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Ladies and gentlemen, thank you for standing by, and welcome to the March quarterly conference call. [Operator Instructions] Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, Managing Director and CEO, Mr. John Welborn. Thank you. Please go ahead.
Thanks very much, Kevin, and welcome to everyone who's joined us on this quarterly activities conference call for March 2020. I'm joined here in the Perth Syama boardroom of Resolute by our Chief Financial Officer, Stuart Gale; and Chief Operating Officer, David Kelly. And we're obviously appropriately distanced in the boardroom under our new protocols.We've headlined today's quarterly activities report Syama Underground Delivers Record Tonnes, and we're really pleased with the very important and improving performance from the Syama Underground Mine as part of March quarterly performance, where we poured 110,763 ounces at an all-in sustaining cost of just over USD 1,000 an ounce, USD 1,007. Mako and Syama, our continuing operations in Senegal and Mali, collectively poured just under 100,000 ounces at an all-in sustaining cost of USD 918 an ounce, and that's a significantly reduced cost considering that Syama and Mako are our 2 ongoing operations. We also recovered significantly more gold than we poured during the quarter, just under 120,000 ounces, which was up 15% on the December quarter. We sold 102,000 ounces at an average realized gold price of USD 1,407 an ounce, delivering into what is a closing Australian dollar hedge position as we increasingly look to take advantage of stronger gold prices. We ended the quarter with cash and bullion of USD 96 million, not including our listed investments of USD 19 million. We've completed an important refinancing during the quarter and now have a fully flexible, low-cost USD 300 million facility provided by syndicate banks, which provides us significant flexibility and a strong balance sheet, very important in this current environment. Part of that refinancing, we were also able to negotiate the acquisition of the external royalty over Mako, which was put in place during the financing phase of that mine, and that removes the external royalty over that project. And we've issued equity for that royalty, and that will increase immediate and future cash flows from Mako. Another key pivotal point for Resolute's history was the sale of our Australian operation at Ravenswood under terms which sees the total proceeds receivable by Resolute of up to AUD 300 million. We've received AUD 100 million of that value-add settlement in the form of AUD 50 million of cash and AUD 50 million in a convertible note earning 6% coupon. And 2 further upside payments are receivable, and we look forward to the success of the EMR consortium at Ravenswood.During the quarter, we also updated our mineral resources to just under 20 million ounces. And after the sale of Ravenswood and the reduction of the reserves and resources at Ravenswood, current mineral resources across the company are 13.3 million ounces, which includes reserves of 4.7 million ounces at Syama and at Mako. We've had a comprehensive response to COVID-19 across our sites and offices, and I'm very pleased that at this stage, we do not have any confirmed cases in any of our locations globally, in our Perth office, in London, and in Syama, at Mako, at Bibiani and across our exploration portfolio. And we continue to monitor all of the locations in which we're operating and continue to look to improve our protocols to make sure that we can -- our #1 priority is keeping all of our people safe, and we're confident that we can do so in a way that continues our operations. And on the back of that confidence, we have maintained our FY '20 guidance for Mako and Syama as part of the updated guidance we issued during the quarter following the sale of Ravenswood, and that is, across the company, guidance of 430,000 ounces at an all-in sustaining cost of $980 an ounce. And I said that maintained previously budgeted performance for Syama and Mako. We also maintained the corporate cost guidance, which included high-cost production from Ravenswood. And that represents, one, the cost of Ravenswood during the first quarter, the roughly 10,000 ounces we poured from that mine, and also includes a buffer for potential disruptions and associated costs with our COVID-19 response. And we'll be working very hard during the year to maintain our performance at Mako and Syama. And as you can see from the first quarter's performance, we're on track for that guidance. And that's -- and the #1 focus across our company is to make sure that we're reporting against both that production and that cost guidance. We published our standard quarterly activities report, and I've just run through the highlights of that document. But we also have today published a presentation to go along with the quarterly, which provides interested parties, analysts and market participants with an easy summary of the quarter. And I'm going to go through that document and pass over at various points to our Chief Operating Officer, David Kelly; and Chief Financial Officer, Stuart Gale, to talk through the quarter's performance before we open up to questions. So we've got our usual snapshot of the company on Slide 2. And interestingly, as we pointed out in the quarterly, this -- the March quarter does represent a pivotal moment in the very long history of Resolute. We're very proud that we've been a mining company for more than 30 years. Mako represents the tenth gold mine that Resolute has variously explored, discovered, constructed, acquired, owned, operated and closed successfully. And Ravenswood represents our exit from Australia, and we're now a purely focused African-based gold producer, which has been our stated ambition for some time. And we've separately commended the many people who have been very significant in what is a very successful history at Ravenswood. We acquired a very large-scale, low-grade, open-pit operation in 2003. And we pioneered sub-level caving shrinkage method at the Mt. Wright underground mine incredibly successfully, and we've now exited that operation in terms that we think are very successful as described. And so now you can see our footprint is very much in West Africa with Syama in the South of Mali, Mako in the East of Senegal and the Bibiani Gold Mine in Ghana. The quarter in review, I've run through the highlights. They are again covered on Slide 3. Of great significance is our company-wide response to the COVID-19 pandemic. We've been very supportive of our host governments in Mali and Senegal, not just in the form of a USD 1 million donation but also in the provision of medical supplies and particularly PPE, both centrally to the national governments and particularly to the regional administrations in and around our mine sites. Importantly, mining and processing at Syama and at Mako is continuing as normal, and we are putting in place procedures as we see fit to make sure that, that can continue, with our #1 priority being keeping all of our people safe, and that includes the local populations and the communities around where we work. I've run through our production and sales numbers for the first quarter. That will be covered in more detail later in this call. Key points of development covered in the quarterly is the very exciting commencement of construction of our new solar hybrid power station at Syama. I'll remind people that this will be the largest hybrid solar power station of its kind, powering a mine site anywhere in the world. It has very significant cost savings for Resolute. We'll bring down our power cost by around 40%. It also has huge logistical importance in the current environment by reducing our reliance on purely diesel-fired power. So that's a very important step, and we look forward to continuing to update the market. We expect that, that power plant will be operational by the end of 2020. The other key area of development is the exploration program and associated feasibility studies that we're doing on a potential underground mine at Tabakoroni. Tabakoroni open pit mine has been very successful, and we're excited by the high-grade shoots that we're expanding with our exploration program. And we expect in the middle of this year to publish a prefeasibility study ongoing underground at Tabakoroni, and it's a -- initial indications are that, that will be a very low capital mine based on the mining style, traditional mechanized long-hole stoping and the fact that we have significant existing infrastructure in place, both in terms of processing, haul road and support infrastructure on-site at Tabakoroni. The key exploration activity during the quarter was both underground at Tabakoroni and also the expansion of our potential oxide deposits around Syama. And we've posted quarterly -- we've published some very exciting numbers, which provide us strong confidence that, that program will be successful in defining further oxide positions on what is an extensive Syama belt that we own and control. I've covered the Ravenswood sale. The Bibiani strategic review is briefly covered in the quarterly. Obviously, that has been disrupted by COVID-19 restrictions and the inability of interested parties to get to site. But we remain committed to creating value from that strategic review. We're working very closely with a number of parties, including the Ghanaian government. And we still expect to have significant advancement of Bibiani and clarity towards its recommissioning as an operating gold mine during 2020. In what was a very busy and important quarter, the last thing covered on Slide 3 is the successful establishment of a low-cost senior debt facility and bringing down the effective cost of debt from 9%, which was the coupon on the USD 130 million bridge facility we used to acquire Mako, to effectively below 5% in the syndicated loan facility. You can see that there is a direct cash flow benefit to Resolute from those successful financing activities, and I think it was an excellent achievement in the current circumstances, and we're greatly pleased by the very strong support we had from a stellar international cast of banks within that syndicate. And that provides us a strong balance sheet. Our COVID-19 response is covered on Slide 4, and we've also separately announced that. We'll continue to update the markets on anything that we see relevant. And I want to commend all of the people at Resolute for the way that we have responded to this virus and the protocols that we've implemented. We've had an experience operating in Africa of the Ebola crisis. Historically, we've also had a number of other situations that we've managed successfully, and that has been very useful in putting in place a crisis management team approach to our response. We have emergency management teams, or EMTs, operating at both Syama and at Mako and at Bibiani. We have a daily interface with our corporate management team. And I commend everyone for the way that we've responded, and that's been very crucial in: number one, keeping our people safe; and number two, keeping our mills operating and our gold poured and being transported off-site, and we'll continue to work on that basis. Slide 5, we're covering a sustainability update in our annual report this year. We've, for the first time, commenced a separate reporting on our sustainability outcomes, and we're going to continue to improve and increase our focus in that regard. As an African miner, it is fundamental to our business as it is for all miners. And I'm pleased to be joined here in the Perth office for the quarterly conference call by Jordan Morrissey who, during the quarter, joined Resolute in the new role of General Manager of People and Culture. Jordan joins us from a similar role at Syrah. And he is responsible, along with Paul Cannon in our London office, for sustainability outcomes. And we're very proud of that approach. It is part of our ability to respond successfully to things like COVID-19. It is intrinsic to our relationship with our local communities, with our host governments. And our focus on health and safety, environmental and community outcomes is fundamental to the success of our business and will continue. Moving on to the operational performance that I summarized at the top of the call. Gold production of 110,763 ounces. That's gold poured. Gold sold was 102,000, and we recovered almost 120,000 ounces. The all-in sustaining cost of $1,007 and really focusing on the sustaining -- all-in sustaining cost of Mako and Syama of USD 918 an ounce, and we'll talk about that improvement and how we expect it to continue in the coming quarters. And to -- on Slide 7, we just show that improvement. I'll cover very quickly. If you look at the top bar, over the last 3 quarters, that's the very consistent and very positive performance at Mako, which poured 42,186 ounces in the March quarter following a similar quarter in December and September and really demonstrating the huge value that our Senegalese operation has added to Resolute since we acquired it in the middle of 2019. The black bar is -- won't continue. That's the ounces contributed this quarter, 11,046 from the Ravenswood gold mine. And having sold and settled that project, there won't be any further contribution from what has been a very successful project for Resolute. And most importantly, the 57,531 ounces that we poured during the March quarter from Syama contributed by the sulfide circuit and the oxide circuit, significantly improving the 47,000 ounces in December and the 46,000 ounces -- sorry, in December and the 46,000 ounces in the September quarter. And we expect that, that improvement will continue. And that's what drove the increase in our total production. Importantly, moving on to Slide 8 and covering our costs, you can see where the $1,007 was generated. $1,083 from Syama and just under USD 700 an ounce from Mako. $1,537 an ounce from the Ravenswood project as we closed our operations there, representing a small production base and significant costs of the low-grade stockpile processing that our asset is currently sustaining gold pouring with. Looking at this slide, you can see the impact of the roaster issues we had at Syama, both in the September 2019 and the December 2019 quarters significantly elevated costs at Syama. The oxide mine there continues to perform well and performed well during those 2 quarters. That was really an issue around the low production base and the downtime of the Syama roaster. So the significant reduction from USD 2,157 an ounce to $1,083 at Syama is very pleasing, and we expect that to continue. Slide 9 is just a quick summary of some of those numbers from Syama. Sulphide production, up 54% in the quarter. That was achieved despite the fact that our recoveries remained below our target level of 85%. We averaged 75% recoveries from the sulfide circuit during the quarter as we reestablished consistent roaster operation. We continue to target 85%. We've indicated in our earlier production update that we expect target recoveries during the current quarter to step up from 75% to 80%, and we continue to believe that 85% is the right number by the end of 2020. Oxide circuit, as I said, continues to deliver higher recoveries. Production was up 10% in December quarter in the combination of throughput and grade. Most importantly, as we headlined in the announcement, we saw a substantial increase in the tonnes mined and hauled from the Syama Underground Mine. And we've continued to report in the quarterly the tonnes we're blasting, and anyone who understands how a sub-level cave works will understand the importance of that figure. At the early levels of this cave, we had a significant underdraw, and you can see that in the graph in the presentation and in the quarterly activities report. That will reverse as the mine progresses. And ultimately, we will actually mine and haul more tonnes than we're blasting. The significant -- and when we started recording that, it was important to show people how we're actually building up the success of this mine. A sub-level cave, if operated correctly, as we've shown at Mt. Wright, can become a very low-cost, successful rock factory. And I'm really pleased with the results we're seeing from Syama in terms of mines -- tonnes mined and hauled, but that blasted number is also significant because it's showing the efficiency of our drill and blast team, the number of draw points we have opened and how that mine is actually operating. And so we're very proud of the records we're achieving and we will continue to achieve as we ramp that mine up to meet expectations. I covered Tabakoroni earlier. To talk about that in more detail, I'll pass across to -- at Slide 10, to Resolute's Chief Operating Officer, Mr. David Kelly.
Thank you very much, John. I'll just amplify some of the points John made. And if there's any questions at the end, obviously, we can delve some further. The key thing we achieved in the first quarter, as John mentioned, was the successful recommissioning of the roaster. In the first quarter, we haven't yet moved to a point where the availability and throughput is at final target levels, but we've been very pleased with the ramp-up and progress that we've achieved in that time. We're very confident in our future recoveries, and we're seeing already in April month-to-date around 80% average recovery, and we're now moving towards a level of throughput that's consistent with our long-term expectations of the plant and of the roaster in particular. The other point, as John mentioned, is that the underground mine achieved record tonnage during the quarter and particularly in the March month, where we achieved nearly 190,000 tonnes in the month, which is around 95% of the final long-term target. That means we have stocks on hand of well over 500,000 tonnes of high-grade underground ore at the surface. So we are very well positioned to ensure the mill is fully supplied for the remainder of the year. If we might turn to Page 11. What we've done here is just provide a very simplified mockup of the sulfide plant because I'm aware that it's often a source of some misunderstanding or confusion. And there are really 4 key circuits: the comminution circuit, which is the same as any other gold mine you might encounter; a flotation concentrate, which generates a high-grade gold concentrate -- sulfur gold concentrate; the roaster, which then oxidizes that concentrate to a form in which it can be leached; and then the leaching and elution circuits, which again would be common to any gold mine in the world. And obviously, the key element of this -- and the element that caused us the difficulty last year is the roaster. And in building that up to full production rates, it does impose limitations on how much we can mill, and that was the case in the first quarter. But once we are at full production through the roaster, that then allows us to run at full throughput through the comminution plant. The surge capacity, if you like, is provided by a concentrate storage upon which you see sat in the center of that diagram. That has limited capacity. So we can only mill a limited amount in excess of the roaster capacity before we consume that storage capacity. And that effectively is a limiting step on the throughput that we achieved in the first quarter. But overall, the critical element, as I'm sure everyone is aware, is the roaster, and we're very pleased with the performance and with the improvement over the course of the quarter. I think the extent of the modifications and repairs we made in the last quarter have led to this quarter being essentially a recommissioning phase. And that's how we treated it, and we're confident that we'll emerge over the rest of the year with it operating as at reasonable expectations for the final 9 months. If we move to Page 12, you'll see an overhead shot of the Tabakoroni North Pit. That's been the main source of ore in the last quarter. The Namakan pit is to the south, which was completed also during the course of this quarter. The north pit had somewhat lower grades than Namakan pit, but that was offset by much higher oxidation, which meant higher recoveries, as a consequence of which we achieved a modest increase in the December quarter production. It means we've also built up a very large stockpiled material, both from Tabakoroni and from some of the earlier sulfide -- oxide satellite pits. And with additional production later in the year from, in particular, the Cashew pit, we will further build those stockpiles and allow us to proceed -- to process well into 2022. As John also alluded to, we have an active exploration plan, a slide which summarizes, which is on Page 13, which we expect will further provide incremental increases to that mine life. So our aim very much here is to extend oxide mine life to provide a seamless continuity production into an eventual underground mine at Tabakoroni. The underground mine at Tabakoroni and our efforts to build a feasibility study to support that mine are summarized on Slide 14. The PFS has kicked off. We're trying to get to a conclusion from that PFS midyear, which will then justify further detailed work and eventually a go-ahead decision later in the year. That's the timetable to which we're working. So far, that's proceeding well. A key element of that has been infill drilling and then estimation of the new resource. That work is largely completed. An interim resource has been -- is in the process of being estimated now and that work will continue through the course of the year. The aim is obviously to have a viable project demonstrated by late in the year. And I might hand over to John on Slide 15.
Thanks, Dave. Just on the Tabakoroni Underground Mine, I will point out how excited we are about that ongoing work. We've often stated that our ambition for Syama is to be a sustainable 300,000-ounce-a-year mine. And this quarter, it does provide evidence and support for where that ambition comes from. The ramp-up of the Syama Underground Mine is consistent with our current year guidance of 260,000 ounces a year from the mine. And the future of the Tabakoroni Underground Mine provides us a clear opportunity to deliver another long-term ore source and production base at Syama. And our ambition by the end of the year based on that work is to demonstrate that Syama has a long-term future as a 300,000-ounce-a-year mine. So stay tuned for that feasibility work. Slide 15, sorry, just deals, as I discussed earlier, with the Syama power upgrade. You can see a photograph of the area where that new hybrid power station is going. From a sustainability point of view, I'm pleased that the solar grid array is planned to actually cap the historic tailings storage facility at Syama as part of our expansion of that facility, and that work is underway and was covered earlier. Slide 16. Mako, stable, low-cost production, consistent, reliable performer that we're very proud of. Ravenswood on Slide 17. We covered the sale earlier. The headline price on the $50 million gold upside payment is actually AUD 2,100 an ounce. And it's amazing how -- it's a very short time ago that, that was negotiated as the upside case for gold, sale of that asset. And in the current Australian gold price environment, that gives us strong confidence that we're going to see greater proceeds from Ravenswood due to the success of that development and the development pathway that we outlined in the expansion project. As covered earlier, we're still very pleased with the divestment. We don't have to fund that capital nor focus on it. We're focused on value-creating opportunities in Africa, and we will participate in the success at Ravenswood. Equally, we're focused, on Slide 18, on the strategic process at Bibiani, and we will update the market when there's something material in that process. The financial performance of the quarter is summarized on Slide 19. $20 million of operating cash flow. I mentioned earlier, we finished the year with just under USD 100 million in cash and bullion. And to cover the financial performance of the quarter in more detail, I'll pass across to Resolute's Chief Financial Officer, Mr. Stuart Gale.
Thanks, John, and good morning, everyone. I'd just like to go through the balance sheet and the cash flow statement in a little more detail because, as you can see and as alluded to during the call, there's been a lot of movement throughout the first 3 months of 2020. They include the equity raising, the refinancing, the Ravenswood sale. And just to add a little bit of color to that, we also changed reporting currencies during that period as well. So perhaps if we turn to Page 20, we've got a cash flow waterfall that we might just run through. So the first point there is the operating cash flows. And I might just turn you to Appendix 1 to our quarterly activities report just as a quick rundown as to how we end up with $20 million worth of operating cash flow generated during the quarter. If you have an opportunity to look at that Appendix 1, you can see that the mining, processing, site admin, royalties and corporate admin and overhead are the cash components of our operations there. That totals $1,209 per ounce. So our cash operating cost is $1,209 per ounce during the quarter. Our average gold price received was $1,407, which ultimately generates you around about a $200 per ounce margin. So when you multiply the $200 per ounce margin by the 102,000 ounces of gold, which we sold, we generate around a $20 million worth of cash operating -- positive cash from operations. So that was the first little bar there. Then, of course, we raised equity during the quarter. We raised that equity in 3 steps. The total of those 3 steps will add up to about AUD 194 million. During the quarter, we received the proceeds from the first tranche of the equity raising, which was AUD 146 million. We also received around AUD 23 million from the share purchase plan. So it totals AUD 169 million at an exchange rate then of around $0.66, $0.65, gives us the $110 million worth of equity proceeds raised during the quarter. Then the other key one, of course, was the net borrowings. As John alluded to, we've been out and refinanced through a syndicate of banks, which we received great support from. From that, we put in place $300 million worth of facilities, a $150 million syndicated facility and a $150 million revolving credit facility. We've drawn the RCF to $105 million. So total proceeds received from the refinancing is $255 million. And from that, we've repaid the $385 million worth of bridge facilities and other facilities that Resolute had on its accounts at the moment. So the way I look at it, the balance of debt that we had at 31 December in U.S. dollar terms was $426 million. The gross debt, which we have at the 31st of March, is $308 million, so a net decrease in U.S. dollar gross debt of $118 million, which is obviously that third bar along there. From a CapEx perspective, we spent around $25 million across exploration expenditures, sustaining capital, underground development and other projects, specifically the solar hybrid power station. So that accounts for the $25 million. We obviously had some higher-cost debt in the portfolio through the bridge facilities, which we've now taken out, but that sort of gives us a higher interest cost for the quarter of $10 million. Ravenswood sale process, AUD 50 million equates to USD 32 million. And then we've had working capital and other adjustments of about $30 million. And if you were to break those $30 million worth of working capital adjustments down, you'd note that we produced 119,000 ounces of gold during the quarter and we sold 102,000 ounces, which leaves about 17,000 ounces worth of gold inventory on hand, which, at roughly $1,000 an ounce, gives you a $17 million increase in our gold inventories. In addition to that, as we lead into the wet season, we've been increasing our consumable balances as well. So that also accounts for the -- there's an increase in some consumables, which gives you that $30-odd million. So that's a quick run-through in terms of our overall cash flow analysis. I think really worth highlighting that the refinancing that's being done for our balance sheet has been, I think, really positive for Resolute during the quarter. It gives us a much more flexible profile. It gives us a much lower-cost balance sheet. So we're in a good position to move forward. And we also are operating with $45 million worth of revolving credit facility available to us. In addition to that, we should expect that during April, we'll get tranche 2 of -- the final tranche of the equity raising that will flow through. And of course, we've also been through the process, which you would have seen announced on the 8th of April, of completing the Mako royalty payout. So all in all, I think the balance sheets are much more straightforward and much more simple at 31 March. Back to you, John.
Thanks very much, Stuart. And that leads us neatly into our outlook and focus areas for the rest of 2020 covered on Slide 22. Number one is our focus on achieving our guidance of 430,000 ounces of gold production at an all-in sustaining cost of USD 980 an ounce. And in the current gold price environment, as we complete the delivery into our Australian dollar hedges, that will be a very positive performance for Resolute in terms of cash flow and value creation. At Syama, we're focused on increasing our sulphide recoveries and focused on achieving the 85% we know is possible from the circuit, as outlined by David Kelly earlier on this call as well as the definition of a long-term future at Syama based on that underground mine and Tabakoroni production with the exploration and feasibility work going on at that mine. At Mako, our focus is very simple: continue its sustainable and very successful operating performance during 2020. Having strengthened our balance sheet, we will continue to look at opportunities to reduce debt while we focus on both organic and inorganic growth opportunities. And with that summary, I'm happy to pass back to you, Kevin, for any questions.
[Operator Instructions] Our first question in queue is from Matthew Frydman from Goldman Sachs.
A couple of questions from me, please, if that's all right. Firstly, on Tabakoroni and the Syama oxides in general. Dave, you touched on this, but I guess the first part of the question is we did see fairly strong grade in the quarter. Should we now expect this to moderate given that you're now transitioning to stockpiles and the satellite deposits from this quarter, which I believe the resource grade, at least, is lower than what you've been delivering so far? So that's the first part of the question. And the second one, I guess, looking at your set of exploration results recently, which, again, you did touch on. Clearly, you continue to find more oxides. Just wondering how you're thinking with the PFS around the timing of that transition from oxides to sulfides. Do you expect at some point that there will be a cutoff or you'll stop processing oxides? Or do you expect that going forward, given your exploration success, that you will continue to be processing oxides in parallel in some shape or form as you develop that underground mine?
Thanks a lot for the question, Matthew. I'll pass across to Dave Kelly to talk in more detail. But in short, the first part of your question, the answer is yes, we do expect grades to moderate somewhat. Linked to that is the second part of your question where the pressure on that transition has been greatly removed, one, by the ounces we've previously announced and defined at Cashew and Tellem; and two, by the ongoing success of our exploration activities looking for oxides in and around the Syama belt. Having said that, I'm personally convinced that our long-term future is 2 sustainable, long-term underground mines. And while you could never guarantee exploration success or failure, the reality is that a very large oxide ore body the size of the original Syama footprint or Tabakoroni, if it's easy to find, it's already been found on the belt. We have strong confidence that we'll find the sort of small satellite deposits that we've been defining at the alpha-beta Tellem, Cashew, Tabakoroni and other places. And that potentially could be sustainable for a long period of time. But our key focus, which we've already been successful on, was defining sufficient oxides to give us more than enough time to get underground in what we believe will be a much longer-term, sustainable ore source. But perhaps to provide a little bit more color on our grade profile, the first part of your question, and transition, I'll pass across to Dave.
Yes. Thank you. In terms of grade profile, you'll note the average grade for the quarter and the ounce production, which was 36,000 ounces approximately, our full year guidance for the oxide circuit was about 100,000. So you'll see there's a natural diminishment in the contribution from oxide over the next 3 quarters. And that reflects lower grades from the open pits. And the Tabakoroni pit last year ran at about 4, 4.5 grams. That grade has reduced a little bit with some of the adjacent pits to around 3 grams head grade, and then we have a large amount of low-grade stockpiles to supplement that. In addition, the Cashew open pit will be around 2.5 grams, which we'll complete in the second half of the year. We're not going to open up any new mining areas just at the moment because we're entering the wet season. So from a practical and logistical perspective, it's not sensible. So in terms of the transition, as John described, apart from the fact that there will eventually be an exhaustion of oxide resources available to us, either from exploration or from existing resources, there's also a value calculation that we'll have to make, which is where do we move from a high-value to a higher-value proposition by moving to the sulfide at Tabakoroni. Our expectation is that Tabakoroni sulfide underground will be relatively high-grade, and we, therefore, hope high-value production. So there will be a point where even if we have remaining stockpiles or remaining oxide resources, it may be a better interest to commence on the sulfide operation. So that's a decision we'll make, obviously, when we've done the study and we can make that comparison and we also have clarity over the time line for the development of the mine. The earliest we could expect to start a decline at Tabakoroni is early 2021. And that assumes the study is completed on time, there's a positive result and all of the approvals, et cetera, can be secured from Mali government to allow that to happen. So that, if you like, provides the earliest possible date at which you could start development, and it's reasonable to expect a year or so to build up to full production. And obviously, we have stocks to carry us well into the implied time line that brings, which is early 2022. But that's certainly not written in stone, and we'd have to look, as I say, at the value and contribution of oxides until we -- prior to commencing the decline at Tabakoroni.
There's also the potential opportunity to stage what we believe will be a very modest capital requirement. So the reality is if we have high-grade oxides available, we're likely to mine them and process them. But the significant important step is we have sufficient oxides and runway ahead of us to maintain our current operations. Any further question, Matthew?
Yes. Thanks for the detail on that one. Just secondly, it might be one for Stuart. But in the quarter, you've spent around USD 22 million on CapEx, ex sustaining -- if I back out the sustaining CapEx there. Your guidance for the full year was around USD 40 million. So clearly, a relatively lumpy first quarter. Maybe can you give us a bit of an idea on how that spend might look over the remainder of the year?
Yes, sure. There's a number of different buckets that, that is in. You've correctly taken out, I think, around $4 million of sustaining capital and then care and maintenance for Bibiani and some fees relating to the refinancing, which are all front-ended. But I'll pass across to Stuart, perhaps, to run you through that in more detail.
Yes, yes, yes. So I think where we're at with it all is, obviously, there's some exploration that sits in there, Matt. So between -- not that much, $1 million and $2 million for the quarter. Sustaining capital that's included within that $25 million number, as John said, around about $4 million or just under that. And then you've got the development, so your ongoing development of underground mine and the project specifically around the solar hybrid. So yes, front-ended. But that's what we would have expected during -- at this point in time in the year, particularly on the solar hybrid side of things.
Our next telephone question is from Richard Hatch from Berenberg.
Yes. I hope you're doing right. First question, just on the sulfide thematics on the cost line. Can you just talk a little bit more about just how that mining and processing cost sort of transitions over the course of the next few quarters and then into 2021, please?
Sure, Hatch. We're doing well and obviously better than you because it's not 2:00 a.m. in the morning. So thanks for dialing in from London. I'll pass across to Dave to talk about how we expect that cost profile to transition. It's a really good question. We've obviously seen the big decrease that I covered. Our focus is, obviously, to continue that, and Dave can outline how.
I think there's 2 elements to that. One is the denominator to the unit cost, which is the ounce production, and our expectation is that we'll build up to a sort of 40,000, 45,000 ounce production rate per quarter. So that obviously dramatically reduces the unit cost even if the outlays remain the same. The other thing to bear in mind is the outlays are inflated somewhat in the mining by 2 things. One is the front-ended nature of the development, which is heavier at the moment than will be over the life of the mine, and we expect that to decrease this year and into 2021. The second element is that we're putting a lot of time and money into blasting rock that we don't yet extract from the cave. As John explained earlier on, we're building up the cave inventory. And in future years, you effectively haul what you mine. So the cost and effort going into drill and blast reduces and the cost and effort that goes into development reduces whilst the ounces produced goes up. So it's a decrease in the numerator and then the denominator that results in us achieving a lower life of mine AISC than you're currently seeing.
Okay. And should we, therefore, expect sort of, as you say, production builds and you start drawing more of the ore that you're blasting that, that gradually transitions down quarter-on-quarter?
Correct.
Yes. Okay. And then second one was just on the inventory build that Stuart talked to. When should we start to see some of that gold in circuit and that inventory build released so that you can sell it and generate that cash?
Yes. So in the particular case of the sulfide mine, I alluded to this before, we have a certain amount of surge capacity in the concentrate ponds. There's about -- there's several thousand ounces sitting in those ponds that we would extract over the course of the year. So that creates a reversal in that GIC and additional ounces pulled. Obviously, that material has to be roasted and leached, but that's a relatively -- a simple element of the remaining process that needs to be undertaken to convert that into bullion. So those are the main things that changed between now and the end of the year in terms of the GIC balance. There's a couple of thousand ounces interestingly now for -- at Mako that we produced but didn't pour late last month. So again, that's some additional GIC conversion into bullion that we'll expect to occur this quarter.
Okay. So should we expect to see a meaningful kind of lump-through of gold in circuit draw-down, say, in Q2? Or is it more of just like a gradual process just as you kind of work that sulfide circuit through?
It's more gradual. What we obviously aim to do is to keep the roaster at full capacity. And there will be periods, for example, where you've got planned shutdowns of the mills that allow us to draw down that con so that by the end of the year, we expect to have consumed all of it or very close to all of it over that period.
Our next telephone question is from Reg Spencer from Canaccord.
Just a follow-up question on Matt's questions on Capex. Can you just provide a bit of detail as to what you expect to spend on that solar -- the power plants over the rest of the year? Just to try to sort of break that out a little bit from those line items that you provided before.
Yes, sure. Our commitment is around USD 5 million, Reg, and that was very heavily front-ended. So the -- one of the beauties of the arrangement with Aggreko is that they are funding the -- almost all of the capital requirements of the thermal and solar and battery elements of the plant. So there isn't a need to model a significant amount of capital from Resolute for that project.
Understood. Just moving over to sulfides at Syama. Just a question on the unit cost. They still do look a little bit high. Just wondering if you could give us some indication of how you expect those unit mining cost to trend down and how long that will take. You mentioned before that you are doing some additional blasting within the mine. At what stage -- or how long do you think it might take to trend down towards those feasibility study cost estimates?
Yes, sure. I mean the first thing to point out, as Dave already has, Reg, that it's a unit cost base. So if you look at the difference between recovered and poured and the fact that we're still not getting recoveries that we want, you can see why those unit costs are currently higher than we expect. We're going to get the advantage of an increasing denominator as we pour more gold. But I'll pass across to Dave to sort of talk more specifically around how quickly we believe -- as well as the factor I mentioned earlier on underdrawn, overdrawing a cave in terms of specific mining cost because not only do you have that recovery denominator influence. Obviously, we're doing a lot of blasting on ore that we're currently not extracting, and we get the benefit of that later in the frontline. So in terms of average life of mine costs, you're always going to see front-ended costs in a block or sub-level cave. And you get the benefit of that as that underdraw moves to parity and then eventually overdraw. But perhaps, Dave, you've got anything to add to that.
Look, just a couple of things, Reg, to put it in context. The total that we're spending on ongoing development as a portion of cash outlays in the underground mine is close to 50%. So as that's gradually reduced and eliminated, you actually reduce your cash outlays commensurate with that reduction in development costs. The other thing that John mentioned is the overbreak. At the moment, we're drawing about 50% of tonnes blasted. We moved to over 80% in the second half of this year. So what that means is the effort expense required to blast that ore now comes more into line with the volumes that are drawn from the cave. So both those 2 things will ameliorate over the course of this year.
Okay. Perfect. Yes. That was really what I was shooting for, just to try to get a better feel for when you start to approach that, let's call it, steady state for lack of a better term. So that's great.
Our next telephone question is from Paul Howard from Hartleys.
Just a question about the sulfide circuit firstly. Are you using any of the historic stockpiles anymore or all the gold being produced in the sulfide circuit from the Syama underground?
The answer is no, Paul. The sulfide circuit is being purely fed by consistent feed from the underground operation. We still have significant historical stockpiles, and we don't expect to use those because we have a significant amount of underground material on the ROM pad and fully operational underground mine.
Great. That's what I thought. And the second question, probably a follow-on from Matthew and David's discussion there earlier. With the oxide plant, the 1.5 million tonne per annum, so let's say we get to the end of '22 or sometime in '23 and there's no oxide feed, what do you do with that plant? Do you convert it to a sulfide for Tabakoroni underground? Or how -- what are you sort of thinking around there?
Yes. The short answer is there's a couple of options that will be covered in the feasibility study. But when we talk about the Tabakoroni Underground Mine, we're talking about a repurposed oxide plant for the processing of that material, and that's obviously the subject of ongoing metallurgical test work as to what, if any, reconfigurations are required. But ultimately, we have a 2.4 million tonne per annum sulphide plant currently and a completely separate 1.5 million tonne per annum oxide plant, and they're operated completely independently with really the power plant and the gold ROM being the only link. But as I've mentioned previously, in the future, those 2 plants are going to have a lot more shared componentry. And ultimately, we won't record them as 2 separate operations potentially depending on how that feasibility looks. It may end up being 1 combined 4 million tonne per annum operation or they may have distinct areas. But there's already some crossover. We already attribute costs arbitrarily between the 2. And increasingly -- and it will be clarified in the feasibility study as to what that processing pathway looks like. So hopefully, that provides you some clarity. But the ultimate answer, you'll have to wait to our -- both the Tabakoroni feasibility study around the middle of the year as well as that will allow us to publish a more comprehensive life of mine information on Syama processing.
Our next telephone question is from Andrew Bowler from Macquarie.
Yes. You sort of touched on it a little bit just then. I was just wondering about Tabakoroni network you've done today. You've said that you'll update us on the feasibility study. But sort of in relation to the main Syama underground, how does it look net-wise?
Main Syama underground, I'll let Dave answer.
Metallurgically, fairly similar. There's a couple of differences. We've got a coarse gold component at Tabakoroni we don't generally see at Syama, which means that the gravity circuit we installed in the oxide plant will have value for us in mining and processing the underground material. But we still, nonetheless, expect to have to concentrate the sulfide component and then roast and leach that component separately. So the makeup of the gold between, if you like, leachable or gravity recoverable gold will probably be higher than Syama, but the remaining gold will still have to be extracted via a similar process. That's our current expectation, and the test work we're undertaking now will, we believe, confirm that flow sheet.
And our final question is from Brian Chu from Australian Gold Fund.
Good work on the December quarterly results. Things are looking a bit more on track. But I do have some hard questions to ask, especially from the perspective of the smaller shareholders. Now the Syama underground development states that the haulage is 50% of the ore blasted, ramping up to 80% later. Can I confirm that when you say that it's 80% of the ore blasted that will be hauled, that you are hauling at the current rate -- no, you're blasting at the current rate and if the hauling is going to be ramped up? And secondly, with the recovery rates still at 75%, ramping up to 85%, what other obstacles do you see stopping that? And what else could you be doing with the capital development plans to improve the carbon roaster? Before -- we've asked this question before regarding, like, what you're going to do with the significant gold in circuits that you've been reporting on a relatively consistent basis, and it tends to be going up more than it's coming down.
Thanks for those questions, Brian. And obviously, you mean the March quarter and it is pleasing. They're not that difficult questions. So the decisions on how much ore we haul and how much ultimately is blasted are obviously dependent on an evolving and managing mine plan. It depends on how much material we've got on the ROM pad and what stage you're at in the sub-level cave. I'm not sure where you're getting the 50% and 80% numbers from. But effectively, the percentage of hauled compared to blasted will change incrementally as -- in response to the cave. Now obviously, we're proving to be very adept in modeling that cave. But you respond to the circumstances, and obviously, it'll depend on the stage of mine life. Effectively, it started around 30%, and ultimately, it will go to beyond 100%. And if you look at Mt. Wright as an example, we ended up drawing, in some cases, well beyond the reserve life of our ore profile. So what's not -- I mean what's really significant is throughput and grade. So ultimately, we're seeking to haul on a sustainable basis -- or process 600,000 tonnes a month. Now we've got almost that amount sitting on the ROM pad. So how effectively -- how quickly you mine is also a capital cost and operating cost model. At the moment, we don't need to haul 600,000 tonnes a month in order to sustain 600,000 tonnes a month of processing. So there's a number of complicated management decisions on how many draw points we have open, how many we're blasting, how many we're hauling. Ultimately, we will manage that on a shift daily, weekly, monthly basis to maintain our expected processing of 600,000 tonnes a month. That's the -- sorry, a quarter. 200,000 tonnes a month or 2.4 million tonnes per year. That's the answer to that question that's relevant from a value point of view. Second of all, in relation to capital on our journey on the Syama processing, the expected ramp-up from 75% to 85% during the course of 2020 does not relate to a significant capital investment. It's really around operation of what is a very complex circuit, which is very -- summarized at a very high level on Page 11 of the slide presentation. To run you through that in detail, it would take, one, a metallurgical degree; and two, a significantly longer time than we have on this conference call. There is also the results: We've delivered 75% results in the March quarter. We've indicated we're aiming for 80% in the June quarter, and we're confident we're going to achieve 85% by the end of the quarter. And the best understanding of that and the shortest answer to your question is we don't believe there's a significant unbudgeted capital component to that -- achieving that outcome. And it's purely operating performance, and intrinsic to our ambition is achieving that. So thank you very much for your questions. And thank you to everyone for listening to today's conference call. It was a very busy March quarter for Resolute. We achieved a number of important outcomes, and I earlier commended the team for their response to COVID-19. I also thank everyone who's worked very hard on all of the outcomes that we're currently delivering. I do believe there's a huge value opportunity for Resolute in the current circumstances. If we meet guidance this year, and we're maintaining it, and you can see our pathway to achieving it, then not believing in an irrational market, I believe there is a huge value opportunity for shareholders, both current and potential. So if you've listened to the 60 previous minutes, it means you're engaged and interested in Resolute, and therefore, I thank you very much and look forward to continuing to release positive results as we work towards creating a high-value, low-cost, multi-mine, African-focused gold producer. Thank you.
Ladies and gentlemen, that does conclude the call for today. Thank you all for participating. You may all disconnect. Goodbye.