Sheffield Resources Limited (SFX) Earnings Call Transcript & Summary

Hello, good afternoon, good morning, everyone, depending on time zone. Welcome back. The quarter has gone pretty quick. Feels like we were only here a couple of weeks ago with Bruce and Mark. It looks like a pretty good quarter. The format will be the same as always, Bruce will be giving a presentation, which will probably last around 15 to 25 minutes. And then we'll go into the audience Q&A. There is a Q&A button. So please post in your questions whilst Bruce is delivering his presentation. Bruce, good start for the quarter. It looks like the plan's working. You must be pretty happy.

Thanks, Peter. We are definitely very happy with this quarter. That's the first quarter since we announced the new business plan for Thunderbird. And thanks, everybody who's online for joining in. As Peter said, same format, same slides updated. So with that, I'll get into this. So same general intro. As always I'll focus mostly on Thunderbird and the ramp-up there. First, it was worth mentioning, given that we had a couple of developments in our other projects during the quarter. At South Atlantic, we were able to clear a main resource across the 2 larger deposits there Retiro and Bujuru, 771 million tonnes at 3%, which is more or less in line with the exploration target we identified when we started getting involved there. So we're pretty happy with that. It's got an interesting assemblage. And the other thing was we did get the installation license for Central Retiro during the quarter. So while there is other approvals required, I think that was pretty important to show that we can continue to progress approvals in that part of Brazil. And the other piece in Sri Lanka, with our investment in [indiscernible] or capital Metals, we did follow our money alongside new strategic investor from Sri Lanka, who is looking to actually largely fund the build of that project through a secondary listing in the local subsidiary in Sri Lanka plus some debt instruments. So that was quite encouraging. And we follow our money there to protect our -- effectively maintain our 10% interest in the associated rights we have. In terms of Thunderbird, just operational pictures put on the left. You can see, obviously, the pit in the background, and in the foreground is waste clearing activities, continuing with drill and blast and now with our new contractor RE Group in there with the larger excavator and trucks, and we have seen a step change in productivity and waste mining as a result of both drill and blast and the new deal with a new contractor. There's still a lot of optimization there, that just started, but we're very pleased with that and our comfort that we're ultimately going to get waste mining capacity we need to increase our ore mining rate. To put in the background, probably comment I would make as the pit gets bigger, you can see that, the pit is actually quite clean. The wall is quite clean. It stands up very well. It's been kept as it's very orderly mine, and you can actually see the use of the oversize to build the walls. So you can see how we're starting to develop the first of the sales for in-pit tailings disposal. And general progress in mining is impressive now. On the right-hand side, process plant from late in the quarter in the foreground a lot of ilmenite in the fingers, drying before loading into the trucks to go to port. In the background, zircon concentrate stockpiles and the process plant sitting there. So not a lot of change there, but process plant continues to run really well. In terms of an update on the business plan, probably key points here. The plan on the left hand side is exactly what I presented in the quarterly end of the last webinar. What we thought we'd do is probably focus on what we've done in the quarter, sort of what's our rate of progress. So recap key elements. The drill and blast and transition to a new waste mining contractor with a larger fleet designed to increase our waste mining capacity so we can uncover more ore to increase our mining rate ultimately to the ability to mine up to 16 million tonnes per annum, although in reality, the focus is on keeping the process plant full. So once we've got the expansion to the mining, how is grade varies and so on in the pit, what we'll find is there are times when we will need to mine at 16 million tonnes per annum equivalent in order to fill the process plant, but there will be other times we mine less than that. So we will -- I would describe it as become more normal mining operation where we'll be process plant constrained and vary the mining rate to ensure the process plant stays full. With process plant, as we've indicated previously, we expect to see concentrate production increase. We have the capacity to haul and ship that. And overall, we are looking for reduction in unit costs as we increase production. Progress today, say drill and blast has been in place now for at least 6 months. And we have seen that has really made a big difference to the viability of the waste. I'd say we're still learning the optimal way to blast and drill and blast and that continues to be optimized. So that's optimization, the blasting itself is very effective. New waste mining contractor with their larger fleet mobilized by the end of May, first full month of -- in waste in June. So a step change in the sort of daily waste movements, and we expect to continue to ramp that up to achieve the waste mining rates that we need. Again, similar to in fact probably even more so than ore mining, the strip does vary as we move around in the deposits. So there will be times when we mine less waste and times when we mine more and we need to have the capacity to be able to handle that variability. Pleasingly, at the DMU, we have managed to achieve record production for the quarter but equally record production in June where we pushed over 1 million tonnes of ore for the month. And this was a good step up from where we were before. It shows we're clearly on that path to the sort of 16 million tonne equivalent, but we're not there yet. I think it's good progress. But you're looking at 1.2 million to 1.3 million tonnes a month mining every month, if you would have achieved 16 million tonnes. And we -- there's a bit of -- there's an evolution still required to get there. I'm very confident on that part, but it is going to take time to be able to do so. As I say, mine enough waste to get done up ahead and to consistently and sustainably be able to increase the mining rate above that 1 million tonnes a month. So looking with the charts we always use for consistency. So we're looking here as always effectively back 4 quarters. We look at 5 quarters the equivalent quarter last year and then the interim quarters. And I guess what we can see is that to from the June quarter in '24 through to the March quarter, we really were mining at around that 2.5 million tonnes a month -- 2.5 million tonnes of quarter, we were able to sustain that a little bit of variation. You can see in Q4, we had that distinct step up, and we mined, it was about 2.7 million, 2.8 million and with 1 million tonnes, we'll be closer to that if we sustain that for full quarter 3. So we're now seeing that step up in mining rate. There's a way to go yet, but we're very pleasing that we've already started on that journey to ramp up the mining graph. How does that translate through to Feed? Again, similar story, as we've done before, the BFS is the dark blue or green line. The actual is the light and then the dotted lines of grades from the block. There are probably 2 key points here at the moment. You can see that we've seen the uptick in the Rougher Head Feed volume, largely driven by that uptick in ore mined. And that means that whereas previously, we were running around 75% of ore -- of Rougher Head Feed being generated based on the ore we were mining, we're now sort of circa a little bit above 80%. So we're already seeing that benefit. And as we push more ore through the DMU, we will be able to raise the Rougher Head Feed production and ultimately achieve that design rate consistently, irrespective of the grade. Grade a little bit lower in the current quarter. That was a few things just partly reflected where we were in the ore body. And also you can see that in the block model -- a little bit below the block model, partly because managing waste into times we're mining a bit more of the lower AT1 ore to keep the DMU full while we were trying to be catching up with waste mining. So over time, we'll continue to look at doing that at times because one was quite rich in Zircon that ultimately, we would feel that as the mining rate increases, we'll largely be targeting the ore that we had in the original mine plan. The process plant, some, again, designed versus actuals on both recovery and grade. What we are seeing is now consistent with -- really much consistent with design are still comfortable that as we're pushing more material to the plant, we're sustaining that good overall recovery as per design and we are making products that are in line with our expectations. We don't have a hard target for quality. We basically are -- we make what -- we're making a salable product and allow that grade to vary a little bit. In terms of the ilmenite product, similar story. Recoveries still have been above and in line with design, and we're sustaining that as we increase throughput. Grade very much in line with the design. We don't do a secondary process of all this material. So it largely -- the grade is what you'd get out of ore, the quality of the materials largely determined by where you're mining. Yes, so that's what sort of looks like in terms of the key production KPIs for the quarter. As I said before, you see the price for quarter is quite steady around that 2.5 million tonnes, the big step up in the current quarter. And then the way to think about it is that was 1 quarter of a 5-quarter ramp-up plan. We are still targeting to be -- have the ability to mine at 4 million tonnes a quarter by the first quarter of FY '27, so effectively 12 -- well, when we're reporting the June quarter next year, 12 months from now, we would expect to add the capacity to mine at that rate, to be able to mine at that rate, and have achieved that rate during the June quarter, but not have sustained it for the full quarter. So hence we say the first full quarter at a higher rate is the quarter a year from now. In terms of cost and track production. Firstly, zircon production. Again, strong quarter for production, up Q-o-Q, consistently building, shipping a little bit above production. And then as you all know, we did have a deferment of some shipments late in the June quarter. Unfortunately, we actually had a zircon vessel alongside, the Jenny ready to load from the crane fail. So we had to hold on that load. And then there was a ilmenite vessel due in a couple of days later. And so we actually missed 10,000 tonnes of June sales that we would have expected to have made should we've been able to ship. We expect to catch that up in the current quarter as well as shipping what we produce. So overall, we're looking at production to continue to increase sort of marginally quarter-on-quarter building towards that higher production in a year's time. And shipping sort of what we produced plus a little bit of that catch-up shipment or shipping that catch up shipment. I will say that the 2 deferred shipments actually did ship in early July. So ultimately, the crane -- it was an unfortunate time the crane was down for circa a week and it bridged the year-end. So the shipments that would have been late June ended up in early July. In terms of ilmenite. Similar sort of story. Sales and production more in line for the quarter. We actually -- again, here, we would have done a little bit of catch-up shipping, but we weren't able to load the last vessel that has shipped now. Current quarter began expecting production to increase for quarter as we increase mining rates and to ship more than we produce. So we are looking at another record production of -- a record quarter of production and sales in the current quarter. And building again, building towards that a year from now, enhanced production rate at the 220,000 to 240,000 tonnes a year of sulfur ilmenite concentrate. The cash flow for the quarter, probably personally highlighted the way I sort of think about this as a second consecutive quarter of operating cash flow positive. We don't see certainly at a relatively restrained price we are able to produce positive net cash, which puts us in a different situation to perhaps some peer operations that found themselves operating with negative cash flow, which is a very different situation to manage. There's definitely room for improvement here as we ramp up. We expect obviously revenue to go up and costs go up less. So we do expect to grow the cash -- operating cash flow per quarter independent of any change in price. Yes, for the nonoperating cash flow allowance here. The prepaid -- there was a net movement in prepaid of about AUD 20 million. We repaid the last of the first 2 facilities, and we did drill down another one effectively to help manage cash flow through the quarter. And that more or less was equal to the principal payment that was made to Orion. So we did make the first debt repayment on time and in full, and a pleasing outcome. And this outcome, we still had that -- we were still carrying inventory at the end of the quarter, given those deferred shipments. Just in terms of the Orion, the debt facility, we obviously made that first repayment. I think those who were on the equivalent call a quarter ago, I spoke about the need to reshape the cash flows to align them -- to reshape the debt repayments to align them with the expected cash generation given the new plan. And highlighting the fact that the original repayments, the June payment then a step up for the next couple of six-monthly payments and then a decline was based on a different ramp-up schedule, different costs, different pricing. So we're in the exercise with the lenders of reforecasting the cash flows over the life of loan and looking to reshape those payments to align them with expected cash generation from the asset. That's a process that takes time. It's not complete, so I can't make any comments about the likely outcome there. But the expectation is that we generate enough cash over the life of the loan to allow the repayments to be made just not in the shape they were originally. Probably also we're expressing that fixed repayments tend to be made on a low-cost forecast. So yes, you always create a bit of room between your sort of base case expectations and what your fixed commitments are to the lenders, and we're working through that process at the moment. I think that's probably all I want to say in terms of prepared remarks. So happy to take questions now.

Thank you, Bruce. We've got a few questions rolling in for those watching, please feel free to submit your questions for the Q&A and we'll get around to them. Just remember, obviously, Sheffield Resources is a listed company. So anything that's too forward-looking, they might not be able to talk about just based on the listing rules, but I think most of you sort of know what they can and can't. Bruce, just to start off with in talking to you about the market, especially in China. Can you give us -- maybe bring out your crystal ball again as I often ask, how is the market looking? We've had some commentary from Iluka. How are things on the Sheffield side?

Look, I think it's interesting. There's been a lot of commentary from others and probably sort of generally in the market that we've seen price pressure in China this year, sort of softening demand. I know that Iluka declined to provide guidance for the current quarter. So there's obviously a bit of uncertainty there. I think what I would observe is it was in the quarterly, we effectively -- we had flat pricing quarter-on-quarter, particularly about zircon, which is where we had our variable price exposure. We had flat pricing quarter-on-quarter. There was a slight uptick that was driven by composition rather than sort of underlying price. And so we thought that was a pretty good outcome. Effectively, we've been flat for 3 quarters. So I think since we started resuming sales in the fourth quarter last calendar year, we more or less had that 540-ish type pricing in net. I think what I would say is, certainly, as in China recently, there is -- well, I think it's certainly the -- I wouldn't say the band is playing and everything is rosy, but I also didn't feel like -- I didn't feel terrible either. It sort of feels like there's a bit of carrying on as we are at the moment. And I think we expect to continue to see some price pressure in zircon. It's sort of inevitable. But I think we have a bit of a view that our product is probably more closely aligned with the way the Chinese market works today, predominantly a concentrate market, not a big consumer of premium zircon focused on sort of substandard -- super standard substandard, a lot of different sector mixes, actually ceramics, a lower proportion of consumption in China than elsewhere, more focused to summer. It makes sense, China is an industrial manufacturing hub. So some of the demand sectors or those that feed more into those other sectors like foundry and refractory and chemicals seem to be doing the right and the Chinese customers focused much more on concentrates than final product zircon. So I think we're very pleased with that price outcome. I think we will come under a little bit of pressure for price. But at this stage, we're certainly not seeing -- we are not seeing the market moving probably dramatically in either direction for the next quarter or two.

The fact now that you have so many sort of approved customers, is that helping with the price pressure as well?

Definitely, if I think about a year ago, we had 3 customers, and those 3 customers are taking a lot of product and ready for more, and we couldn't sell to anyone else. So that's a pretty invidious position to be in. A year on, I think we're at 15 now. It's become less important to count them every day, but we have added more permitted customers in the quarter. We've had more new customers taking shipment for the first time. And that just means that if one customer cannot take another one might if there's still processing material, it just gives us more choice. And so I think it gives us a greater ability to kind of fill out the order book by talking to a number of people at once. So certainly, that has made a big difference to us as an individual or stock market based, essentially, it means we can sell to a broader range of customers in that market.

Okay. Interesting. A few questions here, 1 from Chris Baker. When do you think you'll get to a steady state on waste mining removal? Do you think that the mine is ramping up a little more rapidly than previous guidance?

No. Thanks, Chris. But as I said in my commentary, we're really expecting that we would be progressively ramping up. I think in terms of waste mining, it's probably less about getting up to the capacity we need and we're about getting ahead. We've been at the hand to mouth on ore available for mining. So maybe a quarter or so to get -- to allow the waste mining to get fired up ahead and then ramping up the mine. To fill the process plant is the key point. At some point, we're not just going to be mining flat out. We'll need to be mining to fill the process plant. I think to sustainably, we need to -- the ramp up is all about sustainability. Can you do it month in month out, quarter in, quarter out. But I do think that's a journey. It's not instantaneous. So we're comfortable with our guidance. Just to be clear, we're not saying -- we're saying we will achieve high -- we will have the capacity to achieve the mining rate in the June quarter next year, just we don't expect to be able to do it for the full quarter. So we're now less than 12 months from achieving that rate, which I think is a realistic time frame. So certainly, at this stage, no change to our expectations about how long it takes to achieve that ramp up to the higher production level.

Okay. Great. Just another question here from Chris. The DMU, obviously a critical part of the mine, are you pleased with its performance?

Yes. I mean we have to be. It's performing better than it was. Again, the journey, not an event. What you find is that you move to the -- you find new things and that's a process of working with -- that's not a piece of equipment we own. We -- that's provided by a mining contractor working with them on how you work to continue to enhance both throughput and availability. It does make -- we are mining at a relatively high rate. So being able to mine every day when you're not -- all day every day when you're not doing DMU moves is a key part of how you sustain that higher mining rate. So again, that's -- there's a process there about continuous improvement around that. But the DMU is on that journey. But we're not -- we're definitely not there yet. It's going to take time. The screen optimization, for example, which we've talked about before, we haven't done that yet. We are doing the work. But deploying the new screens is probably still a quarter -- probably last quarter of this year is the soonest that will happen. So there are still things happening that will need to happen to fully get that ability to mine at that 4 million tonnes a quarter equivalent rate when we need to.

Okay. Another question here from anonymous. But basically asking whether or not there's an opportunity here for cost reductions moving forward.

Yes. I mean I think the simple answer is yes. I think really the focus we've had has been -- we've been very focused on making sure we're lifting production. I think the reality is we need that -- we need to be at or near design. Throughput is what gives us the sort of most sustainable business model. Then focus -- I mean, it's not that there's no focus on cost. But as you get more like steady state, you have a greater ability to understand the cost and look for the opportunities. Inevitably in any new operation, particularly when you're chasing production to start with, you do build some inefficiencies into what we do. And we're certainly looking for the opportunity to reduce not just to have unit cost savings through increased production, but also to actually look for opportunities to reduce overall cost. So that is a big part of what we'll be looking for going forward. I think we see that as, again, we've modeled and designed, and we're working on the business as if there's no magic bullets here. We need to make it work with this cost base and these prices. And cost savings and so on would be upside from what we currently are anticipating. But certainly, I do believe there's opportunity to reduce costs over time. Reduce -- as we produce more total costs will go up, but we'll have the opportunity for cost reductions, irrespective of what our production rate is.

Yes. Okay. So especially on a per tonne basis as you mine.

Yes. So the per ton will come down because volume goes up, but we will also be looking to try and compress the costs where we carry as well. So a combination of the two and definitely targeting the areas as we're ramping up and growing revenues. We're definitely looking for -- but I think I've said it before, we have the 50% cost -- more or less 50% fixed cost base. So as you increase production, you are looking for sort of circa half of that to sort of flow through as margin.

Just going back on to the zircon market, when you first had an operating mine and a lot of the narrative around the zircon market was obviously we have JA that's come to market, there seems to be this deficit forming. Do you still have that view looking forward a couple of years? Is there sort of supply chain?

I mean I think yes, there's kind of -- there's probably 2 -- I think thesis about there are some significant sources of zircon that have been in the market now for an extended period of time and are nearly into their mine life, and it will be difficult to replace for names true. So JA, a couple of years out, it's definitely into the -- it's got close. And I think a look to themselves, I think it was in the previous quarter, probably, there was an update where they talked about it, but they are focused on a couple of life extensions associated with it, but those are very, very different deposits. If you actually look at a grade sort of zircon grade, heavy mineral grade, they just look like ordinary mineral sand deposits. They're not JA with a very, very high zircon content. So I think they might provide some life extension but they're not going to provide value that came out of there. We still haven't seen a decision to proceed resulting South at Richards Bay Minerals, which means that RBM continues to probably slowly decline through the end of the decade. Tronox is maintaining production. So if you look at the traditional big three, there's a reasonable amount of that should come out probably on a 2-, 3-year view. Not today, the capacity is there today. Probably the other component, which is sort of interesting is that we have seen concentrate slowing from places that people didn't traditionally associate with. So there is more HMC shift from Mozambique today than there was previously into China. Well, it doesn't contain a huge amount of zircon. It does contain zircon. So that's sort of incremental Zircon. We've seen a bit more out of Brazil. We've seen out of places like Nigeria, which traditionally did not export a lot [indiscernible]. So I think there's been -- in the short term, there has been a little bit of -- and I think this is always a little bit the way that there is probably a bit more flex capacity than people imagine. And certainly, with China very focused on concentrates, we have seen sort of new interesting sources of supply for concentrates, which add up to a reasonable amount of zircon, but they don't replace JA, for example. It's very difficult to replace an asset like that.

Yes. Interesting. Sorry to be flipping around, but we're going back to cost again, Bruce. Someone here is just asking if you could just explain why we had seen a bit of a jump from in the last two quarters in costs. Was there anything in particular that may cause that?

A lot of it is the transition costs from -- into those mining is a big part of it. So in the March quarter, we did have -- we were starting drill and blast. We still -- there was a transition from the previous mining method to that, and we were demobilizing the previous waste mining contractor. Then in the June quarter, we actually hired someone. We had a temporary contractor, a local contractor who kept waste mining going. In the interim, we had mobilization associated with the new mining contractor. So there was a bit of one-offs associated with that transition. Certainly, we are comfortable that the underlying cost base is well. It's not -- we don't have a given product. I think previously we said if we were sustaining that 2.5 million to 3 million tonnes a quarter of production. We expected $55 million to $65 million a quarter of costs, and that's still our expectation that, that's where our true cost base is. Obviously, as we ramp up, that cost is going to go up by definition. We are going to move more material, but we expect that to result in the unit cost, right. So we certainly don't believe that the last couple of quarters reflect permanent change in the underlying cost.

Okay. Good. Just moving on to Capital Metals. Obviously, you followed your money to keep the 10%. I think you mentioned in there that also kept your rights. Would you want to just explain a little bit around, I guess, what the attraction is to the deposit and what the rights are that you've kept as well?

The second part first, the rights, I mean, investments, we have an antidilution right, which allows us to maintain the 10%. If we drop below that in -- while you might reach an agreement with the company to do so. We don't have a right to maintain our share. And we have the board seat and some things like that. So it's -- those are the rights. So I think that's -- if we didn't like the project we wouldn't follow the money that we wouldn't have done it in the first place. I think what we like about that project, I mean, I think fundamentally, and we've seen this in the current quarter that they're drilling there. I have always said, Sri Lanka, a very high grade. There's a small deposit, but very, very high grade. And when I say very high grade, in situ can be 60%, 70% like in parts and averaging well into the 10s to 20s type range. They also found that delay, which we always expect because the historical drilling is quite shallow. So the resource is a decent size, but because of the grade, it enables a low capital developer. You don't need to move a lot of tonnes to get a reasonable amount of production. And because of that, you could actually operate at a relatively small scale and had a good business. So the expectation is that business can -- that volume can get into production for sort of, I think it's in that USD 20 million to USD 30 million range, which is pretty rare. So we think that's quite an attractive proposition overall. And interestingly, the development in the quarter, local partner who sees that, that is the kind of funding that could actually be provided within Sri Lanka from a not only within Sri Lanka, but effectively by Sri Lanka, which is sort of interesting. So then you have that alignment between the development and local interest and so on. So I think we liked the project anyway. The deal with Sri Lanka, I think just enhances the likelihood of that happening and probably a clearer path to funding and potentially funding based on a view of value in the underlying entity rather than Capital Metals' current market cap.

Okay. All right. So that all goes well, that could add some pretty good value to Sheffield. What -- I guess, what's the plan moving forward, it then goes into a production, obviously it becomes a bit more valuable. Is the plan to become more involved in that project? Or is it just to retain and increase in value in what you already have?

Look, I think, yes, those cases, we retain what we've got and it increases in value. I think we need to be -- everybody understands this, that we're very focused on Thunderbird. Thunderbird is not generating cash for us. So I think if I had a magic money tree, would we be interested in being -- would that be an attractive investment for us to be more involved to that project? Yes. But we don't have a magic money tree. So we're very happy with the 10% stake. We see that should grow in value as they progress the project, and we'll keep monitoring it. We'll see what happens. But it's not something that we're going to be -- we're not in a position to make any sort of material investment in there in the short term. A little bit of money to follow our money and protect our position is not -- that kind of cost is not really -- it's not material from what's happening at Thunderbird perspective. But going and spending millions of dollars on a third-party project is not what we should be doing at the moment.

Okay, cool. Moving on to the other project in Brazil, South Atlantic, maybe we could just do a quick update on that for those interested.

Yes. Like I said in the intro remarks, as a result of the drilling, we've now got a resource over the whole -- over the two main deposits, Retiro and Bujuru. Very much along with the exploration target, which isn't surprising. There have been a lot of historical drilling. The clarity is that we didn't -- it certainly wasn't drill compliant back in QA/QC, et cetera. But I think overall, generally showed pretty good correlation with historical. So we all validate that. But more still -- we've basically got an up-to-date resource. We had a good understanding of that deposit now. So I mean it's a large deposit. It's very low. It's relatively firm. It's not a deep deposit. No stripping. It's at surface. Definitely a dredge more. But there's a ways to go there. We've only got effectively an environmental permit on the southern deposit. We have a mining or installation licenses for a subset of that, that's the joint venture. So I think there's a few steps required before that project is really ready to proceed into full production. And I think I also sort of -- I look the current market dynamics and so on. Now is probably not the time to be rushing to bring a new large mine into production, but very good quality product. It sits in -- it's certainly well positioned to supply both local and Western markets with high-quality zircon. And there's a lot of optionality in there. But we're certainly not in any particularly a rush to be moving into execution. We don't think the time is right and the project is not actually ready in our view. And so we're working with the partner there. The idea would be that we continue on the path we have, which is that -- there's a sort of slow burn to get the project ready for an execution decision. And when that's the case, we look to move it further. But I think in the short term, it's more about expanding the approvals to get more of a project able to be included in the initial mine plan to support the economics of that. And that's probably aligned with where we are in the market at the moment, and we are a couple of years away from that squeeze on zircon.

Yes. Okay. So low cost, but high value derisking.

It's optionality, a lot with all options. You want to spend money to, a, retain the option and b, maximize the value of the optionality but you don't want to get ahead of yourselves. You're not trying to pre-exercise. So we don't see it again -- we don't see that as a significant cash burn for Sheffield in the short term. But we do like the project, we would like to retain the optionality on.

Well, look, I think we're out of questions from the audience. Bruce, I'll leave it to you any final thoughts? And what are you most looking forward to in the next quarter or two?

I think it's probably final thoughts what we've been talking about, I think very strong quarter production-wise. Sales, I think we're on that path to the new business plan. We need to continue on that. But ultimately, it feels like we've started that journey and we can build on it from here. So we're all very, very pleased with that quarter and sort of onwards and upwards.

Okay. Well, look, we are recording. We'll send out the recorded link to those who have registered and anyone who may have missed it and it will also be on the Sheffield Resources' YouTube channel website. And obviously, feel free -- there's contact details there on the screen. They will be on the website as well. Feel free to reach out to the team. I'm sure they'll get back to you with any questions. Bruce, thank you very much for your time, and thank you, everyone, for joining.

Thanks, Peter, and thanks, everyone.