Sandfire Resources Limited (SFR) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Sandfire Resources First Half FY '24 Results Call. [Operator Instructions] I would now like to hand the conference over to Mr. Brendan Harris, Chief Executive Officer and Managing Director. Please go ahead.

Hello, and good morning. I'd like to acknowledge the traditional custodians of the land on which we stand, the Whadjuk people of the Noongar Nation, as well as the First Nations peoples of the lands on which Sandfire conducts its business. We pay our respects to their elders and leaders, past, present, and emerging. My name is Brendan Harris, CEO of Sandfire Resources. I'd like to welcome you to our half year financial results conference call. We are fortunate to have the opportunity to connect with you again so soon after our December quarterly call. I'm joined here in Perth by my colleagues, Megan Jansen; Jason Grace; [ Cath ] Bozanich; Victoria Twiss; and Scott Browne. Richard Holmes is currently in transit and sends his apologies. Guided by our new shared purpose, we mine copper sustainably to energize the future. We are hitting critical milestones and remain strongly placed to support the electrification and decarbonization of the global economy. And nothing is more important than the health and well-being of our people. Our unrelenting focus on safety delivered a TRIF of 1.5 at the end of the period, down from 1.6 at the end of the prior financial year. Through strong leadership on the ground, we will further instill our Don't Walk Past operating philosophy and enhance our robust hazard management systems and processes. Similarly, our broader ESG framework must permeate everything we do. And as I mentioned on our last conference call, we were pleased to announce the signing of the framework agreement between Sandfire and the Yugunga-Nya at the end of December. This was an important first step toward rebuilding our relationship with the Yugunga-Nya and ensuring the ongoing protection of cultural heritage at our DeGrussa operation. Our decision to retain DeGrussa and rehabilitate the operation means we will have an important presence in the region for many years to come, and we look forward to working with the Yugunga-Nya government and our other stakeholders to deliver meaningful, sustainable outcomes for the community. Megan, over to you to walk through our financial performance for the December 2023 half year.

Thanks, Brendan. I'm very pleased to present our financial results for the first time. As we said when we reported our quarterly numbers at the end of January, we've maintained our production cost and capital guidance for FY '24 growing consistency and predictability at MATSA and continued outperformance at Motheo underpinned copper equivalent production of [ 63,200 tonnes ] in the first half, which in turn generated sales revenue of $418 million and underlying operations EBITDA of $165 million for an underlying operations margin of 40%. Operating discipline and robust cost control was a feature of these results, as we continue to mitigate broader inflationary pressure at MATSA with mine operating costs remaining stable at $72 per tonne of ore processed. The operation benefited from broader economies of scale, a near 45% reduction in power costs and optimization of consumables usage, all of which abated the impact of adverse foreign exchange rates. By signing an agreement with Endesa for the construction of a dedicated solar facility that will supply around 25% of MATSA's overall electricity requirements progressively from calendar year '25, we have further improved our long-term energy supply mix and reinforce the low carbon credentials of MATSA's metal concentrates. Motheo reported an underlying mine operating cost of $39 per tonne in its first 6 months of commercial production, reflecting good cost control, as the operation ramped up to its interim capacity of 3.2 million tonnes per annum. Below the line, our depreciation and amortization expense remains elevated at $149.1 million, following the $1.9 billion acquisition of MATSA in FY '22. You will also have seen that we have expensed interest associated with the $200 million Motheo finance facility for the first time, as our newest mine achieved commercial production at the start of the period. Our overall net interest expense reflects our level of debt and the margin embedded in our various finance facilities, noting interest associated with the $60 million A4 mine development will be expensed rather than capitalized when the open pit achieve commercial production planned for the September 2024 quarter. While our underlying loss increased by $17.2 million in the period, underlying Group EBITDA declined by a more modest $2.4 million despite the cessation of processing activities at DeGrussa in May 2023 and its $80.8 million contribution to underlying Group EBITDA in the prior corresponding period. This was only possible because the commissioning and ramp-up of Motheo added around $50 million to underlying Group EBITDA at an operating margin of 43% in its first 6 full months of operation. With the ramp-up of Motheo and delivery of our intentionally simple strategy, we expect to return the business to profitability and pay down debt in the coming years. With regard to our balance sheet, we ended the period with a cash balance of $105 million and net debt of $476 million, which included $401 million owing under the MATSA Finance Facility and $180 million owing under the Motheo Finance Facility with the successful commissioning of the new ball mill at Motheo completed just prior to Christmas and the A4 development set to be completed in the current half. We project strong production growth into [ FY '25 ] and a further decline in capital expenditure with net debt expected to peak during the current half year. Indeed, I can confirm that net debt at the end of January declined to $459 million, as we received cash associated with the Motheo December shipment that was loaded very late in the prior half year. Furthermore, I'm very pleased to confirm that we have made significant progress in our efforts to modernize the structure of the Group's debt facilities by securing credit approval for a $200 million corporate revolver facility in early February. Establishment of this revolver is an important step for Sandfire, as a global business. The new facility will increase the financial flexibility of the Group, reduce our near-term debt repayment profile and be primarily used to repay the remaining $88 million balance of MATSA Facility A. The establishment of this facility is subject to final documentation and [ standard ] conditions and is on track to be finalized before the end of March. This excellent outcome gives us even greater confidence to invest in the future of our business. So let's look at our plans for CapEx. Total capital expenditure in the half decreased to $99 million, as construction of the 3.2 million tonne per annum, first phase development of Motheo was largely completed in the prior financial year. Our rapid and low-cost expansion of Motheo remains on time and on budget with the A4 development expected to be completed in the current half as planned. Mine development expenditure included $41 million at MATSA in the period, as we sought to progressively open additional mining [ fronts ] and provide increased flexibility in our underground mines. And with that, I'll hand back to Brendan.

Thanks, Megan and great work. Before I close and ask for questions, let's quickly turn back to Motheo. Our newest mine has started life in rude health, exceeding its initial 3.2 million tonne per annum capacity by almost 10% in only its second full quarter of operation, producing [ 16,800 ] tonnes of copper and 396,000 ounces of silver for copper equivalent production of [ 17,900 ] tonnes. As Megan mentioned, the last major milestone in the rapid and low-cost expansion to 5.2 million tonnes per annum was achieved in late December with commissioning of the ball mill and the maximum daily processing rate, as you know, of 627 tonnes per hour was subsequently achieved. What I can tell you is the positive trend has continued with a further uplift in the average processing rate to 4.3 million tonnes per annum achieved in January. As you'd expect, we are now focused on achieving the facility's 5.2 million tonnes per annum nameplate rate on a sustainable basis before testing its ultimate potential. So on this basis, we remain exceptionally well positioned to deliver into an increasingly tight copper market with more than 50% growth in copper equivalent production projected across the 2 years to the end of FY '25 from our continuing operations. Having sought to avoid repetition from our recent quarterly call, let's get stuck into your questions. May I have the first question, please?

Your first question comes from [ Manav Shah ] from Morgan Stanley.

It's Rahul here from Morgan Stanley. Look, I've got a couple there, Brendan and Megan. First one is on the debt facilities, so perhaps for Megan. Congratulations on refinancing that facility. I just wanted to get a bit of understanding in terms of what type of interest rates we should think about this versus your current net debt balance? And then, in terms of any sort of covenants, et cetera, that are associated with this debt, please. That's the first one.

I'll take that one. Thanks for the question, Rahul. So as you'd appreciate, we can't go into the specifics on the facilities margin. But to give you a broad sense really across the debt portfolio is probably appropriate at this point. And from a weighted average interest expense perspective, I'd guide a margin of a range of 2.7% to 3% across the debt portfolio for the Group. I mean, that should just help with understanding interest expense into the future. Obviously, that will be impacted. The overall expense will be impacted by timing of repayments, prepayments and the like, but I think a broad weighted margin in that range is reasonable. Covenants, again, we can't go into specifics of the covenants of this facility. We'll disclose further details, as we look to finalize it before the end of March. What I'd say at this point is the covenants would be typical and standard. So I would expect those to be not dissimilar to traditional [ lender ] style covenants that you'd see in other facilities.

And maybe Rahul, if I can just add up. I just don't want us to brush past this. This is an excellent outcome. Megan has obviously been in the job for a short period of time and worked tirelessly on this. We've talked a lot about needing to modernize our debt facilities, the structure of them really to be befitting of a global company. And what that really means in code is the ability to move money around the Group, as we need to. And that's what repayment of Facility A will do. In terms of rates, the rates on the new facility are very competitive with the current Facility A. So it's not going to cause us any, if you like, concern with regards to our expense profile. The other key point you would have known, and I think there's an excellent diagram in our slide presentation that shows effectively we significantly reduced our repayment profile out until [ March '26 ], effectively almost 18 months. So that's also another really, really helpful thing for us. Of course, we're not creating value here, so to speak, because, of course, the debt is of an equivalent nature. It's going to remain largely undrawn, the corporate revolver because the Facility A is $88 million. But it really does help us in many ways. So again, as I said, I think this is an excellent outcome for us and something that we've been working on for some time.

Got it. Okay. Thanks for that, Brendan. Look my second question is around Slide 22. So you've given the annualized daily milling rates at Motheo, thanks for that extra detail. I just wanted to touch upon the variability that you've got in that slide right towards the end. Is that purely to do with the commissioning of the ball mill? Or is there anything else in terms of the mill that you'd like to report in terms of any sort of hurdles or changes required, as you're ramping up?

Yes. Look, I'll pass to Jason, but maybe just a couple of comments upfront. If you look at that diagram, you'll notice that prior to tuning the ball mill on, we were starting to get very good levels of consistency, as we said, running well above the interim nameplate capacity of 3.2, i.e., 3.5 across December. It's not unusual, as you move into such a significant step-up that you will have a degree of variability through that ramp-up and [ commissioning ] phase because -- well, I'll leave Jason to explain that detail. But primarily, what I'd highlight to you is, again, 4.3 in the quarter -- sorry, in the month of January is a really good outcome for us in terms of the pathway towards that interim capacity. You'll also note that we've shown very clearly that we can run the facility regularly across days in excess of the 5.2. And hence, first priority is to get to 5.2, and then test the ultimate potential of the operation. But maybe, Jason, to you.

Thanks, Brendan, and thanks, Rahul. You're absolutely right. And particularly with reference to Slide 22, you will note the shutdown there around just before the 9th of December 2023. So you can see immediately after that, we were working on rebalancing and if you like, getting stability back in the circuit. Now what you're seeing in this graph, and that's why we've put it in there is really what you expect to see after commissioning, right, of major plant and equipment. So you're doing a lot of mods on the run, you do it rebalancing the whole circuit and you're trying to get everything back into a stable and almost into equilibrium before you start to push up the overall rates there as well. What we are seeing there as well, so you can see the rates that are climbing up and Brendan touched on that. We are very comfortable. The mill is going to do 5.2. And if you look beyond there and where we're going into February, we are starting to see significant improvements in that overall stability. And yes, we're very confident we are going to deliver on guidance for the full year out of Motheo.

Okay. That's very clear. If I can sneak in a final one on MATSA, perhaps the TSF, we've talked about it in the second quarter. Just wanted to get an idea of the size and sort of how long does that serve you for just for modeling purposes?

Yes. Look, it is a significant investment. Jason, maybe over to you.

Sorry, I missed the first part of that question.

Rahul, do you want to repeat it's around the tailings facility, but Rahul?

Yes. So I was just talking about the tailings -- new tailings facility at MATSA. I don't think that was flagged in the second quarter of FY '24. So I just wanted to get an idea of the size and how long it's going to serve you and just be able to think about sort of what type of CapEx and what type of longevity we think about when we're modeling this thing?

Yes. In essence, what that does is give us about another 2 full years of capacity before we start to do further lifts. And you can see at the moment, we're splitting into cell 1 and cell 2. The next list after this cell 2 construction is around the full envelope of the operations there as well. So we'll progressively start to see that happen about once every 2 years throughout the life of mine.

And so that's MATSA -- Motheo and MATSA, just the second TSF that we've got going through permitting.

Yes. And the second TSF there as well. So we've got life out until late 2026 in the current TSF, after which we will need to be commissioning the new facility at MATSA there as well. So we'll spend the bulk of that capital required for the MATSA TSF in '25, '26.

And it's around $35 million, [ mid-30s ] is the current estimate.

That's right.

It's out the back, if you like, of the operating areas in terms of where the current facility is. And we've got very good support from government is our current understanding the basis of the engagements with [indiscernible].

Your next question comes from Mitch Ryan from Jefferies.

Just returning to the corporate revolver facility. I appreciate you can't talk to the covenants of the new facility, but just if you could potentially talk to more what increase optionality it gives you from either an inorganic growth perspective or capital management perspective [ or rather ] might be in medium-term focused? Any color would be appreciated.

Maybe I'll take the first piece of that, Mitch and Hi. Capital management in the way corporate thinks about it versus the language of the market uses the 2 different things. So when we think about that broader capital management, we literally focused on how we move money within the Group through our various subsidiaries. You'd imagine with project finance facilities and depending on their nature, timing, et cetera, when they're established, they have certain requirements or limitations or constraints. Effectively, they're securitized against the asset. And so, they have things like cash sweep. So when you generate excess cash, they take the cream off the top in many cases. And secondly, they will ring-fence capital in circumstances such that you have an inability to return money back to the center. And that's, in effect, one of the biggest opportunities for us with this strategy, of course, is by establishing the corporate revolver, it gives us a nice source of liquidity, but it also means most importantly, as we repay Facility A, we can move money back into the corporate center. And that's really important for you when you're funding a global business and a corporate office here in Western Australia. So that's a really important step for us. In terms of your question around inorganic growth, I can assure you when I look at this revolver, the main objective we have for it is to pay back Facility A to achieve what I've just described and then to have that undrawn on the balance sheet. Our main objective is to ramp up Motheo. You'll see the EBITDA that it's generating. A4 will be completed by the end of this half year. Our capital expenditure starts to decline, and cash will go onto the balance sheet, will reduce net debt. Hence, Megan's comments that we see net debt peaking through the current half year period. So maybe, Megan, I don't know if there's anything you want to add to that.

Thanks, Brendan. And hi, Mitch, I would add that one of the benefits of the revolver is really around the reduction in the near-term debt profile. And so that sees us repaying MATSA Facility A's [ $88 ] million balance. Now with the drawdown from the revolver, and in essence, that provides an additional sort of $88 million of additional liquidity out to June 2025. And that's what you can see within the diagram that's included with the results presentation. So in essence, it's been deferring that $88 million payment to March 2026, which is the expected maturity date of the new debt.

It's just for me, Mitch, probably summing all of that up, it's just another one of those pieces in the puzzle that you put in place that progressively derisk the business and put us even in a greater, stronger position to deliver on our strategy, a strategy that we feel investors are starting to see that, if you like, it bear fruit, that focus on the real core basics, predictability and consistency. Thank you.

Your next question comes from Levi Spry from UBS.

I might just stick on the debt piece if you don't mind. I don't think we'd all be talking about this, but maybe it's because there's not much else to talk about. What else is there left to do? Why couldn't you do a little bit more? What are the covenants around, I guess, the B Facility? What -- how do we think about even the future potential for dividends and given that maybe [ loan for CapEx ] is a bit further out? And I guess, a question associated with that, are there any implications with the hedge book? What's the current view on that?

It's a great question, Levi. I do love -- I do love it because Megan and I talked about it. As you know in this game, you achieve one thing. The question is very quickly, but I want more what next. And rightly so, rightly, so. So the way we think about it, and I'll pass to Megan for some of them on [indiscernible], but we are comfortable with our debt facilities in general. Facility A is really the -- was the one that created some degree of constraint. And so, for us, prima facie, really what the next step for us is thinking through with this new revolver facility, what's a longer-term solution that even further helps us with tenor and other features. So that's probably a next step for us naturally. We'll get to work on that pretty quickly because, again, it's just a natural step for us to take as a growing global copper producer. Beyond that, maybe Megan if there's anything else with the specifics, hedge book, et cetera?

Yes. Just the specific, no implications on the hedge book, Levi. There's no change. There's no additional requirements to hedge more tonnes into the future. That remains as is.

Your next question comes from Ben Lyons from Jarden.

Just 2 questions from me, please. Firstly, just might dive into the accounts, please. Apologies for the detail, but obviously, a result that was very much in line up to the EBITDA line, given your excellent disclosure in the [ quarterlies ], but a bit of variation in that net interest expense bucket. And obviously, there's a lot going on in that note to the accounts with some FX losses and unwinding of discounts and facility fees and charges, et cetera, which are pretty unforecastable in nature. So maybe just to help us going forward, probably one for you, Megan. Just confirming the new facility, the revolver we're talking about is going to be U.S. dollar denominated, the Motheo facility is going to be U.S. dollar denominated. So probably a little expectation for FX variances in that bucket going forward. Is that a fair assumption?

Yes. Thanks for the questions. And a fair assumption, U.S.-denominated debt across the board. So we won't see any FX arising on that debt, Ben.

But I think the thing to think about with that Ben, is the way you have broader monetary items, so you've got receivables, payables and other items that will always have some FX differences. So those elements do play through as well.

Yes. Yes. Okay. Cool. And then maybe just a second one on -- actually on exploration and acknowledging, I think you mentioned that Richard is in transit. But -- so firstly, on the accounts, again, it looks like you spent about $10 million on exploration during the first half, well below the run rate. I think we're looking for [ 32 ] for the full year from memory. So just wondering if we're going to see a material step-up or possibly come in below that guidance. And the second part to that would be, again, just from memory, I think we're expecting some results from Black Butte around about now. And I might have missed it in the release, but just wondering if there's any comments you can make about that recent drilling program?

Yes. Good one, Ben. Thank you. Look, you're right, if you look at the exploration expense, you'll see the very big delta, of course, right upfront was Australia. I've spoken about that. We took a very difficult decision to basically restructure and shut down the very vast majority of exploration activity here in Australia. And it's not because we don't see Australia as being prospective or a place that we want to operate potentially in the very long term. But we've just invested considerable amounts of shareholder funds in 2 very modern processing hubs in both Spain and Botswana. And so, our focus has to be in those regions. So that's the permanent shift that you'll see until we obviously strategically take a different direction, which I wouldn't expect to happen anytime soon. Beyond that, it's really timing. Black Butte, we -- and I'll pass to Jason to talk about the program, but we've really kicked off an additional drilling program in literally recent weeks. That is targeting the high-grade deeper zone at Johnny Lee, which is a very promising area. It's really where the juice exists, if you like, in terms of getting your IRR out of your project, and we certainly need to see Johnny Lee, as a stand-alone project, notwithstanding the permitting issues being a high-teens IRR low 20% IRR project for us to really get excited about it. So that's what we're focused on there. So you'll see that spend coming through. And remember, both Motheo and in the [indiscernible] built i.e., around MATSA, we very much focused regionally on our AGG survey. So that's to airborne gravity get that very deep understanding of the geological setting and help us become much more focused in our regional targeting. Now what obviously transpires into this half that we are back drilling at A1. And so, with A1, we are focused on opening up, if you like, the known mineralization that was identified in Phase I. What we're hoping in Phase II, we'll be able to come to the market somewhere in the current half with a maiden resource. We're going to -- and we've just commenced actually drilling at A4 testing the open-ended extensions. So you'll see that drilling coming through. And then we're going to get to T3, where we've identified additional opportunities in the footwall. And so, you'll see that timing coming through as well as, again, on completion of some of these basin scale targeting activities, we should start to see a slight uptick in regional, more regional exploration, so i.e., not within the sort of footprint that we would consider relevant for the 2 processing hubs in Spain and Botswana. But maybe, Jason, if you can just talk to Black Butte specifically and what we're doing there at the minute?

All right. So in terms of Black Butte, we have commenced the drilling program there. We started that. We mobilized drill rigs there just before Christmas and got into drilling early January. We've completed 4 holes of that program, and we're in progress on a 5th. And we don't have any assays coming through, but we are processing that core at the moment, and we expect to be able to disclose or report some of these results in coming weeks or months there as well, depending on those turnaround times. As Brendan said, we are targeting the higher-grade lower copper zone at Johnny Lee. And we're particularly looking at near mine design extensions to that mineralization, which is a very prospective zone for us. With the view that this any potential ore that we identified from that could come into the feasibility mining schedule early in mine life and significantly add value to -- add value to the financials of this project as well. So we're quite optimistic.

So thanks, Ben. I appreciate the question. Look, just, [ I guess to ] yourself, but anyone else, of course, Ben Crowley, our Head of IR, is ready to answer questions on the accounts, particularly things like the underlying earnings adjustments, the FX differences that you've referred to. So please don't hesitate to get in touch with Ben. Did you have anything further, Ben?

No, no. That's all from me. And yes, apologies for going into the weeds on the call.

More than happy. Thanks, Ben.

Your next question comes from Matt Chalmers from Bank of America Securities.

Megan, probably a question more for yourself. I know it is kind of accounts related, but a bit more high level. If we look at the Group asset base and the depreciation at MATSA year-on-year versus the broader Group CapEx spend, can you give us some thoughts as to [ kind of ] the longer-term strategy to maintain the value of the operating base? Kind of looking on our numbers is roughly of kind of $200 million -- $150 million to $200 million delta each year between the CapEx and the depreciation rate. So just for the operations to stand still for the next couple of years. Does it really just come down to kind of mine life extension to lower your units of depreciation or appreciate any perspective you have on that?

Thanks for the question, Matt. And absolutely, the lines -- the life of mine extension is an important area that will, in time, see that depreciation level reduce the MATSA. And hence, that's a critical component of our strategy and something the team is actively focused on delivering over the next few years. Brendan, did you want to add anything on to that?

Yes. Look, I think you're spot on. We've said that the first thing we need to do is deliver the growth of Motheo and improve the consistency and predictability of MATSA. I think we've shown that we're making inroads there. Operationally, I think a good period for us. MATSA is obviously delivering record throughput rate to [ 4.6% ]. The processing facility actually running at a similar clip, which we haven't done before. And then with Motheo, of course, the ramp-up has been particularly good. But from here, it's really all about increasing reserves and resources. And I've talked on many calls and to many of you in the past that as a rough rule of thumb for me and what we talk about here is we've got to get towards 15 years of reserves in front of our processing facilities and aim to do that in 3 years to 5 years. And easier said than done, of course, you always need a little bit of luck in life, but really, it's about hard work and planning. It's really about chasing up the work that's already identified these areas such as San Pedro and Olivo at MATSA and particularly the geophysical anomalies the conductors that have been identified at depths below Masa 2, so down dip of Magdalena. They're big, big opportunities for us. And then in the longer term, it's the concept study that relates to Sotiel and what that could mean in terms of the way we can reconfigure the entire operation. All of those things will be helpful. Now depending on the success, of course, that might lead to additional capital from time to time. And if that is the case, i.e., to get out to some of these areas that really open up value, we need to be able to justify that to our shareholders, and we will certainly do so. Beyond that, at Motheo, if you think about what I mentioned earlier, A1 maiden resource, hopefully, a T3 extension of some sort. A4, we hope [ to have ] an extension there. We already have sort of 9 to 10 years. Those -- that sort of work program starts pushing you up towards that targeted area, we hope. Time will tell. But then it's really to Richard and the team and the work that's being done to understand the [ depositional ] environment of these sedimentary copper deposits, but more importantly, the geological structures and so on that are really, if you like, delivering the enriched copper areas. The work that's underway on that is very promising. So again, multiyear work programs in both areas, but our geologists couldn't be more excited than they are today.

Yes. Thanks, Brendan. Look, I think just going -- just touching further on your point around MATSA. So I mean, is it safe to say that where we stand today, there's more value potential around the exploration and greenfield in the Iberian Pyrite belt? Or would you -- do you feel there's enough juice left on some of the other existing operations in close proximity to MATSA, where it may -- it would make potential sense to roll them up into the fold?

So look, first and foremost, I'd say the most significant potential is actually within our mineralized systems that we currently control and are in. If you look at San Pedro, it's within 150, 200 meters of the existing mineralized zones, limited development to get out there. It's shallow. So it's not only going to bring significant tonnes. It's going to be low -- give us cost advantages. It opens up more mining areas, which should help us with productivity. It's all those things. Olivo is very much the same. And as I said, the downdip conductor will do exactly that. There are also other ore bodies in very close proximity that are in other hands that we're wanting to understand, and I'm talking within 5 kilometers and 10 kilometers that sit within private hands. We want to understand what the potential is there because we are the logical party to help bring those into future production. They're large mineralized systems. And so again, good potential for us to explore those in a very, very capital-efficient way. And that's really the focus for us. And then Motheo, again, we control the very large majority of the Kalahari Copper Belt. So we've got more than enough land to keep ourselves busy beyond what I've disclosed already. But Jason, I don't know if there's anything to add to that.

Look, and you might kick me under the table, Brendan. Coming back to Ben's point there and being under budget for this year or not spending a lot, half of it to help Richard and spend any money that he's not going to spend this year because we have a lot of potential in and around both Magdalena and Aguas Tenidas. And I'm very keen on getting drill holes into the T3 footwall zone. I think all of those things will give us growth in terms of resources and reserves without a doubt.

Yes. And so again, I just want to stress -- of course, we look and want to understand what's out there, but we have more than enough sitting within the portfolio to keep ourselves busy, and we think we have all of the opportunity to unlock a lot of value for shareholders. And we actually think that's going to be the most capital-efficient way that we can focus our efforts as well. So nothing's changed with that.

[Operator Instructions] There are no further questions. I'll now hand back to Mr. Harris for closing remarks.

Well, thanks, everyone. Again, I just want to thank my team and the broader organization. I think the company operationally had obviously a very safe half and a very successful half with MATSA hitting record throughput rates, Motheo really hitting it straps. Our job is to keep delivering. We're working hard, and we look forward to catching up with you next time. So thanks for your interest, and have a great day.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.