Earnings Call Transcript - CMCL Q4 2023

Operator, Operator

We're going to run through the presentation as always, and we will leave time for questions at the end. What we do ask though is if you do have a question, if you could just raise your hand and we will unmute you. We find that's a better format than the written Q&A. I'm now just going to pass you over to Mark and Chester who can run through the presentation.

Mark Learmonth, CEO

Thanks very much, Camilla. I'm Mark Learmonth, Caledonia's CEO. And I was going to give a few opening observations and comments before I hand over to Chester. It's fair to say 2023 was a challenging year. Most of the difficulty was encountered in the first half of the year with a difficult situation at Blanket mine and also the Bilboes oxides problem. Both of those are resolved and Q3 was a good quarter. Q4 started off reasonably well. It was sort of sideswiped towards the end of the quarter by a couple of unexpected things. But pretty much the bad news relating to 2023 was dealt with in the first half. Having said that let's just run through this. So annual gold production at Blanket was just over 75,000 ounces, which was in line with guidance. Gross profit for the year was $41.5 million, compared to nearly $62 million in the previous year. And that decrease was largely due to higher production costs, in particular at the Bilboes oxides mine in the early parts of the year. It should also be noted that 2023 performance, particularly the Q4 performance was adversely affected by a higher work in progress. That refers to gold in a bar that hadn't been sold at the end of the year, just over 3,000 ounces. So that represents about $6 million of revenue and about $3 million of gross profit that was sold in the first week of January. So that was just purely a timing issue. In terms of operating costs, we had expected higher labor and power costs, but they were somewhat higher than we'd even expected. We are looking at measures to reduce our electricity consumption and to improve our labor efficiency. And that's certainly on the labor side, that's gone reasonably well since December 2023. On the electricity side, the issue is purely one of higher-than-expected usage. It's got nothing to do with pricing. And in fact, our average unit pricing for electricity has come down. On the good side with the drilling program, our Blanket has yielded very positive results. We put out two news releases, one in July, I think, and then the other one in January. And buried deep in the financial statements, you'll find a reference to the fact that on the back of that drilling, the life of the Blanket mine has been extended from 2034 out to 2041, and that statement will be followed up in due course with a revised resource and reserve table. We maintained our quarterly dividend payable in April this year, which reflects the good start to 2024 and our confidence that the remainder of 2024 will be strong. We've received some preliminary feedback from the various consultants who are working on the feasibility study. Management and the board are evaluating those results so that we can make the capital allocation decision. And we're pressing now quite hard to get that work to a state of finality where it's capable of being published. Then as previously announced, Dana Roets, the Chief Operating Officer, stepped out with effect from the end of February and we're now very close to announcing the appointment of his replacement. So just in terms of summary, I've already mentioned production. That was something you can see here for the quarter, just under 21,000 ounces compared to just over 21,000 ounces in Q4 2022. We benefited from a higher gold price, which fed through into higher revenues. Gross profits for the quarter were within touching distance of what they were in Q4 2022, as you can see for the full year, $41.5 million compared to $61.8 million. And unfortunately, there's a lot of damage below the gross profit line, which meant that the attributable profit to shareholders was a loss in a quarter down the year. Chester will give you more information on that. So though that's just some sort of headline numbers. Can we move on? So just to give you a longer-term view of what's been happening at Blanket, these graphs go back to 2012. The top graph shows grade and tons. You can see that the tons have increased pretty much steadily from 2012 to 2023, but you will notice in the first two quarters of 2023, tons mined and milled did show a fairly sharp contraction for reasons we previously discussed, but pleasing to see that that recovered quite well in Q3 and Q4 of 2023. Grade has in general declined, but one of the things that I think we're optimistic about as we do more exploration is that the grade will stabilize and may somewhat improve.

Chester Goodburn, CFO

Thank you, Mark. Yes. It's good to see the revenue going up from the comparable quarter and asked to increase ounces sold, as well as the higher realized gold prices received. It's not that number. It's about 3,000 ounces of gold work in progress that was sold early in January, and that's mostly just to get the cataloging. Royalties have very much been flat at 5%. The tax in Zimbabwe for several years has been fairly unchanged and consistent. Production prices have gone up for the quarter versus the comparable quarter, and it's predominantly due to the higher electricity usage from when we added the central shaft in 2023 and really started experiencing some damages a little. As we go forward with our life and mine plan, we aim to move our production to below 750 meters. We're currently moving on mine above and below, and that synchronization below 750 would allow us to shut some shafts down, like the four shaft and six ones, that should reduce our kilowatt hours going forward. Now the sequencing of that and exactly how many kilowatt hours we will save that decision is still under process; we're evaluating our various options on that. Over time, it's been high in October and November. Our initiatives have paid dividends in December and now as we go forward, you won't see an increase in the overtime that's been sold. We've incurred some unforeseen maintenance costs late in December of approximately $1.1 million, and we don't expect to incur that going forward. The depreciation number has gone up, and that's where you see the shortening useful life of some of the shafts that we estimate. Going forward with this significant increase in life of mine to 2041, we will probably see a depreciation number now coming down, but that won't improve the short life of the shafts going forward. Under the gross profit line, we've seen a lot of one-off price adjustments that we don't expect to incur going forward. That would relate to about $1.7 million that relates to the settlement payable to the former COO. We had $1.5 million of non-cash impairments on that receivable and the oxides mine utility repair. For the year, we spent approximately $3.1 million on acquisition fees related to Bilboes and that's to acquire a few amounts of resources. Our last significant items would be $2.5 million of foreign exchange losses that are in that other cost. So, overall, we shouldn't see the overtime cost computing; we don't expect the unforeseen maintenance. That’s why it’s not seen, and we should not see that going forward. Our production is looking good for Q3 and Q4, and that's guaranteed to Q1. And we're going to see these sponsored costs that I've just mentioned. So I'm looking forward to sharing these results with you in Q1. All in all, you can also see the Blanket mine numbers remaining robust in a very tough year for us. The tax expense at Blanket mine has an approximately effective tax rate of about 37% to 42%. And why we have such a high tax rate is primarily due to a lot of non-deductible expenditures within the group, like the Bilboes oxides losses. These Bilboes oxides losses were $2.3 million for the quarter. We expect that to come down to approximately $200,000 per month, and you should see that additional cost of $13.1 million going forward. When we look at the detailed cost breakdown — operating cost breakdown, our wage and salaries have come down quarter-on-quarter and that seems to have reduced production bonuses. Consumables are very much stable in check throughout the inflation environment that we've seen globally. Our procurement department has really done well with that pricing and checks with the modest increase in consumables. Electricity, we've seen the solar plant producing some of the high usage that we've experienced on our utility use. And the solar plant has been performing much better than what we expected initially. We're looking at some solutions to reduce our addressable costs going forward. Bilboes oxides have been placed on care and maintenance since October 2023. And as I said, that's reduced to approximately $200,000 per month. Other expenses shot up during 12 months, and that's also due to a few one-offs across the board; we mentioned the $3.1 million we spent to online advisers. Our salaries and wages costs also include the $1.7 million on the settlement payable to the COO. Additional wages and salaries that we've incurred mostly relate to some of our feasibility studies and evaluations. We've seen some of that play into our life of mine. Taking out the $3.1 million, the $1.7 million settlement, and you will see that the general and administrative cost has stayed in line with inflation from 2022 cost per ounces. Here you can see the effect of Bilboes in yellow. We've got some power increases, and we'll explain that. We don't foresee those oxide costs coming through again, and our labor might be reduced going forward with the overtime initiatives that paid off. Looking at the outstanding costs, standing CapEx shoots up, and that's mostly due to a different allocation. Now that we're at steady state, most of our CapEx moves from a non-standing price to a standing capital classification that has pushed up our all-in sustaining cost. And all our CapEx remains unchanged in total; that’s just how we piece it together. Taxation, I mentioned some higher effective tax rates, just due to some of our losses being reinvested, and without taxable income improving going forward with losses like the Bilboes oxide project not being precluded anymore, we should see that number improving. A slight increase was made to an active tax rate to 25% from January 1, 2024. Our balance sheet among current assets has increased due to the acquisition of Bilboes and our solar plant that came online. If we look at our non-current liabilities, that has increased due to our overall facilities that have increased, and that's due to higher working capital needs at Blanket, with Blanket growing to a 75,000 to 80,000-ounce producer. That's very much defined on our working capital, and we've also issued some bonds in Zimbabwe to improve the local financial markets.

Mark Learmonth, CEO

Thank you, Chester. I just want to leave you with this slide, which focuses on Blanket's quarterly performance in 2022 and 2023. I want to make it very clear that the difficulties we faced in the first two quarters of 2023, quarter one and quarter two, saw production dip from about 21,000 ounces in the second half of 2022 to 16,000, 17,000 ounces in quarter one and quarter two respectively, resulting in a fairly sharp fall in gross profit from around $20 million a quarter down to $12 million and $17 million respectively. I just want to be clear that in terms of the underlying profitability and cash generation, Blanket improved in Q3 and Q4, achieving $17 million of gross profit, which is pretty much accounted for by the 3,000 ounces of gold work in progress that was realized in January. So the core of the business is Blanket. It faced some difficulties in the first half of 2023, but we’re now increasingly comfortable that it's moved through that. Should we move on? Next slide. In terms of outlook, we've taken steps to address the higher-than-expected costs experienced in the second half of 2023. Although it's fair to say that finding a full resolution to the elevated electricity usage may take us a little longer. Our expectation is to maintain production at Blanket mine in the range of 74,000 to 78,000 ounces. That's somewhat lower than we've indicated previously because we've decided to scale back production in areas that are relatively low grade and have low volume, and which are quite remote from the main infrastructure. So all three of those factors mean that those areas, which might only be moving 7,500 tons a day, are relatively high cost. We're comfortable operating some areas of the mine which are low grade because they're very high volume and therefore very efficient. We're trying to focus the mine onto producing cash-generative ounces rather than just chasing ounces at any cost. We're in the early stages of preparing a revised resource statement, which reflects the encouraging drilling results we've reported in 2023 and early 2024. The board and management are now beginning to consider some of the initial feedback from the work done on the feasibility study with a view to identifying the most appropriate implementation strategy. Currently, we're doing some low-level exploration of Blanket, but we hope that will start to improve. I guess it's fair to say that the start of 2024 at Blanket has been very encouraging and that creates a solid foundation for us to become, as we've said, a multi-asset gold producer. So I think that's the end of the formal part of the presentation. Maybe I can hand it over for opening up to questions. As Camilla said, if you raise your hand, we'll unmute you. We'll find it easier to deal with verbal questions rather than written questions. Well, having said that, while people get their minds working, I did receive a very detailed email with some questions. The first question was about the reasons for Dana's departure from the company. We reached a termination agreement with Dana, which includes a non-disclosure agreement. However, it is fair to say that Dana made significant contributions to the business over the last decade, especially in completing the central shaft. The central shaft and the tailings facility are now completed, and we have yet to begin work on the Bilboes project. Given these circumstances and other considerations, it was an appropriate time for both parties to part ways. The recruitment process for a replacement is progressing well, and we expect to provide updates within the next week or so, having encountered no issues in attracting talent. We have been pleasantly surprised by the strong and diverse pool of candidates who are eager to pursue the opportunity with Caledonia. There were also detailed inquiries regarding the solar plant at Blanket. To clarify, the proposed sale of the solar plant is an outright sale, not a sale or leaseback. One challenge currently affecting negotiations is the counterparties attempting to transfer risk back to us, but we have been clear that this is a straightforward sale with a long-term take-or-pay contract. The solar farm is performing slightly better than anticipated, and there is potential to consider expanding its size in the future. The limitation we face is that we are the sole logical off-taker for the solar farm's output. Expanding the solar farm could result in excess power production that Blanket cannot use at any given time, which would either lead to waste or necessitate costly storage solutions like batteries. There are no real alternatives for selling any surplus energy. This restricts the growth potential for the solar project, but we will consider it as we aim to lower our overall electricity costs. We have hedged our exposure, and since we are in the final stages of a capital expenditure program focused on completing the tailings facility and the horizontal development related to the central shaft, we will occasionally hedge while we still have relatively high capital expenditures. To clarify, hedging involves purchasing out-of-the-money put options, which is akin to paying an insurance premium. We do not engage in forward sales or hedging structures that could lead to margin calls. Those are the questions I received via email, which I hope I have answered satisfactorily. If anyone else has questions, please feel free to ask.

Chester Goodburn, CFO

Mark, we've got a question that’s been typed.

Operator, Operator

There's one from Howard Flinker. Howard?

Unidentified Analyst, Analyst

The two questions are, what do you plan to spend on CapEx this year?

Mark Learmonth, CEO

$30 million. Sorry, Chester. I'll leave it to you. Chester? I'm sorry.

Operator, Operator

Just over $30 million.

Unidentified Analyst, Analyst

And second, because your sound was so low, I couldn't understand the explanation of taxes. Is it essentially that your deferred tax is in U.S. dollars and you couldn't depreciate it with the Zimbabwean dollar?

Operator, Operator

No. I wouldn't say that. From January 1, 2023, we've been doing the tax scale and income tax scale on a combination of U.S. dollars and local currency. Previously, we placed that in U.S. dollars in past this year devaluation.

Unidentified Analyst, Analyst

Can you get to the computer a little closer? Your sound is very weak.

Mark Learmonth, CEO

Let me step in. We report in U.S. dollars, but the underlying tax calculations are done in a combination of U.S. dollars and local currency, making it impossible for anyone looking at a dollar-based set of accounts to reconcile those dollar profits with the stated tax charge. However, the tax regime in Zimbabwe is not unfavorable. The headline tax rate is 25%, and we receive 100% capital allowances for capital expenditures in the year they are spent. This means that if Blanket makes a profit of $40 million and deducts this year's $30 million of capital expenditure, the resulting $10 million is what you pay income tax on. The difference comes through as withholding, which is deferred tax. This is not a cash tax and will unwind in time. From a group perspective, while we can understand the income tax at the Blanket level, the $7 million in losses incurred at Bilboes cannot be offset against Blanket's profits because they are separate entities. The tax losses at Bilboes can be used in the future.

Unidentified Analyst, Analyst

That part I understood it, but Blanket seems to have a large tax rate in the fourth quarter by itself.

Mark Learmonth, CEO

Yes. That's because Blanket didn't make very much money in the first quarter, and that's because some taxes are calculated in local currency while others are in U.S. dollars. It is audited and it is correct, but it makes it very hard to see through and understand. The big difference is things that are realized tax losses or tax gains in U.S. dollars and local currency reverse.

Operator, Operator

Can you hear me?

Mark Learmonth, CEO

Go ahead and try it, Chester.

Operator, Operator

Yes. Something else to add there is $1.7 million of additional deferred tax in the tax expense, not due to the active tax rate moving from 24.7% to 25.75%, which increased your deferred tax liability.

Mark Learmonth, CEO

That didn't affect Q1. That's a year-end issue.

Unidentified Analyst, Analyst

Probably Q4.

Mark Learmonth, CEO

Yes.

Unidentified Analyst, Analyst

I didn't realize it was that large. I thought it was only 1.5%. I thought probably not $1.7 million, but I didn't understand that.

Mark Learmonth, CEO

It attaches to a very large amount of capital expenditure.

Unidentified Analyst, Analyst

Okay, of course.

Mark Learmonth, CEO

Further questions?

Operator, Operator

Yes. There's one here from Ian Joslin.

Mark Learmonth, CEO

Can't hear you.

Unidentified Analyst, Analyst

I just got a couple of questions. One that occurred as you were talking, I think you said that the amount which you and cost to capital to the balance sheet reduces the cost; Blanket is now becoming an ongoing operation. This means that costs are effectively incurred this spend. If that's correct, presumably at some point depreciation will come down because what you would have added to your balance sheet and then depreciated no longer gets added to your balance sheet that is incurred in the period, so one should expect depreciation to come down on blanket? Is that reasonable?

Mark Learmonth, CEO

Yes, that's what Chester said. Because we depreciate the fixed assets on a per ounce basis. So as we add more ounces to the life of mine plan, that means that the depreciation per ounce will come down. On the other hand, buyers are looking to reduce the useful lives of certain bits of infrastructure, like say, the Jethro Shaft or others. Given the size of the central shaft, I would expect that the benefit arising from the longer life of the central shaft will outweigh the negative effect of shortening the lives of other assets.

Unidentified Analyst, Analyst

Talking about the different shafts and how you're basically looking to rebalance production to the more profitable areas. I'm wondering, would it be helpful for me as a shareholder to understand what your original plans were? And obviously, something didn't go according to plan, which resulted in the higher costs that you've incurred in quarter one and quarter two. So can you help me process this?

Mark Learmonth, CEO

Someone didn't do the math right.

Unidentified Analyst, Analyst

So it was just a planning issue, was it?

Mark Learmonth, CEO

Yes. You could say it was just a planning issue. It's quite a significant planning issue, isn't it? But we can clearly see with the benefit of hindsight; our consumption has increased dramatically when we started using the central shaft in earnest. While we're in this period of using the central shaft, it only services the mine below 750 meters. The other infrastructure largely services things above 750 meters. So as long as we continue to operate from the old mine above 750 meters and the new mine below 750 meters, we will inevitably continue to use a large amount of infrastructure. When in a couple of years, we've gravitated towards mining exclusively below 750 meters, then unless we find something very attractive above 750 to justify continued operations above that level, we will be in a position to stop using the old infrastructure and rely exclusively on the central shaft.

Unidentified Analyst, Analyst

So what you're saying is that wasn't properly accounted for; in hindsight, that wasn't properly assessed regarding the fact that effectively you're doubling your operations. I was also interested to see, I think you correctly said that the bad news was mainly in quarter one and quarter two, but the market didn't react very well to the three results where you said that profits would be down. I'm just wondering whether that was down to the market not really catching up with the bad news in the first two quarters.

Mark Learmonth, CEO

I believe that if we look at the earnings by the end of September, they were approximately $0.17. In September alone, earnings were around $0.35. As we entered Q4, we expected it to be comparable to Q3, and it seemed reasonable to anticipate a year-end figure of about $0.50, which aligned with certainly one analyst's projections. The other analyst might have had a different view. This assumption remained valid until we reached December. We may have underestimated the impact of elevated costs incurred in late December on Q4 results. The poor performance in the first two quarters meant that variations in earnings towards the end of the quarter had a disproportionately significant impact.

Unidentified Analyst, Analyst

I can see. Yes, that makes sense.

Mark Learmonth, CEO

It’s certainly something we will pay much closer attention to. If we start the year as we expect, a variation in Q4 of $0.10 or $0.15 wouldn't have been the upset that it actually turned out to be.

Unidentified Analyst, Analyst

Could you explain what led to the decision regarding Bilboes being placed on care and maintenance? It would be helpful to understand why you believed the stripping cost of the oxides could be managed before addressing the sulfides, and how it turned out that this was not the case.

Mark Learmonth, CEO

Yes. That was, well, again, we discussed that at length in quarter one and quarter two. The management team at Bilboes had been mining oxides for 10 years. They were confident they could continue to do it. They thought all they needed was extra capital expenditure, which they couldn't fund themselves to do a certain amount of pushing back and stripping. After incurring that cost to do the pushing back and stripping, it transpired what they expected to find in terms of oxide resources was either disappointing or just not there. Having realized that in April and May, we made the decision to put the operation on care and maintenance. The contract had a three-month notice period, so there was some runoff for an extra month, which was not comfortable. I would say that a certain element of oxide still remains, and those oxides will be extracted in due course as part of the bigger sulfide project. The Bilboes project still has around 2.3 million ounces of sulfide material. The oxide was only ever a few tens of thousands of ounces, so with the benefit of hindsight, we would not have embarked on that oxide exercise and would have placed the mine on care and maintenance immediately.

Unidentified Analyst, Analyst

I'm sure you've discussed it already, but what you're saying presumably is that the amount of oxides that you thought were there was not there, and that was the problem. But then presumably, the sulfides further in, if the level of confidence of knowledge of the oxides wasn't there, the question is why is the level of confidence for the sulfides further down still there when you were let down by the reserves' confidence?

Mark Learmonth, CEO

Because the sulfides have been directly drilled, while not all oxides have been directly drilled. And you're very welcome to visit and look at the core samples.

Unidentified Analyst, Analyst

I'm sure you've considered this question, but it just occurred to me. The main drilling has focused on the sulfide. I appreciate your intention to return to the market, but what is the timeframe for bringing Bilboes into some form of production? Are we looking at two or three years?

Mark Learmonth, CEO

If we can get the funding in place by this time next year, which I think would be very optimistic, then probably two years to build.

Unidentified Analyst, Analyst

And you're still looking at debt funding, not an equity raise?

Mark Learmonth, CEO

We'll absolutely consider that as one of the things we're focusing on. We believe the project has a capacity to carry a high proportion of debt, and that's the first thing we'll do when deciding the best way forward is to firm up our understanding with direct engagement with the lenders. We've already had preliminary conversations with the most likely lenders, and they're not going to be western banks; they're going to be African development banks that have indicated a strong degree of interest in this specific project. They already know this project from previous management engagement.

Unidentified Analyst, Analyst

Okay, very helpful.

Mark Learmonth, CEO

Any further questions, Camilla?

Operator, Operator

We've got a few written questions that just hold on. Compared to the cost of power from ZESA and the solar plant, which is more expensive? Secondly, has the power reliability improved?

Mark Learmonth, CEO

We get power from three sources, okay? We used to get power from ZESA, that's now been replaced by getting power we import directly into Zimbabwe through a mechanism called the Intensive Energy User Group. We've been doing that since I think about April, if memory serves me right. That initiative has been fostered by the Zimbabwe government, which means the power we import is somewhat cheaper than what we received from ZESA. Chester may have those numbers down. Chester, what's the power differential between buying from ZESA and buying from the IUG; do you have that in your head?

Chester Goodburn, CFO

It’s about $0.035 per kilowatt hour.

Mark Learmonth, CEO

So $0.035 different. We don't pay IUG $0.035. There is a slight benefit to importing power through the IUG, but it still has to come through the grid. What this means is that while we no longer suffer outright power outages as you get in Africa, we do continue to see disruptions in our power supply along with peaks and troughs in voltages because the ZESA grid is in very poor condition. So to deal with that, our second source of power is through diesel generators, which we've had for years. The third source of power, which we started using early in 2023, is the solar project, which provides about one-fourth of our power during sunny times. Overall, our power consumption has increased considerably, but our average unit cost is much lower. So as a case in point, the use of solar means that in 2023, we used just less than 1.5 million liters of diesel, whereas in 2022, before we had the solar project, we used nearly 4 million liters. And if diesel costs $1.50, that's an appreciable saving.

Chester Goodburn, CFO

Mark, maybe if I could add that there's no cost for the solar; it's our solar plant. We own it. We say approximately, on a blended rate basis, about $3.5 million per year.

Mark Learmonth, CEO

The benefit arising from the solar plant is not reflected in our mine costs; it's reflected at the Caledonia level. The mine buys solar power from the solar project at a rate reflecting its average unit consumption cost. We strive neither to benefit nor disadvantage the minority shareholders at Blanket through the solar project.

Operator, Operator

So the next question is just with regards to Bilboes: How soon can we expect gold production beyond 80,000 ounces?

Mark Learmonth, CEO

As I said, if it takes a year to put the funding in place and two years to build it, you can work from that. I must say there's no definitive timeline yet.

Operator, Operator

Next question: How do you plan to raise the funding for Bilboes? And do you have a timeline?

Mark Learmonth, CEO

As I've said, the initial focus is raising the –– getting a handle on the debt to the point of getting a credit-approved term sheet; the balance will be equity. Equity will come from internal cash flows, public market equity, private equity, or joint venture partners.

Operator, Operator

The next question.

Mark Learmonth, CEO

We will not approach the market for any, what I call non-debt funding until we have a better idea of the debt capacity. Frankly, we do think it's going to be the cheapest form of funding.

Operator, Operator

What was the key driver of the advisory fees in 2023?

Mark Learmonth, CEO

We had our advisers, and we had to pay for Bilboes advisers who lacked the funds to pay for it themselves. Even if they had paid, it just would have come off their cash pile anyway. It was a very complex long-running transaction. I think our involvement in the final stage was around two years. It has been an ongoing long process, very, very complex. I’m afraid I don't enjoy paying up advisory fees any more than anybody else.

Operator, Operator

I think the other question I think has pretty much been answered. It's, when do you expect the feasibility study to be completed?

Mark Learmonth, CEO

We're working hard to get the consultants. There are four main elements to the feasibility study. The first is the underlying geology, which has not changed much, aside from a small removal of oxide material. The changes to pit designs and the mining plan have been very minor and focused on optimizing capital expenditure. There have been no changes to the metallurgical processing. However, there have been significant changes to the tailings facility. In that area, we are applying the experience gained at Blanket throughout 2023 by implementing a new tailings facility in a modular fashion. This allows us to start using it quickly and spread out the capital expenditure over a longer timeframe. This work essentially constitutes a new study that needs to be upgraded to a publishable point and can be integrated into an overall feasibility study with a relatively high level of confidence. Regarding the timeline for this, I’m unsure; it could take six weeks or maybe two months. I hope it won’t take longer than that.

Operator, Operator

At the moment, that's it for questions. Does anybody else have a question?

Mark Learmonth, CEO

If we finish that, it was a challenging year. As I said, mainly in the first half. We did recover in Q3, and Q4 wasn't so bad; we got off to a strong start in quarter one. I'm hopeful that we've now reestablished Blanket as a solid cash generator, and we're making good progress both on exploration at Blanket, which is considerably more optimistic than we expected, and we're making good progress with the feasibility study of Bilboes. It has been frustrating, but hopefully we will see better days ahead. So I think with that, we'll finish unless there's any last questions. Okay. I think we are done. Thank you for your attendance.

Operator, Operator

Thank you, everyone.