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Thank you for standing by, and welcome to the Perseus Mining March 2020 Quarterly Call. [Operator Instructions]I would now like to hand the conference over to Mr. Jeff Quartermaine, Managing Director and CEO. Please go ahead.
Thank you very much, and welcome to this conference call to discuss Perseus Mining's March 2020 quarterly report that was released to the market about 0.5 hour ago. I'm joined on the call this morning by Andrew Grove, our Head of IR, and Andrew will answer all the very difficult questions at the end of this session with me, of course.Well, what a difference a quarter makes. Who would have envisaged when we last reported in January that 3 months later, the world would be the place it is today? A lot's changed, and you don't need me to tell you what or why. But it is fairly well accepted, though, that businesses in all sectors and in all jurisdictions are feeling the effects of the COVID-19 pandemic. And Perseus is no different, although I am happy to say that for the moment, we are coping quite well. In fact, we're in a relatively strong financial position, and the business is continuing satisfactorily for the moment. Now whether that situation continues for the remainder of this quarter and beyond, it's not possible to say.As we've separately reported to the market in the last couple of months, we have put in place a range of measures to secure our sites and to protect the health and welfare of our employees. These have included, firstly, establishing what we call our island mode business model where those areas of our operations that are critical for business continuity have been locked down and are accessible only after people have been suitably quarantined. Secondly, we work to secure our supply lines and to locate alternative suppliers where our traditional suppliers are struggling to meet their contractual commitments. And thirdly, we have refocused our immediate assistance to our host governments and communities with the emphasis on providing goods and services to local health authorities to help them manage the COVID crisis.Now looking forward, there are several key areas that continue to cause us a good deal of concern. And these are as follows: firstly, government-imposed travel restrictions. Now these impact us in several ways. For example, senior management is unable to attend sites at the moment and to talk directly to our people. But perhaps, more importantly, Perseus is unable to bring in technical specialists to site on an as-needed basis. Now this is very important, particularly if mechanical specialists are needed in the event of equipment failure or to carry out essential tasks like a mill reline or the like. We've also been prevented by the travel restrictions from changing over our rosters. So for example, at Sissingué, our expat workers have been on-site for about 12 weeks as it is, and they look like being there for quite a while longer, given the travel bans. Now this has implications for productivity in the long term, has implications for productivity, safety, fatigue management, et cetera, all of which can go to production and cost.Secondly, an issue of concern is the timing of reopening of our -- of trading partner countries, and by that, I'm referring to countries where we currently procure our key consumables. For example, we do source a lot of material from South Africa, which has been very tightly closed to business recently, although the President of South Africa's recent statement that they will shortly revert to stage 4 lockdown from stage 5 lockdown is encouraging for us and may open up some supply lines there.Thirdly, opportunism in price gouging by suppliers. Although it hasn't been too widespread to date, we have seen some situations where the prices of goods and services have escalated overnight. In such circumstances, we've sought out alternatives, but I can say we certainly won't be forgetting those who have tried to take advantage of the situation.Fourthly, at the moment, the issue of movement of freight in our host countries is something of concern. At the moment, everything is running very efficiently and smoothly. So once goods clear the ports, getting goods to our sites has been occurred reasonably unimpeded. Now if this breaks down for any reason, then that would cause us some issues. And in the event of infections spreading into the regional areas away from the capital cities, it is something that we need to keep an eye on.And finally, the health of our host communities. I mean this is -- it's fundamentally important to us because it's the health communities that do provide -- sorry, it's the local communities that do provide the bulk of our workforce at each of our sites. And it is very, very important for us to -- that the communities stay healthy. The capacity of local health systems to cope with materially increased numbers is not exactly clear at this stage, although I have to say they are coping fairly well for the moment. But who knows?Now notwithstanding the fact that many in the developed world and Australia, in particular, seem to believe that the COVID crisis is behind us, the fact is that Perseus' future does remain uncertain, which makes it difficult for us to predict with any accuracy. Things that we can normally control such as procurement of consumables, et cetera, are no longer within our control. Now at Perseus, we place a great deal of importance on doing what we say we're going to do. And in fact, this is the core value of our company, and we have lived by this for the last couple of years. And accordingly, when we're in a situation where we are now, where we can no longer say with certainty that what we've told the market we will deliver, then indeed, we need -- do need to take stock of that. And accordingly, we have decided that it's prudent for us to withdraw our market guidance to 30 June. That's both for the half year and the full year guidance. We will review the situation in 3 months' time, and chances are the world will be quite a different place by then. Now in the meantime, investors can be absolutely certain that we, at Perseus, are doing all we can to achieve our previously stated guidance, but we can no longer guarantee that this will be achieved.Now turning to the body of the quarterly report. For those of you who haven't yet had an opportunity to read the document, let me summarize it for you before diving into a few issues in detail.Firstly, the 2 operations, Perseus' 2 operations, Edikan and Sissingué, they continued to perform during the quarter. They produced about 50,000 -- 57,983 ounces of gold at a production cost of $951 an ounce at a weighted average cost of $1,083. Our average cash margin on each ounce of gold produced was USD 408 an ounce, which exceeded our strategic target of $400 per ounce and generated notional cash flow of approximately $24 million for the period from the operations. Now our production for the quarter was lower than in the previous quarter, and our all-in site costs were slightly higher, and I will speak to the factors that gave rise to this later on. But it is worth noting that our December quarter results were historically one of the strong quarters that we've had since starting to produce gold. So any kind of comparison needs to be seen in that light. At the same time, implementation of our strategy for value creation through developing mineral resource has continued as planned, notwithstanding the coronavirus. And the development of Yaouré, our third mine, is now approximately 52% complete, and it's running on time and on budget. And our stretch target of pouring first gold in December 2020 continues to be within our capacity, provided we don't have any delays -- unusual delays coming out of the virus later in the year.And finally, throughout the quarter, Perseus has managed to maintain its balance sheet strength through strong cash flows and prudent management. And as I said, with the cash margin of $406 an ounce, we generated, as I say, $23.7 million, $24 million from operations during the quarter. We also took a decision to fully draw our corporate cash advance facility, which meant that our debt position went from $50 million to $150 million. But at the same time, our cash balance increased by USD 100 million. Now this was done to ensure that we had operating flexibility in the face of uncertainty arising from the COVID pandemic. As we see it today, it's very unlikely that we'll need to -- need that cash to be used, but we felt that holding the cash on the balance sheet, given the uncertainty around us, was in Perseus' best interest, even if it does involve a small holding cost.Now taking all of this into account and allowing for the fact that during the quarter, we invested about USD 29 million in the development of Yaouré, noting, of course, that about 83% of this was covered from operating cash flow, we also funded exploration, paid corporate overheads. Our cash and bullion balance at the end of March was USD 162 million, giving us a net cash position of USD 12 million positive.Speaking of Yaouré to date, we've spent about $129 million or 49% of the $265 million development cost for Yaouré. That means that there's -- $136 million remains to be paid. Now given that we've got $162 million of cash on hand, the cost to complete the development is fully covered before accounting for ongoing cash flow from operations, which is quite considerable at current gold prices.So we're in a strong position financially. And although our operations didn't perform quite as well as we would have liked during the quarter, they did run reasonably well. And so far in June, we've materially improved and are on a trajectory to exceed the elevated production of the December quarter, which I said earlier was one of the stronger performances registered by the company. And if my calculations are correct, we are about -- this far into April, we're about 20% -- looking to be about 20% higher than December actually at this stage. So things are certainly looking up. Very importantly, as we find ourselves in a strong gold market that, according to some experts, is going to continue rising, our growth profile in terms of gold production and cash flow continues to compare very favorable to those of our peers.So that's the quarterly report in a nutshell. But let's dive into a few of the more detailed aspects of it, if we will. So looking first at operations. I mentioned across both operations, we produced a combined total of 57,983 ounces. 38,109 (sic) [ 38,019 ] came from Edikan and 19,964 from Sissingué. Production at Sissingué was above our targets, performing very well -- performed very well across the board, while Edikan came in under the internal targets we had set ourselves due largely to poor gold recoveries resulting from issues associated with the blend of ore fed to the mill. Interestingly, the relative performance of the 2 mines was the reverse of the situation in the December quarter, which demonstrates the distinct benefit to Perseus of being a multi-mine producer.Now if we look at Sissingué in more detail. Run time was 96% during the quarter, recovery is 95%, both of which are very strong and, in fact, ahead of our plans. The grade improved as the quarter went on. We averaged nearly 1.8 grams per tonne for the quarter. So far this month, we're closer to about 2.5 grams a tonne. As we got deeper into the high-grade ore in the Sissingué Stage 2 pit, reconciliations improved. But also, the rock got harder, and that did slow down throughput rates. Nevertheless, it was a good result. And if we can maintain the run times, recovery, grade, et cetera, and if the initiatives that we put in place to increase throughput rates work as intended, then we should have an exceptionally good quarter at Sissingué. While on the subject of Sissingué, we have completed an update of the life of mine plan for the operation. This is due to be tabled to consideration at our next Board meeting. The updated plan is not materially different to our previously published plan, but it does incorporate current costs and operating parameters. We are in the process of seeking a new mining license for the Fimbiasso deposit. This deposit will be mined as part of the new plan. And once this license is being granted and we have certainty on the way forward, then we'll publish the updated life of mine plan. But I can say that there should be no great surprises for anybody in that. Now as we previously reported, I'd indicated we've made a lot of progress in turning the operation around over the last year or so by addressing challenges that we've previously experienced, including getting all through the mill due to the hardness of the ore being mined, especially from the Esuajah North pit. We also established a far higher level of control over the processing circuit by adopting new mill monitoring technology. Now the benefits of this work was particularly evident last quarter with improved throughput rates around time recovery. Now this quarter, the throughput rates continued to improve. So we had 923 tonne per hour compared to 909 last quarter. Run time slipped a little due to some unscheduled maintenance downtime in January, but it was still not too bad when compared to December. So run time was at 88% compared to 90%. Where we did come unstuck at Edikan this quarter, though, was on gold recovery, where we saw a material fall in recoveries from about 85% last quarter to about 61% this quarter. Now the reason for this fall has been traced to the composition of the ore being fed to the mill. During the quarter, we mined the relatively high-grade Bokitsi deposit. Now not only is this all much higher in grade than other deposits, so it runs at about 2 grams a tonne, whereas, say, Esuajah North is 0.9, AFG is 1.09. So it's materially higher grade. And it's also much softer and, therefore, materially improves our throughput rates. And as I noted earlier, throughput rates went up from 909 to 923 tonne per hour, and the average head grade went up from 0.98 to 1.05. So the presence of the Bokitsi ore certainly had an impact. Unfortunately, the metallurgical composition of this Bokitsi ore is not perfectly suited to our plant. And we have discovered that if the composition of the ore-feed blend contains more than about 15% Bokitsi ore, it impacts badly on recovery of all ore fed to the mill, not just Bokitsi, as it upsets control of both the flotation and the CIL circuit.Now as I mentioned, we did have some maintenance issues early in January that impacted run time. Now when we shut down for a scheduled mill reline, we noted that the mill pinions were worn. And we took a decision that rather than risk further damage, we would immediately repair that damage. Now this meant that the mill was down for a day or 2 longer than planned. Now our team on-site is being very focused on hitting targets. They decided that in order to make up for the time lost through that extended maintenance period, we'd increase the percentage of Bokitsi ore in the feed. Now remember, this meant higher grade and higher throughput rates. But unfortunately, in this case, the cure was worse than the disease as recovery rates fell. And it took us well into the quarter to identify the exact cause of the problem and then to implement a solution. So production at Edikan was down for the quarter. But I am pleased to say that after the first 25, 26 days of April, we're on track for a materially stronger June quarter. And this is, of course, subject to nothing else going wrong or coming from left field associated with COVID.Now if we look at the group's costs for the quarter. Our all-in site costs of $1,083 per ounce was higher than the group's reported AISC last quarter. It's based on costs at Edikan of $1,242 an ounce and costs at Sissingué of $781. Sissingué was actually down a couple of percent on the previous quarter. Now at both Edikan and Sissingué, we did bring into account some costs associated with preparations for navigating our way through the COVID crisis. These weren't huge in the overall scheme of things but included things like buying in additional stores, bedding, fencing, additional consumables, et cetera, et cetera. Now quite obviously, at Edikan, the production shortfall for the quarter reflected directly in the higher costs, although, if anything, the rise in costs was proportionally lower than the fall in production, which reflects the continuation of the reduction of the cost base at Edikan, notwithstanding the COVID crisis. Now during the quarter, our technical services team also completed an update of the Edikan life of mine plan, and their results are reported to the market. Now in summary, for those that missed the announcement, with the inclusion of the underground operation to mine the Esuajah South ore body and optimization of existing pits, assuming a $1,300 gold price, gold production now averages 212,000 ounces a year over Edikan's currently estimated remaining 6.2 years of life from July. That includes gold production of approximately 231,000 ounces average for the next 4 years. The total estimated gold production is 1.3 million ounces over the life of the mine, and that's about 95% higher than the amount previously estimated in the last life of mine plan for the corresponding period. Forecast weighted average all-in site costs are in the range of $870 to $890 an ounce over the remaining life, and this represents about a 5% decrease in average costs over the life of the mine. They do include sustaining capital, including the cost of site rehabilitation. All up, we've allowed about $37 million or $28 an ounce for that, and that is, as I say, included in the costs. The forecast -- the life of mine forecasts a very strong after-tax cash flows totaling about USD 356 million or about AUD 0.51 per share at a $0.60 exchange rate, and that's at a flat -- assuming a flat price of $1,300 an ounce. So assuming that we can correct the shortcomings of the March quarter and based on the results this month, I'm very confident that we will. The future of the Edikan mine is looking fairly positive, and we expect that it'll be a material contributor to the group's production profile and cash flow for quite some time to come. Now turning to financial matters. During the quarter, we sold 60,015 ounces of gold at a weighted average price of $1,491 an ounce, generating positive cash flow at both of the mines. In fact, at this average sale price of $1,491 and the average all-in site cost of $1,083, we generated an average cash margin of about $408 an ounce, as I said earlier on. And when we multiply that by the ounces produced, we come up with the notional cash flow from operations of $23.7 million. And that came 57% from Sissingué and about 43% from Edikan. And interestingly enough, as said, these proportions -- proportional contributions are the reverse of the contributions made last quarter.Now as I said, during the quarter, we spent about USD 29 million on Yaouré CapEx. These also met -- corporate costs are about AUD 4 million and exploration costs for a similar level, our movements in debtors and creditors. But after all these things have brought into account, at the end of the quarter, as I said, we had cash and bullion of $162 million on hand. And that, I do note, was clearly boosted by the fact that we'd withdrawn an additional $100 million under our corporate cash advance facility. And it did also mean that at the end of the quarter, we had a net cash position of about USD 12 million.Now one other financial matter that we're frequently asked questions about by investors is our gold price hedge book. During the quarter, we have continued to actively manage our hedge book in line with our clearly articulated corporate policy on hedging. And at the end of the quarter, our total hedge position involves a forward sale of 317,345 ounces of gold at a weighted average price of nearly $1,400 an ounce, $1,393, in fact. Now these sales provide us with downside protection for about 22% of our forecast production over the next 3 years. So 78% is exposed to the gold price. And clearly, at the moment, that's well over the $1,400. But in the event that the price falls back for any reason, we are covered on 22% of our production.Now turning to development of our third mine, Yaouré. Now this quarter, this has been one of the very bright lights for us. We've continued to make very strong progress on all fronts at Yaouré. And at the present time, as I said earlier, we remain on track to achieve our stretch target of first gold in December this year. For those of you who are keen to see the progress with Yaouré mine, so I do note that each month, at the end of the month, we put a video footage onto our website, www.perseusmining.com, and this literally gives you a bird's-eye view of what is happening on the ground. And I do recommend that you -- if you look at this footage, there will be a new clip posted there in the next couple of days, certainly by the end of this week. And there are some -- also some photographs in appendix A of the report that tell the same story. I should say also at this point that in making this excellent progress that we have, we've done it with a very good safety record. So over the weekend, we clocked up 2 million man-hours on the site, and that's without a single lost time incident. So this is a record that our team takes a lot of pride in, and I'd like to publicly acknowledge the very good job that they are doing in the area. So well done, guys. It's a great effort. Off-site engineering is now 100% complete. And procurement, including deliveries to site, is about 85% complete. So during the quarter, we saw delivery of a lot of structural steel, tanks, the ball mill and SAG mill are on site. The electricity transmission are all on site. The transformers are expected on-site in May and switchboard shortly thereafter. I mean the switchboards are coming from South Africa. So we are dependent on the ports opening down there for those. The pleasing news is that notwithstanding the COVID virus, et cetera, cargoes are being efficiently cleared through the port of Abidjan when they arrive and transported to site without much delay. So as I said before, on site, we've made a lot of progress, and that's clearly evident from the videos that I mentioned. I won't go through the details of progress chapter and verse. You can read all of this in the quarterly report itself. But suffice it to say that very strong progress is being made on all fronts across the site. And this project certainly has been one of the real highlights of a quarter in which really positive news has been in a little bit of short supply.Now I did mention earlier, at the end of -- by the end of the quarter, we had capitalized about $135 million of Yaouré expenses and paid $129 million or 49% of the budget to suppliers of goods and services. We've also got commitments of $165 million (sic) [ $186 million ] in place, so that's about 70%. So we've locked in quite a lot of the budget and materially reduced the prospects of cost overruns there. So as I said earlier, no further delays. And at this stage, we can't see too much on the horizon, although it is possible, that's for sure, our stretch target of first gold in December is achievable. And both we and our contractors are certainly doing everything within our power to deliver on this milestone. It is a very important project for Perseus, and it does underpin our future growth. So we are looking forward very much to delivering further progress on that.Now turning briefly to exploration. Last call, I reported that we had renewed our commitment of exploration as a means of organic growth -- generating organic growth. And we'd allocated a budget of approximately $15 million to be spent on exploration over the next 12 months. The majority of the budget is to be spent around Yaouré where we see enormous potential to add materially to our reserve inventory there. The balance will be spent around Edikan and Sissingué where we have existing infrastructure, and we'll be aiming to add mill feed to both of the inventories there and extend the lives of both operations. Now around Sissingué, we've drilled a number of targets during the quarter. Zanikan, that looked very promising early on, turned out not to hang together when we set about estimating a resource and trying to optimize the pit around that resource. We are in the progress of drilling several other targets at Tiana and Kanakono. So far, the drill results are interesting but not spectacular. We still have quite a few targets left, so we're definitely not ready to quit at Sissingué just as yet.At Edikan, late last year, we announced that we'd entered into an option agreement on a mineral lease called Agyakusu. It's located adjacent to the ground at Edikan. Government approval for this deal was received from the government early in the quarter, and we moved to start drilling the prospect during the quarter. Now unfortunately, this brought us into conflict with the local farmers and artisanal miners. And this situation is now resolved as best as we can tell, and we're intending to move bulldozers onto the site in the next day, I think it is, so certainly by the end of the week. Now this is a very, very interesting opportunity for us as success on this tenement could unlock thinking on several other regional opportunities and could also materially extend the life of Edikan well beyond what is envisaged in that recently published life of mine plan that I referred to a few moments ago. Now at Yaouré, in the December quarter, we drilled 3 deep diamond holes, targeting the structure that we expect will host a material underground mining operation for some years to come off the site of the CMA pit. Now all holes hit the target, hit the targeted structure at or near the targeted depth. I must say, though, that the third of the holes, we did have to go back in and extend that hole to get to the structure. We've seen, as I said, those holes. The results weren't spectacular. But the fact that the structure was hit was very, very important. And we do intend to revisit these holes in the future for the purpose of doing downhill -- downhole seismic testing to assist the interpretation of the 3D survey that's now been completed across the site down from the CMA pit. I should say that, that 3D survey did involve us stopping work in the tailings dam for 10 days during the quarter in order to get that work done. But we've managed to recover most of that time on the development of the tailings dam. And at the same time, we got the 3D seismic data that we were seeking to get. So that was a very good result. The work was completed just the other day. We also did an additional 2D survey line while we were at it over there, and that work finished late last week. And the guys will be leaving site in the very, very near future. The hard work starts now, of course, in analyzing the data that has been acquired. This does take a fair bit of processing, and we envisage that we should have some usable data towards the end of the year, if not before. And that'll be used to inform a targeted drilling campaign. And obviously, as news comes through from each of the sites, we'll be sharing that with the market. So look, in conclusion, as I said at the outset of the presentation, we're living in pretty uncertain times. I mean the pandemic is creating some serious challenges for us. But so far, we've met these head on and we are ahead of the game. What happens from here remains to be seen. But we are confident that by remaining vigilant and being proactive, we will successfully see this crisis through. Operations-wise, the June quarter should be a lot better than the March quarter in terms of both production and costs. Sissingué is already running well ahead of budgets for the month of April, and Edikan's getting back on its feet as well. And I think Edikan's June quarter will definitely be a lot better than the March quarter we've reported on today. In terms of development, Yaouré is well and truly on the right path forward, excellent progress being made on both on the ground and off the ground. And we look forward to being able to continue showcasing that through the video footage that we put on the website. And look, we're looking forward, as I said earlier, very much towards hitting that stretch target of producing gold by the end of this year. Exploration-wise, as I said, we are accelerating our efforts to not only extend the life of the existing operations but also hopefully discover our next mine. And we are -- certainly, we're [ working up ] some interesting targets. And hopefully, we'll have some positive news on that front before too long.Now I'm sure that everyone on the call has noted the recent strength in gold price and probably noted some of the very bullish assessments about the future gold price made by analysts from some credible banks. Now whether they turn out to be correct or not, time will tell. But one thing is for sure: Perseus has put itself in a very good position to take advantage of market strength as it happens. In several respects, the quarter that -- was not what we planned it to be. But look, in this business, sometimes things do go awry, notwithstanding the very best of intentions. But we do remain optimistic about the outlook for the company, having successfully addressed the challenges of this quarter. And one thing, as I say, shareholders can be absolutely certain that no matter what does happen, we'll be leaving no stones unturned to ensure that Perseus' enormous potential is fully realized. Thanks very much. I'm now happy to take any questions that you may have. And if I can't answer them, I'm sure Andrew will be able to. Thank you.
[Operator Instructions] Your first question comes from Reg Spencer from Canaccord Genuity.
Just wanted to maybe flesh out those met issues at Bokitsi a little bit more, if I could. Just reading the statement, obviously, you're working on improving those ore blends. But should we expect lower recoveries over the six -- next 6 months? Or the work you've done today has seen recoveries improve back up to budgeted levels?
Yes. Recoveries have certainly improved just since we implemented the changes. So we're running pretty close to our targets right now. And like it's -- we're not there every single day, but most days, we are up there. We have the odd day where things drop down a bit, where we need to control it. But by and large, we're in control of the process and recoveries will come back.
Okay. So this is very much a one-off by the looks of things in the -- even if...
Yes, that's certainly the way we see it, Reg. It did catch us a little bit by surprise, and I have to admit that our enthusiasm got the better of us. We were chasing the targets, having had a delay due to the repair works that we did, and we overcooked the goose, as it was. So that was our mistake. And we shouldn't have done it, but we did. But it was done with the best of intentions. And as soon as we got on to the real cause of the issue, we acted to fix it up. And I don't think there's much more that one can do under the circumstances. But certainly, things are coming back. And as I said on the -- just a few moments ago, we're expecting a much better quarter coming up.
Okay. Great. And just lastly around Yaouré. So given the uncertainties presented by COVID, you've withdrawn your guidance, but yet you've maintained your Yaouré time line. You've identified the movement of people as perhaps being a key risk. Just wondering if you could maybe outline to me why you're still comfortable with the Yaouré time line versus withdrawing your guidance.
Yes. Look, Yaouré, it's a little different. We've got -- it's not only our people. We've got contractors and the like, and we've got a very large number of our people living in the local areas. Now I have to say the infection into the community is a risk because if the community gets infected and our workforce go down, then it is going to make it fairly difficult to hit that target. And I did say that we're on track to deliver that, subject to not getting knocked off course. So I mean I did make that qualifier in there. Look, at Yaouré, things actually are going really well. And what we did do, we got out into the community very early on in the piece in terms of the -- providing assistance to the local health authorities. And at this stage of the game, look, there are no incidents of infection anywhere near us. I think the closest infection to us was about 100 kilometers now, and that turned out not to be an infection anyway. A person was put into a -- an employee of a beer factory was put into quarantine, but he turned out not to be positive. So we are being very proactive there, and we're pretty confident that we'll stay together.Now in terms of our employees on the site, I mean, our guys, I said to them when the virus started kicking in, I offered them the opportunity to return to their home countries. But almost to a man, they said, "No way, we're staying through this, and we're going to see it right to the end." So what will happen is that if the local workforce do start getting infected, then we will close down the site to the extent we can and continue on what we can continue to do. And we'll be working hand in glove with our contractors on that score. So Lycopodium and ourselves are very much in sync on this. And as I say, we're working very well together to achieve that target. Both of us are highly motivated to do that.
Your next question comes from Nick Herbert from Credit Suisse.
You've been very clear on the challenges presented by COVID. I'm just wondering how much of that is an impact to current production rates versus more you calling out potential risk from here. Just trying to get a sense of what production could be possible in the June quarter if there -- if those disruptions don't come through versus that bottom of the guidance range you've suggested, excluding any COVID impact.
Yes. Look, Nick, it will be quite ingenuous of me to blame COVID on our production this quarter, to be perfectly frank. It has had an impact, but I couldn't really quantify it. I mean it has to have an impact when you've got people who are working longer shifts and when they're anxious about what's happening at home and things of that nature. It's inevitable that, that would be the case. And there's also some incremental costs which have come in, which, as I said during the call, they're not massive, but there has been some incremental costs. So I would say I'm not going to hide behind it and blame COVID for the issue we had at Edikan this month. That's simply not the case. So the opportunity for us to get stuck in and to lift the result is there.
Got it. Understood. And then do you mind just providing a bit more of an update on consumables and critical spares? If there is an issue getting those to sites, I guess what could that look like in terms of potential sort of full mill shuts in this quarter? Do you have sort of...
I'm going to say pretty 0, pretty much 0. You've got -- on all of the key spares, you've got at least 3 months, probably more, in fact, ahead of us. So I don't think mill shuts will necessarily come in. Where it could impact this month, I think, is things like mill shutdowns or if we have a breakdown. We have had some trouble, for instance, with the crusher at Edikan. Again, you know we've been having troubles with the crusher since day 1. Bringing in specialists to deal with those issues is very, very difficult. So it's that sort of thing that we can't predict, which could have a material impact on us. But the thing is this, that we're not saying that we're definitely going to be impacted. But what we are saying is that there is a risk because of these things that we can't deliver. And rather than make false promises and mislead people, it's prudent on our part to withdraw that guidance. And -- but at the same time, as I said quite clearly, we'll be going hell-for-leather to try and achieve the targets that we did set ourselves previously. There's no motivation for us to put the tools down and go soft on this situation. We'll be out there going flat out, I can assure you.
Okay. Great. And then finally, just an extension of Reg's question then that gets to your contribution. What was the original planned contribution versus that 15% that's been optimized to now? And does that present any additional challenge for you guys if there were to be gaps sort of seeking that all from alternative sources? Or is that all sort of covered...
There's no problem seeking for an alternative. It was about 20% and previously in the blend, and we overdosed beyond the 20%, frankly. And we think that 15% gives us a high level of control. What we will be doing over the next period of time is gradually edging that up because it does carry higher grade. But if we see any sign whatsoever that as we edge it up to 16%, 17%, if it starts having negative effects, we'll back it off again. It is very much a -- it's an inexact science, this one, a bit of a dark art, to get that blend exactly right because not only are we putting Bokitsi ore in, but we're also putting in ore from -- well, we just actually finished mining in Esuajah North this week, actually. We're doing a good buy cut on that now. We're bringing ore from Fetish, and we're bringing it from AG, and we're bringing it from stockpiles. So there is variability from the ore sources. And so just getting that blend right absolutely on a day-to-day basis is quite a challenging exercise. Now we have managed it in the past, and I'm confident that we can manage it again in the future so long as we don't get carried away by chasing the higher-grade Bokitsi ore in a single go. Now the Bokitsi ore itself, I think we've run out of Bokitsi ore in about -- I think it's in the September quarter. So it's not like this is a permanent problem for us. And that's why we're very comfortable with that life of mine plan that we've put out, that what we've seen this quarter won't impact that because that life of mine plan is based on ore coming from AFG and from Fetish and both of those -- and then in Esuajah South. And both of those -- well, Esuajah South is very similar to Esuajah North. We've processed that material in the past. We know the properties of the material, and we're very comfortable that we're not going to get any big surprises. I should say also, too, that, particularly from AF-Gap, which is the biggest ore supply, it's a large granitic ore body. It doesn't involve the sheer of hosted material or metamorphics which comes from Bokitsi, which is a little bit more metallurgically complex than the big granite-hosted material. So in terms of the impact on the life of mine plan, we think that there will be any negative impact. And that plan, as presented, stands, and we're looking to deliver to that.
[Operator Instructions] Your next question comes from Adam Baker from Global Mining Research.
Just on Sissingué, unfortunate to see Zanikan didn't meet the hurdles being quoted in the life of mine update. Yes, just wondering if you could remind us exactly what the current mine life is out to?
As it stands today, it's about 3.5 years, I think from now, about that. And that's assuming no other satellites come in. Now if you actually -- in doing the life of mine plan recently, you look back at it to see what -- how that compared to the feasibility plan that we put out, right, where we started off, and we have, each year, incrementally increased our reserve base. So we've been putting it, the ore, through a lot faster than we thought we would do. But we are -- we've got more tonnes, more gold, et cetera, et cetera. And I think that we will be seeing some incremental extensions. But at this particular time, we can't say where they're coming from exactly. But certainly, Zanikan was a little bit disappointing to us, but we have actually benefited from that work. There's other deposits along strike from those, and we -- I think we understand the structure in that area a lot better. And that's Tiana and Kanakono. And I think that the next couple of months will be fairly interesting in terms of the drilling that comes from there in terms of being able to potentially identify satellite deposits. And look, if we are unsuccessful in that area, then I guess what we will need to be doing is to -- looking and see what else we can do regionally to find some other alternative ore suppliers. But certainly, we're not overly pessimistic about the future there. I mean it would be very nice if that mine had a 5- or a 10-year mine life ahead of it because it's performing so beautifully and running ahead of targets in every respect, that it would be a real money-spinner for us. But let's just wait and see what comes off the drill bit over coming quarters.
Right. And just secondly, just on your staff, what's the percentage of expats on each site? And generally, what's the most common country that they're coming from? I think you mentioned that some of your Sissingué staff have been on-site for about 12 weeks now. Just what's your thinking there? And what's your plan to kind of get some new guys in and out from those sites?
All right. Well, at Edikan -- I'll start with Edikan because that's the easiest. We've got about 400 direct employees, and we've only got 2 expatriates, one who is on site and one who is not. So one -- the guy who's on site is an Australian bloke, and the other guy is a South African. And so it's pretty -- that's not a big issue there at Edikan. I mean there's a big issue for the guy who's on-site, but he's -- [ Dan's ] pretty comfortable with the way things are going, and he'll stay the distance.At Sissingué, we've got all up our -- we've got less than 10%, I think it's about 9% expatriates, so there's probably all up about 20-odd guys up there. And where do they come from? Well, they come from everywhere. They come from South Africa, the U.K., Australia, the U.S., so they're all over the place. And what we are doing there is we have actually backed off. We give the guys a day off a week to give themselves a break, then I should say, actually, at the same time. So the local fellows to the local -- the Ivorians have also gone on to longer shifts as well. But rotating the Ivorian staff, we don't think it's going to be that big a problem because what we will do is to take them, put them in quarantine for 2 weeks in a facility that we've established at Yamoussoukro, take them up to site. They will have 6 weeks on, and then they'll have 4 weeks off, and then they'll go through the routine again. So I think the local fellows should be okay in terms of replacing.With the expatriates, the problem at the moment is that the airports are all but locked down. There are -- we believe that there are 1 or 2 flights going to be open in May. So I think Ethiopian Airlines starts to fly in May, and we'll be looking carefully at opportunities to get people on those flights and bring other people in as we go. But in the event of a crisis like, for instance, a medical issue, our medical supplier has successfully done repatriations already. So we believe that, that can be handled. But we are watching very, very closely on the airline schedules. And look, in an emergency situation or in a situation where it became completely intolerable, we would simply charter an aircraft from somewhere and take all the guys out in a single go. But look, we don't envisage that, that is going to be the issue. Our people are there because they want to be there. When this crisis opened up, we said to them, "Anyone who wants to leave, we'll get you out now." And we did actually a couple of people from Sissingué for various regions did have to leave with the things that they had going on at home, and I think there might have been 1 or 2 at Yaouré. But by and large, the team was very determined to get through this issue. Now whether they have the same level of enthusiasm if they're there for another 3 months remains to be seen. But that's one of the things that we do need to be cognizant of and be aware that if we -- we have to put a lot of effort into managing fatigue and boredom and things like that so that it doesn't flow over into productivity.
Your next question comes from Andrew Bowler from Macquarie.
Yes. Adam's questions covered up on what I was asking.
There's no further questions at this time. I'll now hand back to Mr. Quartermaine for closing remarks.
Okay. Thanks very much. Look, as I said, in finalizing my earlier exercise, I mean it has been a challenging quarter, but we are very optimistic about the future. We think that the challenges of this quarter can be successfully addressed. And I look forward to reporting back in July, I guess, it'll be. And I'm very sure that we'll have a much more attractive story to tell at that particular time. Thank you very much.