B2Gold Corp. (BTG) Q1 2021 Earnings Report, Transcript and Summary

Good afternoon my name is Jason, and I will be your conference operator today. At this time, I'd like to welcome everyone to the B2Gold First Quarter 2021 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the call over to Clive Johnson, President and Chief Executive Officer. Mr. Johnson, you may begin your conference.

Thanks, Jason. Welcome to the conference call to discuss the financial results for the first quarter 2021. Thanks for attending. We had another very strong quarter, as you're going to hear from Mike, certainly as evidenced and as laid out in the news release, very good financial performance, again, driven by strong operating performance at the mines, which allowed us significantly beat on our operating all sustaining costs. And all of this, as everyone is still aware, is during COVID, so once again, it speaks to the tremendous leadership and the tremendous management and the employees we have at all of our sites, everyone on the same page, which was committed to continuing to mine during COVID, if we could do it safely and responsibly, with a great relationship with the governments in the countries that we mine. And I think we've earned a lot of trust there, I think, over time with our cultural approach that we bring to the business of treating people with fairness, respect and transparency, I think that pays off in a time of crisis or in a situation like COVID, because we established a mutual trust. So the government, our employees, and the company, all wanted to do the same thing, to keep mining but do it safely and recognizing the impact of COVID. So we took many steps we've talked about before, to assist areas we're in, impacts of COVID, as we do with all sorts of aspects of their lives, but I think it's been a great success in a very difficult scenario all around. Overall, these companies don't have a safety net; so the fact that we can continue to mine and pay taxes and keep these good paying jobs going and keep our communities as safe as possible, I think it's been a good thing for the industry. I think there's a positive going forward potentially in the mining space, because I think post-COVID many governments were looking at who were the good performers, what were the good businesses to have in your country during COVID. And I think responsible miners, not just others as well; have shown governments that gold mining can be a very positive thing in a time of crisis. So just in general, we're going to review the results of the quarter. And then, we're going to talk about Gramalote. And as everyone sees in the news release, we - we delayed the completion of a final feasibility study in Gramalote and we think it will be about a year, and if the economics are positive for the feasibility work that we've done so far, but we feel there's a much better project there or - sorry, potentially better project there with optimization for the drilling and other things that we can do. So while the economics are positive, we want to make it a better project. And we're going to take the time to do that. I think it's important to know that also we were going to be looking at - we originally hoped to potentially have boots on the ground in September of this year, if there was a positive development decision, there was going to be some delay in that anyway, because the government was interested in our idea of doing resettlement in stages, instead of altogether waiting to enough years to do all resettlement and then start construction. So we've had conversations with the government where they've been interested in hearing more about that idea. But they did ask us to go and do some public consultation, understandably, and also to have the government reviews proposal, which would take some time. So we probably would have been looking at a six-month delay, the boots on the ground, regardless of the economics or whether we'd have a positive development system [ph]. So now we're talking about a feasibility study of a year. Bill will detail us to what we think and why we think more drilling, and some of the other things are important. People talk about optimization sometimes to perhaps try and negate some negative. In this case, there's a number of things you'll hear from Bill that we identified in the project some time ago that we thought were things we would have liked to have optimized, but overtime, we were trying not to change the footprint because AGA in the pre-feasibility study had realized a construction permit. So we are trying to stay within the bounds of that. Now we can open that up and look at the authorization, you'll hear more about that from Bill. We remain very positive on the project. We've had good conversations with AGA partner. And we're looking briefly to shortly finalize a budget over the next year, an increase in the budget and we should be able to hopefully announce that soon. But conversations we've had, and we're on the same page, we're disappointed that we didn't have a robust economics we saw in the PEA, Bill will talk to some of the things that change, but they along with ourselves remain positive that this can become a good asset for us. So we'll go ahead and do all that work. I think it's really important to note as well, the government relations remain very good with Ethiopia and with the federal government, we had a meeting yesterday. I had a call with a representative of the Minister of mines in Colombia, and they've been very supportive. And there we're beginning to hear that it's not going to happen right away, but very supportive of our desire to build the best project for everyone, including the Colombian people and the government, as well. So very supportive there, and there's a lot of activity going to be happening, as you will hear, on the site in terms of working towards the resettlement program, all of our social programs we're doing there, working with the government with small miners, there's a lot of good things are going to happen, in addition to the optimization to pretty much keep this project moving forward. Generally, corporately, I think, I've just touched on strategy briefly, we remain pretty much on the same page and strategy we've been on for some time, which is continue to optimize production around our sites, as we've seen. We're going to continue to pursue our development opportunities to see where we're going with those in Gramalote. At Kiaka, we're also looking at the potential for additional production that's a call out from the Anaconda area. As we announced in the news, we have applied for an extension of a mine and coal license, which is part of Anaconda with the government, we felt we fulfilled all the requirements and obligations to legally do that. And we're in discussions with the government, as we speak, about remedying the situation. And we hope to have a positive resolution of that. But we will take whatever legal means we have to, as required. Because we think legally, we should have been awarded that extension to the license, we're working to eliminate any confusion on that and we're also working with the government on that. It's an important project for us, as you'll hear from Bill; we are planning to be tracking ore from mine and coal down to the separator work down to the Fekola mill as early as early next year. Obviously, that's subject to getting the license issue sorted out. And once again, we think there's tremendous potential in Anaconda, not only for the saprolite which we've seen the resource so far, but much greater potential in this effort [indiscernible]. So it's an important project to us, I think it's a very important project to the people in the government of Mali as well, and we're uniquely suited to produce from there to everyone's benefit, given the proximity to the Fekola mill. And then, we're going to continue to focus on another thing we've done extremely well, which is exploration. We have great results around as [indiscernible] today, because we had traditionally great results around the mines, turning resources into reserves, increasing my life, that work continues, and this continues to go very well. But also, we're bored of expiration twice and being unbeatable. We're very good at grassroots exploration, as well as brownfields. And we've got a very good exploration budget this year. A large budget, which I think is a good thing, if you look at the return on investment over the, say, the last three years or so, I think somebody worked up and it's about $19 an ounce for exploration spend to discover ounces of gold bear costs remarkably low. So as I always say, the cheapest ounces will be the ones that you find. So Tom will talk about some of the exciting investments projects that we're doing, and then touch on the brownfields, as well. In addition, we're always looking for opportunities to grow, M&A has been tough these days, we've said repeatedly that for us to go into that area would have to be something that we could find value for our shareholders on an accretive basis, not anticipating higher gold prices, or exploration success. That's the discipline we've had for decades and that will continue. So, we're looking at the mirror to see if anything will be an act transactivating it's going to be something that we think there's an opportunity for us to judge the value. We're not likely thinking the way the bidding wars run a few decent devices that are out there, because we won't overpay and we did some heavy lifting before in the sense of building, which - and acquiring and building which are caught on for quite a while it was very unpopular to be growing, hence the opportunity at the time being contrary. But we continue to look at things that make sense to ensure the value through from an acquisition point of view. So that is an overview. I'll pass it over to Mike and he's going to give us some of the financial highlights from the quarter, discuss our financial position and then we'll be hearing from Bill, and then Tom. Over to you, Mike.

Thanks, Clive. I think I can run through the results of the quarter fairly quickly. It was good, clean quarter and some nice results. So just starting firstly with revenues, we had revenue of $362 million on the sale of 257,000 ounces and realized an average price of $1791 an ounce. And overall, we sold 14,000 ounces more than we'd originally budgeted. And that's really a function of having higher production than budgeted in the quarter. So total production in the quarter, including our share of Calibre, was 221,000 ounces, basically 19,000 ounces ahead of budget. Total production from our three sites operating mines was 206,000 ounces, which was 18,000 ounces ahead of budget. So looking at those individually, Fekola, we produced 125,000 ounces, which is about 8000 ounces higher than budgeted. That's primarily a function of Fekola processing facilities just continuing to outperform. We had originally expanded Fekola mill to a notional annual throughput rate of 7.5 million tons. We did budget 7.75 million tons for 2021. But in the first quarter of 2021, we had quarterly record of almost 2.1 million tons, or an annualized rate of well above 8 million. So Fekola mill is outperforming and we're seeing more production as a result. Masbate was 58,000 ounces, some 1000 ounces ahead of budget, and that's a function mainly of higher than budgeted mill recoveries. If you look at the RFP [ph] that was processed in the period, we had better recoveries from the high-grade sulphide ore that we mined from main vein in the period. And also, better recoveries from the low grade stockpile, that with some of which material we ran through the mill and that was originally mined from Colorado, but both of them had better recoveries. Then, Otjikoto production was 23,000 ounces, 2000 ounces higher than budget now, that was really just slightly better in all fronts, process tons great recoveries. Looking at that in the context of cash costs per ounce produced, consolidated cash cost rested just for the quarter $609 per ounce, that was $54 lower than budget, and from our three operating mines $581 per ounce, and that was $60 less than budgeted. And if you look at the individual components, Fekola $503 per ounce, $55 less than budget, and the beat on budget, in terms of cash costs, France [ph] is a function of a few things is higher than budgeted production, as I mentioned, and lower than budgeted mining and processing costs. We had lower budget maintenance costs for the mining fleet, and then we had lower budgeted processing costs at the mill, higher mill throughput and then lower signage's [ph]. Also, to note, the new Fekola power facility actually came online in the quarter slightly earlier than we thought. And we think that probably benefited cash cost by approximately $4 per ounce in the period against budget. Masbate $608 per ounce, cash costs $80 less than budget, and that's almost exclusively higher production in the period. We did have some savings of minings cost that's mainly driven by higher production. Otjikoto was $940. That was $56 per ounce lower than budget. And that again is primarily a function of the higher production. Turning to all-in sustaining costs per ounce sold, consolidated including Calibre $932 an ounce, which was $146 lower than budget. And if you look at our three operating mines, it was $919 per ounce or $159 lower than budget. And that's a function of a few things, obviously, the lower cash costs as described a second ago, and also the higher than budgeted ounces sold, we produced more and sold more. And that has a positive impact on the sort of fixed capital element when you look at it in terms of all-in sustaining costs per ounce. And also, we had lower CapEx in the period, that's mainly lower sustaining capital, it's really the timing of fleet maintenance and rebuilds. So those are really the primary drivers - the capital class, we think are just timing and we think they'll reverse later in the year. Just to give you the individual components, of the all-in class, Fekola was $770 per ounce, that was $128 lower than budgeted, Masbate was $818, $194 lower than budgeted, Otjikoto $1475, which is a larger number, but it's still $214 less than budget. Just a reminder for everyone on the line, the production from Otjikoto was very significantly weighted to the second half of the year and the first half of the year we're processing almost exclusively from stockpiles at site, while we continue to strip the Otjikoto and shake pits [ph]. And when we get into those pits later in the year, especially the higher grade components of Wolfshag in the second half of the year, we'll see that production level significantly increased. Overall, production-wise, cash cost-wise, we still think we're on target for guidance for the year, guidance is maintained. Again, reminder, it's significantly weighted to the second half of the year; our production for the first half is between 390,000 and 415,000 ounces. And the second half is 580,000 to 615,000 ounces. And that reflects us getting into the better grade material in the second half of the year, both Fekola and Otjikoto. Masbate is fairly consistent as it goes all the way through the year. A couple of other comments on the operation, then Bill's going to give you some comments later, but just a couple other thoughts. At Fekola, what's not included in the budget or guidance for Fekola is any new material from the cardinal area. We're currently looking at that now and what we can pull into 2021 my plan, but that wasn't included in our budget or guidance. Fekola solar, I mentioned that that came online. I think we've now managed to source the remaining solar panels and get them on the way to site. They were on a ship at one point waiting to go through the Suez Canal. But fortunately, that's resolved. And so, we're still on track to finish the solar plant by the end of the second quarter. But in the meantime, we did bring it online, the first part of it, online earlier than expected. I got a couple of comments, I think, on really income statement, good results, nothing major to highlight, the earnings for the period $99 million, earnings attributable to shareholders the company $91 million, or $0.09 per share. And adjusted EPS was also $0.09 per share. Then, a few things to highlight on the cash flow statement. So, cash provided by operating activities was $146 million. So that's pretty close to our budget in the end. So we did have a beat, as I mentioned, on the cash cost side. So the cost of our operations were lower, but offsetting that, we had some working capital movements really related to the timing of that and certain tax payments that offset that. So we ended up pretty much right on budget for the quarter for operating cash flow. And assuming that gold price is $1800 for the full year, we're still on track, we think for that guided operating cash flow number of somewhere around $630 million, approximately $500 million that will come in the second half of the year, as we get into that higher grade material and higher production, higher sales. And just to remind everyone, that the second quarter's operating cash flow will be impacted by the payment of those outstanding 2020 tax liabilities, there's about $140 million worth of 2020 tax obligations that will be settled in the second quarter, the largest part of which is for Fekola, but $125 million of that total relates to either Fekola taxes or priority dividend, payments which are triggered as a tax. And we'll also have an addition of $140 million [ph]; we'll also have some other withholding tax payments we'll make for monies that we're going to pay remit up from sites as dividends to pull the cash up from sites. A couple of things to highlight in the cash flow statement, dividends to shareholders in the quarter $42 million, $0.04 US per share. We're pretty comfortable with our dividend level right now and annualized it would be $170 million US. We are paying one of the highest dividend yields right now in the gold sector. And it's a significant component of our 2021 free cash flows. So we will look at it again in the second half of the year, but as I mentioned, I think we're pretty comfortable with that level just now. The only other couple items I'd highlight on the cash flow statement, investing activities, just under $60 million for the period. That's about $18 million less than budget. And as I mentioned in the all-in sustaining cost discussion, some of that's timing on CapEx for mobile fleet and rebuilds at sites, we think that will reverse later in the year. And on the non-sustaining site, we were under fairly significantly; Gramalote was under $6 million. It's under budget. But we're continuing work on the feasibility study. So we expect that will reverse and, in fact, as we noted in the newest release, we are currently in discussions with AGA about increasing the feasibility study budget by approximately $34 million, so our share be $17 million higher than we've currently budgeted. And that would take us through to the end of our first quarter of 2022 when we expect to finish a feasibility study. Also wonder on the CapEx side, we were about $5 million under in the quarter and expiration, that's just a function of timing again, and we expect that to reverse later in the year. And so, overall, we finished we finished Q1 $512 million in the bank and $600 million undrawn. We've got the full amount of our revolving credit facility available to draw. And so, we're in good shape, cash flow-wise, liquidity-wise and it was good, solid, production quarter and results quarter. I think those are the main things I was going to highlight there. So, thanks.

Thanks, Mike. Bill, over to you. Here's an overview of operations, review and a bit of an outlook for highlights from operations, and what we're looking at going forward.

Yes, sure. Thanks, Clive. Do you hear me all right?

I do.

Okay. Well, thanks. A lot of the stuff certainly was either hinted at by Clive or by Mike, maybe I can just provide a little more color, commentary to the actual operations. If you look, overall, obviously, we're quite happy with how everybody did at all three operations for the quarter, every site exceeded its budget. And we really didn't see any downsides as far as working forward into Q2 and into the second half of the year. Kind of going mine by mine, if you look at Fekola, great quarter. As far as development, I think everyone's aware, we previously said that our budget was run at 7.75 million tons per annum, we put out in the press release that obviously the mill is running much better than that. We're still holding it at kind of what we're saying is 8 million plus, but our life of mines are due here in the middle of the year. So we're going to take a good hard look at what we think that number is going forward. We certainly believe that we've got some potential to add quite a bit of saprolite from both Cardinal and from the main coder [ph] the Anaconda area. Discussing Cardinal specifically, we did receive our bulk sample approval. So we are right now out there starting to strip it, or we'll be heading to the mill or already started heading to the mill, I think, or if not, it's imminent. So we certainly see going through the rest of Q2, and in Q3, we will be developing that. And of course, as Mike insinuated or discussed, we see in 2022 and 2023 the potential for additional ounces to come from Cardinal which are not in our current life of mine. And the same story kind of holds true for main coder [ph]. You know, from the operations perspective, we're assuming that the current situation is resolved and we believe when it gets resolved, that we're going to see trucks saprolite into the Fekola mill in 2022. And given the fact that we have a large additional capacity for the mill, those numbers could be quite significant as far as changing the life of mines. So once that's resolved, I think in Q3, we're talking about coming out with what we want to do there, and putting it into production in 2022. And I think it's important to note, while we're talking about trucking typical, we see that as like phase one of the project, Tom's group continues to drill out there. And we continue to have some success as far as looking at the hard rock. And so, once we get the phase one studies complete, and get it all set up for trucking, we really want to take a hard look is there's a potential to put another mill up in that area. And so, that will be the emphasis once we finished the trucking study and get that all put to bed, we'll move on to what is a trade-off look like trucking versus putting a mill up there. Real quickly on the solar side, Mike hit hinted at it, but solar plant is up and operating really well. I think we've been publicly stating that we're kind of at 75% per completion. But the reality is, is we're probably higher than that, we've seen great, great returns on that solar as far as reducing our power costs. And we believe that in Q2, we're going to finalize that, and we'll have the full benefiting starting in Q3. Going to Otjikoto, Otjikoto once again had a really nice quarter. No issues as far as mining or milling, right on schedule. The development is, as Mike pointed out, the key is the second half of the year, the development for getting into Wolfshag three remains on schedule, we don't see any issues there for meeting our targets. The underground remains, while it's a little bit behind, we still see gold coming out as projected in Q1 of 2022. So overall, no issues at all at Otjikoto. Maybe one of the things to talk about is, we are in the process of connecting up our overhead power line, that facility, the power facility at Otjikoto operates in standalone configuration, it's an island. We believe by connecting to the overhead power line that we'll be able to continue to reduce power cost here significantly throughout the rest of life of mine, by taking the off-peak power prices, which I saw something, I think it reduces almost $0.04 a kilowatt hour for those hours that were on the off-peak hours. Looking at Masbate, Masbate once again, a great quarter. I continue to say, that's the project that is probably just day in and day out just performs as designed. We continue to see, you know, better recoveries and better grade at Masbate, as we say every quarter, and that certainly contributes towards the overproduction for the quarter. The rest of the year there is kind of business as usual, we're in the process of developing another lift for our tailings that remains on schedule. So overall, on the operational side, everything completely as advertised and as predicted. Maybe talking a little bit, as Clive asked, a little bit about Gramalote. I think it's important to start out talking about what the feasibility was trying to do and really get our head around why we've now talked about on handcuffing maybe the project design from what the pre-feasibility was. When we took over the project, we agreed with AngloGold that we were going to basically hold the design and the reason was is they had already pulled a construction permit. So the footprint had remained the same. And we basically had to just try and optimize within the existing footprint. What we found very early on is that there was a lot of things that we wanted to do. And some of these things were quite significant, things like re-diverting rivers in a different direction, moving infrastructure facilities, taking a look at the tailings pond [ph]. And in order to do that, we would have been required to open up the permit. So we've decided to go ahead and maintain the same footprint, but keep a log of where we were going and what we could change. And so, when the feasibility was done, remember, one of the key things was upgrading the resource from inverter to indicated. And that was very successful. And then updating the costs, when that was all said and done, we looked at it, we said, while this project is positive, we certainly think that there's a better project here. And so, we presented it to AngloGold, Anglo agreed with our concept. And basically, what we decided is that we were going to do some additional drilling, because we thought there was some further potential to increase the resource up to indicated. We were going to take a look at the engineering design as far as taking the handcuffs off and moving things around. And we thought it was still critical, because we do think this is a project and we do think this is something that that we can move forward quite rapidly once we get what we're now considering, kind of the updated feasibility. We wanted to make sure that the social aspects continue to move forward. So things like resettlement, we've been talking with Anglo, we've been talking to the government about how we can make sure that that stays on track. The Colombian government is in the process of formalizing some artisanal mining within the region. That's a very positive development. So we wanted to continue to support that. And we wanted to make sure some of the critical path items, things like bringing the power line into the region, continue to move forward. So all of these things we put together as a packet for AngloGold. Conceptually, they agree with the concept. And we provided a budget to them. They're in the process of having a look at that. And we think very shortly, we will continue to move this project forward. We see the updated feasibility study coming out at the end of Q1. And, obviously, if it's positive, we would mobilize shortly thereafter. And I think, it was Clive that talked a little bit, it's really important to remember, the difference between our proposed new schedule and what the actual schedule was, was not that different, because when we talked about kind of doing the betway [ph] when we were going to do concurrent resettlement, the government came back to us and asked for us to do some additional stakeholder engagement, and to have them review the results of that stakeholder engagement. So we saw the potential for six-month delay in any case, so we're not really that far off of that schedule. Moving maybe now to Kiaka; I'm not going to spend too much time on that. As we've said and we continue to message, we do believe by the end of Q2, the results will be out. We'll be discussing that. Clive, was there anything else that you wanted me to talk about?

Well, I think for good - maybe for the interest of people on the line. Maybe we should talk a little bit about some of the some of the issues between the PEA and the feasibility work. Now, the study when it comes on next year will not be an updated feasibility study. It will be the feasibility study. So now we've done the feasibility work has given us some economic indicators, but we have not completed the study. I think it's important point, but can you maybe talk a little bit about some of the differences between the PEA and what we're seeing now and the feasibility work that we've done. Some of the factors behind that?

Yes, sure. I mean, some of the key ones relate to the resources, I said. Obviously for 43101 feasibility study, we can only use indicated and we did the modeling only on grammar low to rich and didn't include the oxides in that. The pit design itself is changed a little bit based on some geotech issues related to the pit design. But the mining itself, the mining rate and the mining design remained exactly the same. On the milling side, we believe that we have a more elegant and more efficient milling process, we have looked at it certainly was cheaper, we've included some additional equipment that weren't in the pre-fees. And that's just due to level of detail. The tailings facility remained exactly the same. Power, overhead power lines come in, some of the key cost drivers which had changed, things like the power cost was slightly different. We had updated some of the costs due to inflation. And then one of the key ones, as you talked about already is resettlement. We want it to move people out sooner instead of the way that the way that the pre-feasibility had the resettlement was that it had a really long period where you had to fully complete resettlement before you can start construction. That said we were looking for concurrent resettlement there the issue there currently is a river that flows right through where the existing pit or where the future pit would be. There a big tunnel where they diverted that. We think that there's a potential to make that a better project. So some of these issues, so those are the key differences.

Okay, thanks. Yes, I guess just maybe, from a strategic and a corporate point of view, we're quite well known for being aggressive. And there's a big difference between being aggressive and being reckless, I always point out to people, but in terms of the way we approach projects, the way we do it very safely and responsibly, but do it more quickly than some others in the industry may move. I think this is perhaps an example. And some people recognize that of our discipline, when we have a project that has some positive economic indications, albeit not as robust as it was before. But we took a look at it and said, well, what's the best thing to do and the best thing to do here, because we're famous for building quality projects based on quality work and attractive economics. So that continues. So this is an indication, perhaps, if anybody needed to know and I don't think they should have needed to know given our history, but an example of our financial and corporate discipline, where we think we can make a better project and our partners and ourselves are prepared to believe in that concept, as well as the expense money to do it. So at the end of the day, the delay is appropriate to do a lot of very good work, and then have a look at what comes out, we're hoping we're going to have a significant improvement from the economic indicators that are positive or not meet our threshold given abstractly see so much upside, or super upside potential in the work that we're going to be doing. So, thanks. Thanks, Bill, for that. And I'd like to pass on to Tom Garagan about our large expression, budget this year and some exciting new countries and targets for us.

Thank you, Clive. Hello everybody, as you know, we have an exploration budget this year of some $66 million to be spent, not only on our main projects, but also in grassroots exploration. In fact, in the grassroots exploration, we're looking at just over $27 million. Just brief comment on the exhibition around the mines that Mass body, we're continuing to drill on the pit edges and deeper portions of the pits where the pits get bigger, with the better gold prices that we're seeing now. In Mali, we're continuing to do exploration down plunge on Cardinal remains open and we'll continue to do exploration in the Anaconda area, as vettery remains open. In Namibia our exhibitions almost exclusively focused right now on what we call the OTG, 23 years old, which is about 100 meters away from our wall shake. We'll have more on that later as our work continues. But we view that as a positive sign for Otjikoto. Just in the grassroots exploration, you know, we're talking about significant budget. Within that budget, we're talking about over 30,000 meters of diamond and RC drilling on some of our newer targets. I'll mention specifically, we'll start with this Pakistan. Scenario we've been looking at, I hate to say this, because it could have as me a little bit but for probably close to 15 years, dating back to the bema days, in this scenario, we had visited back down and we continue to work on relationships with government and geologists in our country. And that led to us a few years ago being awarded some licenses in the country. The license we have, right near three world class ore bodies, mercantile, which is everybody. You know, there's a large variety of numbers related to that. But it basically is the world's largest gold mine that over 2 million ounces of production per year. And then there are two other $10 million ounce deposits in the immediate area. Our work in the area to date has been trenching, auger drilling, some lab programs, and we're just about to start a 10,000 meter RC program this week, this will be followed later in with diamond drilling. This is an area of World Class deposits. So there's not seen a lot of exploration outside the exploration being done by the local government called them out. We're very excited about this. In addition to that, in Finland, we have almost 8000 meters of diamond drill planning on our property, we're currently earning, we've already earned 51% from the line and we're up and we're getting close to having 70% on this project, we're set about the area as on strike with a new discovery called Acuri [ph] and the geology of Acuri [ph] continues on to our ground, and we've had some decent golden armies in there in our overburden drilling and our chilled drilling. And then, also in some of our soil sampling, and certainly walk sampling. So we're excited about the potential for that, which is a whole something, something new that's just come up from just recently, we've been awarded licenses in Egypt to the historic mining area. Those licenses are just being papered right now. So I don't have too much detail on that at this time. We'll have more later but it's an area we've been, again been focused on for several years of doing grassroots exploration and evaluating the potential of areas. So we are excited about. And then we'll continue doing grassroots exploration and other targets in other areas of the world that hopefully will be available for more discussion now later on this year. Thank you, Clive.

Thanks Tom. Appreciate it. I think operator, I think we're ready to open up for questions now.

[Operator Instructions] Your first question comes from the line of Tyler Langton from JP Morgan. Your line is open.

Good afternoon. Thanks for taking my question. Just to start with I guess Gramalote. Could you talk a little bit about, you know, to kind of make the economics more attractive, just the importance of either sort of increasing production at the project or kind of lowering operating costs or capital costs is trying to get a sense of maybe kind of what's sort of the most important or bigger focus?

Cinnamond?

Yes, sure. So certainly we see some potential for capital reductions. That's one of the big ones. Another one of the big ones relates to increasing the ounces, you know, that we can generate over the life of the project. And this includes kind of a drilling program within the existing design pit, there were a few ounces, left, within the existing pit, which were in the inferred category, and then just outside of sight of the proposed pit, which would be in the measured indicated and inferred category. So we see those two things really as some of the key economic drivers. And in particular, if you look at the CapEx, as I said, there are some mostly related infrastructure projects where we think we can bring the cost down. Things where maybe the project's been going been designed for like 10 years now where people kind of lose focus if you had a blank sheet of paper, could you optimize things? And that also relates to certainly the constructability of the project. And so those are some of the things that we're looking at as far as the OpEx, we don't see a lot of changes that between what we have now versus what we would have a year from now.

Got you. Okay, that's helpful. And then they just switching with Cardinal [ph], I think maybe last quarter, you talked about that mind potentially contributing, I think, 20,000 to 25,000 ounces, kind of in Q2, that'd be kind of the main contribution for the year. Is that kind of still what you're thinking? I think maybe I heard some comments you are talking about maybe contributing in Q2 and Q3, just provide some more color there that'd be great.

Yes. I think what I said was, hopefully, what I said was 20,000 to 25,000 ounces over 2021. Starting in Q2, from the bulk sample, right. So we're talking about 20,000 to 25,000 ounces out of that bulk sample. But I will say that it looks to me like we're, while we do not have it yet. And now I must stress that. And I should also stress that. That is an inferred resource that we see it starting it really right now through the end of the year, we're going to start mining a card on. So there is potential that it could be a little bit more than that.

Great, thanks so much.

And your next question comes from a line of Ovais Habib from Scotiabank. Your line is open.

Thanks, operator. Hi, Clive and B2 team. Congrats on a good quarter. And thanks for taking my questions. Actually, first couple of questions guys are on Gramalote. And thus I guess, I can direct to the Bill. Now, you've already answered a lot of the questions I had. So good overview on that front but in regards to the additional, I guess, extended resettlement, just to make sure that I understand correctly, was this due to additional footprint needs to be added? Or is this resettlement always in the plans on the webs?

No, obviously, it was always even back in the AGA, there were there was a quite a big resettlement, which went along with it, we certainly have provided now more detail around that. And we're in the process of really working through our resettlement action plan. So a rap has been developed. And the difference really was, as I said, there was a condition precedent for the construction permit, which basically said you had to do all of the resettlement. So everywhere, in every region, you had to move everybody out. And what we realized is that there was a big chunk of it, which we could do. And then we can start construction. And there were some people on the periphery that we could then deal with it as we got to that area. And so that's really the difference. But the overall result is basically the same. There are some people that are saying that they're in there some people saying they're out. But in general, the quantum is pretty close to the same.

Okay, thanks for that. And just kind of talking about the optimizations that are expected is the plan basically, to get close to the economics shown in the PA before growing green light to the proxy? What I'm trying to ask is, is that a point where you would kind of walk away from Gramalote or in this kind of, you know, where is the point where you will make a decision essentially won't pronounce?

Here, that's quite probably answer that from an engineering standpoint, I mean, all we want to do is we want to make sure that it's got the best economics possible, and that it's most easy for us to build.

I think we are going to spend a similar amount of money in addition, with our partner, we're expecting an ingredient and the budget, as we've talked about in the news release. So we definitely are doing that for the reason. The reason is because we think we're seeing enough indicators, as Bill says, with even when you start taking the handcuffs off the engineering side of the design side of things that we see significant potential to make it a project that we would want to go forward with. So you know, the economics today are positive. I mean, I guess some companies may use mechanisms like hedging, etcetera, to maybe look at making those things better potential. But that's not where we are in the sense of, we looking at it from a technical point of view, saying we think we can have more ounces. We think we can lower the capital. If you look at the sustaining costs based on the current economics from the feasibility work, I think it was somewhere close to the mid-70s. So attractive project from that perspective, can be [indiscernible] the notional capital and add to that 15% IRR. So we wouldn't be, I mean, ourselves in NGA, our companies, I believe we can speak for them. But I believe that we are not companies that would continue to pursue something if we thought we were sort of flying on a dead horse or just giving false hope. We really see an opportunity here to make this a project that we would want to develop.

Perfect. Thanks, Clive and Bill. And, I have a more couple of more questions, but I'll let others ask questions, and then jump back in the queue.

Your next question comes from the line of Geordie Mark from Haywood Securities. Your line is open.

Good morning, everyone, thanks for time today. Maybe if I can expand on some of the relative questions. Just in terms of the change in budget, is that largely drilling expense related in addition to the 18,000 meters of drilling, it was already planned this year?

You want me to answer that Clive?

Yes.

Yes. So Jordi, there's kind of three components there for sure. You're right, there is a big chunk of drilling, which goes along with that, and I can let Tom or Brian kind of, maybe get more clarity there. But there's also engineering component, which is more just the actual consulting and engineering aspect of it. And then if there's a social component, and like said, we do want to push forward some of the key social issues and so we have put some money in there for things like basically preventing some sort of inflation happening with resettlement, purchasing land packages now, making sure that we've got the right areas available for resettlement. You know, those types of things also take up a chunk of the budget.

Okay, brilliant. And it's also mentioned of the powerline. Is that in terms of trying to bring it online to basically move the project forward or the project timing, forward progress with optimization?

Well, what we know is the power line is absolutely on the critical path, regardless of what happened, right. So we've been in negotiations with a couple of power companies down there, and I picked a group that we'd like to do the studies for. So they have to go out now and do a fully SIA [ph], they have to do all the engineering. And basically, they have to design the route on the site. And so they're talking about something like a 28-to-30-month schedule to do that. So we decided at this point, that we're going to put a little bit of money at risk to get those studies going. And so that's what that is.

Okay, that's excellent. And in terms of, if we stay on power, just a color. So obviously, if you call it two-thirds, solar panels is heading beyond capacity. Is that right moment, or nominal baseline, at least, with additional final 25% of panels in place? Do you speak to any linear sort of capacity increase there or you kind of met with battery storage sort of limitations there for delivering more power into local grid?

So I'm super bullish on this. So I'm going to pass that one on to John Rajala, who's really more qualified to answer that.

Yes, we'll plan on trying to maximize our solar power usage only 75% of the class is online right now. So because of the loss in panels, about 25% in the fire, and they're going to be on site very soon, and then installed, we plan on having that in operation by around the end of June or so. So it'll be up to 100% of capacity and hopefully increase, we should be able to increase the amount of solar power contribution from that. Does that cover it?

Okay, I was just wondering if there's going to be beyond the original expectations given the before.

While we think we have a good shot at it. We've been exceeding expectations, I guess what 75% capacity and operation so hopefully, we'll be able to continue that with the additional solar panels installations.

That's great. And if I can just do one more, moving over to here, obviously experience on solar power, and looking at a tool, LNG solar source, and what sort of capacity you're thinking for that power plant.

The power plant we're looking at for a combined LNG solar plant. We're currently looking at about 30 megawatt plant very similar to for [0:49:56] for that right now. You know, optimization, you might want to kick that up a little bit, but it's in that in that magnitude.

Okay, thank you for that - for taking my questions. Thank you.

Your next question comes from the line of Josh Wolfson from RBC Capital Markets. Your line is open.

Thanks, Bill. Earlier on the call, you mentioned that the Anaconda trucking study was going to be continuing on this year. Could you clarify what the permanent challenges there relate to and I guess it sounds like you're still able to proceed with Anaconda? Or if not, what the sort of implications are in advancing that opportunity?

Yes, so I'll talk, as I said, so, I think Clive was pretty clear that they were kind of working through what our permitting issues are right now. But what we've always said it is a separate license, right. So it would have to go through the full permitting, and we're working on those studies right now. So obviously, for permitting, you would need a fully SIA [ph], which we're in the process of completing right now, you would need some sort of feasibility study. And what we're calling that is kind of the phase 1 aspect of the Anaconda project, all of those, it is our intent to kind of complete those in Q3, and then you would have to go and look at what the license conditions would be for actually bringing the product up, how it would be for totaling it through for all of those things would need to be discussed. So that's why we're talking about really, you're probably with the exception of maybe a bulk sample, you're probably not going to see any ounces, best case in probably in the second half of 2022 being trucked.

In that just so I understand that those answers that would be produced, you know, the minnkota permit, you know, the issues there do not affect the ability to tract the ore to Fekola.

All that stuff has to be resolved before we could do it for sure.

There's another there's another - there is a few different licenses there, though there's an there's other licenses that are not impacted by this current discussions going on with the government about the medical license. So but yes, clearly, we should be very clear about that. We need to resolve this issue with the government about our right to the extension of the license, but hoping to resolve that shortly.

Okay. And then looking at a check at any update that's going to be coming out? I guess we won't have the updated Gramalote numbers until early 2022. You know, what's the potential for the team to look to advance that project in the second half of this year, either in lieu of Gramalote or even alongside it, assuming it proceeds next year?

Yes, that's I mean, we haven't gotten too far into that yet, because we're waiting to see the results of the feasibility study in Kiaka, and to see whether it needs to threshold for us to go forward. We're going to know that by the end of the year, we have to conceptually if it was a positive development decision there, we can look at we talked before about the potential for if they were both positive. Gramalote had; Kiaka, we wanted to develop both of them, we talked about various possibilities. One would be to sequence the construction team, we will never build and organize at the same time it was one of our rules. That's key to our success without one great team. But you can also look at potentially using the team for earthworks. Initially, let's say [indiscernible] work and then moving Maxime to the next one. With everyone you do it, and then similarly, the mill construction team when they complete one project and move to another. So all of that, of course, is based on the final feasibility. And also the feasibility study, the updated feasibility study will work out right now, that will be we next step comparing to release in the middle year in Kiaka.

Understood and then one sort of final one, just in the language in the release, the comments about Gramalote, I guess, the expanded footprint that could require the permit modifications that not affecting the license, but that potentially affecting the implementation schedule? You know, is that just for, I guess the project as it was if it was advanced here, or does the potential footprint change and the permitting changes affect the implementation schedule if it was advanced next year as well?

Will?

The language maybe is not quite as clear as it could be. So what we're really talking about the way it works in grammar out there in Colombia is that they kind of have three levels of permit modifications, right? So there's this kind of insignificant and these are things like when the resolution of your typography gets better and your role has shifted just a little bit, right and that there's no real kind of major social or environmental impact change. And those are kind of you do on the fly. And then there are these minor modifications where it might be where you're moving something around just a little bit. And once again, there are no significant environmental or social impacts or potentially positive social or environmental impacts. And those have a small review process. And you can kind of do those on the fly. And so those are the things that we've always been talking about inside of the existing permit, we can do that what we're talking about is kind of, as I said, taking the handcuffs off and looking at what we're calling, potentially major permit modifications, where you're actually taking structures and maybe moving them into a different Valley or moving an access road somewhere else, which have real impacts which have to be investigated. So as we go along for the engineering process, now, we've got to start looking at, okay, this is really optimal. This is how much money it could save us. Is it worth trying to get a permit modification to do that? If it is, then you start talking with the government? You know, what would it take as far as updating your impact assessment? So all of those things are now going to be in play, as opposed to us just saying, okay, we're going to keep it, we're going to keep it to kind of be non-consequential or minors that we're talking about. Let's talk about majors. I don't like that the phrase that we're increasing the footprint because that's not necessarily the case, what we're actually doing is we're kind of modifying the footprint. And in that modification, we may be changing that the potential social environmental impacts, and those need to be evaluated.

Okay, that's a lot more clear. Thank you.

I think it's important to note there, you know, we talked a bit about it earlier on but the relationship with Colombian government is very strong, very strong, Canada, Colombia relationship with the Minister of mines and the government there, the government are very supportive of responsible mining is an important part of their economy. So we've always said gravel, obviously in a great location in their mining district, Antioquia if you flew over companies, and where's the best place to build the first large of the goldmine in the country and probably pick up Gramalote. Absolutely tremendous local support and community and there's some disappointment now, because they thought this was going to crank up pretty quickly. But once again, if we are successful, what we're looking at doing this is a really important source of jobs. And there are lots of people working there. Now that continues, all that work continues, as we talked about, we settled on working with the government, small miners, and other things. So between ourselves and the GA, there's been a lot of good work done here. Over the years, it's important to note that I'm building these working with the local community and the federal government, and all governments. And there's a lot of support for this project. So we think it makes a lot of sense, the government gets that and I think they're highly motivated to work with us to see Gramalote become the best project it can be end to end and so to get it built for sorts of positive reasons for the economy, local economy, but also the overall benefits to government and the people of Colombia. So there's a lot of support for this project. And it's really important to keep that in mind.

Okay. And then sorry, final question. I know, I'm taking a lot of time here. You know, when you think about these potential changes and modifications in the footprint, are there permanent elements that you're able to accelerate before that first quarter 2022? You know target date or does that sort of date then start the permitting process for these modifications?

Yes, well, that's a really good question. And the answer is, we have to look at that. That's really literally what we're doing right now. You know, as I said, it's, it's a huge trade off study, in our mind, on the potential delays. As far as permitting versus a potential economic benefits, as Clive indicated, I said already, we have a positive project now, but can we make it that much? Can we make it even better? You know, those are the things we're looking at, what I will tell you is, well, you have to remember that that resettlement still kind of is on that critical path. And so we're now working through that resettlement action plan. And that's really going to push us out into Q1 2022 in any case, and so, how do you play around with that that's what we're looking at right now.

Okay, that's great. Thank you very much.

Your next question comes from the line of Don DeMarco from National Bank Financial. Your line is open.

Thanks a lot for taking my call guy. Just building on one of the last questions. There was mentioned of comparing Kiaka to Gramalote. Maybe they take this a bit further and is there a chance for some of the projects that Tom talked about to take priority over Gramalote saving the next 12 months? I mean, you've been in Egypt and Finland and in Pakistan for a few years now. Which of these projects is most advanced, maybe even closest to the PDA [ph].

Yes, I think. No, we haven't been working on immediate doors back for a couple of years. We've done some work in Uzbekistan as relatively and this is pretty early-stage software. We've done some longer drilling and things like that and we're doing some reverse circulation drilling and heading towards diamond drilling as well. I mentioned both. They're all pretty early stage. They're really big, attractive targets, but we don't want to - or some of them are at an early stage. So we're a long way away from talking about PEA in any of these things but we're in the elephant country and there is a certain chance we're looking at them. Tom can you - want to make a comment on that further?

I think that's pretty accurate. However, we're still early on in the game. But as Clive says, these are all elephant country targets. It's why we chose them. But I don't know that within a year - well for sure, not within a year, we're going to be replacing the other development projects with these.

Okay, great. Then even given the Gramalote, NPVs in the $500 million range at this point and obviously, as you mentioned, there's visibility for it to grow. But is this project perhaps of a magnitude now that's better suited to one owner? And it may be if you believe in the project, is now a time to increase ownership? What are your thoughts on that? We know from your previous comments that Anglo likes the project as much as you do.

Yes, I think that I can't speak for AGA. But we've had lots of calls recently, of course, talking about the situation being very transparent, in a good joint venture and from what - took a look at what we're saying we of course, one of the [indiscernible]. And they'll be coming out shortly with their quarter and their thoughts on more of the development projects. But we're both disappointed and it wasn't as robust as the economics we saw in the PEA. Let's see the opportunity, as we said, normal times, you can make that better. In terms of ownership. I think that what I've heard is that AGA was prepared to spend a significant amount of money along with us to see if we can try to see if we can make it a better project. So, I'd be a little surprised if - we wouldn't be considering changing our ownership into now. We've invested a lot of money and time, etcetera and believe me, the path that we're on, the potential once again, you can ask AGA that question in their quarter, which I think comes out in the middle of May. But the indications were based on sources, they want to be a player in Colombia, they've got other projects, etcetera that they're pretty excited about. So, what they think that a lot - what they've said to me was an important part of what we want to do in Colombia and they were hoping to, with us as operator to showcase what we could do together. So the Colombian government - we still hope to be able to do that just on the delay as we've said here. Sure we have always said that if opportunity to increase ownership, we'd consider that. From what I've seen so far, I don't see that there's going to be a willing seller. I think we'd go forward. So, once again, I can't speak for AGA, but that's what we've been told [indiscernible].

Okay, thanks for that. And just finally, you guys have a strong development team. You build for Fekola, finished the Fekola expansion. With Gramalote delayed, is there any motivation to deploy your development team onto some type of medium-term project?

Well, I think that we have some areas within the company, of things that we're working on, whether it be looking at expansion opportunities or other things like that. We might use some of the team or some of the senior team and input but, we're not going to go and acquire something and build something because we have a tremendous construction team that we need to keep busy. That's not the way to run this business in our opinion. Well, we have a great team and is I think this team has been together for so long - or come back together as a better way to put it. So back in the beta days since [indiscernible] and then of course meeting our stakeholder, they had some of the work for a period of time, but as soon as they got the call to come back to the culture of B2 and the vast majority came back. So, a second-old sort of rock band in a way where they take some time off and then and then they decide to do another tour. Then the whole band gets back together or most of the band and they're able to attract other high quality people because of that. And I think there's a mutual respect here and trust. Our construction guys really feel valued in the company as they are and they love doing stuff for us. So, if we find the right opportunity in a situation of acquiring a depositor or whatever. Of course we'd be looking at that not to keep the team busy. I believe the team will be available when we're ready to go and get the band back together. But if we find something, of course they're ready to roll. William, you have anything to add to that?

Yes, I would like to add that I just look at one thing that, you know, people don't realize, clearly a lot of these guys in the construction realm are very good at all of the civil type stuff. And so, some of these guys are deployed right now, within Ed for Cola, you know, or maybe they're doing, maybe they're doing a quick project, get most of it, but they're actually working on the operational side, you know, one of the key secrets is this whole core team, like logistics team, the procurement team, the warehousing team, those people sit down on a site, and so right now, they're Nicola bringing up the next group, but we haven't lost them, right, they're still there. Obviously, the exciting part of mine running is the construction aspects, so everybody wants to go on construction project, but they understand there's not a project, but they'll sit down and wait for the next one.

Okay. Thanks so much, you're on. Thanks for your time, guys.

Your next question comes from a line of Lars [ph] from Bank of America. Your line is open.

Hi, good morning, and good afternoon, thank you for the update, just a question on obviously acknowledging the political risk management being a core competency for BT gold, because location of granulocyte and kayak future into, which you might ultimately prefer developing.

Sorry, can you just say that again?

Could the location of kayak and grandma, okay, factor into which of the two projects you might have a preference to develop, first?

That's an interesting question, I think that I'll go first here, but I think that we think they're both in good locations in the country that they're in, in an area with my operations, and the relatively cold safer part of the country, in the sense of them allotted, I think, I touched on earlier. We're in Antioquia, historic mining district, local people understand that we've worked hard to show them, what it would look like, and what we're trying to do a lot of support there. And that's really locations within Colombia, for sure, so I would say, I know somebody else can chime in here, Bill, whoever that but I don't know, I think they're the both in attractive areas in the country, so I don't know that one would be decided over the other on that basis, ability, things like that.

Yes, I know, you're absolutely right guy, for sure. I mean, we just like the good projects, I will tell you, most of the guys, if I'm being honest, from a construction standpoint, you know, we've spent the last three, or four years in West Africa building that project. So they'd like a new venue, and of course the fishing is much better in Colombia, so you know, they do have a preference.

Things are better.

Also, you mentioned in the past, that it could be developed, with a partner. Have there been any discussions in that direction?

No, you know, I think the key thing, of course now is you'll get the feasibility, and see what it looks like, you know, the alternatives have always been to bring a partner in sell, so that we don't think, it's for us, or we just don't want to, you know, take too much on, there's always an alternative. So, that I think the key now is going to be getting the results of the feasibility study, she even meets our criteria, if not, then there's somebody else interested in it, potentially, all those options are still on the table, but it's hard to have those discussions, when she really knows the economics of the project.

Fair, and if I might, can I just ask a question on the men in quota permit? In terms of what's going on the ground there? Has this third party that now has a license already started exploring? And in follow up to that, are you able to share with us, who the third party is just in terms of like? Are they a junior? Are they a local company? Are they a major mining company? Maybe you can share that, but if you could be helpful.

Yes, you know, I think, obviously, we're in the process and have been for some weeks of having extensive conversations over the government, and then we, you know, we can we feel, we've had some positive indicators from those discussions. It's just, it's a small Malian company, frankly, without a history of mining, construction expertise, or financial strength, so at the end of the day, we just feel that, I do want to point out, and I think, I meant to say earlier, but you know, the history of Mali and gold mining, it's been a good set a really good place to do business, and I've said this many times. If you go back to our mind opening up in the years ago, and listen to the speech of the president at the time, it was tremendous, and the government's performance was really great, and a mutual trust relationship, we delivered on the promises we made, which we have, this is what we try to do always, and we're transparent with the government affairs cycle, really good relationships. And I think they, if you look at, you know, talk to mark restyle, and look at the wrangled experience and not American experience, he's argued for decades, and he got it right, he got there early, and was constrained and paid off really well, for the mangled shoulders. He says the same thing, but it's one of the better, it's a really good company to work for with the government, they understand the importance in Monaco mind for their economy, hugely important, never more than today, when you look at COVID, etcetera; and they've always honored their laws. You know, when it's not that many countries in the world, we actually have a mining convention as we do in Mali, the maxing your taxes for your, for the duration of your project that's actually seen. And you know, back in the early days, wrangle, that's a pretty attractive tax to see, we're typical in the industry at the time, but these are things like five-year tax holidays, relatively low royalties, but the government never, ever attempted to change the tax structure in those mining conventions, and those mining conventions are backed up, and if you have issues, you end up in Paris, to deal with them. So, and this new government, we've had success in working with, this new government within the Ministry of mines, the civil service there, who many of them are the same, and then getting things like permits for low sample permits, for other things. So, this is one that we feel, as we said, on the news waste, we feel we have a right to the extension of the medical licenses, that's what should have happened, and we're working with the government to really show our side of that story in that argument. You know, we spent $27 million there, and really logical thing for medical for everyone, including the government that we're on 20% of that acquittal, and owns 20% of a cola, the clear better thing for investing for the people of we believe of Mali, and our shareholders is and the government with their ownership is to see that medical, or track down to the court, and we think, we have a legal right to that license. So, we will take, we will be working cooperatively with the government respectfully just to resolve this situation, but we will, you know, we will take the steps to defend our rights, as required as we go through the process. So, our hope is to resolve through discussion and get back to work, you know, we had scheduled at least $8 million work in the UK on air, some of its ongoing until the north of the genetic correlations were so good. But to this is an important part of the potential to achieve a further improve for cola, but also is there another for cola there, we see a lot of potential there, so, yes, the history of Maui has been very good, and I've been very strong in my view of saying the shareholders, and people they know don't, you know, don't as my father used to tell people to generalize, or wrong, don't generalize about Africa, or even West Africa, you know, look at situations and where they are. Mali has centuries of gold mining, they get it, history, governments have always gotten that, and we're looking for this government to continue the tradition and the Malian governments have which is only the last, and seeing the importance of gold mining and future gold mining investment in the country. So that's our position today, and we're having some constructive conversations around that, I hope to see the situation resolved.

Okay, thanks, and I just realized it's a quarter past the hour, so I had one more, but I'll try to ask it really quick. I think this is from Mike, basically, in January, you guys guided to much higher h1 unit costs, and Q1 came in well below the low end of what your guidance was, is it fair then to expect a very material increase in like all in sustaining costs, and Q2?

Well, on the operating side, we just, we did better, right, if you look at this, the factors impacting the better cash class, this quarter, they're better recovery that we just didn't model, right, so expect that we'll keep those for the benefit of those, as we run through. And then, lower input costs, for cola for things like OSI and ICE, so again, we expect to keep the data for that, so I think some stuff will roll forward, and just benefit overall, you shouldn't just push it all in the second half of the year, the guidance we gave the second half of the year, we think is still good. And then on the on-site; yes, it was the benefit of those lower costs, higher production, which we think about a lot higher production, as we roll through the year, and then some of it was that calf actives is tiny, so you will see that what we don't spend in H1, we still expect to spend in H2. So on the Catholic side, yes; those costs will just roll over into the second half, on the effect side, most of those benefits we should keep.

Okay, thank you, that's it for me, guys.

Thank you very much.

Your next question comes from Carey MacRury from Canaccord. Your line is open.

Good morning, everyone, maybe just one more question on grammar latte, I think the all sustaining costs for 15% higher than the PDA, how much of that is underlying costs inflation versus maybe just, you know, fewer ounces in the plan, or is there are some other factors driving that change? Which I build on Mike?

Yes, so the all-in sustaining cost will be up a little bit, because of some inflation for sure, particularly related to - as I think I've mentioned labor, power and fuel prices versus what the PSBA.

Journey context may be on, like, what the dollar [indiscernible].

Maybe, I dig that up, or I don't have a right here at my fingertips.

Okay, thanks.

Your next question comes from the line of Anita Soni from the CIBC. Your line is open.

Hey, good morning, guys, I love how Jelani sneaks in a question there, I only have one question left and that's with regards to the grandma tag, I know, it's a broad question, but can you give me an idea of the timing? How long it takes for permits in Colombia? I'm not as familiar with Colombia.

Yes. So as I said, there's sort of kind of three levels, and we've had some pretty in-depth discussions with the government on these particular issues, and so, you know, you're kind of looking, as I said, for the insignificant ones, those are on the fly, the minor ones might be kind of in that three-to-four-month range, for review and approval, and I think it's six to nine months on the majors from the time you submit.

Okay, and the last question, I know, also very early stage, but as you think about a construction decision, what are you looking at for construction timeline on this one?

Well, I'll just say, you know, we were always talking in that 30-to-36-month range. I don't, I can't think of any reason why that would change.

Alright, thank you very much.

Your next question comes from the line of Jared Hoover from Morgan Stanley. Your line is open.

Good morning guys, thanks for the call, I know there's been a number of questions asked in Gramalote, but I just wanted to get to more MPs, and it seems from a lot of the commentary that the two main points that are going to result in potentially better economics on this project, is around infrastructure, and how you can move that about and optimize that. And the other is potentially increasing the life of mine production, but if I look at the two monitors West and the Trinidad puts, it looks to me like those are lower grade pits, so if you have to bring it into the life of mine, it seems like it would automatically increase your costs. So is it more case of, yes, you potentially bring that into life of mine, but it's more a case of your view having to look at the recoveries around that project, and that potentially enhancing the economics, if you could just check to that piece? And then, my second question is just around your partner and your goal, if for some reason it doesn't meet their particular hurdle rate, and they were wanting to be sellers of the project. Are there any mechanism that would allow them to, or in your agreement within that would allow you to potentially be picked the projects up? There for 50% of the reviewing stages sort of 10, 20, 30, ETCs, so just to be could check to that that would be very helpful. Thank you.

For your second question, we were saying in cricket, that the asking whether we can VGA would be amenable to us purchasing some of their interest in stages is a question. And is there a mechanism?

Yes. All authors?

Yes.

The case of Indian or one of the total 50% [ph]?

Right, there's a mechanism. Yes. Okay, relevant the lens of the personal development, so that one may be first a second. Yes, there's a mechanism in the agreement, where if you make a poor development plan has operator NDGA [ph] hasn't none of the period of times 30 days, or respond to both parties to respond to deciding to find out if our plan, or there's a mechanism whereby you can purchase the other 50% out of the party can based on fair market value, based on a feasibility study that the developer decision would be based on. In addition, though, there is a provision where either party can go down to 30% as a mechanism, to go to 50%, if you want to stay involved, the project would not have before 50%. So, there was those mechanisms that work both ways in the agreement, do you want us to the first.

Yes, sure. So you are correct. MOS in Trinidad currently, their resources are lower grade, and I guess internally at this point, we see those as potential, you know, out near the end of life, and mine is kind of upside to extend the life of mine for sure, and that really wouldn't do a lot for your MPV. But what I was talking about, when I was talking about drilling is we're talking within the gravel loti Ridge area, just outside of the existing design pit, and even outside of that, in the measures indicated and inferred, we see some potential to increase the NPV and IRR by bringing inferred ounces into the indicator, which of course then allows us to put them in the 43 101, and as far as the infrastructure, you're correct, that was the other issue.

Perfect, great. Thank you very much. Thanks.

Your final question comes from the line of Charles Row [ph], a shareholder. Your line is open.

Thank you for taking the call, much of what I was going to ask about has to do with the problem of malaria, Mali, I guess, so that's been answered, the only thing, I would ask you to do, is been asking for a copy of your annual what do you call it. Your annual information form, and the last thing I've got was shareholder relationships, he had put something in the mail to me, of the week of April 6, I still haven't received it, so if you could just remind your shareholder people, I'm still waiting for the annual patient for notice, and I'm obviously following what's going on with Mala, because so much of the company's interest are there, but again, without the annual information, I'm kind of winging, I've got 40,000 shares, pure, very small compared to the corporate vehicle.

But, no one's reportedly and we pride ourselves on our transparency, and delivering on, what we promised. So obviously, something slipped through the cracks there, so, it's very important, Charles and you can send an email, if you'd like to even the plane, I'm McLean that'd be to go calm, or to me, see Johnson beach and grow calm, and I will get out, and make sure that you get, that not by snail mail, best buy a mechanism that gets it to you, quickly. Thanks for your support as a shareholder.

Okay. Good luck to us all; here to help. Thanks a lot.

Thank you, Charles.

There are no further questions. I now turn back over for closing comments.

Well, I think, we've covered a lot of ground here and thank you for your time, and you're interested in some very good and interesting questions. Were then pleased with the quarter obviously, and looking forward to another very good, productive year. Profitable production and loss of all this exploration and development opportunities that we see. So thanks, everybody, for your time. And obviously, if you have follow-up questions you can reach out to me in claim to put you into the person you want to or if you know, the person you want the answer from you can go directly. So, thanks for your time, everybody and stay safe. Thank you.

This concludes today's conference. You may now disconnect.