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[Operator Instructions] I would now like to hand the conference over to Mr. Stuart Gale. Please go ahead.
Thanks, Kylie, and good morning, everyone. Thank you all for joining the March '22 quarterly activities update. I know it's a really very busy day for reporting today, so we appreciate you taking the time to join us. Joining me on the call this morning are Terry Holohan, our CEO Designate; Doug Warden, Resolute's CFO; and James Virgo, the GM, Finance and Investor Relations.
Before I hand over to Terry and Doug to run through the quarter's performance. First of all, I'd like to congratulate the team on delivering a really positive start for 2022 from both a safety and production perspective. This is particularly pleasing given that the shutdown that we had on the Syama sulfide plant, which commenced towards the sort of back end of February and was complete at the end of March. As we all know, this was a really major project for the company. And thanks to some excellent planning and execution it was complete without any injury, and also has delivered an improved operational performance across the entire plant. We also had a mill reline that took place at Mako during January, which again was really well executed. It was really well planned and then executed, and had minimal disruption to our operations in Senegal. So I think as we look back across those 2 events and the downtime that we experienced through the quarter, to increase the gold pool compared to the December quarter was really a very pleasing and positive outcome. It required the teams to think a little bit laterally and to do things a little bit differently. But ultimately, we were able to get that gold recovered, and that ultimately is the most important thing that we can focus on, and I know we'll continue to be focused on. This clearly resulted in some improved cash flows. We had some asset sale process that came through, which is key, but operational cash flow is super important for us, as we've discussed across our calls in the past. That improved cash flow supported a reduction in net debt by about $54 million during the quarter, which again was pretty positive. It was also great to get the refinancing of the revolving credit facility complete during a pretty turbulent quarter from a global economic standpoint.
Just before I hand over, on the CEO change, I think that it's -- we're very fortunate at Resolute to have someone with Terry's skill set and experience. A lot of the turnaround that we're starting to see at Syama in particular has and will continue to be driven by Terry. And of course, he is overly supported by our on-site leadership teams. As announced earlier in the month, I'll be wrapping it up at Resolute pretty shortly. I'd like to thank the Board and the executive for their support over the last couple of years. It has been, let's just say, an amazing period of time, and it feels like a lot of hard work across the business over that period is just starting to pay off. So I wish the company all the best for the future as I move on to another opportunity in the resources space. So with that, I'd like to quite literally hand over to Terry for his update. Thanks, Terry.
Thanks, Stuart. And before I start on the operational performance, I'd just like to thank you for your support over the last 9 months. It's been very hectic. But I think we're, actually this quarter, starting to see the fruits of all that hard work we've put in. And again, thanks for your support on that, Stuart. It's very well appreciated by all the operating team. What I plan to do now is take you through the operations, as I normally do. I'll talk first about Mako, talk about the Syama oxide circuit, then the Syama sulfide circuit, where obviously it's been a lot of activity there. And then the shut, with just a little bit of an update, subsequent events, where we are with the sulfide circuit post the shut. And I'll then talk a bit about the exploration, because we -- a big tick in the box there. and then I'll hand over to Doug to take us through the corporate and cash situation, et cetera.
So as Stuart's saying right across the operations, we've had steady improvements, some significant step changes in operations. And this is, as I've been saying for the last few quarters, we expect this trend to continue through this year.
If you look at Mako, Mako has been exceptionally steady, we've actually managed to find slightly higher grades in the sections that we've pushed back over last year, slightly improved grade. We're still tweaking up the plant, getting a few more tonnes through that operation. We're working right now with the cyclone cluster around the mill, the classification stage, debottlenecking that over the next few months, and we expect a couple of more units to be pushed out of there over the back end of the year.
As Doug (sic) [ Stuart ] mentioned, we did the mill reline. We did push the reline from the last quarter of last year. We did it this year because of the mill slice that was giving us really accurate measurements of our lining system exactly where it was. And with the control on the mill, we've got significantly reduced wear on the liners. So we're only expecting this year now to shut the mill down 3x instead of traditionally 4 because of that control we've got on the mill.
We've also improved the recovery slightly. We have slightly higher grade, which always helps. We've got more felsic material, which is easier to mill finer. And we're still using peroxide in the leach, giving you a slightly higher recovery there. We do have on order now an oxygen plant, which will be coming the following year, and we'll continue to use the oxide -- the peroxide, sorry, to increase the dissolved level -- dissolved oxygen levels in the leaching tanks over this year, and it has given us a couple of percent extra on recovery there. So Mako, slightly improved performance, and we expect that trend to continue over the rest of the year. And as I say, we're still working on now the debottlenecking of the mill cyclone circuit. Because that mill is running at about 84% of capacity at the moment, so we do have a little bit of extra power to push into the ore. The sulfide -- sorry, the Syama oxide circuit. Mining and processing tonnage has increased slightly. And obviously, the focus there is on productivities. We have been focusing a bit more mining in the bottoms of the pits in readiness to the rainy season, so we can actually mine the tops of the pits in the second half of the year. We always said it's going to be a slow start on the oxide circuit this year, with a steady improvement in grade because of the way we've planned it out right through to Q4. We've also opened up a third pit. It's a long time since we've actually had 3 pits, and I'm sure you appreciate in mining it's all about flexibility. So we've now brought in B24 pit. So we've got the 3 pits operating that had some low grades on top of that, but we're now starting to get into the higher-grade material. And we're in a very strong position going forward. What we did do, and I'll talk about the sulfide circuit in a minute because we saw opportunities on production despite the shut, we actually took our tablet and B2 pits off for 2 weeks, stopped mining and did extensive grade control, so we get a full idea of the modeling of the grades right through the year. So we stopped that. We did treat some low-grade stocks in the plant as a result, plus we were mining some lower-grade materials from the bottoms of the pits. So that did give us lower grade into the plant. However, even with the lower grade, we've managed to get slightly higher recoveries. And we've also -- if you notice, we're operating now at about 5% increase in tonnage. And this is really just tweaking that circuit to get more units through it. So the oxide plant and the mine I expect to continue breaking production records over the rest of the year and with our focus primarily on productivities in that circuit. The big story on the operations was a sulfide circuit at Syama. The mine, we've made some significant improvements on the ground now. If you remember, over the last couple of quarters, I've said I'm expecting some significant changes in March. They are starting to happen as we speak, and I expect the Q2 to be an excellent quarter for the mine. We've actually improved our truck loadings. We -- as you know, we have 60-tonne trucks there. We were averaging 47 tonne a truck. We're now over 50, and we're creeping up to the 55 to 60 levels, I would suggest, over the next quarter.
That's all about efficiency, which means costs and it reduces our capital cost because we were thinking we needed more trucks. We've got more than enough when we start filling them properly. The mine grade, it's in line with what our expectations are. And as I mentioned, I expect to see those improvements coming up as the mining sequences are getting better. The development is getting better now underground, and I think Q2, I'll be able to report on significant improvements there. The milling and the crushing all on plan, with roaster on plan. Remember the roaster, we took it off for over a month. We managed to get -- we took the whole circuit off to give it a facelift. The combination circuit came back online 4 days earlier. We did announce that. So we started that, and that started producing concentrates which we collected and stockpiled ready for when the roaster came back online.
When we took the roaster apart, we virtually stripped it down, and we've rebuilt the thing. You remember, we did trial some of the spray lining in the 2019 times, and that material was particularly difficult to take out, to break out, which is very exciting now that we've actually relined that whole roaster now with that material. It's a lot stronger than the bricks. And if you look at the roaster history, the original lining on the roaster lasted 10 years. We've had 4 years with this one with lots of problems. We've now put the new lining in, and I'm now expecting that to be 10 years again. We've done a fantastic job there. The Outotec guys were really pleased with the performance with all the contractors, et cetera. We took a little bit longer over the curing times just on their advice when they actually got inside and saw the nooks and crannies that we had to fill. We slowed that down a little bit, but that machine came back online right at the end of March. So overall, the shut went better than expected. We had 64,000 hours of artisanal work on that project, which is a lot to manage. The teams did exceptionally well with that. A lot of the innovations that we put into the crushing, the milling and the roasters are already starting to bear fruit. We're really excited with that. If you remember last quarter, I was saying after this shut, I expected the roaster to have extra capacity. We're starting to see that now. I wasn't sure about the crushing, but I can see we've got a lot of extra capacity in the crushing circuit. So now it's in the perfect position that we're teeing up now the focus on the mills. If you remember, I suggested the mills are running at 75% capacity. We've had the mill contractors in the office here, and we're in the stages now of just stepping up the production through those mills. I would expect same issues as we have at Mako there, but it will be the classification that we need to -- or the cyclone circuits we'll need to modify, but we're comfortable modifying those over the next couple of months. So we expect to be able to get a lot more units through there. I'd like to focus a little bit on the roaster itself. We took every piece of equipment off-line there. We've cleaned out the whole circuitry. There's some materials that have probably been in there for some time. And as a result of that, we managed to have a significant release of golden circuit, about 9,000 ounces. And that was based on what we were seeing there, that gave us the opportunity, as I mentioned, to say, well, let's look at the sulfide and the oxide circuit, take those 2 pits offline and do some more grade control drilling, which will set us up for the rest of the year.
But we were pleased we've managed to get a lot of metal out of circuit, which have been packed up in tanks for quite some time. They're all 100% clean now. I do not expect that inventory to be filled up again as we started at the circuit. And I think going forward, we're going to have a far more efficient operation. As I mentioned previously, it's all about availability. Last year on the sulfide circuit, we only got 85% availability. And although it is early days in April now, we're in the 90 pluses already. We always expect that once you've had a shut. But we have been taking the plants on and off to tighten bolts as it's heated up to reline the fan systems, to tune it on the higher levels on the roaster. However, we're already on target for the month of April despite all these stoppages that we've had.
The roaster itself, if you remember, I said that the record throughput on that machine previously was 24 tonnes an hour. So that's our -- been our record and our target. And that roaster for the last 12 days has been running at 26 now. The mills on our design throughput on the mill operating now can only deliver 19 to 20. So the roaster is literally vacuuming up all the concentrates that we stockpiled, not only over the last few months, but we're actually cleaning up the whole plant area and outside the plants, some ponds, et cetera.
So I do expect some GIC to come out over the next quarter. It's certainly not going to be a big number, likely 8,700 that we knocked out in the first quarter, but it will be a significant number. So now the focus, as I mentioned, it's on the mills. Availability is going well. Roaster is running exceptionally well, we're really pleased about that. And I think that's put us in a very, very strong position now to be able to bring in lot more initiatives and start squeezing those, all 3 operations now, to produce more units. In terms of exploration, well, they've had an excellent quarter. We did put out our Tabakoroni revision of the mineral resources and ore reserve. We now have 766,000 ounces at 4.7 gram a tonne there. A lot of juniors, once they get past 750,000, that's when they start looking for capital to build plants. That's a critical mass there as a stand-alone, but this is a brownfield operation.
What we've also found looking at the data very, very closely. If you remember, the previous feasibility was going to be all underground material. We're now seeing with the extension of the drilling that we've got open pit opportunities there prior to going underground, and that will soften the CapEx burden on that project. We're still projecting at this stage to bring it in 25, 26. But I'd say, a lot of work is now focusing on dressing down that pre-feas and feasibility study on that.
We also had a bit of success just north into our oxide pits on the drilling. We're looking at extensions on our oxide pits and where we've got a bit of oxide, a bit of sulfide, and we're finding some interesting stuff there. It is extremely early days at this stage. I don't want to say much more about it. But we are expecting to put a release out there probably in the next quarter. But I guess it's going to be probably more geared to sulfide, which again, gives us flexibility with the underground operation and feeding this plant, which is going to be hungry by the second half of the year. So we're really excited with the opportunities there.
Okay, with that, that's the operations. I'll hand over to Doug and I'll give a wrap at the end.
Okay. Thanks, Terry, and good morning, everyone. Just I want to take a few minutes to take you through the cash flow for the quarter, the net debt position at the end of the quarter and a brief update on the hedge book.
So the cash flow waterfall, you'll see in the quarterly report, somewhat simplified from previous quarters, and we have the operating cash flow there of $39.1 million. It now includes royalties, VAT and taxes and working capital. So then turning to capital -- or CapEx is $16 million for the quarter, roughly split 75% sustaining, 25% nonsustaining for the quarter. The sustaining CapEx largely related to Syama tailings facilities and Mako stripping, with the nonsustaining CapEx predominantly associated with the roaster shut. Exploration that Terry has talked about, $5.2 million for the quarter, predominantly brownfields exploration drilling programs at Syama and Mako, with some greenfields work in the region, largely around Guinea. Asset sale proceeds for the quarter, they have already been talked about by Stuart, $30 million was the second tranche from the Bibiani sale was received during the quarter. Plus we sold our stake in Orca for $13.7 million during the quarter as well.
Debt repayments, $40 million, comprised $25 million of the term loan. So you'll recall that, that amortizes $25 million every 6 months until March '24. So we made that payment during the quarter, plus a $15 million voluntary payment on the revolver. Turning now to net debt. So Stuart has already touched on this, but down to $174.7 million at the end of the quarter, which was a reduction from December of $54.1 million, which -- largely associated with the asset sales I've just talked about, plus about $10 million generated by the business net of debt service. You'll note also and we announced it during the quarter, early in March, that we'd extended the revolver by 12 months, and the revised amortization profile has been documented in both that announcement and this quarterly.
The hedge book, as you know, with the debt facilities we are required to hedge 30% in the next 18 months forecast production. And at the end of March, we had 238,000 ounces hedged at an average price of $18.45 an ounce. And that's all for me. With that, I'll hand back to Terry to wrap up.
Okay. I think we're ready to go for Q&A. But I think the key thing is we think we've had an excellent quarter, as Stuart said earlier on the call. And I think by now it's very clear that this has really been over 12 months of hard work that's gone into producing this, especially in the operations. And I can't commend enough the team for what they've done on the sulfide plants. Some of the innovations there that we're seeing are really going to benefit us going forward. Okay. Thanks, Kelly.
[Operator Instructions] Your first question comes from Reg Spencer with Canaccord.
Congratulations on the appointment, Terry. I've just got a couple of questions for you. We'll start at Syama. Were you surprised to pull so much gold out of the circuit during the shut? Because we know that there's been quite a fair bit of [indiscernible] build up there, but were you surprised that it was that much and you're able to get that out at that volume?
Yes, I was. There was a lot more -- the brick lining with -- expanding and contracting is obviously concentrated up in the gaps as it expanded because the bricks are not grouted. They're sort of put in position, and I was surprised how much was in the gaps. And I think that's really a function of the whole system leaning. It was like the Leaning Tower of Pisa. So when it expanded and contracted, the bricks didn't sort of stay uniform. So yes, I was surprised because I'm not used to seeing so much metal being caught up in a system like that.
Yes, I must admit we were quite surprised to see that number as well. Just a second question on guidance. I may have missed it, but I presume that guidance remains unchanged. So there doesn't seem to be any mention of guidance in the announcement today.
Yes, certainly. We're very comfortable with our guidance for the rest of the year.
Okay. Great. I'm going to take the helicopter up a bit. Just a question on what you guys are seeing on overall industry cost inflation. Obviously, labor availability and cost are a big issue in Western Australia at the moment. Are you seeing similar things in Africa, where, obviously, some inputs like energy and steel and so on and so forth are going up. But if you had to put an average percentage cost increase that you're seeing across the board. What put that look quite, Terry?
I'll pass it over to Doug because we're doing a lot of work on that at the moment. We're not -- we're just starting to see it moving now, but I'll let Doug give you a feel for that.
Thanks, Terry, and thanks for the question, Rich. Yes, look, obviously, since the Ukraine invasion, we've seen oil prices go up, as we've all seen, and we're seeing that come through now in diesel and HFO, particularly in Mali. Not yet impacted at Mako with Senegal, where the government controls the supply and pricing of the fuel, but we figure that's only a matter of time. And so the sort of prices you're seeing with oil prices, they're starting to flow through into diesel and HFO in Mali, similar sort of percentages. Obviously, it only impacted towards the back end of the quarter, and we had stocks as well at lower prices. So not a significant dollar impact in the quarter, but we're starting to see it now. In terms of consumables, yes, we're seeing similar sort of price increases to that of oil, so upwards of 20% to 30% on the major consumables that started to impact us during the quarter as well. Not a huge component of our cost base, but north of 10%. So it has an impact. And fuel on top of that, we're certainly seeing the impacts.
What would the percentage of your overall OpEx be comprised of your fuel cost if you had to put a number?
Similar, 12, 13-ish percent.
Yes. And so in terms of looking forward then, you mentioned that you did see huge impact in the March quarter, but that should start to flow through into the June quarter. What are you guys, as a company, doing to help manage what you can? Would you look at hedging some of your exposure? Or what are you guys doing to help manage those costs?
The value derived was obviously units.
Yes. I think our answer is going to be units. We've teed up our plants now. I don't think we've ever been in a position where we can say we're going to get 90% operating availability out of the sulfide circuit. And obviously, we've got a lot of materials. We've got stockpiles in front of the plants. We've got some concentrates. We're cleaning out all our ponds now, which do have materials accumulated over 30 years. So I really feel that units is our answer here.
I think we've put a lot of time and effort over the last year on bringing down our costs. We've changed to mining underground, and we've reviewed a lot of our contracts. But I think we are going to be under a bit of cost pressure like the whole of industry, but our answer to this right now is improving on those units.
Right. One last question. Update on the solar hybrid plant -- power plant that you're talking about last year? Were you full?
Yes. The Phase 1 of the operation is going relatively well. We switched it on last quarter last year. We've all got used to now having a 10-megawatt battery on site. And that -- what that does is it reduces the amount of fuel we have to have just on a reserve ticking over on generator sets. So now that battery can click in, and if we have any interruption on any of the plants, it can run the whole plant and all mines' operations for somewhere between 20 and 30 minutes, which gives us time out to shutdown or fix the problem. It's clicked in 3 or 4 times. Initially, we had a few concerns because it wasn't clicking and fast enough. You have to -- it has to come in within 1.6 seconds to make sure the mills don't stop. But that was all solved in December. It's running well. So I would say our fuel efficiency is in a far better position. As you know, we switched over to HFO. We're not seeing the benefits yet on the price differential between diesel because there's a lot of pressure on HFO in that part of the world. A lot of places have switched over to HFO from diesel. But it certainly brought our cost -- our overall cost down, and that's now put us in a position. Now we've got used to the idea of the battery because it took a bit of time. Now we're starting to look again at the solar part of it. But that's going to be probably more into the next expansion phase where we look at Tabakoroni. That's where we'll be embracing it.
[Operator Instructions] We are showing no further questions at this time. I'll now hand back to Mr. Holohan for closing remarks.
Good. Well, thank -- again, thank you for your time. And as I say, I think we're all under the same pressure on the mining industry on costs. We're going to start seeing it in June quarter. But I think, as I mentioned, we're expecting now to see steady improvements on production just by the efficiencies that we've put in place. I think we're in a good position. And at this point in time, our answer is getting more units out of the system. It's as simple as that. Thank you very much, everybody, and have a good day.
That does conclude our conference for today. Thank you for participating. You may now disconnect.