Spartan Resources Limited (RMS) Earnings Call Transcript & Summary

Good morning, everyone. Thank you for taking the time to dial in. Joining me this morning is Spartan Resources Executive Chairman, Simon Lawson. Welcome, Simon.

Thank you, Mark.

As you'll be aware, today, Ramelius Resources and Spartan Resources announced a recommended scheme of arrangement, whereby Ramelius will acquire 100% of the fully paid ordinary shares in Spartan that it does not already own. The scheme has the full support of the Spartan Board and its major shareholders. As many of you will be aware, Spartan is the owner of the Dalgaranga Gold Project, which includes the very high-grade Never Never and Pepper deposits and associated processing infrastructure, located only approximately 65 kilometers northwest of our Mt Magnet mining and processing operations in WA. Along with the announcement that's gone out in the ASX this morning, we have released a detailed presentation that we will be speaking to this morning via an audio webcast. If you are on audio only and have the presentation available, we will be starting on Slide 9, noting that there is a number of pages of important notices and disclaimers that you can read at your own leisure before that. We just move to Slide 9. We are very excited to be announcing this transaction today. Bringing Ramelius and Spartan together is a logical and synergistic combination that creates a leading Australian gold company with strong, highly profitable existing operations, a supercharged growth profile and exceptional exploration upside. Our vision post this transaction is to be a highly profitable plus 500,000 ounce per year producer by FY '30. That vision includes developing and incorporating Dalgaranga into our Mt Magnet Hub and also developing our Rebecca-Roe growth project as a stand-alone operation east of Kalgoorlie. The combined Ramelius-Spartan entity will have a pro forma market cap of $4.2 billion whilst retaining a strong net cash position of $503 million and still benefiting from ongoing cash flow from current operations. From a mineral inventory perspective, the combined entity will have gold resources of 12.1 million ounces, reserves of 2.6 million ounces with a maiden ore reserve at Dalgaranga expected around the end of this calendar year. In addition, combined processing capacity of 4.4 million tonnes per annum and the potential to expand this further. In addition to this, we will continue ongoing aggressive exploration of what Simon and I think is the most exciting new discovery in Australia, but also across our broader portfolio. Simon and I are delighted that this transaction will be bringing together 2 great companies with such complementary skill sets and assets, and we are excited for what we can build together in the future. If we move to Slide 10, we have a map of the combined group's operations, which clearly demonstrates the geographic logic behind the transaction. Integrating Dalgaranga is expected to supercharge the recently released Mt Magnet mine plan in all aspects and is expected to deliver higher overall grade, higher ounces and higher margins and opportunities to optimize existing infrastructure to increase throughput. Ramelius intends to substantively increase its exploration budget with a renewed focus on true exploration and resource growth across the expanded tenement package, and we're very well-funded to do this, not only from our current bank balance, but with an additional $250 million in free cash flow expected before the end of the financial year. As I mentioned, the vision is that the combined group is producing plus 500,000 ounces per annum by FY '30. At this point, I'll hand over to Simon so that he can provide his take on the merger.

Thank you, Mark. This is a highly attractive and transformational combination, which we believe represents a great outcome for both Spartan and Ramelius shareholders. With the ongoing development of the Juniper decline at Dalgaranga, we expect the enlarged Mt Magnet-Dalgaranga hub to cement itself as a long-life and low-cost mining operation. Spartan shareholders will be able to benefit from continued exposure to this exciting journey while also gaining exposure to the rest of Ramelius' high-quality WA gold portfolio. I'm looking to stay involved in the next chapter of this exciting journey as Deputy Chair of the enlarged Ramelius company, where I will be providing direction into a renewed exploration focus at a number of existing Ramelius assets as well as the continued drilling and growth of the high-grade Dalgaranga ore bodies. Moving to Slide 11. The transaction is structured as a recommended scheme of arrangement, whereby Ramelius will acquire 100% of the fully paid ordinary shares in Spartan that it does not already own. Spartan shareholders will receive $0.25 cash and 0.6957 Ramelius shares for every Spartan share held, valuing Spartan shares at AUD 1.78, an 11.3% premium to Spartan's last closing price and a 27.5% premium to its 30-day VWAP. If the scheme is not successful or terminated in certain circumstances, a conditional off-market takeover offer for the same consideration is under the scheme has also been launched, both the scheme and the takeover offer have been unanimously recommended by the Spartan Board. In the absence of a superior proposal and subject to an independent expert concluding and continuing to conclude that the scheme is in the best interest of Spartan shareholders. Spartan's substantial shareholders, Tembo, 1832 Asset Management and Fourth Sail, who collectively own 18.9% of Spartan, have each provided voting intention statements to vote in favor of the scheme. Upon successful completion of the scheme or takeover offer, I will join the Ramelius Board as Non-Executive Deputy Chair, and Deanna Carpenter will also join as a non-executive director. We look forward to welcoming -- we look forward to joining the combined Board. Turning to Slide 12 and continuing with Board composition. The combined Board brings complementary skill sets with Ramelius' operational DNA paired with Spartan's exploration DNA. We will work together prior to completion of the scheme to ensure the best skills are retained within the combined group. Over to Slide 13, which shows a snapshot of the combined group with a pro forma market cap of $4.2 billion, a strong net cash position of $503 million and significant gold endowment with a combined resource of 12.1 million ounces and reserves of 2.6 million ounces. And as Mark alluded to, a maiden ore reserve due at Dalgaranga by the end of calendar '25. We expect the liquidity of the combined group to be very good and for the larger entity to become a go-to Australian gold investment. Slide 14 features the key dates for the completion of the transaction. Under the timetable, the first court date under the scheme will be held around mid-June 2025, with the scheme meeting for Spartan shareholders to vote on the scheme to be held in mid-July 2025. In the event the scheme is approved by Spartan shareholders, the second court date will be held around mid- to late July. And if all approved, the scheme will be implemented in late July to early August this year. Takeover period is conditional on the scheme not proceeding with the takeover offer period commencing in mid-June 2025 and closing at least 20 business days after the date of the scheme meeting of Spartan shareholders. I'll now hand back to Mark.

Thanks, Simon. If we can go to Slide 16. This slide shows Ramelius' current Mt Magnet mine plan and the output of the recent Rebecca-Roe PFS combined prior to any contribution from Dalgaranga. We do expect the high-grade resources at Never Never and Pepper to increase the overall ounces produced, increase the average grade of production, decrease the per ounce production costs and increase per ounce margins. Overall, this sets the basis of our vision for Ramelius to be a plus 500,000 ounce producer. I'll now step through and further detail the reasons why we believe this is a transformational transaction to be undertaking. Slide 17 details the rationale for the transaction, which we think is compelling. The merger of the 2 companies will create a leading Australian gold producer with a supercharged growth profile and exceptional exploration upside. The transaction signifies the combination of complementary and proximate assets with significant work already undertaken to optimize the obvious synergies of the Mt Magnet and Dalgaranga projects. The combined group will have a strong growth profile with the future development of Dalgaranga, the Eridanus cutback and the Rebecca-Roe project all expected to proceed. The combination matches Spartan's excess processing capacity and high-grade mineral resource with Ramelius' large mineral resource, currently operating plant and Tier 1 operational team. Our market position is materially enhanced with the combined group to become a larger, more liquid and more investable gold producer with the aspiration to be within the ASX Index at some point in the not-too-distant future. The merged entity will have a robust balance sheet set for future growth with over $500 million pro forma net cash and an undrawn $175 million financing facility. The transaction is expected to generate cost savings through rationalization of site admin and duplicate corporate costs. Given the complementary strengths of the 2 companies, the transaction is mutually beneficial, and there are significant benefits to both sets of shareholders. Slide 18 is how we plan on delivering our vision to expand Mt Magnet itself to over 350,000 ounces by FY '30. Firstly, we'll progress an integrated study on Mt Magnet and Dalgaranga, targeting a robust 10-year mine and optimization of processing options at the new Mt Magnet Hub to deliver the highest value for shareholders. It's important to point out that significant work has already been undertaken to optimize the obvious synergies of Ramelius' Mt Magnet operations with Spartan's Dalgaranga operations, and we'll touch on those more a little later. We will enhance processing. The Mt Magnet mill is currently operating just under 2 million tonnes per annum. Ramelius will reexamine capacity upgrades above the previously announced expansion to 2.5 million to 3 million tonnes. Spartan's Dalgaranga mill is currently on care and maintenance with an installed processing capacity of 2.5 million tonnes per annum. We note that the operational readiness has been maintained during this care and maintenance period. We'll investigate restart options in conjunction with exploring capacity upgrades at Mt Magnet. Importantly, the initial plan is for the high-grade Dalgaranga ore to be treated at Mt Magnet to fast track Dalgaranga gold production. And final -- the final processing configuration will utilize optimized capacity from existing and potentially expanded infrastructure. All source flexibility and enhanced processing capacity are the key enablers to achieving our vision. The expected development and timing of final investment decisions on the Eridanus cutback is currently unchanged by the transaction with Eridanus expected to provide long-term baseload feed to the Mt Magnet mill. This is all subject to the outcome of the integrated study we mentioned targeted for release in the December quarter of this year. As mentioned earlier, we do plan to increase the exploration budget for our Mt Magnet operations with the aggressive exploration strategy implemented by Spartan that has delivered the Never Never and the Pepper resources to be applied to Mt Magnet and the broader portfolio. If we look at the Mt Magnet Hub -- expanded Mt Magnet Hub on Slide 19, there will be 2 processing facilities, 8 deposits and a significant integration opportunity. The planned integrated study will investigate a robust plus 10-year mine plan and optimize processing options to maximize value for shareholders. Eridanus Stage 3 or Eridanus cutback as communicated last week and Penny and Cue are currently delivering high-grade ore to the Checkers Mill, and we're currently carrying out high-priority exploration to extend those projects currently. The Never Never and Pepper deposits are the jewel in the crown for Spartan, and this transaction allows the processing of these ore sources to be fast tracked and also de-risked. Slide 20 sets out what a combination of Spartan's excess processing capacity and high-grade resource with Ramelius' large mineral resource look like. As mentioned, Dalgaranga is expected to supercharge the Mt Magnet mine plan with higher grade, higher ounces and higher margins. The combined resource sits at just over 100 million tonnes at 2.34 grams per tonne, which equates to an 18% uplift in tonnes and a 34% uplift in grade. This delivers a combined resource at Mt Magnet of 7.8 million ounces, a 56% uplift for Ramelius. Dalgaranga production is expected to help us achieve our vision to be a plus 350,000 ounce producer out of that hub, again, by FY '30. Over to Slide 21. The transaction will create a leading mid-tier gold producer with a robust balance sheet to deliver on growth potential. Post-transaction, we will become the largest mid-tier producer on the ASX, assuming that both Northern Star and Evolution are not mid-tier. Hub will have a leading balance sheet, both significant gold endowment, obviously, to be unlocked with enhanced milling capacity. The last one on the right-hand side. Ramelius has delivered sector-leading cash flow generation on a per ounce basis recently. And this is expected to not only increase but be extended following the completion of this transaction. Just a reminder, in FY '25, Ramelius is expected to generate over $5 million in free cash flow. On Slide 22, as we've touched on, we expect to achieve meaningful synergies both qualitative and quantitative from the combination of Ramelius and Spartan. These include expedited production by processing initial Dalgaranga ore at Ramelius' Mt Magnet Mill for an accelerated pathway to production. Greater operational flexibility achieved through the ability to truck and blend multiple ore sources, creating a robust and integrated operation. There will be a focus on optimizing our labor forces, equipment and capital across the combined Mt Magnet and Dalgaranga operations. We'll be streamlining CapEx profiles by deferring near-term CapEx associated with the Dalgaranga Mill, allowing an optimal program of capital to be established at both Dalgaranga and Mt Magnet, including assessments for respective mill expansions. Lastly, reduced commissioning risk with the Dalgaranga underground ramped up and ore transported to our Mt Magnet Mill in the first instance, which has a proven track record in processing high-grade ore prior to a final optimized processing configuration being determined. We'll also be doing work to maximize the value of the ore, and we expect to achieve meaningful synergies through the rationalization of site admin, removal of duplicate corporate overheads, positive tax synergies through the utilization of Spartan's tax losses and a considerable step-up in the tax cost base of Spartan's assets. Lastly, the combined team has a proven track record of operational and exploration excellence, and we expect these skill sets to deliver through value through sustainable production, mine development and exploration uplift. We'll work together with Spartan to ensure delivery of meaningful integration synergies to the benefit of both sets of shareholders. Slide 23 shows what we see as key attributes each party brings to the table. We are combining operational excellence and explorational excellence to deliver significant value for shareholders. Operational excellence is Ramelius' DNA. We have established operations and processing infrastructure and the experience in underground development and mill restarts and expansions along with a track record of value-generating acquisitions and a culture of productivity and capital efficiency. If I can speak on your behalf, Simon, Spartan's exploration DNA, established infrastructure and track record of discovery and growth provides complementary and diverse skill sets that Ramelius will leverage and continue to be one of the lowest cost, highest margin gold producers on the ASX, whilst maintaining the continued growth focus through ample exploration upside across the whole tenement package. We have admired what Simon and the team have done at Spartan and look forward to integrating the Spartan DNA within Ramelius. Moving on to the individual assets that will make up the expanded portfolio. I'll pass back to Simon so that he can talk about Dalgaranga in the first [ instance ].

Give you a bit of a rest there, Mark. Thank you very much. We're now on Slide 25. For those who aren't familiar, Spartan's flagship asset is the Dalgaranga Gold Project with a total JORC resource of 15.9 million tonnes at 5.61 gram a tonne for 2.87 million ounces. Central to that, the Never Never and Pepper Gold deposits are the key underground deposits with a combined high-grade resource of 2.3 million ounces at 9.32 grams a tonne. Freak is our most recent high-grade discovery just along strike from Pepper and Never Never with recent drill intercepts including 10.26 gram meters at 5.37 grams a tonne from 521, including 2.3 at 13.67 with a maiden resource pending. We are the owner of the existing 2.5 million tonne per annum CIL Dalgaranga processing plant, which has a gravity circuit and is currently on care and maintenance. And I'll just point out, it's less than sort of 5 years old. So it's in pretty good neck. With operational readiness maintained during the care and maintenance, we have kept it in that. good state. Our deposits are located on granted mining leases, allowing for accelerated development time frames under the proposed initial Mt Magnet Mill processing option. The underground decline is advancing towards the Never Never ore body with, I'd say, over 1,500 meters of development completed as at 1st of March. Over to the next slide, 26. Exploration is our DNA, and we have a track record of rapid resource growth and step-out exploration success, and that is what we plan on continuing to do. We are currently undertaking a 20,000-meter surface drilling campaign at the highly prospective Pepper-Freak and northern corridor areas as well as the Sly Fox target with first assays expected progressively over the coming weeks. The underground Juniper decline is currently well progressed, and there's a 65,000-meter underground drilling campaign that has already kicked off in February this year and will be 100 meters away from the Never Never ore body coming into the June quarter moving very quickly. Integrated study work is also underway, and we'll obviously integrate that with the Ramelius Mt Magnet mine plan, and we're targeting December quarter 2025 for it to be released. And here, I'll pass back to Mark.

Thanks, Simon. Slide 27 provides an overview of our current Mt Magnet mine plan that was released last week and the opportunity that underlies our vision to turn Mt Magnet Hub into a plus 350,000 ounce per annum producer. We released the study to expand the existing Mt Magnet Mill to between 2.5 million and 3 million tonnes per annum depending on ore blending, and we do plan on undertaking further studies to potentially increase the capacity further beyond these levels. What this will look like? We aren't sure just yet, but we will do the work and advise shareholders of the outcomes by the end of the calendar year. Spartan's Dalgaranga Mill provides an opportunity to optimize ore processing and blending across assets of the combined group. Slides 28 and 29 recap the Eridanus cutback and the Checkers Mill expansion that we announced last week. Work on these is both currently proceeding as planned, and the expected timing of the respective final investment decisions is unchanged. Lastly, we can't forget about Rebecca-Roe as it is important to lifting our overall production profile to plus 500,000 ounces per annum. Slides 30 and 31 recap the metrics from the PFS delivered in December last year. I'd reiterate that this is a robust gold project with scope for improvement as we move through the DFS process and continue exploration in the area. We remain on schedule to make a final investment decision on Rebecca-Roe in the September quarter this year. So in summary, we're really excited to be bringing the highly complementary assets of both companies together and what we feel is a sensible and compelling deal for both sets of shareholders. We feel that the combination of Ramelius' production expertise and financial strength, together with Spartan's culture of discovery, its exceptional high-grade Dalgaranga project and its excess processing capacity will provide an ideal platform for strong shareholder returns over many years to come for both sets of shareholders. We look forward to seeing what we can deliver together. You'll all be happy to hear that we'll now open the line for questions. If we could please, [ Amy ].

[Operator Instructions] Your first question comes from Hayden Bairstow with Argonaut.

Great transaction. I think it makes a lot of sense from my end. But just a couple for me. Firstly, just on the 2 mills and trucking ore between the 2 of them. Is there anything stopping you trucking any deposits to either mill? Or is it going to be limited to undergrounds at Magnet could go to Dalgaranga and obviously all the Dalgaranga stuff would go to Mt Magnet? Is that the best way to think about it?

I'll take that one. Thanks, Hayden. At the end of the day, we'll run a number of scenarios, Hayden, and whatever makes the most money for shareholders will likely be the way it lands. Running the high-grade Dalgaranga into Mt Magnet in the first instance makes a lot of sense. And that obviously defers capital that's currently planned at the Dalgaranga Mill. And you need to remember that even at 2.5 million tonnes per annum, the Mt Magnet Mill will be in the low $20 a tonne. And that's something that's important to consider, especially when you're considering 10- to 15-year mine lives that if you're running a mill that's in the region of double that cost, that needs to be factored into your decision-making. But we haven't landed on what those optimal scenarios look like. There is more work to -- we've started the work. There's obviously more work to be done as we can get into the detail on precise costs in terms of operating mill costs, in terms of haulage costs, road upgrade costs, et cetera, et cetera.

And how quickly could you do that? I mean, obviously, Penny and Break of Day starting to wind down. How quickly could you get Never Never or Pepper ore in to replace it? Does it line up in terms of a timetable?

Look, I've challenged that I think Cue and Penny are starting to wind down, Hayden, but appreciate that there is a limited time span to everything. In answer to the question, how quickly could we get Dalgaranga ore, Never Never specifically back to the Checkers Mill is before the end of this year, I think, would be a reasonable understanding in terms of first ore, but we'll obviously make those decisions as we integrate this all together, but we can see very much an accelerated pathway to getting access to that high-grade material given that we'll be 100 meters away from it in May to June this year. So we'll be very close, and then we'd be expecting to take that material straight back. Mark is not a fan of stockpiling high grade and neither am I. So we want to get it through that mill as quickly as possible.

Okay. And just one final one, just on the tax cost base you mentioned. I mean is it as simple as just turning Dalgaranga into a $2 billion sort of taxable cost base? Or is it more nuance to that -- than that?

Look, I'll probably defer that to someone who knows more about the numbers than I do. My co-exec, Dave Coyne and Darren Millman, the CFO at Ramelius, have been talking extensively about that. I just know that it brings a lot of benefit to the combined groups.

Yes. Hayden, there is tax losses within Spartan that obviously can be utilized. But I think the bigger picture is the write-up in the value of the Spartan asset and the combined group, which then can be depreciated. Obviously, Ramelius is in a cash taxpaying position. We wrote a check out not so long ago for about $68 million. So anything we can do to reduce that going forward, obviously, will be helpful.

[Operator Instructions] Your next question is a follow-up from Hayden Bairstow with Argonaut.

I certainly ask [indiscernible]. So just back on the mill expansion studies. I mean what's the capacity then to completely change the plan at Magnet? So I was just keen to understand you sort of talk about capacity beyond the 3 million tonnes. I mean have you got any sort of guide as to is it the 4 million tonnes or is it slightly bigger? What are you sort of thinking there?

Thanks, Hayden. Yes, look, I have touched on this earlier. Our Mt Magnet mine plan produced something like 42.5 million tonnes. So there is a suggestion that sort of 2.5 million tonne run rate is a touch undersized. One of the things that you will find is that you get to a certain size where you're almost building a whole new mill, which will take longer and cost significantly more than the $95 million we've got. So we have to balance that off. But I think it's incumbent on us to do the work to look at a larger mill, along with the other scenarios of just going for the current expansion, not expanding at all and turning Dalgaranga on at 2.5 million or a nuance on that. So there's a number of scenarios. And at the end of the day, I don't think emotional subjectivity will come into it. It will be what actually produces the highest value that we end up going for, and we'll do that -- we'll work on that tomorrow. We'll start on that stuff.

Yes. Okay. And just one for Simon, just on the underground development. So you're 100 meters away from Never Never. How quickly do you get from there back into sort of Pepper and get even sort of high-grade material out?

Yes. Look, it's an important consideration, and that's one of the reasons why we're having the conversation we are now because there's sort of a -- stand-alone, there was an 18-month time frame to get to a point where we would produce gold on a stand-alone basis, and there was probably a 2-year time frame before we got to the top of Pepper. What this does is allow us to continue with that development, get into Never Never, produce cash flow and help to increase the group's productivity and cash flow generation. And then it will still be a product of physics that's still going to take us 2 years to get to the top of Pepper. But by that stage, as you alluded to, there are other high-grade sources around the company that will start to become limited, and that will play very well into an expanded mining profile at Dalgaranga. Obviously, we've got to do the work on that to make sure it all measures in properly. But for me, this is a -- it truly is a transformational process that we're going through here. And I think what we've done by putting that high grade at Dalgaranga right in front of that mill at Checkers for a start for the first 2 years, at least before we get to Pepper, is an amazing opportunity.

Yes, fantastic. And just, Mark, just following up on a comment you made before about trucking dirt and the work you need to do on a haul road. I mean what's in place now? And what would you have to do to get Dalgaranga back to Magnet?

Thanks, Hayden. It's actually a road that we've been down before, literally. We've actually hauled ore from Western Queen, which is 100,000. Actually, from Mt Magnet, you have to go past Dalgaranga to get there. So we've -- we've hauled ore on that road. So we have undertaken upgrades on that road, albeit it's a gravel road currently, and we'd have to do a little bit more work. If we were to do that long term, for example, that 60,000, 70,000 in my mind would have a [ 2,000 ] seal on it to reduce outages due to rain and ongoing road maintenance costs. But again, that's subject to further work. I think it's pretty limited in what it needs to do. The guys drive up and down there on a regular basis now and bus people in and out when they need to. So it's a road that's been used before. It's largely in the Mt Magnet Shire. We obviously have an ongoing relationship with those guys that -- and haulage in the district that we'll be looking to build upon.

Okay. Brilliant. And look, just one final one for me. Just on your shares in Spartan, Mark, are you definitely canceling those? And I know a previous merger was they were left as treasury as a potential way to raise money at some point? Or are you going to do it that way or just cancel them straight up?

I think we'll go for the canceling. Yes, with our balance sheet, we did -- I do know the transaction you're talking about. I don't see us doing that.

Your next question comes from Michael Scantlebury with Euroz Hartleys.

Well done on the transaction this morning. Just talking to the aspirational target of 500,000 ounces by FY '30. Is there potential to obviously try and bring that forward? And what's the kind of upside to go beyond that, assuming the group production kind of numbers?

Thanks, Scant. So at the moment, we think that that's a sensible vision, aspirational target, if you like. Simon mentioned that we'll hit -- or at the moment, they'll hit first ore this year. So there'll be a small amount of production in FY '26. And like all underground mines, they take a while to ramp up. So there will be a ramp-up period from sort of the start of FY '26 right through to, I think, maximum production or peak production in that FY '30 year to produce the 350,000 at Mt Magnet with the average around 150,000 at Rebecca-Roe to sort of help you understand our 500,000 ounce a year vision. If we can do it quicker, then we will. At the moment, I think that's a reasonable estimation given that underground mines take a little while, probably longer than people would like to ramp up, but we'll be doing it as quickly as possible.

And look, we'll certainly be drilling to make that a lot longer and a lot more sustained as well. That's the vision, Scant.

For sure.

Perfect. Makes sense. And maybe just one more for Simon in terms of just your exploration kind of view on Ramelius' assets. Is there any one in particular that you kind of love to set your eyes on, obviously, outside Dalgaranga?

Look, I think we've proven pretty categorically you can take mature gold fields and find new discoveries. I'm looking forward to getting right into the detail, particularly at Mt Magnet because I think it's just -- it's not shooting fish in a barrel. I'll give credit to the guys that are already looking for upside within the Ramelius group, but I certainly want to help and assist where I can. And I think that there's a lot of ground to be tested there. And I think Mark and I are aligned on that.

[Operator Instructions] Your next question comes from Tim McCormack with Canaccord.

Just like it's implied in the presentation, but I think it will be nice to hear you guys say it that for Dalgaranga at full run rate just off Pepper and Never Never is at plus 200,000 ounce per annum center. And I guess further to that, like if Freak sort of tends to form up in that medium term, how many more ounces do you think that could add?

Look, I mean, I can take that. We haven't finished the study work yet, but I appreciate that you've forecast our production for us. Thank you very much, Tim. We strongly believe we can do that and exceed it from the Dalgaranga operation, and I'll let Mark and the team look over our study towards the end of this year or the middle of this year, and we'll be working to working together to make sure we get the best result there. But certainly, north of 200,000 ounces, I think, would be something that Mark would love to be able to come into the Checkers Mill along with the work that we're already doing down at Mt Magnet and the Penny and Cue assets coming back to that central facility. I think over the next 2 years, you'll see some pretty amazing performance come out of that central processing facility. And as Mark said, we'll be looking at increasing processing capacity with the optionality that we now have with 2 processing centers.

That's good. And just with your, Simon, exploration strategy, does it pivot at all? Do you have to go and attack more infill and things like that? Or are you going to balance the step-out stuff along that trend like you've been doing as well?

Look, nothing really changes. We obviously have a fairly nimble exploration strategy. We prioritize and deprioritize as we see things we like or don't like. We've been doing that the whole time through this journey. Mark has made a point of saying that he's been impressed with what we've managed to do with that asset that at one stage was challenged. And I think there's no intent to change how we do things. I just think that there's an expanded opportunity for that same exploration mindset to embed within the wider Ramelius group across that portfolio and start delivering those same upside multiples from the group. And I'm sort of really excited about that.

Well done, guys. It's a good plan.

Thanks, Tim.

Thanks, Tim.

There are no further questions at this time. I'll now hand back for closing remarks.

Nothing more from me. Thanks for taking the time to dial in this morning. Anything from you, Simon?

No. Look, men of few words. We just want to get on with it.

Thank you all. Enjoy the rest of your day.