending towards the upper end of our guidance for the cash cost range. But equally on the all-in sustaining when a net on net it comes out in the (inaudible) all-in sustaining. So truing up for the ounce impact between denominator of poured versus sold. We within our range, within the all-in sustaining, but the cash cost number will be trending towards the upper end of the range. But we still believe within that range and acknowledging there's other moving parts in terms of diesel price and the like. I'd highlight in terms of the CapEx. So when we put out our CapEx outlook and guidance of the $215 million. So that's our true CapEx before we do this adjustment of the waste stripping. We're largely on track with that. We're slightly behind in terms of some of those discrete CapEx items like those trucks and the like. But, we believe that that CapEx will drop as planned. Overlaid with that, we had an annualized number of $90 million for this waste stripping that we thought would be taken out of Opex and capitalized and that was for our fleet. So that didn't eventuate or crystallize in the first half. We do believe that that will come through in the second half, but obviously we're not going to catch up the full $90 million. It'll be another $45 million for the second half. And that's why we'll still be within our ranges, but trending towards the top end for cash costs, but no effect on all-in sustaining costs. Hope that explains it.

[Operator]

Your next question comes from the line of [ Laura Chan ] from RBC Capital Markets.

[Unknown Analyst]

Just 2 questions on my side on Sukari. Can I just clarify on the outlook for closing that gap between sales and production for the rest of the year? And secondly for Doropo, are you still considering moving from contract mining to owner operated? And is there any potential timeline on making that decision?

[Martin Horgan, executive]

Thanks very much. I'll take the Doropo first, if that's okay, Ross, and thanks for that. And then I'll pass to Ross in terms of the gold sales and how that sort of unwinds. So from the Doropo perspective, one of the things that we've obviously looked at is contractor quotes for the feasibility study. If one goes out and sounds the market and gets a range of 5 or 6 contractor quotes, it does give you a much more solid base of estimation for the feasibility inputs. And if you can point to a market sounding of quality contractors, when we plug those numbers into the feasibility study, it just overall enhances our confidence in the outcomes of the feasibility study as well. So in part, that was part of the reason for looking at contractor. Another way to think about it from our side as well then was the CapEx and the capital efficiency of that. So obviously, it's a lower CapEx option, but it's a higher Opex option. And we are aware, of course, that there's lots of things like equipment financing available from some of the major equipment providers and they can provide everything from a fully financed fleet with a marks, straight through just so to participating in the funding facilities as well. So that is something that we will look at. And as I mentioned that we were looking at the financing work streams over the second half of this year. Now we've got feasibility numbers in. And so part of that, of course, will be one of the discussions will be, do we look at sort of a fleet financing as part of the overall financing package? What does that say to the CapEx requirement and how does that work structurally with the other lenders? What does that say to OpEx? And clearly, it should reduce it. But then we've also got to think about sort of operational risk and implementation risk in francophone West Africa. So, obviously, we move on 120 million tonnes a year at Sukari in the open pit. We've got a very experienced operational team, very experienced maintenance and supply chain team. They're Egyptian, predominantly with some expats. This is francophone West Africa have its own rules. So we've got lots of operational experience in one sense of moving this equipment around. But also we've got to recognize that this establishment of a new projects in a rural area in a francophone country as well. So I think we'll look at it operationally, we'll look at it from an implementation risk perspective and we'll look at it from a financing perspective as part of the overall financing work stream in H2. And then we'll make a decision as part of that in the round as well. So there's a number of aspects that we'll consider when we look at either own mining or contract mining for that as well. So that'll flow through the second half of this year. And maybe I'll pass to Ross around of the joys of when we pour gold versus when we sell gold and then when we have cut off points in terms of calendar dates and how that all doesn't line up perfectly from time to time, which again confuses the issue somewhat, unfortunately. But ounces or ounces and they get sold and we get the dollars in due, of course. Ross?

[Martin Horgan, executive]

Thanks Martin. Yes, Laura, in terms of, I guess the outlook in terms of where we sit. We've had an abnormally large differential between gold poured and sold, as you've seen, for the half. In outlook for the year we -- that the timings of that, and we manage that towards the year end in terms of where those sits and calendar dates. But basically, any amounts that are poured that sit and stay within the gold room, they are still produced ounces but not sold. It's only sold when the carrier comes and picks up that bullion and moves off site. So that differential, as you see in prior periods, that's normally a lot less. It's up -- it's probably 7,000 to 10,000 ounces that we would traditionally see in terms of timing of those ounces. And here we've had a big differential just in terms of the trajectory of -- and the run rate as we entered or exited the first half. So we're managing that. We think it's going to be a lot smaller in terms of quantum as we end up managing through to the end of December.

[Martin Horgan, executive]

So I think the short answer, Ross, is that we expect that to -- I think we expected to unwind over H2 to get back to a more normalized. So by year-end, by 31st December, which I know is a Tuesday, which aligns with a bit easier with the Sunday [ goalpost ], is that we expect that to effectively unwind over H2 and get back to a more normalized level of the effective -- a bullion in the safe, ready, awaiting sales.

[Operator]

Your next question [Operator Instructions] And your next question is from the line of Daniel Major from UBS.

[Daniel Major, analyst]

So just to clarify a little bit on this accounting. So basically, the delta, because of the reclassification of ore and waste, is the difference between your previous guidance for contractor deferred stripping of $91 million going to $45 million. So it's $46 million difference, which is like $95 an ounce at the midpoint of your guidance range. And that basically goes from CapEx to OpEx. That's the right number, is it?

[Ross Jerrard, executive]

Dan, your numbers are absolutely correct. But clarify though, is it's not the contractor waste strip. So our contractor waste strip, that's a non-sustaining and below the line. This is our sustaining that our fleet would otherwise have moved. But you're right, it's a $45 million number that hasn't gone through, and that's remained in OpEx that should have been capitalized if it had unfolded as planned.

[Daniel Major, analyst]

And that puts you at the top of the guidance range for cash -- total cash cost. But obviously, it's a wash through when it comes to all-in sustaining. That's the key -- that's the key difference.

[Ross Jerrard, executive]

Exactly.

[Martin Horgan, executive]

Exactly.

[Ross Jerrard, executive]

And then, Dan, AISC, then further confused slightly by the fact that it's divided by ounces sold rather than ounces produced. So, you've got the reallocation --

[Daniel Major, analyst]

Yes, I got that.

[Ross Jerrard, executive]

Yes, yes. So, yes, exactly. Exactly.

[Martin Horgan, executive]

Yes. No, no, every half year we sit there -- and to me, I'm like, great, we've got more ore, we've got more gold. We can put it on the dump leach and bring those ounces forward. That's a great result. Then Ross gets out the big spreadsheet and starts looking to recut the numbers. But ultimately, tonnes of moving, compliance to plan, dollars are spent. We've got more gold. I'm a happy bunny. Let's move forward. And then Ross just has to navigate the joys of IFRS 20 and sort of reallocation of that.

[Operator]

And there are no further questions on the conference line. I will now hand over to Michael to address written questions submitted via the webcast page.

[Michael Stoner, executive]

Thank you. So, as it stands, just one question on the webcast with Centamin purchasing new dump trucks. Are we or have we not considered buying used trucks, such as those from our departing mining contractor?

[Martin Horgan, executive]

So we currently have a mine life out to the middle of the next decade. And obviously, the open pit runs all the way through that period. So I think when we look at that, when we look at an 8, 9, 10 year operating life is that -- but that pretty much gives you a full life cycle of a truck. So if we were to purchase used or part used equipment, you're then very much quickly into potential sort of midlife rebuilds and so on. You buy a new truck, the first sort of 2 to 3 years in terms of getting your hours on there, it's a lot more cost effective to basically run those trucks before you start getting into that sort of rebuild period. In fact, if you look at lots of mining contractors, open pit contractors, especially, they often buy trucks, run them to the first mid-year -- midlife rebuild, and then dispose of them. Because once you start sort of building engines and doing sort of chassis repairs, it gets a bit more expensive as well. So when we round out future mine life ahead of us when we round out or trade off buying cheaper used equipment, but might need sort of rebuild sooner in their sort of productive life and will they last the end of the mine life versus buying something new that takes us to the end of the mine life and we don't have to think about rebuilds for 3 to 4 years. Actually, it's a lot more cost effective for us to buy that new equipment at this stage. So it's a combination of purchase costs plus ongoing maintenance and rebuild cost and life of mine. When we balance all those out, it's a -- where we are today, if we have 5 years of mine life left, 4 years of my life left, then that might have been a different equation. But with the life ahead of us and those competing sort of opportunities to purchase cost and some maintenance cost, it's better for us to buy new.

[Michael Stoner, executive]

Thank you, Martin. That's all from the webcast questions.

[Martin Horgan, executive]

Well, thank you, Michael, and thank you everybody else, for taking the time to listen in today. As I say, a little bit of noise around the AISC and the cash cost, but fundamentally, obviously good Q2, very happy were Sukari sits, puts us in great position for H2. Supported that growth initiatives of cash flow. Good liquidity and balance sheet strength coming through. Really excited about EDX, lots of interesting work going on there. Delighted that Doropo has come through as it has done and I think set very fair for H2 and some pretty exciting momentum going forward, notwithstanding the joys of accounting procedures overlaying on top of that. But I think, yes, look happy with where we sit here today. Very much looking forward to H2. Further good news as we roll forward as well. So with that, I'd like to thank everybody for taking the time listening today. As ever, if there's any sort of follow up thoughts or questions, myself, Ross and Michael are available through the usual channels. Do feel free to reach out. And wish you all the very best for this Thursday and talk soon. Thanks everybody.