Resolute Mining Ltd
ASX:RSG
Earnings Call Analysis
Q4-2023 Analysis
Resolute Mining Ltd
The company has made strides in its financial turnaround, moving from being debt-ridden to a cash-positive position by the end of the year. A significant highlight for the investors is the announcement of expected cash generation starting from this year, with the operations set to produce around 350,000 ounces annually. Management conveyed satisfaction with the repayment of debt and net cash of $14 million in the bank, signaling a strong recovery and paving the way for both debt-free and hedge-free operations going forward.
On the operational front, the company reached its production guidance by mining 331,000 ounces of gold, with a notable 80,000 ounces in Q4 alone. This was slightly lower than anticipated due to challenges at Mako, which they've addressed with a $25 million investment for a major strip to access more metal cheaply. The All-In Sustaining Costs (AISC) fell from $1,498 to $1,470, outperforming the original guidance of $1,480. The reduction in AISC reflects successful cost reduction initiatives that are expected to drive further improvements. Additionally, the EBITDA stands at approximately $165 million with a capital expenditure of $70 million, aligning with their forecasts.
Exploration activities yielded significant results, particularly with the discovery of a 3.5 million ounce sulphide ore body at Syama North. Plans are in place to start mining the high-grade portions of this ore body towards the end of the year, which will be processed through the existing facility. This adds to the excitement around Phase I and Phase II expansions, as the new reserves are predicted to underpin both stages. These expansions aim to increase annual output from a range of 205,000-215,000 ounces to approximately 250,000 ounces.
The company has been actively improving its Environmental, Social, and Governance (ESG) credentials, evident from its compliance with the World Gold Council's IGM fees and certifications at both operating sites. A key achievement in safety was highlighted, with the Mako site reaching 2.3 years and the Syama site nearing 5 years without a Lost Time Injury (LTI), underlining a strong commitment to operational safety.
The financial overview for 2023 revealed gold sales of 79,480 ounces in Q4, contributing to a $630 million revenue for the year. Despite a decrease in revenue compared to 2022, due to lower production, the company benefited from higher realized gold prices. The AISC trended downward, and the company experienced substantial operating cash flow of $30.8 million in Q4. These figures reflect strong cash flow generation capabilities, crucial for further reducing debt and funding future expansions. The unaudited EBITDA grew to $165 million, with an optimistic outlook for an increase in 2024 given the current gold price environment.
You don't have any saved screeners yet
Hello, and welcome to today's Resolute Mining Q4 Results Call. My name is Bailey, and I'll be your moderator for today. [Operator Instructions]I'd now like to pass the conference over to our host, Terry Holohan, CEO. Please go ahead when you're ready.
Thanks, Bailey, and welcome to everybody. This is our annual and Q4 report, and I've got Chris Eger with me. We have -- we are going to be talking to our presentation, which we loaded up on the ASX and the LME sites this morning. And I'll be talking to it, the 21 pages, we'll get through it rather quickly, so give you time to come forward with that -- with your questions.If we jump through to page 2 and that just have our revised guidance there, which we'll talk about shortly. Chris will give a bit more color on to that.Going on to Slide 3. Just to remind everybody, we have the 2 operating assets, the major one in Mali and the one in Mako, producing gold, and we have quite an exciting exploration portfolio with quite a bit of progress there to report in Mali, Senegal, and Guinea.If we go to Slide 3, I think this is the important thing. We announced this core mark of 2.5 years in our turnaround project. And I certainly think that we've achieved a lot over that time frame. If you look at the clear numbers there, where we started out with the debt, we're now in a cash positive position at the end of the year, and that is very satisfying for everybody, I think. We've now got operations where we think going forward we can produce about 350,000 ounces annually and generating cash, we're certainly going to start generating cash this year. Chris will take you through a few of the numbers and we're going to be starting going forward into operating based on cash margins.So I think also, as I mentioned, exciting exploration opportunities, Guinea and Senegal. We've got a 3 horse race now going in Senegal to try and find the optimal satellite ore body to put through the Mako plant in 2.5 years. And the Greenfield Guinea, it's only just gone on temporary pause at the moment because of diesel supply in Guinea. However, that's going to be ticking over fairly soon again.So if you look at it, we think the major expansion now that's ongoing at Syama, our Phase I, I think now we've ticked the box on the sulphide processing and mining. As you know from last year, we found the Syama North, which is a large potential sulphide open pit. We're doing a small expansion on that. Long lead items were ordered last year. We're starting construction this year. We expect to be kicking that in and commissioning in H1 next -- in first half of next year. That will take us to 250,000 ounces. And at the same time, we'll be looking hard at Phase II and how big should we take this operation. We put numbers out of 400,000 ounces. This is given that we've got 10 million ounces in the ground there.So the near-term catalysts for our business going forward and our major focus is it's doing the organic expansion at Syama, looking hard in the extension possibilities at Mako with the geologist this year and obviously, the cost reduction initiatives. I think this is key, the cost reduction, I've been talking about this for quite some time. We're starting to see those kick in and we certainly think that that's going to improve further going forward. And of course, the exploration potential. We see in all our 3 areas a lot of prospectivity and we're going to, again, spend quite a lot of money on our exploration this year.So jump to Slide 5. If you look at the highlights, we hit our guidance, 331,000 ounces. We hit -- we made 80,000 in Q4, back on track as far as we're concerned, ready and forward to this year. We know that we were slightly lower than we wanted to be late last year because of Mako. But Mako, I will mention a bit later, but we completed a major strip at the Mako pit. $25 million we put into that, and that's going to create the ability to harvest significant amount of metal out of that pit of 2 gram a tonne relatively cheaply over the next 2 years, and we'll come into that shortly.I think the major excitement is if you look at our AISC $1,470, we're very excited about that. That compares last year to $1,498 and our guidance originally at $1,480. We still think we've got a long way to go there. Chris will talk about that also in a short while, but we're very excited about the initiatives that we've put in place and that will unfold over the rest of the year. So we're in a position now. We're producing EBITDA of approximately $165 million, cash flow is $142 million. And we also hit exactly on with our capital guidance of $70 million for the year. And all the jobs that we wanted to do were ticked off.Exploration, you know we had a good year there with Syama North, 3.5 million ounces of 2.9 gram a tonne. The exciting thing is that we will be able to start mining some of that sulphide ore body towards the end of this year. It will be high grade. So we're not going to sit on the floor and wait for the expansion of new plants. We're going to put it through the existing processing facility given that we know that it's actually very similar to existing ores. And so we're excited about the progress on that. That's -- we brought that to account very, very quickly. And as we know, it's within 7 kilometers of the plant, and it does underpin the Phase I expansion project, but I'd suggest it will also underpin the Phase II expansion as well.So as I mentioned, net cash, $14 million in the bank. That's a big change for us. We've got our last debt payment in this quarter. Then we'll be debt-free, hedge-free, and looking at max optimal cash generation over this next year. Meanwhile, while all this activity has been ongoing, we've been ticking the boxes on ESG. In terms of the World Gold Council, we ticked the box with the compliance on the IGM fees. In August this year, we got the thumbs up from them. So we're now looking and regrouping with the World Gold Council on what next. And that we also successfully passed the 14,000 and 45,000 certifications on both our sites.And I think the other very, very pleasing for me is that if you look at our LTI performance, Mako is at 2.3 years right now. And there, I'll say, that Syama's coming up, it's within 10 days now with 5 years without an LTI. And I think that is a very, very impressive record for the operations out in West Africa.Move forward to Slide 6. As you can see the production growth, if you all remember, in 2022, we released 21,000 ounces from our stocks, and we produced 353. So arguably, the production from the mines virtually on track, I think, however, despite -- if you look at the '22 costs, you can see, I think, a major improvement in a step forward on the cost there, given the lower ounces, especially given that we have virtually free ounces in '22, of 21,000. We've also, as I said, we've proven the sulphide processing, mining and processing. So that's given us the confidence over this last year to actually put in place our mini-expansion now, the Phase I expansion at Syama, as I mentioned, that will kick in early next year.And we're getting more and more bullish, more and more optimistic now with what's going on in Mako. We've got the 3 projects there. It is a 3 horse race and I think those -- at least 2 of those will be able to bring to account fairly soon. So we're expecting some good news flow towards the end of this year. So all in our favor, we think we can get to the 375,000 ounces in a couple of years' time. And then, as I mentioned, the big prize there, which we're all here for is to take the Syama operation up to far larger number and make this company a 500,000 ounce operation.If you go to Slide 7, safety I've talked about, very pleased with the progress there. Recordable injury frequency rates, that's a bit of a checker graph there, but it does reflect actually that while we had 15 incidents, we've actually got fewer people on the operations, so you've got slightly higher ratios there. But safety is a journey. We are focused, we're taking 0 tolerance on the operations to negligence and we believe that we are systematically improving the performance. And as I mentioned, the ISO and the RGMPs all ticks in boxes there.So let's go just a bit more detail into the operational overview in Syama, on Slide 9. If you look at the mining, we managed to mine over the 2.4 million tonnes. We lost the grade down a little bit by 2%, but I think that's manageable. I think that obviously, if you remember this SLC was originally designed at 2.1 million tonnes a year, between 2.6 grams a tonne and 2.7 grams a tonne, I think we're still in there. We're still doing some minor changes on the ground to the direction of mining in some of the levels to optimize the efficiency of leaving the waste regulars behind and mining ore, that is still a focus in some of the areas. But going forward, we're very confident with the sublevel cave operations.What is also pleasing is if you look at the sulphide tonnage process at 2.26%, that's a steady improvement over time. In '22, we did 2.1%. I think the most important thing that people will remember is our plant there. We did spend a lot of time in the first 18 months of this turnaround on fixing the plant there, and it has achieved a 93% availability over this last year. So I'm very excited about that. We took our plant offline early in January now, we just brought it back online. We've inspected everything, the roaster is in amazing conditions inside.We've got third-party reports saying that it's the best that they've seen for a long time. We're very excited about that. And we've done some minor enhancements to that just to give us a little bit more flexibility going forward and ready for some of the tie-ins for the expansion project that is coming down the track now.Grades on sulphides round about the same, going through the processing plant. Recovery is still at about 78%. I mentioned the enhancement work on the roaster. Some of the work that we've just done will allow us to take the temperature in the roaster up marginally. I'm talking about between 720 to 750 degrees centigrade and the main thrust of that is to be able to take -- sorry, oxidize some more of the carbon with a plan of trying to improve the leaching or, let's say, reduce the [indiscernible] in the back end of the sulphide leaching stage. So we're excited with the work that's ongoing there. But I'd say that I think the good story, if you look at the bottom there, you look at the cost profile on both the sulphides and the oxides. You can see we've made steps there, and we'll continue to make those steps going forward.Let's go to Slide 10. This is a slide that we started putting into our pack. Just to remind everybody, if you look at 10 million ounces, it's Syama, the majority of that as we mentioned indicated, we should not be operating that at 220,000 ounces a year, but there was always a question mark on sulphide. We think we firmly answered that now over the last 2 years of operations, and we're firmly on track to take that operation up in terms of ounces. And you can see the Mako one in the corner there. I think that we'll be able to keep that one going for quite a few years based on the exploration where it was ongoing.If you look at Slide 11, just to remind you where the Syama North is, we did quite a bit of mining in the blue circle A21 this year. As I mentioned, later this year, we're going to be starting the strip. There are some sulphides close to surface. Initially, they will be able to take only small amounts of the high grade. We will put them through the process this year. And -- but next year, we're going to be mining that earnestly and have it ready to feed into the oxide plant, which is going to go through its conversion process this year.Going forward to Slide 12, Phase I expansion, just to remind you, at Syama, we think we can go from the typical sort of 205,000 to 215,000 to about 250,000 ounces in Phase I. Everything is on track at this stage, project costs about $55 million this year. We have spent a little bit of money last year on this. Everything is on track. As I mentioned, the civils, we're just finalizing the contract, we should be starting ticking those off in March.So if we move to Slide 13, Mako. I think this is a big success for us this last year. We did mention that we're doing a major final strip on the pit to open up the last 2.5 years of metal at 2 gram a tonne. That was successfully done. We're now putting waste rock into the pit in the Stage 5 areas of the pit. So we're actually seeing reductions in costs there. That's why our costs were slightly lower this year than we thought they were going to be.We exceeded plan. We did 119,000, nearly 120,000 there, as you see the number of $1,373, I think that's a great performance from the guidance there. And now we're in a position where we can actually go back up to above 140,000 ounces for a couple of years. These are sort of production levels that we haven't seen in this operation for 3 or 4 years since we hit the high-grade patches in the middle of this deposit a couple of years ago.So that's going to be in harvesting mode. We have done some work on putting an oxygen plant in, that's reducing our costs, both on chemical reagents for oxidants and on the cyanides and we took over the power plant, and we've actually put chillers on those on half of the machines there to reduce our diesel bill. So there's a lot of technical improvements that we're putting through. We put through this plant on the last year, so we're expecting some great performance out of it going forward.And as I mentioned, we put out these recently, we're doing -- on Slide 14, the exploration update. We're active here, there's a -- we are on the greenstone belt. There's a lot of areas that we've been trying to get into for 3 or 4 years. We've managed to sign 2 JVs at the end of last year of the quarter, and we're actually active on the ground as we speak now. We're moving RC rigs onto Bantaco. This is an area that we're very excited about. And we've also delineated our first improved resource at Tombo.So we certainly think it's a 3 horse race. I think there's going to be a lot of news flow out of this over the next year. By the end of the year, we hope to be able to say, right, this is the next one. And I think at least 2 out of 3 here should actually be processed at some stage -- mined and processed at some stage.Guinea, we've been fairly quiet on this, just plugging away at it. We've got exploration licenses throughout Guinea on the Siguiri Basin. It's the right ZIP code to have deposits or, sorry, to have licenses right up at the top, Niagassolo, I was there last year to have a look at this while we're doing the GFS. There's certainly a lot of very interesting structures there. We have delineated some economic mineralization, we believe, although it's unclassified at this point. We are going back in to drill that and then fill it to take it up to mineral reserve -- sorry, mineral resources fairly soon. So we should have some use flow on that, and we're very excited about looking at this part of the world.And with that, I'll hand over to Chris, who will take us through on Slide 17 for our financials, and then I'll do a bit of a wrap at the end.
Great. Thank you, Terry. Look, I'm very pleased. I'm here on page 17 to report selected financial results for both 2023 and Q4. It was a very strong year with progression into 2024. So starting first on some of the key financial highlights for 2023 and Q4. Gold sales were 79,480 ounces, which was slightly higher than in Q3 as a result of higher production levels and our AISC in Q4 was at $1,480 per ounce, which is slightly higher than in Q3, but in line with our expectations.CapEx wrapped up the year at $19.4 million for Q4. And as Terry already highlighted, the CapEx for the full year was at $70 million, which is right on top of our expectations for the year. But most importantly, operating cash flow was at $30.8 million for Q4, which continues to highlight the strong cash flow generation of the business, which is important to us. In general, in 2023, the business generated very strong cash flows, which is important to reduce our debt levels and position the company for future success.So moving over to the right side, when we look at our full year 2023 selected financial highlights. Our revenue was $630 million, which was a decrease over 2022. This is predominantly as a result of lower production levels, offset by higher realized gold price. As mentioned, the AISC for the business continues to decrease, and we finished the year at $1,470 versus in 2022 at $1,498. So again, a strong achievement in operating costs as a result of really cost initiatives that we're working through the system. And you can imagine that we're very pleased with this number because we had substantially lower production in 2023 relative to 2022.Unaudited EBITDA was at $165 million, which you can see is a continual increase over the past couple of years, and we expect this number to rise in 2024 at the current gold price environment. So overall, very pleased with our financial results at this stage. We'll be releasing our full year financials in March once completely audited.So turning the slide to page 18. Talk a little bit about liquidity. As we know, cash is king these days and a lot of businesses are having trouble generating cash. I have to say that we're in a position that we're generating very strong cash flow. For the end of the year, we ended up in a net cash position of $14 million, which is a significant achievement because at the beginning of the year, we were in a negative net debt position of $31.6 million. So that means that we reduced our net debt by $45.6 million through 2023.So again, very happy with the cash flow generation. As the business, you can see in the second bullet, generated $60 million of free cash before interest and debt payments. So again, very pleased. What did we do with that cash? As highlighted, we reduced our net debt levels, sorry, our debt levels and we made $55 million worth of payments of debt in 2023. So that's why today we're sitting in a solid cash flow generative position and in a net cash position, we expect to continue throughout the course of the year.So then what do we think about next year, so moving to the next slide with regards to our guidance, this is on Slide 19, both in our press release and obviously in this presentation to give you a view of what we expect for 2024. We expect the sulphide operation at Syama to increase slightly between 155,000 ounces and 160,000 ounces. That's really as a result of consistent grades through the year and strong mining levels relative to 2023. Oxide production from Syama between 50,000 to 55,000. I think one key to note here is the oxide level production is expected to decrease over time as the mine has been mined out of the oxide and we look at much more into a sulphide operation.But most importantly, what we see in the business is a drop in our AISC and a higher-margin business. And we're guiding AISC to be between $1,300 and $1,400 relative to an actual achievement in 2023 of $1,470 per ounce. Again, this has been an enormous emphasis on the company in reducing cost, but we're also benefiting from much higher margin ounces at Mako relating to the fact that we did that significant strip in 2023, and we'll be harvesting gold in the next 2 years at very attractive levels.CapEx though in 2024 is expected to increase quite a bit from 2023. That really relates to the fact that we're spending quite a lot more money in 2024 on the Syama Phase I expansion. In addition, there's quite an additional amount of capital that's being allocated to Syama for equipment and a fleet replacement exercise that's ongoing for both 2024 and 2025. Exploration expenses are also increasing via 2023. This really relates to the fact that we're going to spend a lot more money in Senegal in order to extend the mine life at Mako. We may actually increase these numbers throughout the year in 2024. Just as we see successes, it's very beneficial to the business to fast track the Senegalese exploration activities. So again, if you see this number increasing throughout this year, don't be surprised, that will be actually very positive for our business.So with that, I'll turn it back over to Terry for some concluding remarks.
Thanks, Chris. I think if you -- Slide 20 is a busy slide. I'll leave you to have a look at that. But I think if you look at where we're going this next year in the catalyst, it's obviously on the last column there. Mako mine life extension, Syama Phase I to kick in, and the cost initiatives. Those are the 3 major areas that we're going to be focusing majority of our effort on this year. So it's the cost, it's the Sayama expansion to kick in early next year, and the Mako mine life extension.Thank you very much. And I'll hand you back to Bailey for questions and -- question time.
[Operator Instructions] Our first question today comes from the line of Andrew Bowler from Macquarie.
Terry and Chris, just a couple of questions from me about the years beyond calendar year '24. I mean, noted that you'll still get to provide an updated 3-year outlook. But in terms of same in particular, I mean, commentary here that the undergoing grades were lower than originally expected and rectification works in terms of dilution set to get underway. Do you expect those rectification activities to complete before the end of this calendar year? Or do you think there's potential for that dilutionary impact on into calendar year '21 as well?
Andrew, we expect that to change around over this quarter. We were seeing improvements right through December, which didn't fully reflect in the Q4 numbers, but we expect to see that over this quarter and the next quarter to get back to where we want it to be. I think because there are still some areas, as I mentioned, underground where it's this transverse mining, where it should be longitudinal and vice-versa. We're just really tidying up some of those areas over the middle of last year, and we think we're back on track for this year.
Now, in terms of Mako, I mean, obviously, some pretty handy resources delineated there recently. Just wondering in terms of approvals, what the sort of scope there is and potential approval time lines? I mean, obviously, 2.5 years of mine last year things need to be pretty snappy. Is there a chance that there could be a relatively short highs period? Or are you pretty confident that sort of I think you noted 2 out of those 3 sources potentially would be mined, but if you get one of those up before the end of Mako's mine life.
It's -- Andrew, I know I asked this. When we first started talking about this, I think I was 30% confident then 50, then 60. I'd say I'm probably 75% confident now, but there's always that chance. I don't see the permitting as such, but we supply it. Well, with lots of issues potentially, we should -- if we can get the mineral resources up there, I think we can get it on time. If there's any delays then I think there could be a short window of delay. But that could be a good thing because it always gives you a good opportunity to renegotiate your contracts.
Now, last one for me, just on Mako, I mean, obviously upgraded guidance compared to that 3-year outlook released last year. Is that bringing ounces forward from calendar year '25. So is calendar year '24 expected to be a little bit lower given that you're at this year is going to be higher than that original on that outlook?
Yes and no. We're just reviewing that at the moment. We do -- we are bringing a few ounces forward, but we are seeing slightly higher grade material than we originally anticipated with the great control. So we just need a little bit more work on that that's why we're just holding back a little bit. But we will give guidance later this year.
All right. That's all for me. Thanks.
Sorry, Andrew. It's always been a trend at Mako that we've always been slightly conservative on grades. And every time we've gone into great control, we've come out slightly better on grade.
The next question today comes from the line of Justin Chan from SCP Resource Finance.
Just -- maybe just start at both operations, are there, I guess, grade profiles and/or any planned maintenance we should be aware of just looking at the yearly profile this year?
I think the planned maintenance, I think you're going to see progressively improving quarters for lots of reasons. We did do a major stop now on the plant to reconfigure some of our milling on the sulphides at Syama and to just open up that the roaster to check it out and to do some enhancements, particularly on the ancillary equipment. So that's the major maintenance for this year. The rest, every time we take a mill offline, then we'll do a little bit of tie-in work. If we can get that right, there should not be any problem. We don't see any major problems, but the engineers are always going to be slightly conservative to say they need a little bit more time at this point.
So I guess, looking at the quarters other than managing rainy season, it's -- I imagine every quarter is similar, there's no specific trend other than the, I guess, rainy season and then some higher grade from Syama North coming in in Q4?
I think Q4 is going to be a big one because as we go progressively down Mako, the grade is going to increase. For example, in Q1, it's just under 2 gram a tonne, Q2 2, Q3 2.2 and I think Q4 2.25. So to graded are progressively increasing through the year there. So they're going to have some impact. And then as I mentioned, there should be some material coming out of Syama North in Q3, Q4, and we'll put that through probably Q4 at Syama.
And then just on the build profile, similarly, I guess what is your spend and/or work profile through the year for the expansion?
Chris, do you want to talk through the spend through the year on expansion?
Yes. Justin, so from a CapEx perspective, the spend would be pretty [ hooked on ] prior year. There'll be probably a bit more spend in Q2 relative to Q1 on CapEx. But yes, it will be pretty consistent. And going back, Justin, just to your previous point, when you think about -- when we look at our budgets, I would say roughly 60% or so of the production is coming in the second half relative to the first half. So as Terry highlighted, the quarters are going to build slowly over the year. So the Q1 should be the low point and then it should get better and better. The only thing I would be cautious for is just the rainy season and when it starts and when it ends.
And just -- sorry, I'm stepping into the models for the first time here. Just in terms of understanding on the tax side of things, like effective tax rate and when you pay tax, are there any kind of subtleties or things to watch out for this year?
In short, no, it's a pretty consistent sort of payment schedule on a quarterly basis with taxes at both operations. So there's nothing unusual to highlight.
The next question today comes from the line of Reg Spencer from Canaccord Genuity.
Apologies if you've already answered this question, but I only really caught the end of Andrew's questions. But I was wondering if you were able to maybe provide some kind of broad or direction or quantify those possible all-in sustaining cost reductions beyond 2024? Or is that something that we'll just have to wait for that revised 3 you planned for?
Reg, it's Chris here. Look, I would say we will be obviously providing more specifics. But I think similar to what we highlighted last year we do expect costs to continue to decrease. Mako, for the next couple of years, we expect numbers to be in line with 2024, so plus or minus. But really, with Mako, the key point is if we do make progress on the satellite deposits that we're expecting, we will then be spending money in order to extend the operation. So if the site were to stop, then we obviously see cost to decrease, but it will be very good for the company to continue to put money in the business in order to extend the mine life. So that's what I can say about Mako.On Syama, look, we do expect cost to continue to decrease from the levels we've prided this in this guidance. Last year, we were saying that we were looking to achieve at least $100 AISC decrease year-over-year, and we're still focused on those types of reductions. But we'll need to do the work properly in order to provide an updated forecast for the next several years, once we've got our arms around the mine plan and exactly what we can do on the cost side of the equation.
I'm going to try to pronounce it, Tomboronkoto. It looks like it might add a couple of years -- it looks like it might add a couple of years to your mine life clearly there. Just shooting over to Bantaco and Laminia, what kind of terms govern those JVs? Will you have dominant ownership there? And then can you maybe give us an idea of what kind of resource potential exploration targets that you think these prospects might have?
Reg, it's Chris here. So let me start first on the economics of those JVs, and then I'll turn it over to Terry around the potential. Look, they are standard JVs with earning structures. We have full control. At the end of the JV will be the operators and there will be a standard royalty. I don't really want to hand out what those exact economics are at this point just because it's confidential and it impacts how we negotiate future JVs, but they're very standard and nothing onerous. Then maybe over to Terry on the potential.
I think, Reg, that we got to very careful, we're, obviously, in third stage, but all 3 areas, we have known mineralization. We've known about these for several years. And you can see by -- they've had waves of artisanal miners working through those sort of looking at the top 10, 15 meters there. And they just keep moving down. There's a lot of material in that part of the world. So size-wise, obviously, this is our hope. We think that the combo should may be double but we actually quietly think that Bantaco will actually win the 3-horse race. That's what I sort of gut feel at the moment.
No, that's useful. Look forward to seeing some results. Last question from me before I pass it on. There's been a lot of discussion, I guess, you could call it about potential mining code changes in Mali. So far, it doesn't seem to have impacted any of the gold miners operating there. But I was wondering if you've got any comments or any updates and if you've got any views or comments on what the withdrawal from [indiscernible] might mean for your ability to operate in [indiscernible]?
Reg, maybe I'll take this one as well. So looking short, we operate today under the 2012 code. So the new code does not impact our operations. As highlighted, it really only impacts new projects coming to bear in the country. So we're -- I think we're quite confident from that perspective. With regard to the ECOWAS exit, look, Mali's been in a suspended say, from ECOWAS since 2021 for the last Q. So they haven't actually really been impacted by ECOWAS from a beneficial perspective.So look, at this juncture, we don't see any impacts. At some point, possibly in the distant future, there may be some impact to supply chain, but we would just have to route our goods through countries that have treaties with Mali. But really, it's hard to tell if there will be any impact. But the view from our guys on the ground and in the short term, there should be no impact. But unfortunately, it is a bit of noise that we need to work through. But like I said, it's not impacting our business.
[Operator Instructions] The next question today comes from the line of William Dalby from Berenberg.
Thanks a lot for taking the call and congrats on the following year and the continued plant. Just a couple of questions from me. Firstly, on CapEx guidance for 2024. If I'm interpreting correctly guidance for the -- in the 3-year outlook was $95 million to $110 million for 2024. And this has now been revised up to $115 million to $145 million. So yes, I'm just wondering if you can maybe break down that revision, whether that's just kind of deferral and timing and sustaining CapEx or what you just going to clarify some detail on that, please?
Sure. Maybe I'll take that one. So look, in the original forecast, we highlighted CapEx for just Syama and Mako. And in the most recent guidance on page 19 of the presentation, we've also included exploration CapEx, which was not included. So that's part of the change, which is adding another bucket, which wasn't previously provided. The spend for 2024 this year in the guidance, it's higher than what we've got presumably for both Mako and Syama slightly. I would say Syama, we identified when we went through the budget process that it made sense to put a bit more money in replacing our equipment fleet in the underground mine, and that added an extra $10-odd million.And the same with Mako. It was a bit of additional CapEx items that we saw. Frankly, it wasn't one that was across the board that we thought made sense. Look, the business in the past probably didn't spend it off on CapEx. This is more in 2022 and 2021. So we've told the teams that if there's good projects that provide a good return on capital, they should put it forth, and so we're very happy to spend that money on CapEx. So it's a bit coming from an additional, call it, review to the budget process, but also providing additional details on exploration CapEx.
And then just a second question, more broadly, on the Syama expansion. Maybe if you could just add a bit more color around the target of kicking off in Q1 and getting it delivered by H1 '25, how are you justifying those targets?
Essentially -- hello, William, Terry. If you look at where we are now, it's essentially only the installation of a mill into the oxide plant with flotation section and significant work on the existing plant putting a variable seed around the flag mill, all those major key items, which are long leaders were ordered last year. So there'll be arriving in Q3 this year for installation of Q4. We're starting with the civils now for those in March. We see -- we're going to start mining -- well, I'd say we've been doing mining in A21 up at the top in the 15 oxides there last year. We stopped that, but we'll be starting again later again this year.There are some fairly high outcropping sulphides, which we're going to harvest this year. The original intention was to wait for the plant commissioning in Q1 and Q2 next year, but it's more likely that we'll process that because it's proving to be higher grade. It's going to be 3 gram a tonne, some of it come slightly over initially. So that would probably just displace some SLC material in the sulphide plant. So we think that normally, it takes about 3 months to commission the mill. It's not being complicated as such. We're going from 4 mills on site to 5 mills on site.And then we've said that by H1, we'll be running at a run rate there of 250,000 ounces. It could be earlier. But we're obviously very cautious about timing. We've given ourselves a 6 month of final construction and commissioning. But we reckon we'll be running at a $250 million run rate by the middle of 25.
The next question today comes from the line of [ Phil Matthews ] from [ Matthews Capital ].
Terry, great results starting outlook. Just had one question. Could you remind us please of the raise with milestone payments and where they stand as a $50 million to receive in March? I just can't quite recall at all.
Yes. Yes, the last payment now for the Syndicate is $25 million during March, and that is the end of the payment in the original $400 million.
Right. Just one payment to be received.
That's correct.
And the [indiscernible].
Sorry, are you speaking about the Ravenswood transaction or payment --
Yes, the Ravenswood, correct.
Sorry, Phil. Payments from Ravenswood, yes.
Okay. So that -- yes, Terry was speaking about final payments for our syndicated loan facility. On Ravenswood…
Okay.
There's a couple -- there are always 3 possible future payments that are due. One is we do 50 Australian -- AUD 50 million due in 2027, which is basis alone. So that we expect no later than 2027. There is a possible additional $50 million due in the first half of this year once Ravenswood achieve cumulatively 500,000 ounces of production at a set gold price. The gold price has been most likely be hit based off of what we see historically, but it's still TBD, whether or not the operations continue to perform as expected and meet that $500,000 threshold. So once we know, we'll obviously provide an update to the market. But at this stage, it looks possible that we will be receiving that AUD 50 million payment in the first half of this year.
Do you know where they are now with their production? Is there any -- we can't find anything on the Internet or anywhere really to get some feedback on it.
So we do. We get monthly reports from them. So we do have a view on that number, but unfortunately, it's not something that I'm able to share to the public.
Right. I think March has been mentioned previously. Is that right or not on a previous call last year?
It was the period that they had to achieve it was between March and June of this year. So we'll know really soon.
Okay. So you would have a high confidence on that you think.
We're mining guys, so we're optimistic on that.
Right. Okay. All right.
They're doing a good job there on that project.
Okay. And actually, just a second question on the hedging. So you've rolled that off pretty much now. That will stay rolled off, is that right, for the future?
That's our anticipation. So the hedging requirement was put in place due to the loan documents, they'll put back in place in 2022. And the final hedging is you roll off at the end of Q1. And at this stage, with the cost reductions that are working through the system, our confidence in our production profile, our confidence in the gold price, we don't see any reason why the business should put any hedging in place. That could change if through future financing facilities, it's a requirement, but I would say from both the Board and the management perspective, we're comfortable not being hedged.
So the financing facilities in the past required a percentage, didn't they, of the loan, and you've been able to roll off despite that. I was just a bit confused about that.
Correct. So the banks require that at least 1/3 of the production was hedged. And those -- that bank facility or those loan documentations or the loan itself matures in Q1 of this year. So the loan is finished, and therefore, the hedges are finishing.
[Operator Instructions] There are no additional questions registered at this time. So I'd like to pass the call back over to Terry Holohan for any closing remarks.
Thank you, folks. And I think, in summary, we're very comfortable with our progress over the last 2.5 years. And this year, it's all about cost reduction, organic expansion at Syama and extending Mako, and we'll keep you informed. Thank you very much for your time, it is much appreciated.
This concludes today's conference call. Thank you all for your participation. You may now disconnect your lines.