Gem Diamonds Limited (GEMD) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to the Gem Diamonds Half Year Results Presentation. All participants are in a listen-only mode and there will be an opportunity to ask questions later during the conference. [Operator Instructions] Please also note that this event is being recorded. I would now like to turn the conference over to the CEO, Mr. Clifford Elphick. Please go ahead, sir.

Thank you, Chris. Good morning, everybody, and welcome to the Gem 2022 Half Year Results. We'll be stepping through the presentations, which you have on your screens. If you turn to Page 3. This is a summary of half 1 figures there. As you'll see, we achieved revenue of $100 million and an EBITDA of $21 million. 55,000 carats recovered. If you look at the other data presented, our all injury frequency rate of 0.82 slightly higher than last 6 months, but nevertheless, in a good position. Net cash, $12 million, a little bit less than we planned, but we'll speak about increasing costs, which occurred as a result of the Ukrainian-Russian war. Our dollar per carat achieved just short of $1,800. We paid a dividend and we did a share buyback. So that's a brief snapshot of the year so far, the first 6 months. If we turn over the page, please, to Page 4. This is a snapshot. We think that economic growth is -- certainly all commentators expecting this to decrease. And of course, there has been a massive impact of the unexpected invasion of the Ukraine. Commodity prices spiked. I mean they are on the way back down. We've seen that in iron ore. We've seen it in oil. We've seen it in a number of prices. But for the first half of the year, we've borne the brunt of all of that. Energy inflation, interest rates and supply chains obviously disrupted. And as far as we are concerned, obviously, that comes through in diesel, in electricity, in steel prices. So we'll deal with that in some detail. The diamond market was strong. And of course, initially, sanctions stopped the Alrosa, the Russian suppliers from getting to the market. But more recently, we have seen Russian goods in the market sold through China into India. India pays in rubles. And we've seen India ignore the sanctions on energy and purchase oil. So those goods are now getting back into the market, and the market is in a more normal place. It has had the very recent result of prices, particularly at the bottom end of the market falling some 5%. We know that the premiums on the De Beers boxes, which were as high as 10% sort of in the first half are now back to much lower and very small premiums. But the result of the supply interruption, the Alrosa supply interruption, meant that significant positive aspects came into the diamond supply chain, debt levels and margins, which the manufacturers were able to achieve. We are -- we have a tender in process right now. Goods are in Dubai. They then will go back to Antwerp and in 10 days or so as time, we will see what the effect is on our larger goods. I'm expecting there to be some pull-through of price decrease, but not very much more than that. On the right-hand side, the column about our market position. I think you all know where we stand and what we are doing. I'd really like just to highlight the bottom bullet point, and that is that we have now started selling goods into a trial with Vuitton LV and some of the other brands. You may be aware that the 910-carat diamond, which we recovered some time ago, ultimately went into Van Cleef & Arpels, and they have launched the polished, successfully sold all of the polished, and we're delighted with the outcome. And more recently, a 100-carat polished out of the Letšeng goods has found its way again into one of the major brands, and they too are delighted with the outcomes of what they have been able to do with those goods. So we have a toe in the water here, perhaps more than a toe in the water, maybe a foot, maybe a leg, and we are running this out. We're assessing the added value which we achieved as a result of this. And I have no doubt that this certainly will be a channel for a portion of our goods. We always like to sell a portion of our goods in the open market to have an absolutely clear idea what market price is. Because one of our obligations in terms of our agreements with the country, Lesotho, is that we are obliged to achieve the highest possible price in an open market. And so we are always searching to ensure that we have the reference, the current reference price in the market, and that determines our relationship with the brands and with third parties. If we can keep going, please, the next major topic. I'm sure you're all aware that we have a major obligation in terms of climate change and TCFD's reporting obligations on mining companies and the direction of travel. And so I'm going to ask Brandon to talk through this slide so that you have a clear idea of what it is that we are doing at this point.

Thank you, Clifford, and good morning to everyone. As Clifford said, this is front of mind, and we have a focused approach to climate change and decarbonisation in our group. I'm pleased to say that our 3-year TCFD adoption strategy, which commenced in 2021, is on track to be fully implemented in 2023. We maintain a focused approach to climate change and decarbonization and are driving the integration of decarbonization into our strategic priorities, which are set out in the blocks in the slide below being extracting maximum value from operations, working responsibly and maintaining a social license to operate and preparing for our future. Through the implementation of a number of initiatives in H1 and continuing from last year to reduce operating costs and carbon emissions, such as the focused waste rock dumping strategy to shorten haulage distances and also through reduced volumes half-on-half, we did see a 10% reduction in carbon emissions in H1 2022. We also track carbon emissions intensity indicators to assess the efficiency of resource consumption. This also -- these indicators also saw an improvement of about 9% half-on-half, which is pleasing to see. And this comes in with a number of initiatives that we are placing for reduced fossil fuel consumption. We have also developed and adopted a carbon pricing model, which will be brought into our strategic planning going forward. [indiscernible] so I'll move on to safety. Moving on to safety and our commitment to Zero Harm and Responsible Care. I can report zero fatalities and no major or significant environment or social incidents during the period. We did, however, have 2 lost time injuries as we continue to implement our strategy focused on improving the maturity of organizational safety throughout the group. In the bar graph below, and as Clifford mentioned earlier, we have seen a positive trend in our all injury frequency rate and lost time injury frequency rate, which is pleasing. And this is as a result of a number of continued focused safety campaigns held throughout last year and continuing into H1 in 2022. Move on to sustainability. Our focus as a group is to ensure sustainable and responsible operating practices. And our CSRI projects support our commitment to our 6 adopted UN SDGs. Over the period, our corporate social initiatives focused on education. You'll see that we issued 3 new scholarships, which brought our total to 51. And we also approved a school project, which will construct fencing to protect learners and ablution facilities at that school. We also had socioeconomic initiatives. More cows were purchased for our dairy farm and also infrastructure by expanding access to water and sanitation in local villages. It's also important to remind everyone that we maintain our stringent management of all our tailings and water storage facilities, and the full implementation of the global industry standard on tailings management is on track for implementation in 2023. Next slide, please. Just an overview of our operations. I'm pleased to say we had steady operational performance in H1. Our treated ore tonnes and reduced waste tonnes is in line with our mine plan, and the carats recovered was well in line with our expected grade of the material produced through the plants. As you can see, the reduction in waste in the graphs are all tonnes in line with previous halves and carats recovered. The AV contract, which is our third plant contractor, came to an end 30th of June, and that's mainly as a reason being that our next cutback in the Main Pipe cut for waste commences in Q3 and the plant had to be relocated for that. Next slide. A brief update on our projects. We have a number of projects running and have continued through the period. The replacement of our primary crushing area is well on track for commissioning. In beginning of Q2 2023, that project has commenced. We've also continue with our underground feasibility study for the satellite pipe. We've done surface miner trials, again, on the new machine in our Main Pipe. These trials are expected to complete at the end of September due to the economic liability of surface miner activities in our pits. And we also completed our resource core drilling program in June, which will tie into our resource and reserve statement, which is being completed. In terms of large diamond recoveries, we have seen in H1 that it is in line with expected resource performance. And pleased to say that in the period, we recovered 10, 100-carat diamonds, which was sold in July, and a fourth plus-100 carat was recovered after the period in July.

3 not 10.

My apologies, 3, plus-100 carat diamonds.

It wasn't 10. The other 7 are coming.

They're on their way. So 3 plus-100 carat diamonds which were sold in July and a fourth being sold now in September. We've also intensified our focus on cost management given the cost challenges that you've seen during the period, which Michael will touch on in his report on finance. I'm going to hand back to you for sales and marketing.

Thanks. We have spoken about quite a lot of these data points. I think if you focus on the plus $20,000 per carat goods, it's our bread and butter. And the plus 10.8 carat is -- you'll see that, as always, contributes by far the majority of our revenue. Our goods are highly sought after in the market. We have expanded our marketing channels in an effort to ensure that we have the most competitive tender that we can. And the way we attempt to do that is to ensure that our goods travel to where the market is. Over many years, Antwerp has been the center of attention for the sale of independent rough. And by independent, I mean non-De Beers rough. But a lot of Russian rough is also sold in Antwerp. But increasingly, Dubai is being recognized as a important selling center for rough, and many tenders are being held there. The Dubai authorities, in promoting their business activities, make it extremely easy for Indian buyers and now more recently Israeli buyers to be able to fly in on early morning flights, and there are late flights, which leave and therefore, the efficiency of Dubai as a regional market much closer to the manufacturers is becoming ever more important. We have, therefore, had 2 trial viewings in Dubai, and now we are currently with a third viewing. We find that it is an extremely efficient place to get customers to come and view our goods, large numbers and new buyers who have previously not seen our goods are coming. The banking system, the import and export of diamonds. It's all extremely efficient. And Dubai will play an ever increasing part in our activities in the years to come. As you know, we did do a similar experiment in Tel Aviv, and that, too, delivered excellent results. And so our strategy is always to expose our goods to as many bidding customers as possible, and that is what delivers for us the best possible outcomes, the highest dollar per carat that we can achieve. Nothing more to add on sales and marking. Mike, over to you for the financial results, please.

Thank you, Clifford, and good morning to everyone. I'm on Slide 15 at the moment, the income statement. And you'll see that we generated revenue of $100 million, as Clifford had mentioned on the first review page. And that was generated of 55,000 carats at an average dollar per carat at $1 745 per carat, comparing to a very similar number in the prior year of 55,000 as well, but at a dollar per carat of $1 886 per carat. The revenue that we achieved this period, and we spoke about the 3 plus-100 carat stones, which were recovered at the late end of H1, were not sold in the period and were only sold in the first tender in H2. And those sales generated $13.9 million in the period after this. Royalty and selling costs. As you all aware, royalties are at 10% to the government of Lesotho and we have a 1.5% rough sales and marketing cost to market going to Antwerp and Dubai. Cost of sales, you'll see that's gone up to $63 million, $63.3 million, up from $54 million. We've spoken about the macro events of commodity prices. And maybe I'll just cover some of that, yes, and then go into a bit of detail when we look at the unit cost side. So a couple of local currency matters to deal with. And we've had the commodity prices, as mentioned here. We had a loti price per liter of about ZAR 9.95 in 2021. and that was up to about a high 2032 in May. We have seen it come back a bit, but that's had a major impact on overall costs. Similarly, [ exposures ], we've seen a 60-odd-percent increase from the end of last year to the prices we are seeing now in June. Local inflation on other costs generally in Lesotho been running at about 6%. So we've seen that come through aside from the specific increases we've seen on these items I've mentioned already. Overall, though, we've had some benefit from a weaker Rand over the overall cost for the period. So that's also benefited and reduced the impact of those that I've just previously mentioned. And then another point just to highlight on the cost of sales as just a global position is that our inventory movement in the current period was relatively small compared to that in the previous period, where we saw roughly $3 million of adjustments to our costs last year as we had a reduction in inventory -- increase in inventory loss here compared to this year. Corporate costs, you'll see that at $5 million, gotten up slightly from the $4.8 million. Major driver there has been insurance. We've seen a very tough insurance market. Insurance costs of probably $200,000 to $300,000 higher in current period than it was in previous years. All of that resulted in an EBITDA of $20.9 million, down from the $34 million, and that's mainly driven by the $4 million less revenue and a $10 million extra cost. If I look at income tax, $5 million. That's low, is relatively low in terms of comparison, obviously, due to the lower EBITDA linked to 25% tax rate to [ restructure ] and then a 5% withholding tax rate for any dividends we extract out of Lesotho. Loss from printing operations that relates to Ghaghoo. We still have the asset. We are still running a sales process. There are still some interested parties in trying to conclude the deal. However, we have started engaging with the government with some alternatives on the asset. We have been able to reduce the costs and looked at some of the dewatering opportunities we have there to reduce costs and the use of diesel there. So you've seen a reduction in costs but we are still actively trying to dispose of that asset. Attributable profit of $3.8 million resulting in an earnings per share of $3.4 million and roughly 141 million shares in issue. Taking into account the shares we bought back of about 1.5 million, the base of calculation then would be on a weighted average trending towards the 139.5 million shares. If I go then over to the next slide on the cost analysis. You'll see that we've had a slight reduction in tonnes treated from 3.1 million tonnes to 3 million tonnes. So that will have an impact on unit costs as a whole. The direct cash cost of LSL 223 per tonne, yes, per tonne. Again, driven by those micro -- macro issues we mentioned earlier. But then just on some operational differences compared to the prior year, we've had longer haul distances, which has an impact on cost, which we expected. We've had significant load shedding in the first quarter. We've used a lot more diesel power to run the plants. And we've been about 3x higher on plant on generator power than we have in the prior period, which has also caused a significant increase in costs. We've also run some trials on the surface miner. It wasn't planned for and wasn't different to last year. So it's a new initiative that we've started. So those costs have come through. And then in addition, we've utilized the mobile pressure to assist with the crushing and the feed rates into the plant. So there's been some benefit for that, but those costs have also come through compared to the prior year. Contractor costs, and that's based on revenue, as you're all aware, and you'll see that it's slightly higher, and that's driven by the fact that they've generated more revenue. Their revenue increased 10% compared to the previous year. And as a result, there's been a 10% increase in that cost on a unit basis. Noncash accounting charges, that comprises waste amortization based on its mining mix, inventory movements and the like. But the most and biggest impact that's increased is the direct cash cost that flow through into that as well. Average exchange rate, as mentioned earlier, has -- the dollar had strengthened, the Rand weakened there, and you'll see that our costs were converted at $15.41 versus $14.54, resulting in a $21 per tonne cost versus $17, and therefore, 29% increase in cost is translating -- in local currencies translating to a 22% increase in dollar terms. On the waste side, slightly more challenging. We've had a big decrease in our volumes of $10.2 million to $6.3 million. And that has had a big impact on the unit cost, although we've reduced overall costs. In aggregate, on a unit cost, because some of the elements of costs are fixed and cannot be eradicated, we've had that increase and then complicated by the fact that we've had the additional fuel and diesel costs and explosive costs coming through impacting that there. Again, the average exchange rate table there resulting in a U.S. dollar waste tonne -- cost per waste tonne move of $3.69. On the next slide, we've just set out at some point on our balance sheet. You'll see that it's relatively static year-on-year. There has been some movements in our liabilities. You'll see our current liabilities have dropped down by $4 million, and we've had an increase in current assets of $2 million, which has impacted our investment in working capital. The right of use of assets on the balance on the asset side and the lease liabilities on the liability side really refer to the IFRS 16 assets that we need to account for. But otherwise, I don't think there is much to highlight or detail on the financial position. On the cash management side, Clifford mentioned our net cash of $12.1 million, but we've got group's gross cash of $24 million. So we've gone down by $12 million, which is the revolving credit facility at the group level. We have available facilities of just under $70 million available to us at the moment. Let's talk about the corporate costs [indiscernible] graph and the trend there over the last couple of years. If we look at our cash position and how we've moved and we have reduced our cash, but there has been 1 or 2 elements that have driven that. We had $31 million worth of cash at the beginning of the year, excluding our facilities. Letšeng generated $50 million and invested $27 million into waste, cost and capitalization thereof. We've had a big drawdown in our working capital, resulting in a $10 million investment into that. Some of that will turn around in following periods. Inventory is often has a turnaround of $2 million to $3 million either way. So that may well turn around a bit by the end of the year. Corporate costs, we've spoken about. Clifford mentioned our return to shareholders. We paid a dividend during June, post the approval thereof, and we did a share buyback. And as a result, we also have to extract dividends out of Letšeng. And as mentioned earlier, we pay a withholding tax on our portion of the 70%-plus, we paid the government 30% of that and the dividend to NIC is the cash flow as a result of that out of the group. Investment in PPE, that was quite low during the period. The majority of that related to the PCA refurbishment project that's been done the replacement of PCA. And that will increase during the course of H2 as that project gets more momentum as we target to finish that early next year. And then all of that resulted in a cash position, as mentioned, of $24 million at the end of the period. Just on the next slide, I've covered most of this, but we did conclude our dividend payment. We approved a USD 2.7 payment on the 17th of March to propose that, and we've got approved at the AGM on the 8th of June, and that had been paid. And then we commenced on the 12th of April a share buyback program, where we could purchase up to 10% of our issued share capital in terms of the authority allowed to us. But we've set a project of $2 million during the period up until 8th of June, which is a date where that authority lapsed. We had purchased just over 1.5 million shares for a cost of $1.2 million. The next slide just talks to the guidance numbers and the changes that we published a couple of weeks ago as a result of the costs that we've just spoken about. So that's just a reaffirming acquisition. And with that, I'll hand over back to Clifford to close out.

Right. Well, thanks, Mike and Brandon. That's the presentation. We now move to the Q&A section. So Chris, can I leave that to you to manage that, please.

Of course, sir. [Operator Instructions] Our first question is from Oliver Grewcock of Berenberg.

Congrats on a good set of results. And just a couple of questions from us, please. What other options do you have to replace the Alluvial Ventures tonnage? And what CapEx level would you expect a third plant to cost there? And what options are you still looking at with Ghaghoo?

Okay. So the AV plant, as you know, was a very old technology pan plant. It sort of lived with us from the very beginning. It was the early production plant whilst plant #1 was built and then plant #2. And we've always been pretty uncomfortable on the one hand, with the grade recovered out of their plants compared to the grade recovered out of our plants. But on the other hand, it has delivered cheap carats to us, and we've had an advantage of that plant. And again, it was an externally managed plant and the security around it was something that we had to manage very carefully. So we have, for many years, wanted to get out of that situation and an opportunity presented itself with the expansion because of the necessity to move that plant because it's consumed by the pit expansion. So that's the background. We have looked at a number of options, including a third plant and/or a way to debottleneck the possibilities so that because our 2 plants are running at maximum capacity. And what we have found is that if we are able to run the plant at a steady rate diamond damage then reduces. When we put our plants under pressure, whilst we might recover and go past nameplate deliverable, whilst we might recover more diamonds, we find that we damage, there's an increased amount of damage. So the choices that we are faced with is to get an independent third plant, and we are a long way down the road evaluating that. The final prices are coming in. We should have those prices sort of mid- to end September, and we will be able to adjudicate a decision on that. We've obviously incorporated the very latest technology in terms of diamond recovery in that plant design, but we don't have the final figures to hand at the moment. So that's on AV. I hope that answers the question. Then on Ghaghoo, the buyer has yet to be able to pay us. And therefore, we are now pursuing effectively 2 broad stream alternatives. On the one hand, additional buyers have emerged of greater or lesser credibility. And the final point is to give the license back to the government and call it a day. So we -- I would think we're in the last throes of this. Of course, we would have preferred to have sold this and exited it that way. But we have had 2 failed attempts at selling when buyers didn't produce the necessary guarantees for payment. And so that's the situation we find ourselves in.

[Operator Instructions] So we have no further questions in the queue. Do you have -- would you like to take the questions from the webcast?

Okay. The first question is about Alrosa goods appearing in the market. Can I comment on the quantities and supply chain they are following? My suspicion is that Russia is selling the -- or Alrosa is selling goods, which were stockpiled in the Gokhran and perhaps directly from Alrosa via China into India. That is the -- and that the Indian manufacturers are paying in rubles and that they were emboldened to do this by virtue of the fact that India has ignored the worldwide sanctions, which have been applied and not using the SWIFT and the dollar mechanisms for payment, they're able to skirt around these issues. So that's what I'm told from the market. We, of course, don't have direct knowledge of this. We're not in the business of buying or selling Russian goods. But many of our customers are telling me that this is exactly what is happening, these goods are finding their way into the market. As for the quantity, I'm unable to comment on that. But again, I'm told that it's normal quantity. So I'm afraid that's the best answer I can give you in respect of that. The question is, are we seeing changes in the quality or character of our rough from [indiscernible] as we proceed down and mine deeper? No, is the broad answer. But a more detailed answer is that as our knowledge of the various phases of kimberlite in our ore body grows we are getting much better at detailing this. So you may recall, if you were involved in the company from the very beginning, we had basically main pit, and then we had what we called [ MVK ] and [ SVK ]. So broadly, 3 different phases of kimberlite. Now our geologists are of the view that there are 5, 6 or even more phases, different phases of kimberlite. So I think our data now over 20 years and the expertise is really growing. And so, yes, overall, I would say we're not seeing any difference in the quality or character. We set out a table of the sizes of the goods. And because of the low grade nature of our ore body, I think that you can look over a period of a number of years and you can see more or less the trends have remained static over a long period of time. So that's how I would answer that, Paul. Then the next question is from Anthony Barnett about the share buyback. So we have done about half of the share buyback.

Just overall, about 60%.

So 60% of the funds which we had set aside for the share buyback with [indiscernible]. We still -- of what was authorized for us to spend. We paused that for a period of time, and it is available to us to continue. And given the weakness in the share price, I think it's reasonable to expect us to make -- we think that's probably the best use of capital in an underpriced share. Richard Hatch asks, what are we doing to control corporate costs? Richard, I think you know our business better than most. And I think you know that our corporate costs are down to really a bare minimum. And if you compare our costs to most of our competitors, I think we're probably in the gold star category. Nevertheless, like toenails, I suppose, costs always grow and you have to cut them and trim them and look at them. And we are looking at those consistently and constantly. I think there's a broader, I mean, frankly, corporate costs are not the driver here. The major driver is going to be costs overall. And we have now version 2 of the initiative going into the business and taking a very aggressive approach to our activities as a whole. Again, we think -- and I think you have agreed with this, that our overall dollar per tonne cost of mining, load and haul, processing, selling is amongst the best in the category, the lowest, not the highest, the lowest in the category. But nevertheless, they do we always are searching for, and we unearth further opportunities to renegotiate contracts, change things around, look at our numbers, examine everything with no holy cows. So that process is beginning again. And again, we are working with an outside set of expertise to really drive and ensure that every stone is turned over. So I think you're going to find in quite short order, further reporting on that. If I can move then to your next question, next steps on the underground and what we should look for from here? We've done a lot of work on this in a conceptual phase and sort of to pre-feed. We've had our work peer reviewed, and we now have some additional and slightly different opportunities, which we have unearned, which we think are being validated and double checked to establish whether or not there is a better way, a quicker, less expensive, less capital. And in fact, we've got some -- we're quite encouraged by what has emerged. As far as timing is concerned, Brandon, I think I'm going to ask you to answer when we will be in a position to speak meaningfully to the market and to have a clear statement of intent.

Yes. Thanks, Clifford. I think in terms of timing, Richard, the feasibility study has been intensified this year on Phase 1 of a potential underground in satellite pipe. And we're looking to come back to market with an update with our annual release next year in March with regards to underground.

Okay. Richard, I hope that fully answers your question. For exploration news, we are not in the exploration business directly. But we are indeed looking for opportunities for new ore bodies around the world. But let me caveat that we don't think -- for example, we've just had served up to us an opportunity in Canada. And that, frankly, is way beyond the scope of a small business like ourselves, with the capital structure that we have. So that -- and in Australia, we've had various opportunities. So those are, frankly, off the table. Closer to home, in Lesotho, we look at everything there, and we have done more studies and update studies and rejig and rethinking about could things be done differently at the few ore bodies immediately surrounding us because that would obviously be the best cheapest way of exploiting an orebody. Unfortunately, we haven't really been able to make any sense of those for geological reasons and what's in the ground. So moving slightly further afield into South Africa. We have a jaundiced view of the area because of the fact that it has been very highly explored, highly exploited and that other businesses, which are in the exploration field haven't turned up anything which looks exciting. We do, however, attend all of the kimberlite conferences. We put our name out there. We try and be user-friendly for junior exploration companies, and try and present ourselves as somebody that they should think about in the event that they find an ore body, which needs a mine building and operating. Into Botswana, we -- again, it's a very well explored and looked at place. We still regret missing out on the African diamonds, which became the Karowe mine ultimately and in Lucara, we regret missing out on that. And we look at the lessons that we have learned there, and we try and apply those further a few. Getting to proper, a more positive answer. We have put our toe in the water in Angola, which is frankly -- I think Zimbabwe is uninvestable for a business like ours, a listed business, which is a pity because, of course, the Marange ore body is one of the most high dollar per tonne deposits in the world, but we can't go there. In Angola, which has improved its method of dealing with foreign investors and all the majors, De Beers and Ria Pinto are back there, the Lucara business is doing extremely well there. The [indiscernible] business, again, is making good revenues and margins there. So we have made a number of visits now to Angola. We are looking at a few things there, which look positive. And the method of selling goods no longer has a sort of corruption tax associated with it. You're able to sell the goods at proper market value, you're able to export your capital. And so it is a place that we're looking at. And whilst we have a gleam in our eye, we don't have anything to -- we don't have anything to report yet. But we are making a further visit up there and evaluating 3 or 4 opportunities, which India might have put on the table for us. And hopefully, there will be an ore body which has margin which we can build and participate in. Anthony, you asked about what is done to reduce operating costs. I think I've answered that question. We are certainly attacking every cost in our income statement line. We are going at this aggressively and hopefully, we can find in a second look at this. Hopefully, we can find some opportunities, and I'm sure we will. The final question from John. John, we renewed our mining lease a couple of years ago, and we got effectively a further 10 years plus an option to renew for a further 10 years. Of that 10, I think we've used that 2.

For 2019, we renewed.

Yes. So 2019, we renewed for 10 years to 2029, plus an option for a further 10 years. So I think we're in reasonable shape as far as that is concerned. And so I hope that, that gives you some comfort. No further questions that appears. I don't know if anybody would like to submit anything more. Right. Thank you, everybody. We stand ready to answer any other questions which you may not have got around to or think about subsequent to this. Please don't hesitate to send us a mail or call us directly, and we would be happy to answer those. So thank you for your attendance, and goodbye to everybody.

Thank you.

Thank you very much, sir. Ladies and gentlemen, that then concludes today's event, and you may disconnect.