Good morning, and welcome to Dundee Precious Metals' second quarter 2021 earnings results conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touch-tone telephone. As a reminder this, this conference call is being recorded. I would now like to turn the conference over to your host, Jennifer Cameron, Director of Investor Relations. You may begin. Thank you. Good morning. I'd like to welcome you to Dundee Precious Metals' second quarter conference call. Joining us on the call today are David Rae, President and Chief Executive Officer, Hume Kyle, Chief Financial Officer, and Michael Dorfman, Executive Vice President, Corporate Development. After the close of business yesterday, we released our second quarter results and hope you have had an opportunity to review our material. All forward-looking information provided during this call is subject to the forward-looking qualifications, which is detailed in our news release and incorporated in full for the purposes of today's call. Certain financial measures referred to during this call are not measures recognized under IFRS and are referred to as non-GAAP measures. These measures have no standardized meaning under IFRS and may not be comparable to similar measures presented by other companies. The definitions established and calculations performed by DPM are based on management's reasonable judgment and are consistently applied. These measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS. Please refer to the non-GAAP financial measures section of our most recent MD&A for reconciliations of these non-GAAP measures. Please note that unless otherwise stated, operational and financial information communicated during this call are related to continuing operations and have generally been rounded. References to 2020 pertain to the comparable periods in 2021, and references to averages are based on midpoints of our outlook or guidance. I'll now turn the call over to David Rae. Thanks, Jennifer. Good morning, and thank you all for joining us. As you've seen from our news release circulated last night, we delivered an exceptional quarter, achieving multiple records for operating and financial performance. Highlights from our results include excellent operating performance at our mines, which resulted in production of 85,000 ounces of gold and 10 million pounds of copper. Strong cost performance at all our operations, with all-in sustaining cost of $605 per gold ounce. Record financial results, including free cash flow of $67 million and reporting $67 million of adjusted net earnings for the quarter. Closing of the sale of MineRP, which brought in proceeds of approximately $46 million, and we continue to build our financial strength, exiting the quarter with a cash balance of $261 million. As you may also have seen from our news release earlier this week, we successfully closed the previously announced acquisition of INV Metals, adding the high-quality Loma Larga project to our development pipeline. This is a project that we believe fits extremely well with our core strengths and our proven track record as an environmentally and socially responsible mining company, and that has the potential to add meaningful production growth to our portfolio. As we move forward, our approach to developing Loma Larga will reflect our firm commitment to the highest standards for engagement with local communities and environmental stewardship, and we'll leverage DPM's technical depth, financial strength, and our strong track record of delivering innovative solutions to unlock the significant potential of Loma Larga. I'm joining today's call from Ecuador as we take the first step in engaging with the national and local stakeholders and our local team. We look forward to continuing this engagement as we work to advance the project. In terms of next steps, we intend to explore further optimization studies at Loma Larga while continuing to advance the permitting process. We'll be taking a disciplined approach to project development. This includes minimizing upfront spend during the permitting process while engaging with local communities in line with international best practices and working to secure an investor protection agreement with the Ecuadorian government prior to making any significant capital commitments. Turning to a review of our operating performance, I'll start with Chelopech. Chelopech delivered an excellent quarter, producing 52,638 gold ounces and 10 million pounds of copper, which was a significant increase compared with the first quarter as a result of mining in higher-grade zones and improved recoveries. Cost performance continues to be strong, with second quarter all-in sustaining cost at $638 per gold ounce, which is below the low end of Chelopech's 2021 guidance range. We continue to focus on extending the mine life through our in-mine and brownfields exploration programs. During the quarter, significant effort was dedicated to testing conceptual targets within the Brestovene exploration license, as well with the completion of the scout drilling of several near mine prospects, including Vozdol, Petrovden, and Sharlo Dere, which are expected to continue over the summer season. We continue to advance work to support and optimize infill and mineral resource delineation drill programs planned for Sredokraska. That at the moment is an exploration license, but it's in anticipation of moving into the commercial discovery activity, where the contract is anticipated to be signed off within the last part of the year. With mineral reserves that now extend to 2029, an updated mineral resource base, and increased in-mine and brownfield exploration drilling, we believe there is strong potential to continue our track record of mine life extensions at Chelopech. Turning to Ada Tepe, we've continued to deliver impressive performance, producing approximately 32,500 gold ounces in the second quarter. Ada Tepe also achieved strong cost performance during the quarter, with an all-in sustaining cost of $563, which is at the low end of its guidance range. This highlights its significant potential to drive free cash flow generation in our portfolio. We continue our exploration efforts around Ada Tepe with 23,000 m of drilling planned for the year, including 9,000 m of additional resource and conceptual target extension on the mine concession, as well as advancing the Çatalkaya and other prospects on regional licenses. Drilling activities have been completed at Surnak, Sinap, and Kuklitsa. At Surnak, a new geological model has been completed in order to support internal technical assessments. We've now shifted our focus towards a significant camp-wide surface data evaluation and compilation program, which includes additional mapping programs, as well as geochemical and geophysical surveys to support exploration target exercises. Turning to Tsumeb, complex concentrates melted increased in the second quarter following the completion of the Ausmelt furnace maintenance at the end of March. The smelter processed approximately 59,600 tons of complex concentrate during Q2, and the cash cost per ton was $400, excuse me, significantly lower than the first quarter and more typical for Tsumeb, reflecting the increase of concentrate processed as the facility returned to a higher level of throughput following the maintenance shutdown in the first quarter. It's worth noting that while Canada and other parts of the world are seeing an encouraging decline in COVID cases, we are seeing a third wave in Namibia linked to the Delta variant. At all of our sites, we continue to maintain the strict protocols which we've had in place throughout the pandemic to prioritize the health and wellbeing of our workforce and to provide support to our local communities. Recently at Tsumeb, this included donations of medical supplies and oxygen produced from our smelting facilities, which then displaced medical oxygen for use in local medical facilities. In terms of future growth, we continue to advance our Timok project in Serbia. Earlier this year, following the positive results of the pre-feasibility study, we initiated a feasibility study, and which we expect to complete in the first quarter of 2022, with the results to follow in the second quarter of that year. Drilling programs were completed at the Chocolate South, Frasen, and Čoka Rakita targets, all located southeast of the Bigar Hill deposit. This information is now being processed to support the preparation for the feasibility study. Plans for the next quarter include scout and target delineation drilling on the adjacent Umka exploration license south of Bigar Hill, as well as other regional early-stage exploration programs. We also continue to pursue our growth strategy by evaluating additional opportunities that have the potential to generate strong returns and enhance the value of the company. In closing, overall, our strong gold production profile and significant free cash flow generation, combined with our operating track record and unique skills in innovation and building strong partnerships with local communities, position us well to continue delivering value for our shareholders. We are focused on demonstrating the potential of our portfolio to generate significant free cash flow and our commitment to deploying this capital in a disciplined manner. We firmly believe that DPM's strong fundamentals continue to represent a compelling value opportunity for investors. I'll now turn the call over to Hume for a review of our financial results and comments on our 2021 guidance and three-year outlook, following which we will open the call to questions. Thanks, David. Good morning, everybody. As David mentioned, we had very strong operational performance during the quarter, including record quarterly gold production, excellent cost performance, and generated record net earnings and free cash flow. For the quarter, adjusted net earnings were $67 million, or $0.37 per share, representing an increase of $0.13. Adjusted EBITDA was $101 million, up $23 million. These increases reflect a 9% and 69% increase in realized gold and copper prices, respectively, and lower G&A costs related to share-based compensation, partially offset by a weaker U.S. dollar. For the first six months, adjusted net earnings were $98 million, or $0.54 per share, compared to $0.52 in 2020, and Adjusted EBITDA was $167 million, up $9 million. These increases were primarily attributable to higher increased metal prices, partially offset by the impact of the Q1 maintenance at Tsumeb, a weaker U.S. dollar, and in the case of the earnings, higher income taxes. For the first six months, net earnings attributable to common shares were $108 million and included a $21 million gain from the sale of MineRP, as well as mark-to-market losses on our Sabina warrants and deferred income tax adjustments related to unrealized losses in respect of Sabina shares, none of which are reflective of our underlying operating performance and are therefore excluded from our adjusted earnings. From a cash flow perspective, funds from operations for the second quarter and first six months, which represents cash flow from operations before changes in working capital, were $85 million and $184 million, respectively, up $18 million and $22 million compared to 2020. Free cash flow for the second quarter and first six months was $67 million and $118 million, respectively, up $7 million and $8 million compared to 2020. These YoY increases reflect the continued solid operating performance from Chelopech and Ada Tepe, higher realized gold prices and copper prices, including the fulfillment of the prepaid forward gold sales at Ada Tepe, which was completed in December 2020, partially offset by Tsumeb's Q1 maintenance shutdown, and higher cash outlays for sustaining capital expenditures in line with the mine plans. Turning to our consolidated cost measures, we continue to deliver strong cost performance, achieving an all-in sustaining cost of $605 and $583 per ounce for the second quarter and first six months. These represented a decrease of 17% and 12%, respectively, due primarily to higher copper by-product credits and lower allocated G&A expenses, partially offset by a weaker U.S. dollar and higher cash outlays for sustaining capital expenditures. At Tsumeb, cash cost per ton in the second quarter was $400, up $55 compared to 2020, due primarily to a weaker U.S. dollar and lower acid by-product credits as a result of the timing of deliveries. For the first six months, cash cost was $558, up $206, reflecting the impact of the Q1 maintenance shutdown and the fixed cost nature of the facility, as well as a weaker U.S. dollar. From a capital expenditure standpoint, sustaining capital expenditures incurred in the quarter and for the first six months were $12 million and $29 million, respectively. This compared to $10 million and $17 million in the corresponding periods in 2020. These increases were due primarily to planned maintenance at Tsumeb and the accelerated grade control drilling at Ada Tepe. Growth capital expenditures incurred during the quarter and the first six months were $4 million and $6 million, respectively. This compared to $1 million and $4 million in the corresponding periods in 2020. Turning to our balance sheet, our financial strength continued to grow during the quarter with available aggregate resources of $411 million. This is comprised of a $261 million cash position, as well as $150 million of available capacity under our long-term committed revolving facility. We also have a liquid investment portfolio providing additional upside valued at approximately $58 million. This excludes INV Metals, which, as you know, as of Monday, we now own 100% of. From a risk management perspective, all of our key financial metrics and underlying financial exposures are well within our established tolerance levels. As previously communicated, from time to time, we enter into hedges to manage cost metrics with the primary objective of reducing variability and supporting the achievement of our guidance. For the balance of the year, we have hedged the currency exposure in respect of approximately 79% of Tsumeb's projected operating costs using a zero-cost collar structure, locking in a weighted average floor and ceiling exchange rate of 15.65-18.69. We've hedged substantially all of the copper by-product price exposure, which forms part of our all-in sustaining cost at a weighted average fixed price of $3.77. Looking forward, as David mentioned, we're on track to deliver on our previously issued 2021 guidance and our three-year outlook, which remains unchanged with the exception of growth capital expenditures, which we have revised to reflect the addition of the Loma Larga Gold Project. Our detailed guidance for the year is outlined on slide 15, and with strong year-to-date performance, we're on track to produce 271,000 - 317,000 ounces of gold and 34 - 39 million pounds of copper, achieve an all-in sustaining cost in the range of $625-$695 per ounce, and smelt 200,000 - 220,000 tons of complex concentrate at a cash cost of approximately $450-$520. With the acquisition of Loma Larga, we've updated our growth capital expenditure guidance to $21 million-$28 million, and this reflects an estimated $5 million-$7 million of costs that we expect to incur on this project over the balance of the year. Over the longer term, covering 2022 and 2023, the guidance that we've provided remains unchanged and can be found in the three-year outlook section of our MD&A. In closing, we're committed to continuing to deliver value to our stakeholders. When you consider the current share price, solid free cash flow generation, strong three-year outlook, and a strong balance sheet, the case can certainly be made that we represent a compelling value opportunity for our investors. With our unique capabilities and track record, we're also well-positioned to further optimize our existing assets and to realize the potential value of our development assets, including our newly acquired Loma Larga Gold Project. As we reinvest and grow the value of the business, we're also committed as part of our disciplined capital allocation to ensuring that we return capital to our shareholders and that these returns are underpinned by a regular and sustainable quarterly dividend, the most recent of which we announced yesterday. With that, I'll turn the call back over to the operator. Thank you. If you have a question at this time, please press star then the number one key on your touch-tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Your first question comes from the line of Dalton Baretto with Canaccord. Thank you, operator. Good morning, David and team. A couple of quick questions from me. First of all, it looks like there was a decent bump in the cost per ton at both mines. I'm trying to understand how much of that is currency and royalty driven, and how much of that is something more operational, if you will. Thank you. Hume, did you want to take that? Yeah. I would say, we are seeing an impact with respect to some costs. The main drivers for the quarter, and what we would expect for the year, center around three aspects. Power pricing, which is up significantly YoY. Weaker US dollar. In the case of Ada Tepe, a higher royalty, because as you may know or may recall, the royalty rate at Ada Tepe is a sliding scale based on prior year profitability. That royalty rate increased, I think it was approximately 2.7% in 2020, and it's now at the higher end of the sliding scale, at 3.9%, and there's a cap of 4%. Those are the three primary factors that are causing an increase in the cost per ton metrics. Understood. On the assumption that the exchange rate, the power pricing, and the royalty rate don't change, can we assume that costs kind of stay in this range on a per ton basis going forward? For the rest of this year, at least? I think that's probably fair to say. We'll obviously look to reduce costs and offset some of that elsewhere through productivity and otherwise. At this stage, yeah, we are expecting costs to be higher in the second half of the year, and why we've indicated that, given the current backdrop, we're likely to be at the higher end of the range on those cost per ton metrics. Now, having said that, the all-in sustaining costs that we report, which includes those cost pressures, is certainly well on track to achieve the midpoint or even perhaps the lower end of the guidance on the basis of the copper pricing. Understood. Just in terms of Chelopech's concentrate distribution, it looks like Tsumeb processed about 60% of the concentrate produced by Chelopech this quarter. That's a bit higher than I was expecting. I thought you would minimize the amount of concentrate to Tsumeb. Yeah. There's slight timing differences between when Chelopech actually ships concentrate and when Tsumeb processes it. When you look at it from a Chelopech perspective, this year in the quarter, we did send or divert some material to other smelters, other third-party smelters, whereas last year, all of it went to Tsumeb. In the six months, we definitely have shipped less material to Tsumeb relative to last year. For the year, we do expect to divert more material to other third-party smelters. We should see a YoY decrease relative to 2021. Got it. On an ongoing basis, what's a good number to assume in terms of the percentage of concentrate produced at Chelopech that gets sent to Tsumeb? Is it 60%? Is it 30%? I would say that probably something around 70%-80% is a good number based on history. It can and has varied YoY. It all depends on the spot market that exists. Wherever there's an opportunity for us to displace material, bring in additional third-party material to Tsumeb and divert it elsewhere, we're going to do that. It's a difficult thing to really predict. That's really the strategy. We've seen those opportunities, we've taken advantage of it, and it's tended to range between, say, 20%-30%. This year will probably be higher, but it can vary. Okay. Just a couple quick ones on Loma Larga now that the transaction's closed. First question, to what extent do you anticipate having to optimize the INV feasibility study? Do you actually plan to release an updated kind of DPM feasibility study? Hi, Dalton. It's a bit premature to be able to say that at this point. We see that there are some trade-off studies that we will be doing with an intent to optimize. Also, we have some opportunities to upgrade some of the environmental standards, for instance. We can do that in a way that may not require, at this point, to update the feasibility study. I'd say it's a little early. We're busy doing the trade-off studies. We see there's some opportunity for operational improvements, some things which would make a meaningful difference to our sustainability objectives, energy utilization, greenhouse gas, climate change type of thinking, and other opportunities in terms of the overall value of the project. We're working on that at the moment. It's going to be an activity, I would imagine, over the next three to four months to really get the priorities and opportunities balanced. The other opportunity here, which I know you didn't ask, but just pointing out. Hume mentioned the cost projection to the end of the year. There's obviously some exploration opportunity here as well that we're considering in the course of our immediate actions in Ecuador. Got it. Just maybe one last one from me. In terms of the investor protection agreement you're looking for, are you starting from scratch in terms of discussions with the government, or are you going to pick up where INV left off, and is there an existing framework you can work off? Basically, we're picking up where INV left off. We've been in consultation with the government. Things are well on track, and we anticipate some news before the end of the year. That's great. That's all from me, guys. Thank you. Thanks, Dalton. Your next question comes from the line of Don DeMarco with the National Bank Financial. Thank you, operator. Good morning, gentlemen. Your cash balance is growing quite a bit. I see you benefit both from the free cash flow and the MineRP disposition this quarter. Is there any chance that you'll revisit your capital allocation strategies, potentially with higher dividends or NCIBs or potential other uses as your cash balance continues to grow? I mean, I'll start with that and Hume. Yeah, sure, I'll start. Anyway, I think the answer is that obviously our capital allocation program is something that is a very healthy discussion with our board at each meeting, and we're very conscious of the fact that we do have that building cash balance. Clearly, we have some needs for that cash going forward, but there is an opportunity to use both the NCIB and look at the dividend level. At this point, do we anticipate anything? We just released the information on the dividends for this quarter, but it is something that we look at. Hume, did you want to answer anything further on that? I think I'd just supplement and say that's something that we've put the dividend in place. The primary objective at the outset was to establish a sustainable dividend over the long term. Obviously from our standpoint, it's based on a long-term outlook. Over the last period of time since we implemented that dividend, there's no doubt that the environment in which we've operated has produced better than anticipated free cash levels that actually would have originally driven the dividend setting by the board. I think, we're obviously in a stronger financial position. We update the outlook on a regular basis. I think from time to time, the board will revisit that decision. I think, as you say, there is an opportunity in future to potentially increase and/or supplement that dividend. Certainly to the extent that we have a view that our shares are undervalued, there is the opportunity for us to do some buyback under our existing NCIB. Okay. Thank you. Continuing with a previously asked question, you mentioned that the power pricing has gone up. Can you comment on just the power situation at your mines are in Bulgaria, how much it's gone up, and whether you expect this to be transitory and power prices coming back down or expect to stay elevated? Go ahead, Hume. Yeah. I guess what I would say is, at this stage, we would expect that they're likely to remain elevated. They can be seasonal. If you look over the last four or five years, the levels that we're seeing currently aren't unprecedented. I think that the current spike up is reflective of carbon tax in Europe. It's difficult to say that they're going to return to the lower levels that we've previously seen over the last four years just because of the impact of the carbon tax. At this stage, I'd probably say that if nothing were to change, we're probably looking at something in the order of a 30% increase in power prices that could be sustained, which we consume, I think it's something like 165,000 MW hours of power. When you translate it's probably $3 million-$4 million of increased cost if things don't revert back to the historical average. Okay. That's helpful. Just shifting over to Loma Larga, then one final question. You're not spending a lot there over the next couple of years, but can you talk about the primary pushbacks that you anticipate in the permitting process and perhaps how you can leverage some of your permitting experience at Ada Tepe to specifically address some of the expected challenges in Ecuador? Yeah. Hi, Don. First of all, just some numbers around the power. It's around 10% of our cost for Chelopech and 7% for Ada Tepe. You're trying to get a sense of the impact of that change. In terms of what's going on here with Loma Larga, there was a view that we would be able to get the permitting within six months. We think that is optimistic, we've, as you know, been saying 18 months to two years is we think something that's realistic. In terms of what we need to do, obviously, myself and the Vice President Sustainability, Nikolay Hristov, are here at the moment. We're going to be joined by Kelly Stark-Anderson next week. We're in Quito at the moment, heading to Cuenca, the outcome of this will be helpful in terms of understanding our path forward. Coming in, the due diligence that we've done, we can see a need to engage more broadly with the communities and more consistently with the communities. Our intent is to go and listen to the needs. We know, for instance, that concerns conservation of water, and the areas in which Loma Larga would be developed is a sensitive ecological area. It's not that we can't mine that appropriately, it's just that there are concerns that we need to understand and address directly. That's going to take engagement with the key stakeholders at the community levels, at the regional level, and at the national level. We see that as a process that we're going to accelerate over the time that I'm talking about with the permitting, such that by the time that we have the national permits, we'll be in a position with the support from the communities to then go ahead and develop Loma Larga. Okay. Great. Is there anything that, in your experience in permitting Ada Tepe, there were similar challenges in some ways that you leverage that experience to apply it to Loma Larga? Yeah, absolutely. Engage broadly, listen carefully to what people have concerns about. There's a strong appetite here for people or groups that come in that demonstrate best practices in mining. I think there's some good examples already in Ecuador, for instance, Fruta del Norte. It's our intent to demonstrate what quality mining internationally can mean in terms of the success in engaging with communities and constructing projects such that everybody looks back with pride and a sense that this has been something that's generated value and outweighs any minor negative impact. Learning from Ada Tepe. What we did there, the thing that really made the difference was engaging more broadly, understanding the key concerns, working with innovation and technology solutions, as well as the latest best practices. As long as we do that, I feel very positive that we're going to be able to get good early traction and then really get to the true points of concern as we go through that period that I was talking about with the permitting with the government. So far, been here since Saturday last week. Very, very happy with the commentary that we've had after meeting a number of government officials in different ministries and hearing from local stakeholders, and looking forward to hearing more as we move to Cuenca and the communities over the course of next week. Okay. Thank you. That's all for me. Thanks, Don. Your next question comes from the line of Cosmos Chiu with CIBC. Hi. Thanks, David, Hume, and team. Maybe my first question is on Chelopech. Just quickly, I noticed that Q2 grades were up 3.85 g per ton, 1.02% copper. Could you maybe comment on that and, in terms of as well, what we should be expecting for the remainder of 2021? Sure. Yeah. Obviously, we did mention that there was some sequencing between the two quarters. What happened was we had some areas that we were set to mine that sequenced between Q1 and Q2, hence the difference in grade between those two quarters. I'll come back to the grade expected for the rest of the year in a moment. In terms of what else has been going on, we've also been doing some work which is looking at getting more consistency in our performance around the mine in total, and specifically focusing on the metallurgical plant at Chelopech. This is an upgrade to our operating model and looking at how each individual in the organization can create greater continuity and efficiency in terms of performance. All of these things have come together, to change the grade between quarters and change the metallurgical recovery. I'm not too sure if you noticed it, but this was a record total production quarter as well. If you add the production both from copper concentrates and pyrite concentrates. sort of all of those things that are a part of it. Now, for the balance of the year, I'd anticipate a grade between the first and the second quarter, because what you see is that the reason why there was a displacement was just a moving of the stocks between quarters. That was basically at the average grade expected for the year. Take the answer in Q1, take the answer in Q2, anticipate we're going to be somewhere in the middle of that range, then project to the guidance, and we do target mid-range. That should give you some sense of comfort as to where we can expect to end up. There was another sort of minor thing. In some areas, what happened was when we went in with our 20 m by 20 m spacing for the grade control drilling, and then we got into the stopes, we were actually finding ore earlier and at a higher grade than we'd anticipated. In combination then, sequencing, improved recovery overall, and a more consistent performance in Q2 than Q1, and also a slightly more positive reconciliation in Q2 than Q1. That's great. Maybe my next question on that. The I-word these days seems to be the new F-word in mining, and by that, I mean inflation, David and Hume. You've touched on power costs, you've touched on some of the other costs, but inflation-wise in the mining industry, is it something that keeps you up at night? Are you seeing inflationary pressures in labor or any other areas outside of power? Cost of living increases, we're running at about 3% typically at the moment. Labor increases are running at around those numbers. We do have a slight offset with efficiencies in terms of the number of people that we have at the operations. In terms of some other variable costs, our consumables, we're seeing similar but lesser inflationary pressures. An example would be steel balls. Coming out of COVID, there's obviously been some constraint in that supply chain. It's not affected us in terms of our production, but we have seen a 20% increase in steel cost and about a 10% increase in our key reagent costs. Cost of living increased 3%, 30% in energy, 20% in steel, 10% in terms of reagents. Okay. Then how do you, I guess looking forward, David, how do you expect to manage that risk? Is that something that you can hedge against, or how would you factor that into your budgets? How do you manage that cost? We're actually just at the moment in our detailed planning for our three-year outlook and our 2022 fixed numbers. We're actually looking at exactly that. How do we deal with that? We deal with that in a number of ways. We're obviously continuously looking at optimizations and efficiencies, and we're applying advanced technologies on the mill in terms of energy efficiency, water consumption, reagent consumption. What I came back to in terms of consistency of operation. That affects not only recovery performance, but effective utilization of all the consumables. Better grind control means that you're managing both power and steel consumption. I would say that we're busy looking at this thing in more detail at the moment and seeing how we might change some of our focus on innovation. As Hume said, not all of these things are going to be in and stay. We do expect there's going to be something where we're seeing a peak at the moment and anticipate greater supply and some competition on those prices coming down. Hume, I don't know if you wanted to add anything to that. Yeah, some of these things are transitory, just like we see in the news. The numbers, when you're comparing period over period, are quite high, in part because some of these areas and prices were at lower levels a year ago. When you look at it over a longer period of time, the numbers aren't as stark as you might first think. On the power side, as I said, I don't necessarily anticipate nor are we banking on there being a reversion to sort of the historical mean. For instance, in Bulgaria, which has largely been a closed power market, it is opening up access at the end of this year to a number of other markets. That might help to support price decreases. Again, we don't know for sure. What can we do? We can certainly look closer at our procurement. We can look at what we can do in terms of entering into contracts that might provide for lower costs over a longer period of time. We just have to do everything that we can on a continuous basis to find ways to offset through productivity. Yeah, for sure. Maybe switching gears a little bit here. Reading through your MD&A, clearly there is a, not renewed, but certainly there's a focus on exploration at both Chelopech and at Ada Tepe. Could you remind me in terms of the drilling here, how much of that is infill? How much of that is step out? What are you targeting here from a, if I were to step back and look at it from 10,000 ft, are you looking for incremental increases in terms of one or two years of mine life? Are you looking for replacement or are you looking for that jackpot here in terms of finding a completely new deposit? Could you maybe comment on exploration for Chelopech and also Ada Tepe? Sure. All right. Let me start with Chelopech. Chelopech does around 44,000 m of underground drilling annually. It's a very consistent number. Two-thirds of that is step out, as you referred to it, and one-third is infill. Perhaps the best way to say it there is it's actually extensional rather than step out. That's the underground drilling. Last year we did, I believe it was 17,600 m from surface at Chelopech. This year we have 38,000 m planned, and that's including picking up on our geological discovery, which we're anticipating will get the contract to move to the commercial discovery phase, which is going to be one year of activity on Sveta Petka. If you have a look at Ada Tepe. There we're doing something which is not going to be a useful reference. I'll say that right off the bat. This year we're doing 217 km of drilling, which is all of the grade control drilling for the balance of the life of mine. The reason why we're doing that is because we have found a good deal of value in our understanding the nature of the asset in terms of being able to be ready for metallurgically different material coming into the plant to support recovery. Also to be able to put together a program which maximizes mine recovery and grade control as well as maximizing the overall process efficiency and so on. That's why we're doing that. It's roughly $10 million of $5 million direct drilling and $10 million of analytical costs. In terms of the extensional drilling, we're doing 23 km of drilling, where last year I think we did 11,000 km off the top of my head. That's focused on two areas, so that's immediately around the mine, and then it's up to 40 km away in case of Çatalkaya. All of that outside of what I talked about with the 217 km is extensional step out. Great. That's helpful. Yeah. Yep. That's very helpful. Then one last question. I ask this every quarter, and apologize if you've already answered it. I got cut out a little bit during the call. Certainly, free cash flow was very good in Q2. How much of that came from Tsumeb? Hume, did you want to take that? No free cash flow came from Tsumeb, or very, very little in the quarter. Is that the expectation for the rest of the year? I'd say that Tsumeb this year is probably looking at best, like a break-even cash flow situation. Historically, we've said that we can manage Tsumeb to a kind of a break-even to maybe $10 million of free cash flow. Certainly this year it's going to be at the lower end of that range, principally due to the fact that it's a maintenance year. With the maintenance that we took in Q1 and the extended maintenance, we're not expecting Tsumeb to generate much of any free cash flow this year. Mm-hmm. Of course. Those are all the questions I have. Thanks again, David and Hume, and have a good weekend. Thanks, Cosmos. Again, if you have a question at this time, please press the star then the number one key on your touch tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Your next question comes from the line of Wayne Lam with RBC Capital Markets. Good morning. Thanks, guys. Just kind of following up on the other questions. Just wondering if you could maybe provide some more detail on the higher labor incentives that you guys had outlined this quarter? Just wondering if that was seen at both operations and are those more one-off type payments or kind of ongoing in terms of cost inflation? Go ahead, Hume. I'm guessing that this is in addition to David's comment, just in terms of normal course escalation that we're seeing in labor rates, which are sort of in the order of magnitude of 3%. I think the other thing that came through in the year, is there was a higher cost that came through in 2021 as a result of higher LTIP payouts that were allocated down to the site. Last year, very strong year, payouts higher than previously expected and budgeted for. That came through on a YoY basis, the LTIP payments that impact operations were higher on a YoY basis. That would've been the other factor. Are they transitory? I hope not. I hope that we continue to perform well and our share price goes up and those payments continue to maintain at current levels or grow. That aspect of it, you can't really predict. Okay. Just on that, are those payments accrued and then paid out annually, or is it paid out on a quarterly basis? Like on an overall basis, we accrue quarterly. As it relates to the mark-to-market impacts, we accrue those on a corporate basis quarterly, but we don't allocate them down to the site until they're actually known. They can be quite volatile, you don't really know exactly what to accrue or what's going to be paid out until the end. When we actually realize on the STIP, the mark-to-market component gets allocated down in a quarter. It's Q2 of every year that mark-to-market would flow through to operations, it can be favorable or unfavorable. Okay, perfect. Thanks. Just in terms of the third wave in Namibia and kind of the measures that you guys are putting in place at Tsumeb, kind of similar to the other operations, should we also anticipate an uptick in cash cost there in the back half of the year? No, I don't think that's fair to assume. The uptick is already showing signs that it's decreasing. It looks like it may have been relatively short-lived. What happened was, first in South Africa and then into Namibia, we saw this new wave. From being fairly open, things were closed down pretty rapidly. Travel between the major centers in the country were effectively shut down, forcing people to wear masks, this type of thing. That seems to have had the desired effect. Schools were closed and so on. We haven't changed what we do at the site itself. We've maintained a higher level of control than watching distances and hygiene and this type of thing. In terms of the impact on costs, it's more of an impact on the efficiency in and around the sort of edges of the operation. For instance, you have a team of people that's working on a particular activity, and then the following week, suddenly you've got a number of them in isolation. It's not to say that they're positive, it's just that somebody in contact with them has been, and we take contact tracing very seriously. It's more little sort of things around, you thought you were going to get something done, it's going to get done a little bit later. We might have to bring other people in and sort of swap things around. It doesn't really translate too much into a cost issue. It's more sort of just one of those things on the fringe of the operation that makes that a little bit more difficult, require more management. Okay, perfect. Yeah, that's all for me. Thanks, guys. Thank you. Thanks, Wayne. Your next question is a follow-up question from the line of Dalton Baretto with Canaccord. Just one quick question for me, and thanks for taking the follow-up. Now that we're halfway through the year, is there any thought being given to hedge out the copper production next year? Go ahead, Hume. Yeah, I'd say we regularly look at all of our exposures. Copper, on a byproduct basis, is one of those exposures that we consider. Yeah, we're considering it, but no, at this stage, I think on balance, we're inclined not to hedge. There's no formal plan to put on additional hedge. As I said earlier, we've hedged substantially all of our second half production. I think something very significant would have to change for us to put on any additional hedges. At this stage, looking at our outlook that we have for the business, we probably see our all-in sustaining cost tracking in and around the levels that we've put out. There's no need for us to put on an additional hedge at this time. Thank you for the color. There are no further questions at this time. Now I would like to turn the call over to Jennifer Cameron for closing remarks. Well, thank you everyone for joining us today. If you have any further questions, please feel free to reach out, and we look forward to keeping you updated. Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day. You may all disconnect.