TRX Gold Corporation (TRX) Q4 2022 Earnings Report, Transcript and Summary

Thank you for standing by. This is the conference operator. Welcome to the TRX Gold Corporation 2022 Year-End Financial Results Conference Call and Webcast. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions] I would now like to turn the conference over to Stephen Mullowney, CEO. Please go ahead.

Yes. Thank you and welcome everyone to our fourth quarter and year-end 2022 results call. Thank you for joining this morning. Joining me this morning is Andrew Cheatle, our COO; Mike Leonard, our CFO and Christina Lalli, our VP, Investor Relations. We always started all our presentations with the front slide showing our pit. Now this picture is a little bit out of date, if we were to look at this today and we'll get a more recent image as we get our drones up in the air. The road would be beyond this pit and the pit would be a little bit more extended. We're going to get into a few things of why we like this pit and the mining asset foundation that is here at Buckreef. But before we do, let's move our slide deck to the next slide. Obviously, this is a public call, so there is a cautionary note in a forward-looking statement. We are going to be talking about forward-looking information, and we must do this from a legal perspective. Thank you. And as I mentioned, joining me today is Andrew, Mike and Christina. In the presentation today, we're going to talk about a couple of things. We're going to talk about the foundational assets that is Buckreef what we've experienced particularly over the last year and why we think it's a great asset and has a lot of growth. We're going to give you an overview of what our accomplishments have been last year. Anybody following our story will realize that a lot of things have been accomplished and things are moving very, very rapidly around the Buckreef asset. Mike will give an overview of the financial results that were achieved in 2022, which have been great particularly around cash cost and the production profile from our plant. We are then going to give a 2023 outlook of where we see things going over next year. And then Andrew is going to give us a really good view of the Blue Sky and exploration potential around the asset. This is always my favorite part and everybody always sees me smile around this part. And then we're going to have Q&A at the end and as well as closing remarks from myself. So TRX, so with regards to our company, we have a team of experienced leaders that continue to deliver a milestones I think people follow the story or starting to get a really good sense that we are going to deliver on what we say we're going to deliver upon. We've made a focus of doing that over the last two years, since I joined and that will be continuing to be the case. You've had seen a rapid production growth from Buckreef over that year, particularly over the last year and the plant has been doing really well and achieving high gross margins, positive operating cash flow. The expiration upside, we knew that it was a lot of exploration upside when joining. But I think we're just really starting to scratch the surface and understand really the potential around this asset. We're finding it more and more every day. And that's to the positive side, not the negative side. So I'm really excited to get through that with Andrew and we're really going to be focused in the next year continually growing the business both from a production profile and a resource profile through the exploration drill bit. So when I mentioned that Buckreef is a foundational asset, we're still really getting to know the deposit in the region, and we're liking what we're seeing. So with regards to being a foundational asset, there's 2 million ounces here in the measured indicated category another 600,000 in the inferred category from the last resource study. What's good about this is the grade profile is good at around 1.88 grams a tonne in the measured and indicated category. This resource comes to surface, and that is great. That enables us to get into mining very quickly. It's a flat surface. So it's easy to move around and to put in place mine plans. Also, the resource is very wide at around 20 meters and it's consistent, so what that means is there is a good continuity of mineral resource along strike. And the strike in the Buckreef main zone is right now around two kilometers with the Northeast extension. So that means it's a very mineable asset. And then when you have an asset that's mineable, you want to make sure that you're able to process that ore as well on a very, hopefully, easy flow sheet, which is the case here at Buckreef. We have a straight grind crush CIL and we've consistently achieved over 90% recoveries over the last 18-months. From a licensing and permitting perspective, we're also lucky. So we're able to do all this sort of stuff with the overarching permit in place and we got an extension this year to 2032, this special mining license is good till the end of the mine life. The renewal period comes up every 10-years. Our processing plant, which we were able to put up very cheaply over the last year for around $6.5 million between Phase 1 and Phase 2 to get to 1,000 tonnes per day has been consistently beating the production guidance and our expectations. And it's operating extremely well. We also have a minimal environmental footprint. We are responsible citizens. We recycle water. We have good payments management or connected to the power grid that are predominantly hydro facilities. And we take care of the local communities. And what I just discussed relates to the main zone. The main zone is only one zone here. So the expiration potential of this property, we're believing is getting larger and larger. We've released results to the Northeast to extend that main zone. We've drilled in the South. We have pending assays on that. We announced Buckreef West last year as well, which is adjacent main zone. We've indicated that this deposit is well open at depth. But then we also announced Anfield. And we started to drill out Anfield, as well as looking at the Eastern Porphyry, and there's other target areas around the property as well, which Andrew will get into. But we believe we may be just scratching the surface with regards to exploration, but you got to do the work. You got to put a drill bits in the ground and hopefully you get the assays that you come to expect, but it's a very, very prospective property. With regards to some of our 2022 full-year highlights. So first and foremost to start-off, we completed two mill expansions on-time and on-budget and our operating grade. So we did this for approximately $6.5 million on the processing plant for 1,000 tonnes per hour. I would challenge anybody to find anywhere that has been done this quickly and for this cost effectively. We're aware of other sized plants that are take well over years to construct, as well as costing upwards of $50 million to $60 million. We did this for $6.5 million and just in under 18-months between Phase 1 and Phase 2. Those plans have operated and exceeded [Technical Difficulty] expectations. Mike will get into the numbers in a few minutes. But we've had great gross profit margins, low cash cost, operating cash flow and positive adjusted EBITDA as well. So now with the foundation these plants put into operation, we get to focus the growth on expanding those plants again, which we're evaluating, as well as expanding drill bit program, which will ultimately lead to a much larger asset hopefully through the drill bit. So in 2022, this is an underreported number from us and I'd like to focus on it. We did do 22,000 meters in 2022, that's not a small program, it’s not as large as some of the ones you can see in Canada, but this by no means a small program either. And let's just focus on discovery expansion definition. And Andrew will get into what the results of those are and what's pending as well in a few minutes. We did do an infill drill program in those 22,000 meters in the main zone. We did do the Northeast extension as mentioned. We did go South of the South pit into a South zone, and we do have that drill bit in Anfield. We also did grade control programs and a [met] (ph) program. And so the drill bit in 2022 extended the main zone by 30% or 300 meters to two kilometers. And we've done everything, plant build, operations, as well as exploration very safely with over a million hours reported last month with no lost time incident. So I'm very, very pleased and proud of the management team, as well as particularly the Buckreef team and everybody on-site for all the achievements in the last year. So now I'd like to hand over to Mike and he'll go through our financial highlights for 2022.

Well, thank you, Stephen, and good morning, everyone. On the financial side, 2022 was really a banner year for the company. Stephen touched on some of it, but it was really a year where the company achieved a number of record results, record revenues, gross profit that Stephen touched on, operating cash flow, adjusted EBITDA. That was all off the back of record production and ounces sold. As Stephen mentioned, we successfully expanded our mill to 360 tonnes per day during the year. And on the production side produced almost 8,900 ounces and had record quarterly production in Q4 of over 3,600 ounces. And importantly the 360 tonne per day mill only came online at the back end of Q2 and hit steady state throughput in Q3 at nameplate capacity. So really, the numbers that you're seeing here today really only reflect the two quarters operating at 360 tonnes per day. The 1,000 tonne per day plant expansion that Stephen touched on came online after our year-end, which was August 31, and I'll speak a little bit about our 2023 outlook in a moment to some of the numbers that we expect for next year. On the sales side, we sold most of what we produced during the year with the exception of some in-circuit material and finished goods that built up and was sold in early September, so we'll benefit 2023. And that was really just due to the timing of our gold sales program. But during the year, we did recognize revenues of over $15 million and generated a realized price of $1,756 an ounce or in Q4 almost $1,800 an ounce. Now cash costs, which include direct mining costs, processing costs, site administration, royalties and depreciation came in at a very, very low $665 an ounce or in Q4 less than $600 an ounce. That was well below our published guidance ranges. And given the robust revenues and strong cash cost figures we reported, we achieved a very, very healthy gross profit margin of over 60% and consequently, the company was operating cash flow positive during the year and that was the first in company history, so a major, major milestone for us in that regard. Now the balance sheet continues to be very, very strong. We had a cash balance, reported cash balance at year-end of $8.5 million. We reported working capital of $5.5 million and that's after adjusting for certain liabilities, which will only be settled with equity of the company. And Stephen touched on adjusted EBITDA of $3.5 million, which is really a proxy for cash flow. But all these statistics demonstrate very strong liquidity to help us fund that organic growth that Stephen touched on a little bit earlier. And very importantly, we're endeavoring to improve on all of these metrics in 2023. Now that 1,000 tonne per day processing plant is running at full capacity. Next slide, please, Stephen. So in terms of our fiscal 2023 outlook now that the 1,000 tonne per day plant is running at capacity, we expect production to be in the range of between 20,000 and 25,000 ounces and that's 3 times the production levels that we achieved in 2022. Now the 1,000 tonne per day mill ramped up in early Q1 and has been operating at nameplate capacity, since the end of October when we declared commercial production. And consequently, we expect production in the second half of the year to be slightly higher than the first half following that ramp up period. Now cash costs are expected to be between $750 and $850 an ounce not slightly higher than what we realized in 2022, that's mainly due to an increase in depreciation following the commercial production declaration in November. In terms of CapEx, sustaining capital includes certain expenditures related to road realignment that will enable full life of mine access to the main zone. We're also spending money on construction of a significantly expanded tailing storage facility that will accommodate future growth, as well as purchase of certain pieces of capital equipment, things like loaders and gensets and cranes and grizzly is all really to support the expanded production. We're currently renting much of this equipment. So expected benefits in the future on depreciation of some of this equipment following purchase rather than what we're currently expensing, following rental. In terms of growth capital, we've initiated a project aimed at increasing throughput over and above levels that we've just spoken about by up to 75% to 100% through the addition of a new ball mill. Detailed engineering in this project is underway. We're advancing on it and we aim to further benefit production in the second half of the year, we'll update the market accordingly as we continue to update and progress on this initiative. But importantly, any incremental production from this expansion has not been considered in the production guidance figures above. So as part of exploration, Stephen touched on it, and Andrew will get into it in a bit more detail, but we are continuing the program that we started this past year with brownfield drilling to the Northeast and Southwest at the Buckreef main zone. We'll continue to drill at Buckreef West. We'll drill at the Eastern Porphry. We're doing Greenfield work at Anfield, as well as sterilization drilling at site expansion facilities. And finally, in terms of outlook, we continue to advance the sulfide development portion of the project with metallurgical testing we're looking at geotechnical studies for a deeper pit over time and continue to assess what a much larger sulfide processing facility would look like. And again, we'll update the market accordingly as we continue progress on that initiative. So with that, I'll hand it over to Andrew to take us through exploration.

Yes, just before Andrew jumps in, Mike. It's important to realize that our fiscal 2023 outlook is really focused on growth, so it's focused on how do we get the asset to produce more. It's also focused on how do we get the asset to have more resources. So basically, we want growth in cash flow and we want growth in resources at the same time. I know it's a very aggressive objective in a junior mining asset, but we believe that we're able to achieve this in the asset that we have here at Buck Reef. So on the growth profile around the resources, Andrew, I'll hand it over to you. And the first slide that we have is the map of all your lines of where you are going to put drill bit.

Well, thank you very much, Stephen and Mike, for that introduction. And for our listeners today, greetings from Tanzania, I arrived at the Buckreef site this afternoon. So things are progressing very, very well and very fast. And as Mike has pointed out, we are reinvesting some of our profits back into Buckreef and this specifically through the drill base. Maybe we’ll create value this way. Now please bear with me as I just get a little technical on these slides. But what we're seeing is an immense opportunity to generate and drill significant exploration targets to expand both the scale and scope of the Buckreef gold projects. Where we're focusing is close to the main zones. We've got the Anfield zone between 200 meters, 300 meters, 400 meters to the East, and we're also focusing down towards the South towards Tembo and on the Buckreef West. Let me just take you through a little bit of what we're beginning to understand. And by that, what I'm saying is we -- one of the keys to success is to begin to understand the DNA of your gold deposit. And we've been spending the best part of the last year, really looking at the rocks and become incredibly excited by what we're finding. Probably the most exciting part was the Anfield zone itself where we were able to retrieve fresh rock samples from artisanal scale mining shaft in fresh rock of over 28 and another one at 36 grams a tonne. But those are -- when you look at the slide, what you'll notice is that these main target zones are all oriented from the Northeast to the Southwest. And there's a particular pattern all the way from Bingwa, all the way through to the main zone on that. We've extended the main zone to the Northeast to 300 meters. We've had the drill rig over 200 kilometers to the South, we've done some infill drilling and we've recently had the drill rig on Anfield and it's currently on the Eastern Porphyry, where some historical drilling to find a mineral resource of over 100,000 ounces. And we're specifically focusing in on an area in the historical drill hole that was at 30 grams a tonne over three meters. But what you'll notice with the Anfield zone is -- it lies between that historical resource and the Chinese operated mine immediately on our Southern borders, so we're anchored to the North and South by known gold mineralization. Each of the white dots, you see on the screen, locations of artisanal scale minor shops, none of them are active at the moment, it is all historical. And this has all come about because we've insisted on having our geologists go out, put their boots on the ground and to identify these things. You'll see again towards the lower left or the Southwest on this image, there are two red arrows, those are on top of again some new discoveries of artisanal workings, both of those showings also being very, very strong. So you see now how we're beginning to build up inventory of drill targets. And similarly we've also discovered some new artisanal scale working further to the East at the halfway between the Anfield zone and the Bingwa deposit. So please take away from this slide. We've started our exploration programs. We have indeed made some very early and some very, very compelling discoveries and we're currently drilling them and have reported on some of those results. So let's go to the next slide then please, Stephen.

It's been switched Andrew.

Okay. Thank you very much. Just taking a little bit of time to reach me here in Tanzania, but I have it on the side here. So the true results we have put to market so far are those on the Northeast extension. We've successfully demonstrated continuity of the zone itself, we've had a number of very, very good hits in there, but we've also discovered some new zones and some newest place. Compared to the main zone, you can see the main zone just to the South of it there with the pits. We don't have that density of drilling at the moment that will come as we continue to build our interpretation of the results to-date. So, so far, these results are very significant. They've extended mineralization by about 30% of the strike length. We're seeing good width and greater mineralization that is consistent with Buckreef main zone. We've continued the steps out, extending the strike length. The gold mineralization is remaining still open to the Northeast and to the Southwest and the depth. So we see an immense opportunity to continue to generate significant exploration targets, both in the main zone and on those zones around it. So for financial 2023, the exploration will include and you'll start to see results coming back from the Buckreef main zone and the Buckreef West will be later in the year. The drill rig, as I mentioned, is currently on the Eastern Porphyry, and we've got some holes in -- at the Anfield zone already. And over and above this will continue to do some sterilization drilling at site expansion facilities, for example, the tailings storage facilities expansions. So a lot's going on. It's a bit of a cliche, but as a geologist, by background I feel like there's gold everywhere and we just simply got to keep putting those boots on the ground and the drill rigs turning, we'll find the new deposits. There's new deposits in turn with success will obviously flow through to mineral resources and in turn to mineral reserves. Ultimately, we would hope that then drives our mine plants that gives us flexibility and additional pits to work from. So with that exciting news Stephen back to you.

Yes. Thank you, Andrew. Truly, we're just starting to scratch the surface, I believe, here at Buckreef. We know the main zone has always been there, but it appears that there's a lot more zones potentially around the property. But we got to go explore it.

Absolutely, Stephen. Thank you very much.

Okay. Thank you. So with regards to being responsible citizens a couple of things I would ask the investors take this slide. We completed the land compensation process. And what does that mean? It means that we've now purchased the land in and around the Buckreef special mining license to be able to go and do all the things that we're just mentioning, both from a mining perspective, as well as from an exploration perspective. So the company spent $2.6 million plus over the last year completing that program. We've also entered into programs with the local districts with regards around a CSR program and we reported that an ongoing basis around things that we're doing with schools and labs and things like that. This is necessary from being a corporate citizen in this area. And I believe one of the biggest things is we do put a big focus on hiring locally, both for our contractors and for ourselves. And you start to see the benefits of that through your social license in the area. And it's interesting when I'm there and Andrew is probably seeing it against [indiscernible], you know, there is a sub-economy developing around the mine with regards to taxi services and other services in the area, so it's very nice to see. Right now, we're probably on-site, including contractors, over 400 staff earning and living from the Buckreef Mining operations. And that's up from around 30 or 40 from when I joined. The next slide, what you see here is guess a lot of the accomplishments over the last year, so you'll see a nice organized core shack, because you see schools, you see our nice plant up and running, government visits, first class, that was fun. Bal mills arriving on-site in [indiscernible] and Gold dore is obviously being produced and we expect all of this to continue. So without further ado, I'll hand it over to the question-and-answer session.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] First question comes from Jake Sekelsky with Alliance Global Partners. Please go ahead.

Hey, guys. Thanks for taking my questions.

Yes. Thank you, Jake.

Just looking at the additional ball mill that you guys are contemplating. Are you able to share any color with respect to capital here? I mean, I know you guys are working on numbers now, but are we looking at a, you know, is it fair to say we're looking at a sub-$5 million investment? And maybe on the back of that, are you able to share any thoughts on potential impacts from an operating cost standpoint assuming that additional ball mill is added?

Yes, I can provide some color on that. So yes, we're aware of where to get the additional ball mill. We're just figuring out the exact size that we'll put in place. So the tanks on the capital cost estimate the tanks are oversized currently for the existing processing plant. So your capital cost figure of being sub-$5 million would be in the range, yes. I can say that with regards to expansion. So from an operating cost perspective, it will obviously cover on a per tonne basis more operating cost. We need to get through and we're putting this together now is finalizing another five year mine plan and looking at grade profile. And so grade profile obviously has an impact on cash cost per ounce. But I think our guidance is still good between $750 to $850 per ounce and I don't expect that to change anytime soon. Did that answer your question?

Yes, that's helpful. And then I guess building on that a little bit, assuming throughput increases yet again in 2023, do you expect to funnel some of your exploration dollars towards additional oxide resources just to, kind of, extend that mine life a bit?

Yes. So if you're looking at the potential around Buckreef as Andrew noted on his slide in the white pits, they're obviously all surface resources, right? So there is a lot more potential oxide resources here even in Buckreef West over in the Eastern Porphyry potentially long Anfield and long strike in Buckreef main and we just need to put in place the drill program to expand those oxide resources.

Got it, okay. And then just lastly, on the sulfide development study, obviously, the sulfides are a big piece of a longer term mine plan. Should we expect news there in the first half of next year? Or any update on the status of that?

Yes, you should expect some news on that in the first half of next year, we're going through finalizing where the PQ holes will be sent. We'll also evaluate the ability to put sulfide through the existing plants and any modifications required for that as well. Remember, we do have that test plant, so we just need to get some sulfide material for that. And we'll also evaluate the flow sheet that we currently have, as well as other flow sheets as well. And so do expect some news out on that. We do know what the PQ holes look like and we'll probably have a releasing on those PQ holes shortly.

That's all on my end. Thanks again and congrats on a strong year.

Yes. No, thank you, Jake.

And the next question comes from Heiko Ihle with H.C. Wainwright. Please go ahead.

Hi, everyone. Thanks for taking my questions.

Yes, thank you, Heiko.

Hey, I saw several of your exploration areas when touring the site earlier this year and the outlook you focus on drilling at Buckreef main, Buckreef West, you support free on the greenfield, you only get Anfield as per your release. But can you break out the approximate drilling between these targets? And also would you expect to do exploration business in February?

Yes, we can do that. But Andrew, do you have those numbers in front of you?

Stephen, unfortunately, I could not hear the question clearly. Could you please repeat it?

Yes. So the question Heiko was asking is if we can break out the data for the number of meters by area. And I think my correct math, if I'm wrong, that is in the Q4 management discussion and analysis as well?

Yes, it is Stephen. It's broken down by meter in the MD&A, Heiko. Hopefully, that's helpful.

Okay. Or you can add enough for you.

Yes. And so Andrew [Multiple Speakers]

But outlook wise, you have the outlook in the MD&A? Or just the actuals?

No, just the actuals and so I’d add --

No, I was looking for the outlook. I'm looking for the outlook for ‘23.

2023 outlook, okay. Yes, so Andrew, can you give Heiko, an overview of our outlook of where we're going to focus on in next year?

Yes. And Heiko, I don't have the specific budget numbers right in front of me, we can always talk about that later if you like. But in the very broder sense, the exploration program will continue to focus now on the ANfield to the Eastern Porphyry. So if you look at the map that's in the presentation. From where we're drilling at Anfield to where we're drilling at Eastern Porphyry, again, let me just remind you that we've got 30 gram per tonne [grap] (ph) samples and some drilling going on at the Anfield, historical results at, let's say, Eastern Porphyry, highlighted by 60 grams a tonne over three meters. Those two areas are separated by 700 meters of strike extent, which we believe to be perspective. And that's where we're going to focus. And one of the reasons for that, is we want to focus on those targets that will bring us mineral resources and mineral reserves as quickly as possible. In a second order, it would then be to continue to drill underneath the South pit and to push along on the South extent. So rather drilling has gone as far as 200 meters to the South, we will report on that quite soon. I hope that gives you some sort of ranking and some sort of idea, yes.

Very helpful.

We need to have the drill bit permit the result of this. But the theory would be is that there is a very good strike length among Anfield through to the Eastern Porphyry, which needs to be proved out.

Yes. That's -- I think that's [Multiple Speakers]

And simply put it. Yes, simple put it, obviously, it all ends up and you can all see that. But as we also all very well know, we've got to put the drill bit in to prove it up. And then thirdly is we continue to analyze the more recent extent. And we'll be coming back there later in the year to do some further infill drilling on what we consider the preeminent areas of that area. And also you might just notice with a keen eye on the -- just on the Western side of the main zone, you'll see this little cluster of some good intersections that we've been quite pleased with what we're seeing, what we call, a little footfall zone there. There will be sort of honing in on that smaller area, but it is very, very prospective. Thank you. But Stephen, back to you.

Thank you, Andrew, for that.

Got it and you preempted my next question, which was going to be the not so obvious focus areas for next year. And then talking a little bit about costs and also supply chain bottlenecks, and I'm cognizant I've asked you that same question in person not too long ago. But is there anything that maybe we should worry about or that you're concerned about in things that are hard to get?

Yes, right now, look, we keep an eye on this on an ongoing basis. So we purposely had a lot of things done in Tanzania, which limits the risk from a supply chain perspective and has been very good. Right now, like on the expansion, we know where the ball mill is available, so we're pretty comfortable on that even on the sulfide project, we're pretty comfortable where to get resources and potential, if that lines up on the flow sheet ball mills for that as well. But right now, I don't think there's anything that's overly pressing from a supply chain perspective. We have all equipment on-site. Tanzania has thankfully a lot of skill sets and equipment in country to develop assets and to do contract mining, things like we do on-site. So right now, there's not an abundance of concern as we expand. There may be a one thing that has popped up with the war in Ukraine as diesel generation that could be a concern, but that will be an industry concern given how Russia is pounding their electrical networks.

When you say diesel generation, you're talking about the fuel as opposed to the generator?

No, no, I'm talking about just the gensets.

Okay. You are talking about the gensets. Okay, got it. Perfect. That's all for me. Thanks a lot.

[Operator Instructions] Our next question comes from Mike Niehuser with ROTH Capital Partners. Please go ahead.

Yes, hi --

Hi, Mike. How are you?

Hi, guys. Congratulations on a -- good, good full-year for sure. I'm looking forward to your first quarter of ‘23, which should be out, I hopefully pretty soon. Follow-up question on the plants to address the sulfide, I'm getting the picture that this is a pretty good sized ball mill you're going to be bringing in time? And will that allow you with your other existing capacity to -- are you at a depth where you can start maybe processing from a test level, some of the transitional or sulfides to get a feel whether you can use the same recovery regime without doing -- without having to spend additional capital to boost recoveries?

Yes. So you're reading by mine, Mike. That question is imposed to the team. And we're not currently at that depth of the sulfides, but we should -- we do have ways going and getting some perhaps trenching the bottom of the pit or doing some really wide our sea holes in order to obtain a bulk sample to put through the small test plant that's on-site that's around five tonnes per hour. So we are going to be commencing on that, sort of, program in the next couple of quarters.

I imagine that would be a pretty important and a critical item for you to complete your study. So I guess 2023 is going to be really digging down and figuring out how you're going to get after the sulfides?

Yes, correct. Well 2023 is focused on growth and production, as well as growth in resources. And the growth in production is the large component of that is. What is the long-term plan for the asset? How is that going to be developed? And that will be a core part of a lot of the technical teams work over the next year. Yes, absolutely.

Okay. And one more question on the -- I see you're doing some sterilization drilling for additional tailings ponds. Are you -- can you comment on area available for tailings ponds as you do grow? And if you have any clever ideas about being able to manage those ponds so that maybe using a material elsewhere for the roads or such, because it looks like your -- when you grow, you go from bottleneck to bottleneck as you go from glory to glory. And I kind of sense that, that's going to be following your new ball mill?

Yes. So tailings is the top priority, obviously, in any process flow sheet tailings is at the end, so it needs to be large enough to accommodate the mine plant. So the team is working with a major engineering -- international engineering firm that develop that. There are spots on this property to put tailings facilities. It is a flat area. And so that team is working with government officials around that as well. With regards to how do you build that up over time, obviously, with tailings, it will be a potted system or a rebuilt over time. The asset is in operation and is mining waste along with ore. So the -- sorry, the engineering firm along with the team on the ground is looking at using mine waste over time to build out the tailings facilities. But that is a work-in progress.

Yes. Okay. I just also congratulate [Multiple Speakers]

[Multiple Speakers] lower your operating costs as well.

Yes, it’s need how to configure it that way. Just also want to say congratulations on your no lost time accidents, a good sign that things are really well organized and efficient and modern. So congratulations to you and your team.

Thank you for that. That's a great accomplishment for the team no matter where you are in the world. Do you want to go to work safely? Do you want to go home safely?

As there are no further questions from the phone lines. This concludes the question-and-answer session. I would like to turn the conference back over to Stephen Mullowney for any closing remarks.

Thank you. And so I would like to thank our shareholders for the support over the last year as we continually grow the Buckreef asset and expand it. Financial markets have not been the best, but we've been able to accomplish quite a bit over the last year in a really tough operating environment today. I don't think we found it tough, but I think generally the business sentiment is that it was getting tougher, but we managed to get through that, build these plants on time, on budget, start to figure out our asset and the potential of that asset. We have a good idea of where we'd like to go with the asset. But there's a lot of work to continually do and the focus on growth on both production profile as resource expansion requires a lot of work, requires a lot of exploration programs and it requires a lot of ingenuity to make sure that you continually advance on a very profitable basis. And that's going to be the focus of our next year at Buckreef. We have a laser focus on growing the asset, while having now focus on cost, not only in the short-term, but over the medium and long-term as well, both from an operating perspective, as well as a capital cost perspective. And so we expect to have just as good as 2023 as we did in 2022. And myself and the team are absolutely open for any questions by anyone at any time. And we maintain an open door policy with shareholders. So thank you for your support and we look forward to continually growing our asset base together and future success. Thank you.

This does concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.