Gem Diamonds Limited (GEMD) Earnings Call Transcript & Summary

All right. Good morning, everybody, and welcome to Gem Diamonds half year results. The presentations will be made by me, Clifford Elphick, the CEO; Brandon, Chief Operating Officer; and Michael, the CFO. I'm going to refer to the page numbers. It will be easier for you to follow. So Page 2 is the disclaimer, if you wouldn't mind scanning that at your leisure. If you turn over to Page 3. This is a summary of 2021. And on the top left-hand side, the revenues of $104.5 million. We think that's a satisfactory performance. Diamond prices have been rising, and our goods are in high demand. So happy with that. And that flows through to the EBITDA. There's been big efforts at cost control. Obviously, a difficult time with COVID ongoing and various different levels of lockdown in Southern Africa. But nevertheless, we are pleased with that. The average dollar per carat of 1,886 million too is pleasing. We obviously want that to be trending higher, but the trend has been good in the recent past. We've got a net cash of $20 million. Business transformation, something we've talked about a lot with $95.5 million delivered through those initiatives. Our target was $100 million, and we're pretty confident that we're going to get there by the end of the year. And then which was our target and won't be talking about this particular initiative in the future. All injury frequency rate at 1.29. That's higher than what we would like it. It's been a reversal of what has been 4 or 5 years of excellent trends. This number when compared to other mining companies is good, but it's not as good as we would like it to be. Bottom left-hand side, the EPS, that obviously flows from the EBITDA, and Michael will talk about that in detail. 58,000 carats recovered, 59,000 carats, that's tracking what our plan was and that is pleasing too. And then $30 million cash generated by our operating activities. If you go to Slide #4. The diamond market, we've split this up as we usually do into the global backdrop, the diamond market itself and then specifically where we operate in that market. There's been various economic indicators, a suggestion that the economy is going to expand in 2021 by nearly 6%, which is obviously a very large number. Coming off the back of the COVID problems, hopefully that, in fact, is the case. There are some risks to that, slower vaccine rollouts than had been anticipated, particularly in the emerging markets. Certainly, Europe, after a very slow start has accelerated away recently. U.S. seems to have reached a point where a lot of the population is vaccinated. And in China too, which are our main markets, we think that's all in reasonable shape. Further COVID-19 waves may emerge. But it appears that the vaccination programs around the world are having the required effect and that hospitalizations and deaths are minimized as a result. So I think as far as the global economic backdrop and particularly the markets which are applicable to diamonds, I think that's in reasonable shape. Specifically talking about the diamond market, the holiday retail season at the end of 2020 into 2021 was strong. You would have seen that from De Beers' announcements, ALROSA and other companies too. And of course, that flows through to get stock out of the shop window, and that needs to be replenished with rough. And so that's been very good for us. There's been a good demand and rough and polished prices increased in the first half. And again, it seems as if that demand is pretty strong. And China and India continue to show good strong growth trends. So underpinning the diamond market in particular. Our position as the highest dollar per carat kimberlite diamond producer. Has been strengthened to an extent. Lucara have chosen to sell their high-value diamonds, which, whilst not in the same dollar per carat range as ours, nevertheless, compete for similar customers, they've chosen to sell those diamonds through a single source. And as a result of that, there's been greater competition for our goods, and I assume that, that has resulted in stronger prices for us. But overall, there have been strong demand for our goods in any event. We are trying a new method of tendering our goods. As you know, we have sent our goods in the past to Tel Aviv for reviewing and final viewings in Antwerp. And then we closed the tender there. The reality is that the more we show our goods, the higher the number of bids, the higher the number of bids, the greater the competition. And generally, this results in better prices. And so we are going to, in September, be taking our goods to Dubai. With the ability for Israelis, Israeli customers and Indian customers to get to Dubai easily, Emirates have flexed those prices -- those flights in such a way that it's really efficient. We're testing out Dubai as a viewing center, and we will let you know in due course, if this has had the desired effect. It's quite easy to track, of course, when we get the final tenders because we can see the source of all of that. That did well when we went to Tel Aviv and we're expanding this now as we can. Right. I'm going to hand over to Brandon to talk to you about what we've done in respect of COVID.

Thank you, Clifford, and good morning. It goes without saying but always worth reiterating that our highest priority remains the safety of our workforce. And obviously, this includes the protecting of our people in the COVID-19 environment to safely and responsibly continue operations. We have continued our strict adherence to all our implemented COVID-19 protocols, and this has allowed us to continue operations successfully in H1. It's interesting that we have conducted to date about 28,600 tests, and that includes our PCR testing and our rapid testing of workforce coming on an off-site before they board buses to go to site. And that has worked well for identification, isolation and at times, evacuation to keep the site as safe as possible from any spread of COVID. As soon as we were able to secure vaccines, we managed to donate 20,000 vaccines to the government of Lesotho, and this took place on the second of June 2021. We've had a successful vaccine rollout, which started in mid-August, and to date, 885 of our workforce have been vaccinated, and that's approximately 62%. Pleased to say that we have got 2 further days scheduled in September, being September the 10th and 12th, where the vaccinations will again take place on-site and hopefully be able to vaccinate the rest of our workforce. To date, we spent approximately LSL15,000 On average per employee, and that's really related to COVID prevention related costs. And it's -- and our donation overall, including communities has been approximately LSL 27.6 million. If I turn over to Slide 7. Again, zero harm remains a priority for us. During the period, we had no fatalities but unfortunately had 4 LTIs and this talks to Clifford's view, which you have raised earlier in terms of our increase that we saw in our all injury frequency rate and our lost time injury frequency rate compared to last year. Following these 4 LTIs, we initiated a shut for safety campaign, which took place at the beginning of June. And this was ready to address the entire workforce and reinforce the -- and reaffirm the importance of safety and that it remains our #1 priority. The entire workforce was addressed over a period of 20 hours, pleased to announce that we had no major or significant environmental incidents and no major or significant community incidents. If I turn the page to sustainability. Slide 8. Following from what we reported our annual results, we continue to focus on our sustainability. And in particular, I want highlight 3 of the initiatives that are currently been worked on. Firstly, focused tailings and fresh water storage facilities management. We've adopted the global industry standard on tailings management, which came into effect last year August 2020. And we've put in the structures throughout the company and the group. One of them is the appointment of an independent tailings review board and that's comprising of 2 world-renowned experts who completed their first review, which culminated in a favorable report on our tailings facilities, and that was completed in June 2021. We, in the meantime, continue our stringent structural safety inspections and audits and these occurred regular intervals, daily, weekly, monthly and annual performance reviews also on our tailings facilities. In addition, it's a priority for us to support the UN SDGs and the integration of the 6 UN SDGs that we have adopted continues and these goals are now aligned to our business strategy. As previously reported, we have also adopted the recommendations of the task force on climate-related financial disclosures. And we've implemented formal governance structures at both Board and management levels. Also, we've done a series of climate change studies, and these have been commissioned. And the aim of this is to provide operation-specific data, and this will really align us to mitigation and adoption strategies An example of this is the climate change scenario analysis, which we have completed. And this study is aiming to provide us the group with insight into risk and opportunities that we need to consider going forward. Also, we are commissioning a series of studies to inform our decarbonization strategy, and this really is focused on energy efficiency and fossil fuel. And we've initially focused on an efficiency work to reduce our Scope 1 emissions and thereafter, we'll turn our attention to renewable solutions for long term. In terms of this, our fossil fuel really in terms of our -- related to our CO2 emissions emanate from our mobile and stationary combustion equipment, which is really our yellow metal and generator use on site, and we'll be targeting those to reduce the CO emissions going forward. If I can turn to Slide 10, our operational review. As mentioned earlier, H1, we faced a number of challenges. The COVID-19 impact on our workforce, availability of spares, skills and services has continued in H1. But as I mentioned, the protocols that we implemented mitigated the impact of that. We had higher rainfall season in Q1 and extremely cold conditions for the winter in Lesotho, in particular, from May. And we also faced the unrest and looting in South Africa and the possible impact of that on our supply chain management to the site. That all said, we've had a relatively successful H1 and our operational metrics remain on track. From a plant perspective, we reported previously. We've now implemented a dynamic simulation model, and this has assisted in our plant stabilization and treatment capabilities on site. In terms of the metrics, as you'll see in the graphs, our waste tonnes mined was at about 10.2 million tonnes. Recovering, as Clifford mentioned, approximately 59,000 carats through an ore treatment of about 3.1 million tonnes as at half year. Again, always an interesting slide, our large diamond recovery. You'll see the full year average from 2008 to 2020 versus our H1 averages for 2020 last year and H1 for this year. We believe, we're pretty much on track in all the categories. We'd obviously like to have seen one or 2 more plus 100 carats and hopefully, those will show up in H2. If I can flip over to Slide 12. Our business transformation. I won't spend a lot of time here. As Clifford mentioned, we have, to date, achieved a benefit -- cumulative benefit of $95.4 million and remain on track to deliver our targeted $100 million by the end of 2021. All of the initiatives that we have implemented, we believe are embedded, and we'll continue to deliver value to the end of the year and beyond. If I can hand over back to Clifford for the sales and marketing.

Yes. This slide sets out some of the highlights in the first half. I've spoken about the dollar per carat. Pleasing to see a pink diamond, small diamond, but sold for $120,000 of carats, high price. The white diamonds seem to be trending -- our top white diamonds, top quality seem to be trending back to the $40,000 per carat. And it's good to see customers willing to pay various sorts of prices again. We've got the rest of the data there, how many diamonds sold for more than $1 million, those that sold for more than $20,000 a carat. As usual, we reiterate that large diamonds are our business. And as you see they, contribute 3/4 of our revenue. I've spoken about Dubai and the high number of people attending our tenders and the strong bids that we are receiving. If you turn over the page, we always like to put some photographs of significant diamonds during the period. I think the top right-hand corner reiterates the point I was making, 254 carat. It was a very high-quality diamond good shape for manufacturing high yield and the result was a $40,000 price. This is up from the low -- the high $28,000, $29,000 at what we think was the low in the large diamond market. And so we're trending back up again. The highest prices, if I recall correctly, that we achieved was $60,000. So there is space still to move up. We're probably halfway between the high and the low, and we are seeing that trend. And again, a few other diamonds there, which achieved good prices. Mike, over to you for the financials, please.

Thank you, Clifford, and morning all. I'm on Slide 16, and we've done something slightly different this year. We've included H1 2019 2 years ago's performance. And the reason for that is we're all aware of H1 2020, where the operation at Letseng was shut down, and we had the forced lockdown. And as a result of that, the results there maybe aren't as comparable as what we wanted to understand in terms of this year. H1 '21 '19 was obviously a normal operating year and is relevant to compare how we've performed this year. So you can see we've generated revenue of $104 million, and that's from the sale of 55,000 carats at the price already mentioned of $1,886 per carat. So it is up 50% on prior year. But I think in comparing to 2019, that's a revenue of $91 million, up 14%, and that was based on 55,700 carats at $1,697 a carat. Royalties slightly different in this year, H '21 compared to 2019 is that royalties change, the rate increased to 10%, but that is based on the revenue generated. So that's in line with our expectations. On cost of sales, $53.6 million, and that's up from last year, and that's obviously because we've had normal and expected operating activities during this period. The local currency costs are within our expected targets. However, we have been impacted by foreign exchange. We've had a stronger-than-expected exchange rate during the course of this period, the rand or loti has traded at 14.54 as an average compared to 16.66 in the previous year, 2020. But was very similar to 2019 at 14.20. And you can see costs there are similar at $52.5 million. We've had continued focus on corporate expenses. Again, this has been impacted by foreign exchange. Our costs are based in rand and in pounds, and therefore, we have had an impact on the dollar side of it because both currencies have traded stronger against the dollar compared to the previous year, but it's still down from the previous year 2020 -- 2019 apologies by $300,000. All of that culminates in our EBITDA of $34.7 million. which is 3x last year, but for point of reference, 37% up compared to 2019. You'll see on our depreciation. We've had a lower depreciation this year of $4.2 million compared to the previous years. The reason for that is based on the new lease that was signed. We've reassessed all our useful lives to take into account of this extended lease period. And as a result, we're depreciating our assets over a longer period. Profit before tax at $28 million, and that's before tax of $10 million. Tax is based, the effective rate here, you'll see is 35%, but that is based on local tax rate in Lesotho of 25% and then we have a withholding tax on dividends declared out of Lesotho. Following all the taxes, we've ended up with profit after tax of $18.3 million, that's from continuing operations. And taking the minority interest into account, that's the government of Lesotho portion on Letseng's profits. $10.6 million is allocated there. We've had a loss from continued operations in Ghaghoo of $1.3 million. Again, we've had continued focus on the care and maintenance side of the cost there. It has reduced significantly from the previous year, and we'll obviously talk later about the sale that's taken place. Earnings per share of $0.076 per share is based on $140 million shares currently in issue, and that's based on the attributable profit before continued operations. If I can then move to Slide 17, the cost analysis. You'll see that on the production side, 3.1 million tonnes treated during the period, very similar to 2019, but obviously significantly higher than 2020, which has impacted unit costs. Our direct cash costs of LSL 172 a tonne includes all mining, processing and all support service costs. And that is in line with our expectations. As mentioned earlier, our local currency costs are being maintained, although there is some impact on exchange rate on some of those dollar-based costs. but it's a 7.4% increase over 2019 over a 2-year period. So that's pleasing to see that we maintain those costs. The plant 3 operator costs, as you may be aware, that's based on revenue. That's the Alluvial venture operator. Our costs are based on the revenue generated from the diamonds that they recover. And as a result, the costs there are very similar to the prior years. They've had very similar revenue stream so there a significant impact there. Our direct cash cost of LSL184 -- LSL185 is slightly below our target or our guidance for the end of the year. we believe that there will be some additional costs coming through at the end of the year. So our guided numbers are still intact coming through for that. Non-accounting charges, this is always something that varies significantly. It depends and is contributed by 2 main significant areas. The one is amortization charge, and that's driven by our mining mix. As you're aware, the Satellite pipe has a higher amortization rate due to its higher strip ratio and that would impact the costs. But there's also movements in inventory. We ended the year with smaller inventory costs in the previous year. And as a result of that, the impact of inventory has also had an impact on our overall costs. Again, LSL249 per tonne is within our guided numbers or below our guided numbers at this stage, but that depends on our mining mix plan for H2, where we expect to be back in line within those numbers. Exchange rate I've mentioned, you can see the 1,454 average versus 1,666 last year, but comparable to 2019. Taking exchange rate into account, our operating cost per tonne treated has increased to $17.15 compared to 2019. But again, as mentioned, this is based and impacted by the exchange rate. Waste tonnes, for the year, we've mined 10.2 million tonnes as Brandon mentioned, it's 30% down in 2019. And that has had an impact on our cost this year of LSL44 a tonne. The LSL44 is slightly higher than our expectations that has been impacted by explosive costs. There have been some dollar-based costs carried over from the exchange rate in prior year. which has still flowed through into this year. And as a result, we're seeing a higher cost come through. We've also had slightly longer haul distances to some redesigned waste dump areas, and as a result, the longer haul distances have contributed to the increased cost. Percent exchange rates mentioned earlier, our dollar per tonne cost for waste move now is $3.06. If I -- if we can move to Slide 18 on the financial position. A couple of points just to highlight here. You'll see on the current assets, the increase in our current assets and increased contribution to working capital, our inventory has increased or current assets have increased from $32 million to $37 million and that's driven mainly by a $4 million increase in time and inventory through the increase of some carats from 14-odd thousand to 17-odd thousand a period at both period end. Cash, I'll talk to on the next slide. I would just like to go down to the liabilities. The noncurrent liabilities of $15.5 million. That represents our environmental provisions accounted for in accordance with IFRS. On the current liabilities, you'll see there's been a big reduction again of current liabilities from $28.8 million and that's in December 2020 down to $22 million. And that's driven by a reduction in our payables at the end of last year, at the end of December 2020, we had some deferred costs going payable in this year, and that was mainly driven by our cost initiatives to reduce costs during the COVID issues we had. And so that flowed through into this period. And we also had a royalty payment, which was only due in January of this year. but showed and reflected as a liability last year. Income tax payable of $11.9 million that's on the December '20 balance that was paid in quarter 1 this year. On Slide 19, on the cash management. As mentioned previously, we've got $33.9 million cash on hand at the end of the period, a net cash position of $19.6 million, that's taking -- after taking into account some $14 million worth of debt. We have repaid $2 million of our workshop facility during the period. So that balance at the end of the period is roughly $3 million still owing and ending September 2022. We have 3 available facilities totaling $61 million available to us at the end of the period. As mentioned previously, at the full year results in March, we have embarked on a process to refinance all our facilities into a larger debt facility. We are looking at least renewing our $500 million Lesotho RCF in-country facility and then the Gem Diamonds Group a $30 million facility, and that should be concluded in Q4 2021. If I just take everyone through the waterfall, you'll see that we did start the year on $50 million worth of cash. Letseng generated $64 million worth of free cash before waste. Taking into account the 10.2 million tonnes of waste that I mentioned previously that equates to $36 million invested in waste. Tax paid of $16 million comprised of the $12 million that was owed at the end of last year for the 2020 year performance. However, in terms of the provisional tax basis in Lesotho, once you've been assessed on a previous year, you obliged to pay that similar quantum during the current year. And so in June, September and December this year, we'll have effectively paid another $12-odd million. And therefore, in June, we paid $4 million totaling the $16 million that's reflected here. We had a big investment into working capital. As mentioned earlier, we've had an increase in our inventory, some $4-odd million. And then we've had a $6 million to 7 million reduction in our creditors, as resulted in a net outflow of cash in terms of our working capital adjustment. Dividends paid, we proposed a dividend at the full year results of $0.25 a payable in June that was approved at the AGM held on the 2nd of June. And as a result, a payment of $3.5 million was paid during June for our GDL shareholders. The additional $2.5 million relates to the portion payable to the government of Lesotho for their portion on dividends distributed out of Letseng. Corporate costs, we've spoken about at $5 million and taking the rest of the cost -- cash flows into account, we've ended the year with $34 million. That concludes the finance section. So I'd like to hand over to Brandon to talk to the sale of Ghaghoo.

Thanks, Mike. The sale of Ghaghoo has been quite a long process and following an extensive due diligence, we with AIM-listed and Botswana-listed Botswana Diamonds and vast resources. This all culminated in signing a share sale agreement on the 23rd of August, and you may have seen that in our announcement last week. The transaction is subject to final Government and Competition Commission approvals in Botswana, but we are aiming and hopefully have this completed in Q4 2021. Just high level, the purchase price, as announced previously, is $4 million and is payable in 2 installments being one after the completion of the last suspensive condition and approvals and the second payment should be made on or before the 23rd of December 2021. And then finally, if I can turn over to the last slide. I'm very pleased to let everyone know that we've launched our new website, and that is live, and I really encourage everybody to gain access, have a look, enjoy the new look, and there's a lot of new information on there as well. And that concludes from my side as well, if I can hand back over to Clifford.

All right. Well, thank you, everybody. We're happy to take questions. Questions can be submitted on online, and then we will respond to those as they come up on our computer here or they can be submitted to the people who are running the presentation. William Wilhelm Herzog question, does the injury rate in the past 6 months any relation to the ongoing steepening of the pit walls? No, the injuries have had nothing to do with the steepening of the pit walls. It's a variety of matters which have occurred outside of the pit. There have been motor accidents. There have been silly equipment dropped, people stepped over an unguarded area in the workshops. So I'm happy to say it has had absolutely nothing to do with the steeper pit walls and glad that you ask that question will help. Right. Any other questions, please send them through on the e-mail. Ben, right? Second half costs for Ghaghoo be similar to the first half or are there additional relating -- any additions relating to the transaction? And do you want to answer that, Brandon?

Yes, sure. Ben here, the cost should be very similar H2. Obviously, if we close it out earlier in Q4 to be lower in H2 than H1. But there's no significant additional costs relating to the transaction. So that will be in line with H1 in terms of our care and maintenance costs.

Right. And then on the inflation side, Mike, do you want to answer that? Is it, how much is structural and how much is cyclical or related to the supply chain disruption? And then we'll get on to the third part of the question.

Thanks, Clifford. Ben, some of the costs which, which is a challenge for us of dollar-based costs that are coming through. So items like explosive, tires and those have an impact. I think sometimes we see when an exchange rate weakens, the cost gets passed on. But when it strengthens, we don't get the benefit that quickly. So that cycle is a bit of a challenge for us and continually reviewing. One of our big cost drivers, obviously, is mining with our mining contractor. That cost -- That contract is subject to a quarterly review on costs, which takes into account updated interest updated exchange rates. We refer to it as Horizon 4 position. So that gets reviewed. It does go up and down. The issue around supply chain disruption, we never saw a significant impact on it on costs. Say for the fact that fuel was a challenge. We opened up an old depot to increase our fuel capacity on the mine in case. We had looked at our alternative supply of fuel just to get that and keep the operation going. So that, in effect, was a very shorter-term cyclical adjustment to our costs that came through. But I think the exchange rate for us is the biggest impact on having a structural cost impact.

The other thing, Ben, in respect of the supply chain disruption, there was quite an impact on the ability to get skilled workers in and out of the mine over that period. That feeder highway, which had been shut down. And so we have to make alternative arrangements and coupled with COVID, we certainly had a period of time when we didn't have as many of the best people on site as we would have liked. And so we had to manage that from a distance. I think the last question, how best to think about targeted liquidity, any metric or absolute level?

Yes. Ben, I'm assuming you're referring to just the significant swing in our working capital that took place between last year and this half year. I think last year's balance sheet was probably not normal in terms of the positions we're at, where we normally expect to be. This current balance sheet as it stands is probably more representative. We do have swings of $3 million or $4 million either way just depending on timing of -- in particular, sales and inventory levels, but I would have thought that the big liquidity change that took place on our working capital in H1 isn't a continual position. I trust that answers that question.

All right. Any questions coming through? Any other questions to be posed to us on the emails, please. Right from Berenberg. Do you see scope to beat full year cost guidance? What is the outlook for working capital flows in H2? And how confident are you that you will receive the required approvals to sale Ghaghoo? Let me answer the last one, Mike, and then over to you. So the approvals which are required are in the first instance the Botswana Competitions Commission. I don't see, and we are advised by our legal team that there are no competition issues here. Certainly, I mean, I think that would be a logical outcome. And the sequence of events is that the mining department will not approve a sale until it has cleared the Competitions Commission. We anticipate that's going to take 4 to 6, 8 weeks, probably and then followed by the approval from the mining department. They have a good view of the purchaser who is operating in Lesotho successfully -- in Botswana successfully. And therefore, we don't foresee any issue here, and we hope that this will close by -- before the end of the year, right, Mike, over to you.

Oliver, the cost guidance -- and maybe I can just split that up into a couple of sections. Operating cash costs and operating income statement costs, we're trending below guidance. We believe that we will probably have additional costs coming through and be within that guidance by the end of the year. So albeit that we are pushing hard to hopefully come under the guidance. Those metrics probably will end up at the low end of guidance. The one where we are challenged at the moment, you'll see is our waste cash cost that's trended higher. As explained, there were some additional hole distances that we incurred during the period that we hadn't planned for. We are looking at ways of reducing that and seeing that we can come back into the guidance position. There is a review taking place, and that will be dependent on the waste mining mix for H2. But we're hoping that we can pull that back but that will probably sit at the higher end if we are able to do so. And then I think there was a question on working capital. Oliver, I think I touched on that when I responded to Ben's question previously. So I assume that is covered there.

Right. Question from Hugh. Has -- how has COVID affected the end user of the retail market? Have people been buying online? I'm not as informed on this as I would like to be to give you an intelligent answer, I'm afraid. What we have seen that the U.S. and particularly the Chinese market has really come out extremely strongly and that the retailers have reported excellent numbers I don't have the breakdown as to whether or not that has been online. But in our particular case, our diamonds in the -- once they are polished they just don't -- none of them sell online. They are such high-value diamonds that people want to see them touch them, feel them, wear them before purchasing. So we are not in the online business, us, particularly. But I would think that -- and I'm assuming this I'm afraid I don't have the answer. I'm assuming that at the bottom end, there probably has been much more online buying, but I'm afraid I can't answer this intelligently. Wilhelm, more color around Johnny stepping off the Board. Yes. Look, this was an unfortunate situation. Frankly, Johnny is a highly sort of member of our brands trust with huge experience not just in diamonds, but in mining generally and many -- and experience on many mines. What happened here is the balance between the independents and the non-independent directors on our Board. And given the fact that Johnny was an insider and actually deputy CEO, he was classified by the voting agencies as a non-independent person, we had a choice. We either increase our Board size to a level where that wouldn't matter by pointing an additional number of completely independent directors. But of course, what we're trying to do is manage our central costs as well. The result of that meant that the only logical solution for us was to ask Johnny, which he accepted if he would step down from the Board, but would take on a consulting role so that we would, therefore, benefit from his expertise and knowledge, but that we wouldn't fulfill of the numbers on the Board, so we didn't have to upsize our Board. I think it's one of those sort of silly outcomes of governance rules. And certainly -- I don't think it could have been intended that a resource of that nature and experience and expertise should be lost from a smallish company like ourselves. So I'm afraid it was just one of those things. But irritating for all of us, but we -- it doesn't help to have the voting agencies sending out messages to the institutional shareholders saying that we're not up to speed when it comes to the governance requirements on the company. Right. Well, I think that's...

And are there any further questions from Chorus Call? We have no questions from the conference.

Right. Well, thank you, everybody. Thanks for your attendance. As always, if you have any other questions, please don't hesitate to either call Mike, Brandon or myself or send them through by e-mail, and we will respond in short order. But thank you, everybody, for attending.