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Thank you very much, and a warm welcome to everybody today. What I plan to do is very quickly take you through the highlights, then go through the operations, exploration also with ESG first. Then I'll hand over to Doug on the finances. We will take questions, and then I'll do a wrap at the end of it.
I think starting with the highlights, I think there's quite a lot there. I'll go through relatively quickly. Safety, I think we're hitting some really good numbers there, numbers that I've never seen for a long time in mining operations, especially when you have 4,000 people on the ground. These are sort of numbers that you normally -- I've seen in refineries, not in mines. So I think we're doing exceptionally well on safety. Net debt, that's on track now, probably be 120-something at the end of the year, going well, going to plan. The gold production, these are numbers that we've last seen in December 2020, when we were putting at Syama open pit 3-gram a tonne through the Oxide plant, and it was relatively easy to do this sort of stuff. We're really pleased to see we've had a good quarter there, despite the fact is it rains spectacularly during the quarter.
Unit cash costs starting to move now. If you remember on the call, I said we started to focus on costs in Q2. It's very difficult for people, especially in the Syama background, when they're trying to get the operations working correctly to focus on cash at the same time, but they're starting to know. And we're starting to see the benefits come through. I expect to be able to report improved numbers again on the next quarter.
Sales, we averaged $1,809. This is where your hedge book really starts to kick in. It's always painful on the metal pricing when you're climbing the curve or what is coming down. This is where it actually helps you a lot. So some good sales there. You remember, we put out the mineral resource. This is really exciting. This thing is growing on a daily basis. And we're getting results on a weekly basis, not only on the in-fill, but expansion-wise, we're going a little bit deeper. Given the geography there or geology there, I think we can go down to 200 meters plus. We've only got down to 150 at this stage, and we're still adding gold at reasonable grades there and some very high grades. So as a result, we've commenced our pre-fees and looking at all the options we can do over the next couple of years with low CapEx to optimize what we've got, given that, at this point in time, the mine is a bottleneck. However, when Syama North comes on, we can start mining that in Q2 next year because we are mining areas of it at the moment. Certainly, the plant becomes a bottleneck again and focuses back onto the mills.
So we've got updated forecast productions with the Syama North coming through. So we have withdrawn some of our guidance in the next couple of years, with a view that we will review it and put it out again in Q1, and we expect some upside there. In terms of repayment, Doug will take you through this syndicated loan, and the Bibiani money came through a little bit later, but we can -- there's a good reason why. And that's still coming in. We'll get the next 2 installments. One we've received already post quarter, but the next one will be coming in on time. And then we've had both audits on the ESG side with Moody's and World Gold Council's, and we're looking good on both of those. In terms of the gold forward contracts, we're averaging $1,900 per ounce, which is very healthy against 161,500. Remember, as part of our covenant, we hold 30% covenants on the debt. We hold 30% on the hedge book. And the bottom line is on all of this that we are still maintaining our cost and our production guidance of 345,000 all-in cost of $1,425. And I know the analysts are saying we're going to produce a little bit more 345,000. I agree with that. Obviously, the trick is now, with all this pre-strip work we did in Q1 at Syama on the open pit, we're starting to see those costs of the oxides coming down very quickly. We still think we can get to that number. So all in all, we think it's a solid quarter. Production has improved for 4 quarters in a row. So we see now 5 quarters of steady operation. And now despite the rainy season, the Q3 that normally catches us out, we were way ahead of the game at this point we thought. Exploration, it's discovering a game changer at Syama, and that's why we're growing our guidance. And we need a little bit more work to look at the options there, but I think that's going to guarantee our future, and that's increased production. And as I mentioned, the costs are starting to reduce. Given that we've got the revenue side of the equation under control, we're really starting to focus on costs.
So let me go through -- I'll go through ESG first. As I mentioned, ticks in the boxes. Moody's, they say we're robust on ESG. We're ahead of the pack. But more importantly, they've given us a lot of information on what we need to do to get -- to improve our situation in terms of the responsible mining principles with the World Gold Council 84%. But more importantly, we're on track for June '23 to get to the 100% level. It does get tough from 84% onwards, but we're confident we can get there. And we're also on track for ISO 45000 certification in Q4 at Syama and Q1 in Mako. And if you go back to safety stats, it's quite remarkable. If we stop and think for a moment at Syama, they have not had a lost time incident for 1,350 days. That is 3.8 years, and that is quite a remarkable stat. And that includes, and I keep mentioning it, the 64,000 man-hours when we rebuilt the plant in Q1. So I think they're really doing exceptionally well, and brought our TRIFR numbers down to what is a record for us at 0.62. On the production side, I'll start with the Syama Underground. As I've been talking to, being reconfiguring the underground mining, mining in the right directions based on geology. That's taken us nearly 14 months to get that right. But what we're starting to see is and when I arrived, we were at 2.4 gram a tonne tracking up, but we've been producing underground mine -- run of mine now at 2.71 for the quarter. These were slightly higher than my guidance thoughts. If you remember, I was talking 2.6 to 2.65. Those are my targets. The guys are exceeding this. And I'm not going to say that it's always going to be at 2.71, but it's a significant improvement. We are, next year, going to go through a slightly higher-grade patch. So you're going to see some slightly higher numbers on the next level that we're developing, but it's actually resetting. And more importantly, the modeling that we're doing now, we're actually seeing accuracies of plus or minus 4% against the model of what we're actually achieving. So we're really starting to understand the sub-level caving and being able to predict it accurately. And once you've got these grades, only then are you comfortable to seriously look at expanding the operation, and that's something that we'll be looking to do over the next 2 years.
In terms of the plant, as a result of the high grades, we've averaged 2.8 going into the plant, and that gave us 45,000 ounces and coming out of the sulfide circuit, which is, in itself, a record. And yes -- sorry, the other major record is the roaster. Again, it's still humming along. I'm going to probably stop mentioning the roaster in future calls. We hit a record 52,000 tonnes. Engineering-wise, we have confirmed we can increase this throughput more if we put an oxygen plant on there for our future expansions. And subsequent to quarter end, we actually started doing our in-pit tails. If you remember, I said we're doing the final lift on our main tailings dam up at Syama. We spent about $60 million fixing that last lift. Now we don't spend all the capital and put the piping into one of our older pits. Then we are going to have a bit of a holiday on the costs for a couple of years on capital on tailings. It's only in about year 3 that we have to start putting capital into that in-pit to raise it up a little bit. The Syama Oxide, grades improving and strip ratios. If you remember, we did all that pre-strip in H1. We had low waste required to be removed during the quarter, and that's really set us up not for this quarter so much as the rest of the life of mine on the oxide pits. We've now got the grade control ahead of the game. We've got the pre-stripping ahead of the game. So now when we went through the rainy season, we weren't trying to mine the bottoms of the pits, we were doing the tops of the pits. And we're starting now to see the grade coming up, and I expect to see further improvement over Q4. Mako, we increased some ore mine despite, again, the weather. And we did go through a slightly lower grade patch. We expected that. And as we're speaking, the grades are starting to return back to previous years -- sorry, previous quarters. To move on to exploration. We've wound up the Guinea work for the year. Mako, we're still looking to find another area to mine in 4 years' time. As I've always mentioned that I think could be a bit of a photo finish, but the guys have got 4 areas that we're focused on there. Our work is ongoing. And then the big story is Syama North, 2 million ounces and counting. Of that, we've discovered about 188,000 ounces of oxide, which actually -- will probably take precedent over existing oxides that we've got lined up for the next couple of years. And then we've got transitional sulfides at 127,000 ounces and 1.7 million ounces. Now this is still mineral resources. So this is all blue sky, when I'm talking about it. 50% of it is still inferred. However, we expect, by the end of the year, to have over 85% of it in M&I. And then we'll be able to put it through the feasibility study. In terms of drilling, we are in-fill drilling. We're going to 50-meter spacing now. I think it was originally 100-meter spacing when we stepped it out. And we are also doing the extensions at depth. We're going -- doing some work now, where we're going beyond the 150 meters. And we're still confirming that the large section that we noticed around holding the 538 is still increasing. We're still hitting some 30 meters around it. So it looks like that's quite a large block of ground, which is quite exciting. We also completed our aeromagnet on the hole of our belt. And that work is -- sorry, that information is now being processed by the engineers, and we should have that information to look at from a structural point of view of this quarter now. We also did an earn-in agreement with African Gold right up at the top of the belt. It's contiguous to our operations. It does actually bifurcate at the top there. So if it's adding on 5 kilometers in my Layman's terms, I tend to say it's 10 kilometers because it's 2 sections, but we certainly think there's a lot of potential up there, and we did do the aeromagnet over it. So that leads us to the pre-feasibility study. As I mentioned, we have put some of the Syama North material through the plant before back in 2018. So we've got some broad information about it, but we've done some tests in the laboratory on it. It's not unusual or it's to be expected. We have got a Canadian laboratory doing some format work on it now. I would suggest it will be a little bit softer than underground material, so it should go through the plant a little bit faster. It's higher grade, but because of its closeness to the operation, it should be more economic than going to the -- than the underground material. So this gives us a huge amount of flexibility on the plant, where we can take the underground a little bit slower and controlled and then compete with the open pit. So I think with all the options going forward, as I mentioned, we've pulled in our guidance on year '24, '25, '26, et cetera, we -- until Q1, because I think there will be some exciting numbers coming out in Q1. I think that's about it on the process side. I'm sure there could be quite a few questions on that, but I'll hand over to Doug, and he can take you through the financial section.
Thanks, Terry, and good afternoon, everyone. I'll just take a few moments as normal to take you through the all-in sustaining costs for the quarter and cash costs, also to touch on the cash flow and net debt position at the end of September. And Terry has largely covered the asset sales and hedge book, and then I'll hand back to him for -- to wrap up and take questions. So the September quarter unit cash costs were $1,389 at a group level per ounce, which was 6% lower than the June quarter, which was -- we benefited there from lower waste stripping, the Syama Oxides and processing costs at Syama, together with slightly higher production as well. Offsetting some of these factors were some increased costs at Mako. We moved more materials, 7% more than June quarter, and we're also experiencing higher explosive costs across the group, where we've seen upwards of 30% increase in those explosive costs. And we continue to feel cost pressure across the board. Diesel prices have stabilized and started to come down, particularly in Mali. We haven't had the same escalation in diesel prices in Senegal as the government moves the prices there as well as being buffeted by the CFA, which is pegged to the euro. And so with the euro falling against the U.S. dollar, that has provided some insulation. But we were paying diesel prices in Mali upwards of $1.45 a liter a few months back, that's now fallen into the mid-120s a liter. HFO, which is more significant at Syama than diesel, in terms of volumes is around $0.90 a liter. So we are getting some relief there, if you like, if you can call it relief, versus diesel for the power plant. So on a year-to-date basis, group all-in sustaining costs at $1,483 and we have a noncash expense there of $35 an ounce. Turning now to the cash flow for the quarter. Pleasingly, operating cash flow up a bit at $50 million for the quarter. We had CapEx of $16.7 million. Just a bit of a breakdown on that. There was just under $5 million of that related to tailings facilities at Syama, $5.7 million for stripping at Mako and approximately $3 million relates to open pit stripping at Syama on the oxides. Exploration at $3.1 million, slightly below the previous quarter. Terry has already talked, where the focus there has been obviously around Syama North, particularly working capital of $12.9 million. That really relates to building consumables and critical spares. Given the inflationary environment, we've seen ongoing outlays to maintain adequate levels of fuels, reagents, consumables, et cetera, and that's reflected in that working capital number. Asset sale proceeds was $10 million relating to Bibiani. The second $10 million tranche was received as we announced post the quarter end and $1.8 million in cash related to our Oklo shares from the B2Gold acquisition of that company. We also received 1.2 million shares in B2Gold as part of that takeover, which we actually sold in the last day or so for a U.S. dollar value of about 3.5 million. So that wasn't included in obviously the September quarter numbers but will be added to the balance sheet for the December quarter. Debt repayments of $35 million. The term loan installment of $25 million in September, plus the $10 million from Bibiani went down on the RCF as was previously flagged. Government dividend and withholding tax, a small amount there relates to the installments paid to the Senegalese government from the dividend paid from Mako. So before asset sales, debt service and government dividends, the business generated $17.5 million in free cash flow during the quarter, leaving us with net debt at $156.5 million, which was a reduction of $26.3 million for -- or from quarter 2. And as Terry said, the hedge book has served us well in the quarter. We were left with 161,500 ounces at the end of September, at an average price of $1,901. And that's it for me. With that, I'll hand back to Terry to wrap up and take questions.
Thanks, Doug. So I think -- we think we've got a very exciting quarter. I think a lot of the technical issues are now sorted out. We are finding more economic deposits. And obviously, we're reviewing operations now to really focus on cost and try and get our costs into a far better position. So I think the 4 takeaways from today's call is it's the fourth quarter of production improvement. Our exploration is discovering a game changer, and it's -- we're finding gold now at $10 an ounce compared to $25 historically. Our costs are starting to reduce, and we have maintained our guidance this year at 345,000 to $1,425. And we've withdrawn the next few years, and we will tell everybody the good news in Q1 next year. Thank you. And please, I open the floor to questions.
[Operator Instructions] Your first question comes from the line of Reg Spencer from Canaccord.
Terry and Doug, my first question relates to -- well, my first question relates to working capital. If we go back last quarter, Doug, I think you mentioned that you're expecting that working capital built to unwind into this quarter. I know you mentioned that higher cost inflation has meant you're having to spend more on fuel, reagents and consumables. But can -- does this kind of that unwinding of that working capital was effectively pushed out another quarter? Or how much more of the buildup in working capital we expect?
Sorry. Yes, Reg, thanks for that. Look, I think it will bobble around. But I guess the challenge in this inflationary environment is the guys are just trying to get ahead of it. If there's price increases coming down the tunnel, then they, obviously, order appropriately. So it's not a normal environment or not one that we've been used to in the past, that's for sure. But we're obviously acutely aware of it. It consumes cash. We want to return those cash flows back to the balance sheet as best we can. So I think going forward, we should see it come back to more normal levels and not be a drain on the business.
Okay. Understood. The next question relates to Syama North. Conscious that you will be pretty out of pre-feas early next year, where I'm sure we'll get many of the answers that we seek in the interim. But if you can maybe help me for a little bit. If we have a look at the cross-section at Syama North, how should we think about the strip ratio if we wanted to do some indicative modeling of what this might look like with the mill expansion? What do you think that strip might land at?
If I eyeball it, and it literally is eyeballing at the moment, I think it's going to between 6 and 7. The wind for the stuff is averaging over 10 meters. So my sort of rule of thumb at 45-degree angle is you should be able to get down to about 200 meters plus on that. I think on the wide sections, where we're sort of seeing 30, 50 meters width angle a bit deeper, but then you've got to be careful in the design of the pits because once you go past 200, you have to change the top angles of the pits. But I would sort of work on 200 meters, but we should be able to get down to 220. That's my sort of rule of thumb. With strip ratio, 6.5 on average. But some of the thin sections, we would probably consider look -- going underground for those thin hard exceptions. So it's going to be a combination. That's the trick on the study is what is the best combination for that. Certainly, we'd like to go in open pit and get some of that large, but sort of 1.8 to 2.1 gram a tonne stuff, and then go in to underground and get that plus 3-gram a tonne stuff as a sweetener. But that's where the PFS will come out with it. It's obviously the eyeballing, I can tell you.
Yes. No, look, I tried to do the same but -- I tried to do the same with myself. I just asked you the question. Yes, understood. When you say low CapEx for Syama North, how low is low? If we have a look at Taba underground, I think you earmarked $100 million for that. Now there are obvious benefits of looking to develop Syama North over Taba underground. I think that's clear. But if we -- ballpark, would it come in under that $100 million that you had put aside for Taba underground?
Yes. Yes, significantly less than $100 million. And I don't want to use a number because you appreciate to get out there before we've got the study, but it's less than $100 million.
Okay. Great. And last question for me is you've got an oxide plant there, which you've highlighted maybe utilized as part of the expansion of the sulfide circuit, mainly for the crushing or grinding if I'm not mistaken. But are there any other bottlenecks in the sulfide circuit, which would need to be addressed? You mentioned that the roaster can handle more throughput with a bit of oxygen. But are there any other parts of that circuit that would need to be optimized or expanded as well?
Just a little bit at the back on the dilution side, just to take the extra gold, and that would probably be the opportunity to split that into 2 different plants, sulfides and oxides, for the first time. Because as you know, we have one convolution circuit for both. And so that's -- but that's more capital. The oxygen plant -- I mean, an oxygen plant will be -- we're putting one in at Mako at $2 million. This would be a little bit bigger, so let's say, $4 million. We need to do some work on our crushes and put a flotation section of. But these are not large capital items generally. This is what I would classify as small CapEx for the returns you get.
No, certainly less than a big underground mine like you might have otherwise been considering a type of so.
Yes.
That's great. Appreciate it.
Yes, Thanks, Reg. The original mine, as you know, we had a long development area -- bullion move before we got down to it, to the ore body, and that was a large capital sunk upfront. So this one is small capital, but you get almost immediate return for it rather than waiting a year.
[Operator Instructions] There are no further questions at this time. I would like to turn the call back over to Terry for closing comments.
Thank you very much, and I look forward to Q4. We're already into Q4 right now. The rain is slowing down. We did have a slight reduction in tonnages in Q3 compared to Q2, but grade really pulled us through. And I think the Syama guys are really exciting to hit the strides now. So we're looking forward to a good Q4 to finish the year off. And thank you very much for your time today. I know it's a busy day for all of you, and I appreciate your time. Thank you.