Caledonia Mining Corporation Plc (CMCL) Earnings Call Transcript & Summary

Good afternoon, and welcome to the presentation on Bilboes Feasibility Study. Today, we are joined by Mark Learmonth, he is going to introduce the webinar and start his presentation. Mark, over to you.

Thank you. Good afternoon, ladies and gentlemen, and welcome to this webinar to set out the results of the feasibility study in respect to the Bilboes Gold Project. Could we move on to the next page? That's the forward-looking statement and disclaimer. Just to introduce the presenting team, I'm Mark Learmonth, Caledonia's Chief Executive Officer; joined by Ross Jerrard, who is the Chief Financial Officer; James Mufara, the Chief Operating Officer; Victor Gapare, an Executive Director of Caledonia; Simba Chimedza, who is the Group Technical Manager and who has been closely involved in the preparation of the feasibility study; Maurice Mason, Vice President of Corporate Development; and Admire Makuvaro, who is in charge of projects and capital projects. All right. Before we get into the project -- before we get into this presentation, I just want to make a couple of points. We published the feasibility study and a related press release on Tuesday, the 25th of November. On Thursday, the 27th of November, the Zimbabwe Minister of Finance presented his budget for 2026 to the Zimbabwe Parliament. And this budget, which is expected to be enacted before the end of the year, includes 2 proposed fiscal measures relevant to our sector and to the Bilboes project in particular. The first proposal relates to an increase in the royalty payable to the Zimbabwe government and the second proposal relates to the treatment of capital expenditure for tax purposes. So turning to the first, the royalty rate currently payable by Zimbabwe gold producers to the Zimbabwe government is 5%. It's now proposed to increase the royalty rate to 10% if the gold price exceeds $2,500 an ounce. And our current understanding is that the higher rate of royalty, 10%, will apply to the full price of gold and not just to that portion of the gold price that exceeds $2,500 an ounce. The second proposal relates to the tax treatment of capital expenditure. The current tax regime in Zimbabwe permits 100% of capital expenditure to be deducted from taxable profits in the year that CapEx is incurred. In the budget, it's proposed that capital expenditure deductions for tax purposes will now be spread across the life of the project. Now whilst this has no adverse effect on the overall tax payable over the life of the project, it does alter quite substantially the timing of tax payments and therefore, the NPV of the project. These measures are still proposals and are not yet passed into law. We're evaluating the potential effect of these proposals on the Bilboes project and also on Blanket mine. And depending on the final form of the legislation, we may need to update the feasibility study to reflect revised economic outcomes. So accordingly, this presentation can only focus on the technical parameters of the project, which remain unchanged. We can't discuss at this stage the economic outcomes or any changes to those economic outcomes that we published on 25th of November, and we'll update the market in due course when we finished our evaluations. So with that, can I -- can we start the presentation? Can we move on to the next page? And I believe we hand over -- I dealt with this page. Can we hand over to Victor to lead us into the project. Victor, over to you.

Thank you, Mark. The Bilboes project is located in the Matabeleland North province of Zimbabwe. It's approximately 80 kilometers north of Bulawayo, which is Zimbabwe's second largest city. It covers an area of just over 2,700 hectares of mineral claims or mineral rights. The project was previously owned by Anglo American Corporation Zimbabwe during the period 1986 to 2002. As a background, Caledonia bought Bilboes -- 100% of Bilboes from the previous owners in January 2023 for $65 million. This was settled by the issuance of 5.1 million new Caledonia shares and a 1% net smelter royalty to one of the vendors, resulting effectively the new -- the previous owners of Bilboes holding just about 28.5% of diluted shares in issue. Can we move on? In terms of reserves, the Bilboes projects holds 1.75 million ounces of gold at a grade of 2.26 grams per tonne. It also has 0.5 million -- just over 0.5 million of measured and indicated resources. This is excluding the reserves, which I've just talked about. Those -- that 0.5 million ounces at a grade of 1.37 grams per tonne and an inferred resource of just under 1 million ounces at a grade of 1.62 grams per tonne. The ore from Bilboes is refractory, so it requires specialized processing. After extensive evaluation, we settled for the BIOX technology to treat the ores. This is supported by Metso, which owns the technology and there are quite a number of other BIOX operations throughout the world. I also bring to your attention the fact that the Bilboes project next to the Bilboes project is the Motapa property, which used to be owned by Anglo American again prior to them exiting the gold mining space in Zimbabwe. It covers about 2,100 hectares, and we have ongoing exploration at that property, which when it's considered with the Bilboes project, will probably make it quite a big project. Can we move on? In terms of development plan over the last year or so, we've looked at different ways of commercializing this project. We looked at multiphase development, which means starting at a smaller scale and then scaling up to full production. After evaluating all those, we settled for a single phase development as it gives the most economic approach. Prior to Thursday's announcement of the changes in the tax regime, we had planned to do the detailed designs in the first half of 2026, which would allow us to procure long-lead-time equipment and preliminary works in the second half of 2026. The capital expenditure would have been 2027 to 2028, lasting about 2 years with first production targeted in late 2028 with a 5-month ramp-up to full production. Obviously, what we -- like Mark said, we are still evaluating the impact of the changes. And we've got -- at the moment, we can't say anything in terms of whether this timetable will change. From a mine scheduling point of view, what we prioritized was the the shallow high-grade ore. This optimizes early cash flows and also enhances the debt capacity of the project. Can we move on to the next. From a production profile point of view, our first full year of production would reach a peak production of 200,000 ounces of gold in a full year. This is a significant uplift from what we are currently producing at Blanket. Blanket produces somewhere between 75,000 and 79,500 ounces. per year. The life of mine of this project is 10.8 years with total production of 1.55 million ounces over that time period. In terms of ore throughput, the average production for year 1 to 6 in terms of the ore we'll be processing will be 240,000 tonnes per month when we mine McCays and Isabella. From year 6 to year 10.8, we will be mining ore from Bubi, which has got different characteristics from the Isabella and McCays ore and we'll be producing at a lower rate of 180,000 tonnes per month. The ramp-up, which we have built into the project is designed for smooth transition to full capacity. And what we have looked also is at optimizing cost and high recovery and achieving high recovery rates. Okay. Can we move on? From a production point of view, like I've said, we reached full capacity at 200 -- just over 200,000 ounces. But when we average over life of mine will be about 150,000 ounces per year. And you can also see the grid, which is the line on top, that it's fairly constant in terms of what we will be treating. Thank you. Can you move on? From a CapEx point of view, the amount of capital we need, when we start with Isabella and McCays, we're looking at a total of $492 million during that phase. When we move to Bubi to process the Bubi ore, we will need to put additional capital of $91 million, which would give $583 million as the total CapEx for this project. Move on -- for this section, the funding strategy, I hand over to our CFO, Ross Jerrard. Ross, take it on.

Thank you, Victor, and good afternoon, everyone. As Victor said, there's a spend of circa $600 million. So I'll just quickly talk you through our funding strategy. And it's reasonable to assume that the majority of the financing is expected to be traditional nonrecourse senior debt. We have been able to align the Blanket production and, I guess, the equity contributions that will be able to be generated internally from Blanket over the development phase. And we'll be looking to Blanket to provide that internal equity contribution. What we have done is we've put in place a series of hedges, hedging 3,000 ounces of gold per month for the next 3 years at a strike price of $3,500 per ounce. These are Put Options, so really an insurance policy that protects the downside and enables Caledonia to retain full upside gold price exposure. But what that means is it underpins the cash generation of approximately $200 million from that cumulative production of 233,000 ounces over that 3-year period and really provides that foundation of cash flows and our internal equity contribution from the Blanket mine. In conjunction with that contribution from Blanket, we are looking at various interim liquidity arrangements and other instruments for that matter, so the traditional instruments of royalty, streaming agreements, convertible debt. With those instruments and overall strategy, the ultimate aim is to minimize equity dilution. So in any of those decision points that we're looking at in the construct of this funding, equity dilution is front of mind for us. And importantly, from a spend profile perspective, whilst we're looking to accelerate the procurement and the project development and with our initial time lines before the 26th of November, we are really looking at Q3 of next year to have some quite significant spend beginning to drop the whole funding strategy is all about providing early liquidity and being able to make sure that we've got a robust financial arrangements and packages in place to support that procurement spend and lead times and early works. So with that in mind, we have been working with Cutfield Freeman, a specialist mining finance advisory firm, who have helped us in terms of the construct of what could reasonably be modeled in terms of our internal generation as well as those various financial instruments that I've spoken to and coming up with an overall funding strategy. And I must highlight, we've just returned from a trip to Harare and Johannesburg last week, where we met 7 local banks in Zimbabwe and 2 South African and regional banks, and we were delighted with the response that we received from those banks, and we returned very excited about the whole funding strategy and the construct in terms of how we're going to pull this all together for Bilboes. So a very exciting platform in terms of how we go forward. So with that, I'll hand it across to Simba, who will talk us through some of the geology.

Thank you, Ross, and good afternoon, everyone. I'll take you through the technical aspects of the project, starting with geology. So geology of Zimbabwe is divided into 3 main areas, of which the Archean occupies most of the Zimbabwe Craton. This one holds the remnants of volcano-sedimentary also known as Greenstone Belts Belts. These Greenstone Belts, they cover approximately 60% of land surface of Zimbabwe, and they are renowned for their rich variety of mineralization, predominantly gold. If we can move to the next slide. In terms of regional scale, the project is located within the Bubi Greenstone Belt in the southern west part of Zimbabwe. The gold is defined by hydrothermal vein systems, which are concentrated along structural breaks. The gold is finally dispensed within sulphides and the sulphides are predominantly pyrite and arsenopyrite. And as Victor alluded earlier on, the ore is refractory. The depth of oxidation is very shallow from a depth of 6 meters to 50 meters below surface. That's where you get your sulphide occurrences. If we can move to the next slide. We conducted extensive drilling on the properties with a total of 93,400 meters from some 664 holes over a strike length of 7,400 meters. This was an average depth close to 300 meters. The drilling comprised of core drilling and recirculation drilling, and this was conducted over 3 phases from 1998 to 2018. The first phase of drilling of 17,650 was conducted by Anglo American Corporation in Zimbabwe during the period of 1994 to 1999. If we can move on to the next. This is a demonstration of the drilling that occurred at McCays mine with a total of 20,000 -- just under 21,000 meters from some 177 holes over a strike length of 1,400 meters to a depth of 345 meters. This was done over 3 phases. We can move to the next. Isabella North pit, 29,000 meters from 166 holes over a strike length of 1,300 meters to a depth of 320 meters. The next one. Isabella South pit, 22,000 meters from 156 holes over a strike length of 1,700 meters to a depth below 300 meters. And the next one, in Bubi, which is the last pit, 22,800 meters from 165 holes over 3,000 meters of strike length to a depth of 215 meters. Right. In terms of mining, I will take you through some few slides, which will show you the pit dimensions from a design perspective. This is the work that was done by our consultants. So the first slide you are looking at is McCays pit, which essentially shows you the pit positions relative to the waste dumps and the stockpile positions as well. So the McCays pit length is approximately 1,900 meters and has got a width of 345 meters, and it goes to a depth of 140 meters from surface. So this is the mining depth. Then the next one. Isabella North pit has got a length of 1,000 meters, a width of 360 meters and a depth of 240 meters. This is the best of the four pit. The next one. Isabella South pit, which will be mined concurrently with Isabella North pit, has got a pit length of 1,300 meters, a width of 330 meters and a depth of 155 meters. The next one. And then Bubi pit, which will be mined as Phase 2 in the last 4 years of production has got a pit length of 2,300 meters, a width of 325 meters and a depth of 210 meters. Right. In terms of the process flow, essentially, it involves a combination circuit, a BIOX circuit, a carbon in leach circuit, a neutralization circuit and the tailings storage facility. The key technology, as I said earlier on is BIOX technology. And given the fact that the ore is refractory in nature, it requires specialized mining process for gold recovery. After extensive metallurgical test track, we tested 3 or so processes, we settled for the BIOX as the most viable option for the treatment of the refractory ores. The benefits of BIOX, I can just quickly go through some of them. It's improved rates of gold recovery, reduced capital cost. We've also leveraged on a long track record of commercial operation and continuous process improvement. The technology is very robust and is suited for remote locations. Again, it's very simple. It requires very low skills and it's environmentally friendly. And the process has been commercially available for more than 30 years now and has been operated in 14 plants in 9 countries, as you can see on the screen there. And total production over the years has been more than 36 million ounces of gold. So essentially, the technology is proven. It offers high gold recovery at lower operational risk. The technology is also used by some big gold mining companies such as China Gold, Nordgold, Pan African Resources, which has been operating in South Africa for a while now and Endeavour, which has got the latest generation plant in Senegal. We actually had an opportunity to visit the plant sometime in May this year. If we can move on to the next slide. In terms of benchmarking, this slide will show you that the Bilboes plants for both phases, which is Phase 1 and 2, it shows where they place relative to other BIOX plants in terms of size. You can see they are well placed within the range of other BIOX plants. We can move on to the next one. This is a schematic process flow diagram. I'll just go through the various circuits that you can see there. The first one is on your right -- top left corner, it's your combination circuit, which involves crushing and milling. This is the first stage, which reduces the plant feed size to facilitate the liberation of the mineral particles for subsequent downstream concentration. Just below that, we've got the flotation circuit, which concentrates the sulphides and goes into small concentrate mass of about 5% of original mass for Phase 1 and 10% for Phase 2. This is in readiness for the material to be transferred into the biological oxidation circuit, which is the BIOX circuit below, which essentially destroys the sulphides in the concentrate, utilizing our bacteria to expose the gold for leaching. And then on your bottom right, that's the carbon in leach circuit. So acidic solution from the BIOX plant is then removed for recycling and the solids are neutralized for leaching in that circuit. So essentially, gold is loaded on to activated carbon and then recovered for smelting. And then the tailings from this process, they are taken to a tailings storage facility. Next slide. This is just a flow description. I've gone through that, so we can skip this one. In terms of infrastructure, I will hand over to Admire so that he can take us through the infrastructure.

Thank you, Simba, and good afternoon. Under infrastructure, I will cover the major facilities. Under mining and infrastructure will establish open pit mines at Isabella North and South, McCays and Bubi at a later stage. We'll establish gold processing plant, Tailings Storage Facility and Rock Waste dumps for mining and pits, and we will establish internal roads, network and public access roads, which links to the main roads that cover the area. On power supply, we will construct a new 132 kV overhead line that will span from Shangani to the mine site. We will also construct a new 50, 132 kV, 11 kV substation that will be established close to the facility. On water supply, water will be actually accessed through pit dewatering and from boreholes and also augmented from smaller dams that are close to the mine facility. Let's move on. This is a layout which will show the 3 mines, which is Bubi right at the top, we have both Isabella North and South and the McCays. That's the presentation on the infrastructure layout. Thank you. Back to Simba.

Thank you, Admire. So in terms of operating costs from a mining perspective, we can move to the next slide. Yes. So mining operating costs, they are generally flat around $20 to $30 per tonne of ore throughout the life of mine, except in 2034, you can see it peaks at $37 per tonne of ore. This is about [ something in phase], this is when Phase 1 ends and we will be going to Phase 2, which then requires us to increase the waste stripping, which then drives the cost to $37 per tonne of ore. If we can move on to the next. From a BIOX perspective, the operating costs are a function of the size of the plant, which is dependent on the ore characteristics. As you can see, Phase 1 is in line with -- within range of the other BIOX plants, whilst Phase 2 is slightly higher than Phase 1. It's $113 per tonne of ore. This is really due to the use of more reagents due to the sulphur grade at Bubi, which is much higher, and this requires extra reactors. And there's also the need of a limestone plant for neutralization due to the acidity of the ore. There's also increased power consumption for Phase 2 at Bubi due to the higher sulphur grade. But otherwise, the BIOX cost for Bilboes are expected to stay within industry norms. We can move on to the next one. From a process point of view, our major cost drivers are reagents, labor and power. As you can see in the bottom table there, the unit cost for Phase 1, $22 per tonne of ore, for Phase 2 increases to $38 per tonne of ore. This is, like I said earlier on, increased reagent use, which drives that cost, which is linked to ore characteristics. There is also greater power consumption due to the other ore at Bubi compared to Isabella and McCays for Phase 1. So essentially, that's what's driving that cost. If we can move on to the next slide, environmental and social. So the project is fully permitted with an environmental impact assessment certificate that was granted by the Environmental Management Agency. In environmental and social impact assessment that was conducted in 2020, this essentially guides the social and community commitments such as CRS (sic) [ CSR ]programs, fair labor and recruitment policy, local procurement policy and stakeholder engagement plans. The mine closure is aligned with international best practice and complies with local statutory requirements. So I'll hand over this to Mark now.

Yes. So this -- the numbers on this page are clearly based on the situation that prevailed on the 25th of November and don't reflect the proposed changes on the 27th. But if this project was to go ahead, it would reestablish Zimbabwe as a major gold investment destination. It's a big project and it's a world-class project. So if successful, it will put Zimbabwe back on the map again. And it would make a big difference to Zimbabwe in terms of foreign exchange earnings, about $3,600 gold, it would be about $5.5 billion in ForEx earnings. And it would deliver very substantial tax receipts to the Zimbabwean government, something like $1.3 billion of income tax withholding tax and royalty payments. over the life of the mine. So this project under the right circumstances is good for Caledonia shareholders and also would be extremely good for the -- for Zimbabwe. Clearly, these numbers may change depending on the outcome of the current proposals. I think we should move on. So key takeaways, big project, high grade, very -- under the right circumstances, a very robust project. And what we set out to the market on the 25th of November also had a very robust funding structure. And as Ross outlined to you, we've already made -- started to make some very good progress in terms of putting that funding structure together. Time lines, I think we did set out some time lines in the RNS. Clearly, they now need to be revised based on ongoing assessments of the current situation. So I think with that, we're finished, and we'll open it to questions.

[Operator Instructions]. And our first question comes from [ Mike Kozak ].

All right. So yes, look, I appreciate you guys hosting this. I had 2 questions. First one, just related to the feasibility study. I think -- I believe the base case whittle shell you guys used were run at a little over $2,000 an ounce gold price, but the location of all the long-term site infrastructure like waste rock dumps, processing plant, tailings was based on $3,000 an ounce pit shells, I think if I read that right. So my first question is how much additional ore is captured in that gold price delta? And which of the 4 mining areas like McCays, Isabella North South and Bubi would potentially see the greatest mine life extensions?

I think, I'll hand it over to Simba. But I think the reason we position the infrastructure based on higher gold prices to make sure that we don't inadvertently put infrastructure on top of material that could, in due course, be mineable. But I'll hand over to Simba, probably best if you deal with that.

Thank you, Mark. Yes. So yes, so like Mark said, the reason why we've done that is to essentially ensure that we don't place any infrastructure within our potential mining areas. In terms of potential for extensions, I would have to say both Isabella, McCays and Bubi have got significant upside potential in terms of additional mineral resources. For instance, at Isabella, McCays, we've got several other pits that have not yet actually been tested, but we've got confirmation that they are mineralized because we've mined oxides from there. It does the same situation with Bubi as well.

But I think it's also fair to note that we've got Motapa immediately next door. And I think it's quite likely that we will -- we would also get material coming from Motapa, which would be fed into the [ met ] plant probably after Isabella, McCays and then preference to Bubi, so that we don't incur that extra CapEx for dealing with the different ore characteristics at Bubi. So I think it's not just online -- it's not just exploration upside on the existing Bilboes property, it's also at Motapa as well.

Okay. That's helpful. And then my second question, and I appreciate that you might not be able to fully answer this one given with the royalty and the CapEx deduction rate changes if they do, in fact, go through. But my question was, I mean, how are you guys thinking about it internally? Like realistically, does this push back the Bilboes development time line by like 3 months, 6 months a year. How does...

It depends. I mean if we get rapid resolution to this matter, it very little is going to happen in Zimbabwe, South Africa generally between now and the end of the year. So we've got a whole month. If we get this matter dealt squared away within a month, it doesn't change anything as far as I can see. If the outcome is something that doesn't work for us, well, we'll have to reconsider and that will take as long as it takes. So it will be impossible to give guidance on that, Mike, I'm afraid.

Our next question comes from Nic Dinham.

Just a couple of questions. Clearly, you're working with real numbers here as you should. But if we compare the first feasibility study that was done and compare it to the latest, we've had a capital escalation rate of something in the order of 13% per annum. So since you're going to be working with escalated money soon, are you happy to continue that in my model? Is 13% a realistic number for what capital is doing year-on-year?

Victor, Simba, do you want to handle that.

Yes. Thank you, Nic. At the end of the day, the capital intensity of projects between pre-COVID and post-COVID, the capital intensity of projects changed quite significantly. But we've seen a stabilization in that as far as we are concerned in the last 2 or so years. So we are confident about these figures, which we worked on with DRA, which is a very reputable engineering company. They've done several projects elsewhere. So this project has been benchmarked as far as costs are concerned.

Okay. So the escalation from just your last year's PEA to this year is fairly significant. I mean if you have a look at that, that's almost like 20% plus 25%. So there's a big jump in those numbers. Okay. So I take the point you won't know, but clearly, capital escalation is an issue that you have to address. From the...

We have addressed it. At the end of the day, when you look at it, we have addressed it. We've looked at it and what we have come up with is what is realistic from a CapEx point of view. As I said, we have benchmarked it. And also, if you look at PEA in terms of accurate level compared to actual feasibility study, the difference is coming to play as well because now you're doing more detailed designs and everything. So you will get some changes.

Okay. On the operating cost side, strange enough or not strangely, it's great to see that your escalation rate is much lower, something in the order of 3% or 4% per annum. Are we happy? Are you happy that those numbers keep escalating out in that way?

Absolutely happy. Otherwise, we wouldn't have put them in the feasibility study.

No, no, no. I don't -- Victor, I don't think you understand what I'm saying here. You have to escalate these numbers into nominal numbers terms as you go ahead, right? So you'll be dealing with real escalated numbers in a year or 2, not just real numbers that you're looking at the model right now. That's why I'm talking about this. The next question, this may be for Ross. These numbers don't have VAT added to them. What are you going to do about that since it's difficult to get VAT back from the government? And I'm assuming you are paying for VAT in the equation here somewhere.

Yes. So there is that through the system. I'm not sure how much I can talk around the restructuring in terms of how best we're dealing with that in terms of our corporate side. But in terms of the refunds and being able to offset the VAT component, we're comfortable in terms of the numbers and the modeling that have come through.

So I would actually say, Nic, actually, the system for getting that VAT refunds has actually improved quite substantially over the course of recent months.

Okay. Awesome. So you won't have to wait for -- to offset it against other tax payable apparently as you have done?

We can offset it.

We can.

But this does move into a taxpaying situation very quickly.

Okay. And finally, I think this is more of a technical question. There's power. Obviously, you're talking about putting a line directly from Shangani. Yet we read that the system is still under stress. And just how easy is it to get power when you want it, how you want it out of a substation in Shanggani?

Okay. Well, I think the first point I'd make is there's no shortage of power generally in the sub-Saharan region provided you're paying in U.S. dollars, okay? So I'd make that point. I think Admire is probably the best person to address the detail of that question. Admire, could you help us?

Thank you. Thanks, Nick. There was a study that was done by ZETDC in looking at the capacity of abstracting power from the Shangani substation. And they found out that they do have adequate power that we can abstract from the substation in linkage to the grid that we have through [ Sherwood ] substation, which is more like the central distributor of power in Zimbabwe. So there is adequate power that gets to substation and there's adequate capacity.

Nic, it's fair to say that Bilboes location is actually much more conducive to a reliable power supply than certainly Blanket. So we're comfortable about that. As I said, there is power that you can import and we do -- we can and do import power to the intensive energy user group.

The next question comes from Howard Flinker.

What did you pay for your puts?

Pay for what?

The puts ongoing...

The Put Options.

Howard, okay.

Howard, it was a total package of $13.5 million for the total puts over the 3 years. So on an ounce basis across those 3 years, it averaged at $125 an ounce. But obviously, the third year was a lot more expensive. The earlier years were cheaper. But it's basically $125 per ounce. And then -- we got -- and we had deferred terms. So we paid some cash for 2025 and then some of it was deferred for 6 months and another lot were deferred for 12 months. But all in was $13 million.

Second question, is your CapEx at Bilboes going to be $583 million or roughly $350 million? I misunderstood.

CapEx of Bilboes, well, the peak CapEx is what -- sorry, Ross, go ahead, you've got close to numbers.

I think Victor, on your CapEx slide, maybe explain the phased approach in terms of both sides of it. So...

Yes. Our total CapEx is $583 million, but it's over many years. The first phase, which is where we need to get to 200,000 ounces for us to treat Isabella, McCays ore, we will need $492 million in that phase.

So $492 million upfront, at first?

Yes, correct.

Okay. And my final question is something that every company is going to be asked. How much -- how much gold do you have in your heat dumps? Many companies are going to be extracting that now. Do you have any idea how much you have in your waste?

Well, the Blanket or the waste to Blanket?

Yes.

Virtually, the deposition rate of Blanket is something like 0.2 grams a tonne. It's not -- we wouldn't be able to reprocess that. We did do although some of the older sections of the old tailings dump. I'm not sure what the outcome of that was. I'm sure if the outcome had been that it was commercially extractable, would have told you about it. So I guess the answer is that we've looked. And certainly, the new deposition at Blanket is absolutely not capable of being reprocessed. And it looks like the old stuff isn't commercially viable either.

So for you, very smaller next to none?

Yes.

The next question comes from Ian Joslin.

Okay. Right. Yes, I think the questions asked have been very pertinent, so I don't really want to repeat them. But I thought it might be worth just mentioning what's going on in a couple of other investments I have that do touch on what you're doing and partly because I'd just like to use them for benchmarking purposes. So the first one is the more straightforward, which is you're probably aware that Tharisa are also doing a very large project in [ Great Dyke ]. They presented their final results this morning. And I asked the question about the sovereign -- the changes in the rules, tax and royalties in Zimbabwe. And they applied that they're hoping to come up with a bespoke agreement before they finish. I'm sure you're aware of all the various things that they're doing, but they clearly think that they won't be -- they think they won't be subject to the rules as stated at the moment. So I don't know whether it's worth if you're already reaching out talking to other mining companies that are being caught by this, but it might be worth...

On Tharisa -- I have Tharisa's PGM play and the changes in royalty clearly affect gold.

8% is gold of theirs is what they expect.

Yes, but it's a relatively small proportion of -- it affects them marginally. It's not as though our entire product is gold. Clearly, the impact of the tax deductions of relating to capital expenditure, that does need a conversation.

Yes. I just thought that they clearly have -- they are concerned about it. They were very concerned about it. I could tell from their body language. So I would just suggest if you have a chat with them and see whether there's anything at all that you can glean. The second point I want to make is with metals exploration. I see that you've used them as a reference point for BIOX. They [indiscernible]. They're also setting up a plant in India and Nicaragua. And I appreciate they're going to process oxides and their planned output will be 140 versus 200 for you. And they did buy their kit secondhand. But their total spend, the total budget is $122 million. So I'm trying to understand where the gap is between that and obviously, your planned peak of $583 million. It can't all be BIOX surely.

Yes. Thanks, Ian. One of the major costs in this project in terms of CapEx is actually our Tailings Facility because the terrain on which we're building the tailings storage facility is very flat. So that comes with the additional costs. We have looked at alternative sites, and it's something which we've always put on the table that we're going. So the additional costs in this project, that's where the additional cost is at the end of the day.

And as Victor says, we do continue to look at other deposition sites, particularly on the Motapa property, which could be more cheaper because you can lean it up against the hill. That would be ongoing work.

Okay. That's interesting to know. Who knew that TSS were that expensive.

No, absolutely. I mean they're horrendously expensive given the fact that you need double lining. I think the other issue that we face as well is that there's no play available in reasonably close proximity. So it gets even more expensive to source the double lining material.

Okay. One final side, and it probably isn't relevant, but the Rambutan plant is coming to an end next year. They hope to replace it with new deposits, but they'd be oxide. So there's the odd BIOX plant knocking around at the end of next year and going into 2027. So should you wish to reconfigure it, you might want to think about that.

Yes. But as you'd appreciate, we can't -- I mean, that's right. In real term, in real life, we could do that. But for the purposes of a feasibility study, you can't make an assumption about buying cheaper stuff secondhand, which may or may not be available. So I hear what you say entirely, but you'll also understand why for the purposes of the feasibility study, you've got to work on the basis you're buying something as a new.

Understood. No, it's just...

We are aware of that.

Ian, just to add to what Mark said or what you were asking about engagements, we are a member of the Chamber of Mines of Zimbabwe and there's active consultation within gold mining companies to actually try to engage government on this matter. So yes, we are in liaison with other companies.

Yes, I'm sure that you would -- yes, it would be the most sensible thing with unity of strength and all that. I think the rest of the other questions have been asked already. So that's it.

And we've got a follow-up question from Nic Dinham.

Okay. This should be a fairly easy one. I try to get through that budget speech, and there was a something about accelerated wear and tear allowances for projects or factories that work 24/7 type of -- that increase the number of hours they work, continuous operations. It seemed to me that you would fit in there. Did you see any benefit in there for you? Or is it...

There are so many moving parts and so many areas of inconsistency and uncertainty that needs to be addressed. So we can't get into that level of detail on this discussion.

There are no further hands up. So I'll hand over to Mark.

Okay. Well, look, thank you for attending on this call. This isn't the presentation that we'd hope to make, but we thought we should do it in any event. Let's see where this takes us, and we'll be sure to update you as we move forward. So thank you very much for your attendance.