[Audio Gap] run through the results for the second quarter of 2022 for Caledonia Mining, I'm Mark Learmonth, Caledonia Mining's CEO, and I'm joined today by Dana Roets, Caledonia’s Chief Operating Officer; and by Chester Goodburn, Caledonia’s CFO; and also in attendance, we have Camilla. So let's just move on to move through the disclaimer. -- just a very brief summary. Production was excellent. Not the gold price was sort of a modest following wind. It wasn't particularly beneficial. But so the real improvement in revenue was driven by the higher production and then the improvement in gross profit and profitability was a combination of higher production and excellent cost control. But I think more information on that from operation from Dana and financially from Chester. So I think we just move on. Okay. I'll ask Dana, if you could just give us some highlights for the production for the second quarter. Dana?

Good afternoon. We had an exceptional quarter and for a matter record quarter. We are building up to ceases to be a steady state next year. And the higher production was due to increased tonnes milled and improved grade and recovery. And Central shaft currently hoists waste, only teaching infrastructure around a shaft. We basically equipped on all portend then we visit second or as and we should start hoisting reef by the end of the third quarter going forward, which will put us in good set in the shaft plus the infrastructure around the shelf will be fully operational. So currently, we only always seeing are 4 shaft, but a doubt a lot that we could divert all the way to central shaft. And then at the end of the quarter, we had 12,700 tonnes of ore on the stockpile estimated to contain about 1,500 ounces of recoverable gold, which is not in production [Audio Gap] of the ore broke. Unfortunately, we couldn't repair it, and it had to be sent in to be recasted. It's made of cast iron and that should be operational by the end of August to be in. So we did limit our mining, which obviously then went through to August and the stockpile of us just keep on growing. Good news is that we obviously are not commissioning the new Girona, Bolon. And so by the end of, obviously, we'll be fully operational with the [ Borsvepaired ] and new regrind Fluor operational. And that will give us the capacity that we need for total milling at that banked. And then we will start getting into the stockpile.

Thank you, Dana. So we just move on? Okay. I'll ask Chester to run through the financial slides. So Chester, over to you.

Thank you, Mark, and hello, everybody. There is on the back of production numbers, we can see that coming through on our gross profit, the sub-quarter by 29% for a up 44%. And as Mark said, up Russia is in share. Our online cost is down by 2.9% quarter-on-quarter and down 10% on a half year basis. Administrative expenses that's to quarter-on-quarter, mostly due to advisory services fees impaired on the builder’s transaction, which will come on to that in a moment. Net foreign exchange gains amounted to $5.1 million for the half year. I think that number is $1.7 million gain at some realized and that reduces our deferred tax expense in effect, that reduces our effective tax rate. Further is average from our adjusted earnings per share and then you can see in our quarterly number that is down by 10% on an after basis, our adjusted earnings per share is up by 4%. It's in the slide, actual cash wages and services are up quarter-on-quarter. That's to remunerate our saw increase in production. And our consumables are up quarter-on-quarter experience and exposes to steels and China. Inflation is not new to Caledonia. You can see the economy is down, by $500,000 quarter-on-quarter. And as due to capital initiatives that we implemented by installing the auto tap changers in our full sharp enumerative and also reducing our use of diesel gensets or all production cost for maintenance in check. On the left is the slide. Administered costs, advisory services fees are up due to the conclusion of the Bilboes agreement, paying wins on various advisers. We'll see some more coming through or 3. Investran as well and Paris also as we've seen an uptick in the payroll of our salt members post-'19 and us. As sales in to…

Yes. These slides or the following slides will repeat the slides that we presented several weeks ago when we reach shareholders on the billet transaction. So I'll go through -- I'll go to them quite quickly just as a refresher. But basically, Bilboes is a large-scale, low-cost, long-life gold project located some way north of Bulawayo, Blanket Mine is somewhere south of Bulawayo so there's no scope for significant sort of synergies. They're not close enough to run on a combined basis. So we signed a sale and purchase agreement to purchase this asset for a consideration of just over 5 million shares and a 1% net smelter royalty which equates to about 28.5% of our fully diluted equity. Bilboes has a large resource base. It's got reserves of just under 2 million ounces at 2.3 grams a tonne, measured and indicated resource of over $2.5 million and an additional inferred resource of over $0.5 million and it's fair to say as well that there is also a significant exploration potential remaining on the property. The existing owners have a feasibility study, which we publish, which caters for a very large open pit operation producing about 168,000 ounces average of 168,000 ounces of gold a year. I think it peaks at just under 200,000 ounces a year. It's given the fact, it's is large and it's got a good grade, it's got a very attractive internal rate of return of 33% at an all-entertaining cost of 826,000 ounce. Now the CapEx to build that project at a single leap in the feasibility study is about $250 million. Now that will probably have gone up actually in the current environment. I want to be very clear that we -- our approach to commercializing this property will take into account the cost…

No questions at the moment.

No questions. Okay.

No, there's one.

Sorry. Can you just run through your CapEx? It has gone up a little bit. Is that at the end of the – going -- no. CapEx, we have -- we figured in previous quarters, the CapEx was going to go up. And that's a combination of the slightly increased cost. I mean I can -- I do you my thoughts and Dana, do you want to chip in and add more or Chester chip in and add more. It's a combination of more expensive development work related to central shaft. We're spending quite a lot of money remediating the electricity supply. So we had to replace some generators that blew up because they've been overused and we're spending more money on auto tap changers, which will -- which is actually we did some auto tap changers at the end of last year, and that pay for itself, remarkably quickly because it reduced our diesel consumption. So we're now replicating that exercise of the electrical equipment around central shaft. Dana, Chester, do you want to add any more to the CapEx discussion?

I could just add that during [indiscernible] -- just to give everybody back, we had half a crew finishing the shaft recouping it for 6 months. And then we also have delays with the electricity, and we finished equipping the shaft but the development going out was delayed because of that. And what it meant was that more expensive Mark spoke about more expensively were coming down with declines that maintain the profile, the production profile not running out of areas to mine, but it means that we had to push those declines down a bit further -- and that is done with trackers equipment, and that development cost is -- it was extra and it was higher and then at the same time, the electric cost was because, as Mark said, we had to run the generators more because we have more [indiscernible] and more vulturing at Blanket. So that was all extra -- we had to push up the tons for this year. We had to push it up by 30% and that is why we had we used to call the extra [indiscernible] because the grade dropped slightly with the latest information available. So a combination of that...

Having said that, the grade was actually has been better than we expected, but one month... Yes, but because of that, we increased our mining capacity, which is also good in step for the future. So a couple of things that saw our CapEx go up a bit this year. Can I -- on electricity, can just explain something. The auto tap changes that we put in place late last year, protected the electrical electric equipment around #4 shaft and the metallurgical plant, okay? And so the reduction in diesel consumption has flowed through into operating costs. And that's why one of the reasons why the online cost per ounce fell by 3% or so. The electrical equipment around central shaft is not currently protected by auto tap changers and so that's where we are continuing to have to run the diesel generators, and that's why that contributed to the higher capital cost because the diesel usage at Central Shaft is capitalized. I just thought about making that point. Sorry, Chester, you...

Yes. So add to the banquet expenditure. We also spent the large amount of solar is mechanical condition by the engine and a large quarter last Q2.

As I said, we do -- we are looking -- it's fair to say that we will have some catch-up capital expenditure. I mean well, you're at the mine recently, then you can see -- you can see with your own eyes. There is a need to upgrade some of those office facilities and what have you. But that is by no means sort of structural stuff. So we are getting through the worst of the CapEx burden. And I do expect over time, it will fall away.

And then yes, that will make sense. And then just on the milling, what's your capacity going to be when everything's fixed and back up and running?

Dana, did you get that question about milling capacity?

Sure. We will be able to do, Yes, our milling capacity will go up to 2,400 tonnes a day. We're currently be doing 2,000 tonnes day once everything is up and running.

Okay. does that answer your question?

Yes, just on the catch-up that's fine. That's excess. You're going to have excess capacity anyway until you catch up...

How fast that stockpile, which continues to grow, which is hopefully shrinking.

Yes. And then on -- just on the sales... Do you expect any more payments? or is it up to that to fix...

There's quite a lot of activity relating to solar at the moment between us and the current contractor and [ ZoliTDC ]. And if you don't mind, I'd rather not unpack that at this stage. But you've been there, you've seen the plan is there. It's really to get plugged in. So we're working as hard as we can to try and get that sort of final commissioning fix so that we can start using the electricity from that solar project in the plant. So it comes down to the commissioning.

We've got another question here from [indiscernible].

Is a question, is this a noble question?

Okay. My first question relates to the growth, the growth to organizations that the company is currently going through. Maybe if you can share with us after Bilboes and probably Maligreen is the company looking at acquiring more assets? And is it still in Zimbabwe or in other areas?

We -- there are other assets that we would like to add to the portfolio. There are by no means as pressing Bilboes is ready to go, okay? Maligreen's a little bit further down the track. Any other assets that we would look at would be even though it would become behind Maligreen in that it would have -- is much more exploration focused. So the answer is yes. Yes, and it would be in Zimbabwe. So I can see -- 2 written questions here.

That's also how we think on...

Yes. Okay. Let's just deal with these 2. So can you briefly speak to any current or future exploration projects to understand some? Yes. So we do -- we do recognize at blanket in particular, we do believe there is great exploration potential at depth. That's following the existing ore bodies deeper in the shallower areas of the mine but shallower, I mean, above 750 meters in those areas between the existing and the ore bodies that we've known about that have been depleting. Also, we believe there is mineralization to the immediate north and south of the current mine area. And then further, we think there is -- we want to explore something called banded iron stone formation, which lies about 800 meters to the east of the current mining area. So there is plenty of exploration potential. The impediment to us having making substantive progress on that part with the extension of the exploration at depth, we need to improve our -- the access that we need to drill out some excavate some exploration companies and that's in process now and should allow that exploration to start towards the end of this year. And then the further exploration we need to invest in HR -- human resources and technology to improve our exploration capacity. Dana, do you want to add anything to what I said?

Maybe just on the -- first of all, we are looking at adding people to just to help us with especially looking at the opportunities, especially from surface, how we're going to sell it. And then the other extra that we need to sample as you add more drill more people to operate it. So but we want to make sure that we start drilling in the right places and do not waste money. And that's why with putting the models together, we need extra skills to do that...

It's fair to say that exploration -- for the past 7 years or so, we've been focused pretty much exclusively on being this 4,000-foot-deep hole, filling all of steel and then doing horizontal development. We've now got the flexibility and the capacity to begin to take exploration much more seriously, and we are taking it more seriously and it's becoming a much higher priority in our daily lives, it's fair to say. Sorry. There's a question from some of the Austria, resupplies from South Africa, how many months supplies on hand in case of South Africa lockdowns the border? How would Bulawayo supplies, supplies are there, we don't want at the mine. So Chester, you want to go...

Yes. Inventory levels on out-quarter to about $20.2 million. That's down from -- by about $1.3 million will drive to lower increase at Blanket -- to ask the question as fees we got on hand. We're going to look at our group and break it down, critical items is 5 to 7 weeks. And I hope that's fair and therefore a long time. Just for an event that something breaks out -- so critical, if you look at any other down in South Africa, so we can supply for about 7 weeks without any suppliers at Langer...

Look, it's fair to say that what happened over the past few years is that that mantra, just in time became just in case. And I think it was the case that in certain sort of line items, the mine was carrying too much stock, which meant that our working capital was going up. And so we have done a bit of an exercise to try to redress that balance. But having said that, we don't run the mine at such a sort of on a bare-bones basis such that if there is any interruption in difficulty at the border, the mine runs out of stuff. So it's a balancing act. And honestly, I think it has gone too far in terms of overstocking. So we've retained corrective action.

Well, just to add that a lot of those critical supplies we can get in country, that just depends on what price we get that, and we can get it all across the globe. So we're not relying only on one kind of supplies.

But how much of what's been locally supply as far as I know, Dana, you're able to say what's supplied locally and what we procure in South Africa?

Mark, if you look at it basically, CapEx, we're very much dependent on South Africa and the rest of the world for that matter. But exposures, some of it we get locally and some of it is South Africa. And then the ball sort of formal for example, that's my -- so if you look at more the day-to-day running stock, it's more locally.

So -- and that also changes over time when we compare prices on what we can get globally outside of age and what we can get in country, and we try and get the right quality and our price [indiscernible]...

Yes. Okay. Howard, can we open the line for you? You're going to…

Thank you. Is the difference between reported earnings and adjusted earnings, the taxes related to depreciation...

Fantastic question. I'm so pleased that Chester can answer that question. I got to say this, Howard, this quarter was particularly -- it becomes -- some quarters, it becomes very hard to explain, and it's largely driven by the effect of foreign exchange gains and losses on the deferred tax calculation. And I'm delighted that Chesapeake can talk to you about that. I'll be more was.

It's a tacit NCI and noncash items for adjusted EPS, we take out nonwage items such as that large unrealized foreign exchange gain at about $9.7 million. That reduce adjusted earnings per share. We also take our deferred tax, it's on cash like them. It's a lot smaller this quarter. So on the smaller effect, as you see in our presentation, the fourth the adjusted is a lot lower than a comparable one, mostly due to that a foreign exchange devaluation that it's noncash.

Genuinely, some years ago, we started doing an adjusted earnings per share because we just -- there's often so much background noise in the IFRS results. I mean things like massive Forex gains, sometimes we get big sort of funny income items coming from export incentive schemes. So it was a genuine attempt to try and make it more sort of user friendly for users. But unfortunately, often that means that we create another problem for ourselves and that we end up with the effect of foreign exchange gains than then flowing through and fiddling around with deferred tax. So we're kind of chasing our tails. So half they would say, just leave it to IFRS and let people work it out for themselves. But often some there are some huge numbers floating around the place. And so we sort of feel as though we should try and interpret it for shareholders. But sometimes it feels like it's more trouble than it's worth actually.

Second, is your solar plant not yet operational? I thought it would be operational around now.

It's not been committed. That's the problem. Chester, you want to explain exactly what's happening?

Yes. We need to go to the bank Mine First to exclude connected the length mine grid. We need to get authorization from ZETDC and...

Just -- can you just explain that...

ZETDC is the utility of Zimbabwe, they need to approve any connection to interim strategy going and above. Now we're also into EPC contractor to release tests and finalize the commercial work on the set of bonds. But the set of bonds mechanically compete for several weeks barring energy management system.

So really, what it comes down to is a failure to communicate between the EPC contractor and ZETDC. And it's fair to say that the ZETDC are now cooperating fully. Because as I said previously, there's quite a lot of actions still happening in that particular area and I'd rather not sort of dwell on that too much at this stage. Only thing is there. I mean -- and Will, who asked the question earlier was the sort of thing a month or so ago. But it's there, and it's frustrating that, all it takes is a few bits of testing to actually get the thing commissioned and operational. But I think what I would leave you with is the fact that we do have contractual protections in place, to recompense us in the event of delays such as this as a...

My final question before a comment is, could you -- Mark, could you develop both Maligreen and Bilboes, I think pronunciation, at the same time, both managerially and financially?

I'd say yes, Dana would say no. Doesn't want to do. Now I think financially, look, it might be a bit of a stretch financially. But I think more realistically, trying to do 2 projects at once in Zimbabwe, I think may be too much of a challenge. I mean, Dana, do you want to give some more context on that?

If you want to bolt project at the same time, experience boss experience with that it becomes a head. And ideally, our model will be that you build one or you get the other one shovel-ready, do the feasibility study and everything once the project, it stops paying for itself, then you start building a new one.

Howard, it's also fair to say that Maligreen may benefit from -- obviously, it needs a feasibility study, but Maligreen may well benefit from further incubation to see if we can actually find a bigger resource base.

Dana, be careful about that phrase, shovel-ready. We learned an experience here about what shovel-ready really means and what they're shoveling with.

Okay. All right. Let me rephase it. Many can bold it. Feasibility segment and finances go ahead.

Finally, I'd like to add, Mark, for $5 million, was $55 million for Bilboes. In 6 months or so, you'll be generating cash, say, $1.5 billion between $1 million and $2 million. So per year, that's a 30% return per year as long as it lasts. That's during start-up. And that makes a deal even more attractive. That's pretty fast.

Absolutely.

Let's hope it lasts for 4 or 5 years.

Well, we really mean that -- well, we don't have a feasibility study for the oxide. So we can't really talk about it in more detail. But when we evaluate the project and when we agreed the deal, we have no -- we have attributed no value to these oxides. It wasn't included in the data room. So you're quite right. This is like a bit of a windfall.

And I'll add something else that I just remember, the attitude of Mining, if that's the correct pronunciation.

Yes.

Towards independent power producers is really absolutely really useful description of commercial changes undergoing under Zimbabwe, which people think, still think is pretty risky. I would say there are some parts of Australia or Canada and certainly Mexico that are riskier. That's a very positive development.

It is and frankly, it gets to the point where -- when the country -- why Zimbabwe is faced with the difficulties it faces, then just got to say the -- you're going to come up with the solution, which is the government must step away and allow those companies like ours that have got the money, more to do the necessary -- and it's really impressing. We saw something similar happen actually relating to electricity as well, about 10 years ago when there was a similar sort of crisis and government moved very quickly to fix a problem because never get. I mean I don't think you remind South African of this, that people don't like it when the home in the dark for 12 hours a day. Isn't that correct, Dana?

And that phrase governments steering away is very rare. It's very rare that a politician relinquishes that kind of control and it's surprisingly encouraging.

Overall really nice work, guys. One day, people will figure out that 5% yield is a drag up.

Okay. Any more questions? Tony, are we looking for alternative logistical chains access from Mozambique for it. I think we do -- the solar panels did come in from Mozambique in May.

Down through the border of [ Beta ] border post. And we've also got other supply lines from [indiscernible]...

So that's coming through Namibia. We are -- we do recognize the inherent risk of relying on South Africa as a sort of source of product, as a sort of shipping conduit. We do recognize that and so we are beginning to develop alternatives. One more question -- offering shares. No. Offering shares in lieu of dividends, no. We looked at that, and it's called a DRIP business, a dividend reinvestment program, I think and so that caused some tax issues for some shareholder bases. So I think we just prefer to do cash, I think, at this stage. So [ Dialothe ] mine is basically like the goldfields video. So how many vehicles are underground? How many vehicles are underground the 3 levels? These vehicles, when I think of these vehicles, I think there's something like a Bentley [indiscernible] underground. They cost about the same as a Bentley [indiscernible], don't they? And the tires are twice as expensive. So Dana what's the talk about the fleet, talk about the underground fleet?

We've got LSDs and we've got dump trucks that we use. And of those -- we've got about 12 LSDs and 11 dump trucks.

Okay. That goes on to say how long or how deep do you drill? So what's the daily drilling for production? I think it's 3 meters, isn't it?

It depends in our long haul stop, we drill about 12 meter holes. Your sub levels are 15 meters spot and you drill from level to level. And obviously, it's about 2 meters wide. That's why it's not a full 50-meter drop. And then if you look at our handheld [ under hand stamping ], there we drilled 2 meters.

Yes and we have one blast a day, which is not about now. Is that about 2x.

Yes. Great.

Good. Are we done for any more, tight questions or anything you want to ask a question? Okay. I think we're done then. Okay. Well, thank you. Thank you for joining and obviously, we'll update you with further news as appropriate. But thank you very much.