Good day and welcome to the Karora Resources Second Quarter 2022 Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Paul Huet, Chairman and CEO of Karora Resources. Please go ahead. Thank you, operator. Hello. I would like to welcome everyone to the Karora Resources Second Quarter Conference Call. As a reminder, we will be talking to a slide deck. For anyone interested, the slides can be found on the homepage of our website, and you can also follow along on the webcast. Slides three and four are cautionary notes. Before I begin the presentation, I would like to remind you to please review our cautionary statements regarding forward-looking information, non-IFRS measures, and our 2022-2024 growth plan, all of which can be found in our management's discussion and analysis, news releases, and our presentations. Over to slide five. On the call with me today is Oliver Turner, our Executive Vice President of Corporate Development, and Mike Doolan, our Senior Vice President of Technical Services. Brian Szeto would like to be here today but was unable to attend the call. During the second quarter, we produced a very strong operating performance with record gold production of 30,652 oz. That's our best results since the acquisition of the Higginsville mill. We also achieved a record 290,000 tons mined in Q2 from our flagship Beta Hunt mine. This is equivalent to an annualized rate of approximately 1.2 Mtpa, which is 20% higher than our original estimate of 1 million tons from that single decline. This is a significant positive step for our growth plan, where we are looking to double capacity to 2 Mtpa once the new decline is complete and stopes are fully ramped up. I'd like to take a moment to congratulate our operators on this achievement. It's not that far back in my memory. In fact, when I visited Beta Hunt the first time in 2018, the mine was generating 30,000 tpm. Back then, so many people doubted we could ever get Beta Hunt from 30,000 to 80,000 tpm, let alone 100,000 tpm. Today, I'm thrilled that we celebrate this special milestone, so thanks to everyone. Before I get into the details from the quarter, let me highlight some recent announcements that I'm very excited about. Last month, we closed the transformative acquisition of the 1 million ton per annum Lakewood Mill acquisition for AUD 80 million. Combined with our existing milling capacity at Higginsville, our total processing capacity is now 2.6 Mtpa. There are many reasons why this acquisition is so important for Karora shareholders, in particular, how it significantly de-risks our growth plan by eliminating the procurement, the schedule, and the construction risks associated with major expansion of the Higginsville Mill. It's a huge step on the path forward to achieving our target annual production rate of That figure, 185,000 to 205,000 oz. Also, we closed an oversubscribed bought deal on June 14, generating proceeds of CAD 69 million to secure that second mill. We all know this was done in an extremely difficult market conditions and is a great example of how strong our use of proceeds were considering it was oversubscribed. We also announced the closing of our new CAD 80 million credit agreement with Macquarie Bank, consisting of a CAD 40 million term loan and a CAD 40 million revolver credit facility. With this, we managed to significantly reduce our interest rate down to 4.5% and provided ourselves with additional flexibility with the added revolver in place. Look, like many people, I've been told many times, the best time to secure funds is when you don't necessarily need them. So putting this credit facility in place reduced interest rates and provides us with additional optionality at a very opportune time for us. We renewed our normal course issuer bid, which gives us the ability to repurchase shares when we determine to be an effective use of Karora's financial resources. We recently announced two exciting exploration updates from Beta Hunt. The first was drilled in the Larkin Zone that we had discovered a couple of years ago, intercepting the highest grade ever of 29.8 g/t across 7.8 meters. Boy, I look at that and I think, "Holy cow, am I back in Nevada?" One ounce per ton material? Pretty exciting stuff. The second hole extended the Western Flanks main shear by over 150 meters below the current mineral resource. It included an intersection of 13.6 g/t, another really big intercept across 5.3 meters at depth. Listen, for those of you who might not have heard this, I think I got to repeat it. It's 150 meters below the current resource. Look, almost 500 ft lower than our resources. That's pretty significant for us. We announced this morning the results of our Maiden Nickel PEA for the Beta Hunt mine. Oliver will get into further details later in the presentation, but in short, I'm extremely pleased with the outcomes, especially considering we're only scratching the surface of the nickel potential at Beta Hunt. This is just the beginning. I'm often reminded that Beta Hunt was a nickel mine for several decades, and we expect it to continue for many years to come. Our base case scenario uses a conservative nickel price of $19,500 per ton, and it produces a pre-tax NPV at a 5% discount rate of $57 million with an IRR of 105%. These are great results using a nickel price that many of us believe are far behind us. The upside case, the second case, using current consensus forecast prices at a $25,000 per ton nickel price, that produces a pre-tax NPV at a 5% discount again of $111 million or an IRR of 232%. Look, to say that we're excited about this is an understatement. This truly is just the beginning of the nickel here. In my humble opinion, we've got a tiger by the tail here. We are extremely excited and look forward to begin mining nickel tons at Beta Hunt in a much more aggressive plan, just like in the old days. Finally, on the highlights, today we announced increased confidence to our original 2022 guidance with respect to produced ounces. We tightened the production range by increasing the lower end. After producing just about 60,000 oz, it was actually 58,000 oz in the first half of the year. We have increased confidence that the second half of 2022 will be better, more robust performance. Therefore, our new production guidance for 2022 is a range of 120,000-135,000 oz. Look, once again, I've got to just pause here and thank the operators and our team in Australia, in North America for these accomplishments, especially given all the disruptions we've encountered this year. We've truly overcome so many obstacles as a team. As I mentioned earlier, we have not been immune to cost pressures associated with COVID-19 in the first half of the year and the impacts of cost inflation. We have increased our full year all-in sustaining cost guidance to a range of CAD 1,100-CAD 1,200 per ounce sold. The average for the first half of 2022 was approximately that higher end of CAD 1,200 per ounce. We believe the worst is behind us, and we really look forward to two better quarters in front of us. Additionally, we modestly increased our 2022 growth capital guidance by $5 million. This is primarily driven by the acceleration of the development of the new decline at Beta Hunt, which is absolutely a good thing. We're spending dollars because we're advancing the ramp at a faster pace. At this stage, we are still on track for completion of the second decline in the first quarter of 2023, which is ahead of schedule. Our 2023 and... Our 2023 and 2024 guidance both remain unchanged at this point. Overall, these are certainly some huge milestones accomplished for that period. We've been extremely busy. Now I just wanna turn over to some financial and operating results, and our MD&A and financial statements for the period ending June 30th, 2022 have been filed, all of which are available on Karora's website and under Karora's profile on SEDAR. For those following the slide deck, I'm now on slide six, just so you can follow along the financial highlights. As I outlined at the beginning of the call, Q2 was a strong operating quarter for us. In fact, I don't mind repeating it was a record for us since acquiring the Higginsville mill. In Q2, we successfully managed to reduce all-in sustaining costs by 15% from Q1. This was a huge accomplishment given the COVID-19 issues we had in April that carried over from Q1. They didn't just stop at the end of March. We had huge issues in April as well. We managed to reduce AISC by more than CAD 200 per ounce sold quarter-over-quarter. We ended Q2 with an AISC of CAD 1,190 per ounce sold. Let's face it, COVID-19 is still with us, something we continue to monitor very closely like everyone else. We will not let our guards down. Look, I'm certainly optimistic that the worst is behind us. I'll now share some of the key financial metrics from the second quarter. Revenue for Q2 remained strong at approximately CAD 73 million, up CAD 4 million or 6% compared to second quarter of 2021. Second quarter adjusted earnings were CAD 4.7 million or CAD 0.03 per share, and adjusted EBITDA was CAD 22.6 million or CAD 0.14 per share, both showing an improvement over the prior quarter. Our cash balance at the end of the second quarter remained healthy with CAD 114 million, up from CAD 78 million at the end of Q1 and CAD 91 million at the end of 2021. With our renewed credit facility now in place and the closing of the bought deal financing during the quarter, we are in a strong financial position to see us through the execution of our growth plan and of course, further nickel additions. I will now discuss our operating results, and I'm over on slide seven. On a consolidated basis, mine production for the second quarter was 396,000 tons. During the quarter, 462,000 tons were processed, another record for us, at an average grade of 2.2 g/t, which includes 52,000 tons of a lower grade stockpile material that was averaging about 1.3 g/t from Beta Hunt. This was processed through the Lakewood Mill as part of our due diligence process, so that you need to be mindful that it was still part of our due diligence, why we put that through. Excluding this lower grade stockpile material, the combined average grade processed at Higginsville was only slightly low, slightly lower than normal at 2.3 g/t. Mill recoveries at Higginsville remain consistent at 94%, primarily the result of our strategy to optimize the feed blend from Beta Hunt, Higginsville and Spargos into the plant. At Higginsville, we mined a total of 106,000 tons at an average grade of 3.3 g/t for the quarter. Tons mined were consistent with the prior quarter. However, grade was 38% higher, mainly due to the ramp-up of the higher grade mine production from our Spargos. Over to slide eight, Beta Hunt. Beta Hunt provided 59% of the mill feed for the second quarter and accounted for 63% of our gold production. As previously mentioned, a record total of 290,000 tons were mined at Beta Hunt and 295,000 tons milled at an average grade of 2.14 g/t, including lower grade stockpile material, for approximately 19,000 ounces of gold from our Beta Hunt flagship. Over to slide nine, the Lakewood Mill. Before I turn the call over to Oliver Turner to highlight the results of our positive nickel PEA and recent strong exploration results from Beta Hunt, I want to summarize one key factor that defined our quarter, the acquisition of the Lakewood Mill. I remember how transformational buying Higginsville was for us and our shareholders. Buying Lakewood is one of those strategic events that occur that forever change companies, and we're in for some good stuff going forward. As previously mentioned, the Lakewood Mill significantly de-risks our organic growth plan. While we had completed the advanced engineering work to expand Higginsville, the current inflationary and tough supply chain environment put our shareholders and the company in a very risky situation. Capital costs increased, and we, like many other groups, were faced with construction delays due to the labor shortages in WA. These are factors we were not prepared to accept. Therefore, we mitigated one of our largest risks to our organic growth plan by securing the fully permitted plant. The addition of the second mill provides us with tremendous optionality, flexibility, and the advantage of owning two mills in the Kalgoorlie region. Look, I, for one, have often said, "If you own the mill, you control the keys to the kingdom." Having worked in Nevada and Canada, the ones who own the mills, they truly have the advantages. We believe owning Lakewood will provide us with other opportunities in the future that are not even in our plans yet. Finally, as an added benefit, Lakewood is even closer to Beta Hunt than Higginsville plant, which provides a cost saving on diesel consumption, and it really helps us on our carbon footprint. Anything we can do to help remain carbon neutral, we're very pleased to do. Moving forward, we are excited to integrate Lakewood into our operations. Having only just received the keys a couple weeks ago, if any of our newest team members are listening into our call, let me welcome you to Karora. We are absolutely thrilled you are here. One thing is certain, our options are now greater than they were for mining and milling more tons across our properties and within this district. I will now turn the call over to Oliver Turner to summarize what I truly believe is a huge differentiator for Karora and our shareholders, our new nickel plan at Beta Hunt. Over to you, Oliver. Thank you, Paul, and good morning, everyone. On to slide 11, where we have the nickel PEA highlight. This morning, concurrently, we issued a news release outlining the results of our very positive nickel PEA. The PEA demonstrates the exciting nickel potential at Beta Hunt, especially considering it is based on just our first nickel mineral resource released in January of this year, with considerable potential remaining for ongoing resource growth. As Paul pointed out, and as you can see on the slide, the headline economics are very strong. The resulting IRRs of over 100% and, if we use consensus nickel pricing, over 230% point to a very exciting project indeed. Total capital requirements are very low at just under AUD 19 million over four years of the mine plan and just over AUD 7 million to be deployed in the first year. These low capital outlays are a result of a very unique feature of Beta Hunt, the ability to use infrastructure for both gold and nickel mining. This is an advantage we expect to leverage moving forward as we build on the results of this PEA. Base case net C1 cash costs are expected to be roughly AUD 14,500 per ton, and AISC are expected to be just under AUD 17,000 per ton. This equates to approximately $10,000 and $11,700 on a U.S dollar basis, respectively, using current exchange rates. When you think about spot nickel prices, those are certainly some healthy margins. If we convert this to a per ounce basis, the base case has the potential to reduce our all-in sustaining cost an average of AUD 80-AUD 100 per ounce. Of course, at higher nickel prices, this number only gets stronger. In fact, our leverage to nickel prices with this project is tremendous, as is shown on the sensitivity table in the press release, where a 20% increase to metal prices increases the value of the project by over 60%. If you're bullish on nickel prices, this is certainly a project which has tremendous exposure. The PEA supports an 8-year mine plan to produce approximately 9,400 payable nickel tons based on the current resource. As we continue to drill off the Gamma zone, there's tremendous potential for this mine life to be extended. In order to develop the drilling of the nickel zone, we will be extending our BRI development and exploration drift further to the south to produce new drilling platforms. Another benefit of this drive, as with all drives at Beta Hunt, will be for gold exploration and of course, eventually, nickel and gold production. Switching on to the next slide. While the PEA demonstrates the case for rapid development of the nickel potential of Beta Hunt, the most exciting part to our geologists and of course to us as a management team is the upside growth potential. The two main blocks that host the current M&I and inferred nickel mineral resources both have outstanding potential for resource additions. There's also the potential for additional nickel deposits to be discovered at Beta Hunt along trend from known nickel shoots and in parallel structures. A perfect example of this is the 50 C trend, which was first discovered in 2021 and was into mineral resources just 10 months later. That zone currently hosts about 25% of M&I and inferred resources and has been defined over 800 meters of strike extent, of course, with the potential to extend up to 2.6 km to our property boundary. Of particular interest supporting this thesis, and a drill hole I want to draw attention to for all investors, is a historical surface drill hole located 400 meters beyond the current resource shell, which returned 9.5 meters of 11% nickel. This is certainly a strong endorsement of the potential strike extent of this zone, and we look forward to testing that gap as we extend that exploration drive. One of the additional benefits of the new nickel production plan is our transportation improvement. The new nickel tonnage will be headed to BHP's restarting processing facility in Kambalda, which is just a few kilometers down the road from Beta Hunt. Previously, our nickel's been transported to Leinster, which is approximately 375 km away. This shorter haul distance provides two key improvements. Of course, significant cost reductions associated with reduced diesel consumption and, very importantly, emissions reductions as we continue to move forward on our carbon reduction plans. Producing a cleaner nickel product is something which we are very focused on Karora, as I'm sure all investors are aware is something that BHP is very focused on as well. Overall, we're very pleased with the results of the PEA and look forward to building on the tremendous potential to increase nickel mining at Beta Hunt once again. One thing's for sure, with the current macro environment surrounding electric vehicles and battery production, now is a wonderful time to be bringing on new high-quality nickel production and of course, nickel exposure for our investors. Switching on to the next slide on gold exploration. Turning over to gold exploration of Beta Hunt, we're very pleased with the ongoing results of our well-funded program. At Beta Hunt, 17,000 meters of exploration and resource development drilling was completed during the second quarter, well above the 6,000 meters we drilled in the first quarter and an example what we can do with fewer COVID-19 labor disruptions. Gold exploration and resource definition drilling at Beta Hunt during the quarter was focused on testing the down dip extensions of Western Flanks, A Zone, Mason, and Cowcill, which are identified shear zones parallel to the Larkin Zone. We also drilled exploration holes in the Gamma block and the newly discovered Sorensen shear zone. Switching over to the slide on Western Flanks. Of particular interest, as Paul mentioned previously, was a major step out hole on Western Flanks, where we drilled 5.3 meters of 13 g, 150 meters below the mineral resource envelope. At Karora, we often talk about extending the Strike Length of these shears at Beta Hunt, but extending these shear zones at depth is also underway. In fact, our ore body remains open at depth, and we're confident in resource extensions both along strike and as we drive deeper into the mine. Overall, we do continue to deliver excellent results that support potential mine life extensions for many years to come. To ensure that we continue to add ounces to inventory as we have in the past, our exploration and resource definition drilling program remains very well funded, with an average of CAD 20 million-CAD 25 million budgeted per year going forward. With that, I'll wrap up my section and hand it over to Paul. Thanks, Oliver. At this point, I'd like to turn it back to the operator so we can have questions come through, please. Yes. If you'd like to ask a question on today's call, that is star one on your telephone keypad. We'll go first to Ovais Habib with Scotiabank. Hi, Paul. Hi, Karora team. Congrats on the quarter on the positive nickel PEA. Paul, I do have a couple of questions here. Yeah, go ahead, Ovais. Sorry. Thanks, Paul. Just my first one was, with the additional exploration drilling expected in second half, you know, can you give us a timeframe when we should expect the next nickel resource update? Yeah, sure. I'm gonna turn that one over to Oliver here. Oliver, why don't you go ahead and respond to Ovais on that question. Yeah. Thanks, Paul, and hi Ovais. We've got. We had a lot of nickel exploration drilling completed in the first half, obviously, some excellent results down at Gamma. We've also been testing some of the remnant nickel mining areas that we have as well. That's all going to be feeding into an updated nickel resource, which we'll be delivering in tandem with our updated gold reserve and resource later this year. We're aiming for the fourth quarter, so we'll wrap that all together into one update. Sounds good. Just staying on the nickel side, you know, in terms of the nickel byproducts that were reported in Q2, you know, the byproducts looked like they were a little bit low. Was that just because of the lower nickel prices realized or was there a delay in nickel sold? Can you give a little bit color on what you guys produced in Q2 and nickel byproducts? Yeah. Ovais, it was a combination of a couple things here. Early on, we mentioned that we were impacted in April by COVID-19. Unfortunately, we had quite a few of our air leg miners who do all our nickel production that went down for about six weeks. That, for about half the quarter, we struggled with people, labor, and you can't just pick someone else up as you know and say, "Okay, take a truck driver and put him on a jack leg." Well, you can take a jack leg guy and put him on a truck if you need, and you can make up things like that and put him on a jumbo. We really struggled in the second half, and this is, again, behind us here now with getting people on the drill and getting our nickel. In fact, since I've been there, Ovais, it was the lowest nickel production we have encountered in any other quarter. We expect that to normalize and continue to improve going forward. Yeah. Maybe one thing I'll just add on that, Ovais. Sorry. Just one additional bit of color there as well. As you'll notice, we maintained our nickel guidance for the year, so we really do expect a strong second half performance on the nickel front. Yeah. Thanks, Oliver. Good point. Good point. If you look at the nickel PEA as well, I mean, it's outrunning some of the new nickel mining areas, right? You do expect, obviously, you're expecting more production and obviously costs to improve from these areas as well. Yeah. Look, we absolutely are. We're moving. One of the advantages, and Oliver said it on the call here, we've got some tremendous synergies with the nickel and the gold, right? As we're putting in infrastructure for the gold, we're putting in the second decline, as everyone knows, which is ahead of schedule, but we're also adding a huge ventilation system here, and that's predominantly for the gold. But what that does do for us, that CAD 14 million ventilation system that we're putting in provides us air and access to areas to the BRI and south of the Gamma district and south of that Gamma fault. So that's gonna open up a lot of areas like that 50C zone that we've discovered. We discovered 50C. We haven't been able to mine anything in it, and it's only because we don't have enough air. Our nickel mining has predominantly been all remnant areas. We haven't been going into new areas. We're going to start going into new areas in Q2 here. It's, there's certainly gonna be a renewed energy and focus on nickel. I, for one, I'm excited and encouraged by it. Look, with that new concentrator starting up, what is it, 4.5 kl away, we couldn't have asked for a better outcome, considering we were hauling almost 400 kl away to Leinster. That's great. Just switching gears a little bit, and this is the last question from me. You know, when are you looking to provide guidance on how the new Lakewood mill impacts near and long-term operations? Yeah, look, we've had the mill here for a couple of weeks here. We're working hard just getting it integrated into Karora. One of the things during the due diligence that occurred was that as part of the HOA, it was a heads of agreement. It's a binding agreement. As part of that agreement, we were handcuffed from speaking to anyone outside, so that was a toll milling facility completely. We were not allowed to speak to any client for any period. We're now starting to speak to clients, trying to understand some of their needs, while being mindful that we also have our own stockpiles and we're evaluating, do we run our stuff first? Do we run others? There's some work to be done there. Again, we've had the keys for a couple of weeks now. I would expect in the second half, you're going to see from our team some more information as to what that Lakewood mill is going to do for us. It's certainly advancing things. You know, if we think to the organic growth plan, we weren't supposed to be running or having milling capacity like this until second half or Q4 of 2023. This has accelerated things a lot. We've got quite a bit of work to do here. Give us a quarter here. We'll put out some information, or sooner on the impact and how that's gonna be scheduled into our new mine plan. Perfect. Thanks for that, Paul, and thanks for answering my questions, Paul and Oliver. That's it for me. Yeah. Thanks, Ovais. Always a pleasure. We'll go next to Nicolas Dion with Cormark Securities. Hi, guys. Congrats on the cost improvement in Q2 and the great production number. I have a few questions. First one, I'm sorry if I missed the answer, but could you just provide some color on the decision to put the lower grade stockpile ore from Beta Hunt through the mill in Q2? Yeah. Hi, Nick. It's Paul here. Look, that was a stockpile that we had mined, that we brought to surface. It was predominantly all part of our due diligence. There were some technical issues that we had identified earlier in the due diligence that we wanted to get resolved on the gravity circuit and some of the leach times. We wanted to make sure that even at the lower grades, we could get the improved recoveries and make sure that what we were modeling would really occur. We tested some higher grade material. We wanted to test some lower grade materials and see some of the cyanide consumptions. It was really a technical issue to ensure that that plant could deliver similar recoveries throughout, and we achieved that. It was already sitting on surface. For us, it just meant moving it across, which is even closer than Higginsville, and putting it through the plant to increase our confidence during that due diligence period on that plant. Okay, that's good to hear. Then I guess also on Beta Hunt, I just wanted to ask, given how strong the mining rates were in Q2, what should we think of as sort of a, you know, pre-expansion normalized level? Like, should we be modeling, you know, saying Q3, Q4, similar tonnage numbers out of Beta Hunt? Yeah. Look, there's no doubt we achieved some amazing milestones, like 100,000 tons out of a single decline. Look, I've been mining 34 years, 35 years. What we managed to accomplish out of that single ramp, actually, to be honest, it even surprised me. I was always confident we could do 80,000 tons, which is a million tons a year. We're pushing 1.2 Mtpa in a single decline. That surprised even me. Whether or not we're gonna continue that. Look, I would say this, I'd say there are months that we're going to hit that 100,000 tons. I'd say, are we gonna sustain it every month going forward? I'd say I wouldn't model that. We certainly are not putting 100,000 tpm for every month in for the third and fourth quarter, Nick. But it certainly sends a signal that, look, that 2 million tons that we're gonna get out of Beta Hunt is certainly achievable. It certainly shows and demonstrates that if we can get 1.2 million tons out of one ramp, getting 2 million with two declines, and having the right equipment, obviously, and the ventilation is absolutely achievable and attainable at Beta Hunt. In answer to your question, I would say that it's not gonna be every month, but there are certainly months where we're going to repeat that 100,000. Using that 80,000-90,000, I don't think you're gonna go wrong in any model going forward for the rest of the year. At 90,000 I think you're in good shape. Okay, great. That's helpful. I guess moving on to the nickel PEA, when might we expect to see the impact of the higher byproduct credits in your AISC? Is that like a 2023 thing, 2024 thing? Also related to that, is there any timing on updating your multi-year guidance to factor that in? Yeah, why don't I pass that one over to Oliver here. Go ahead, Oliver. Yeah. Thanks, Paul. Right now, you know, we're moving on to the next stage of engineering on the nickel side of things, you know, full steam ahead and full momentum there. Obviously just put out this study, but internally we're advancing the work. As it stands right now, you'd see that kick in in 2024. We're seeing if we can, you know, work on improving that and bringing that forward. That's when the impact of that. Don't forget, of course, that we still have nickel production next year from the remnant mining areas, similar to what we're doing this year, maybe even a slight improvement. We will still be mining nickel next year, but the sort of full impact of what you're seeing in PEA will start to kick in in 2024 as it stands right now. With respect to the impact on multi-year guidance, you know, kind of what we're expecting to do with all of this is our normal budgeting process happens in, you know, sort of September every year. We're putting together those new resources that informs our internal budgeting process, which then leads to our guidance. We're gonna put together an all-encompassing, you know, to answer your question and Ovais earlier, an all-encompassing piece of guidance, once we've completed that work in the normal sort of timeframe. You'll kind of get it all at once rather than piecemeal. Got it. Okay, thanks. I'm sorry, was that sort of late this year, early next year kind of timing? It'd be late this year, early next year. Exactly. We've got it. We're aiming to put out the reserves later this year, and then we might fall into the sort of normal cycle when people update their guidance, so maybe early next year. We're still working on that. We just got to get the work done first. Great. Okay. Then just one more for me on the Lakewood Mill. Can you just comment on any type of refurbishment work or upgrades that need to be done there now that you have the keys? Then, I guess any color on the CapEx that might be associated with that? Yeah. Thanks, Nick. I'm gonna turn that one over to our metallurgist and VP, Mike Doolan. Mike, why don't you go ahead and talk to Nick about the required CapEx we got this year and maybe look into a bit of 2023 here. All right. Thanks, Nick. Yeah. This year we're planning somewhere in the range of CAD 3 million-CAD 5 million to spend over there. Part of what we're gonna do is we're gonna do an engineering study to make sure that you know we're planning appropriately next year. For this year, our goal is to. We have a lift to put on the tailings dam. We have a couple of CIL tanks that are sitting on the property that we're going to install. There's some structural work that we need to do, and then we're gonna upgrade a little bit on the elution plant. We've got a plan for this year. The engineering study will then put us out for what we have to do in next year. We're pretty well set. The due diligence went great. The team at Lakewood was phenomenal. We've kept probably 95% of the workforce, so we are very much looking forward to the next six months there. Okay, great. Thanks for answering my questions and congrats again on the quarter. Thanks, Nick. We'll go next to John Sclodnick with Desjardins. Hey, guys. Yeah, thanks for taking my question. Yeah, most of them have been asked and answered already, but one left and I thought it was an impressive step down in AISC from Q1. Just wondering if you can comment on some of the areas where you're starting to see some inflation pressure relief for costs. I know kind of second half, I guess it's helped with some stronger grade in the second half. But yeah, if you're seeing some cost relief in other areas and whether Lakewood Mill will be helping out. Yeah, John, I'll just comment on one and then Mike, I'm gonna turn it over to you here. Look, where we saw some big cost inflations, John, were actually in diesel. I don't have the exact number in front of me, but I think it was somewhere to the tune of AUD 98-AUD 100 in AISC that we saw quarter-over-quarter additional from diesel costs. That kind of blew my mind. I was very surprised. Some of that is the fact that we were hauling our nickel all the way to Leinster, which Oliver pointed out is 375 km away. It was a long haul. Now we're gonna be hauling 5 km away over to the new concentrator in Kambalda. I'm certainly expecting, I know, I actually know for sure with a high level of certainty that the diesel consumption is going to drop significantly based on where we're transporting the nickel alone. Mike, maybe you can comment on a couple other of the consumables. You know them inside out, all of them. Over to you, Mike. Yeah. Thanks, Paul. In the next six months, what we plan for is the same price on the consumables that we're seeing here in the first half. The biggest difference that we're looking at is that we've made a number of improvements. In the mining, in the processing, as Paul said, and when we're looking at the nickel transportation to offset those increases in the consumables. Right now here in the U.S, we're seeing a slight drop in fuel price. The expectations are that we see that drop in Australia maybe later in the year. Right now we expect to see essentially the same price. Just we've done a lot of modifications to, you know, to drop the cost. The group over there has done a phenomenal job focusing on all of the cost savings measures that we put in place to drive the cost down. Okay. Hopefully that captures your thoughts there, John. Yeah. No, absolutely. Yeah, looking forward to the strong second half. Congrats, guys. Yeah, are we, actually. I think it was Nicolas who asked the question, are you gonna achieve that 100,000? I wanted to put my whole team on notice and say, "Actually, I'm hoping we're gonna do 120,000 tons every month for the rest of the year." My team are probably very nervous right about now. This is obviously a joke. It's early morning, so hopefully people can laugh a bit. Go ahead. We'll go next to. Go ahead, operator. Yes. We'll go next to Matthew O'Keefe with Cantor Fitzgerald. Hi, this is Kate Nakagawa on for Matthew O'Keefe. Thanks for taking my question. I was wondering if you could provide an update on how COVID is currently impacting your operations today and whether these impacts seem to be decreasing. Yeah, thanks for the question, Cathy. Look, in the quarter where we saw the worst was in April. There's absolutely no doubt that COVID still impacts us. I would say it's probably to the tune about CAD 15 an ounce even. Somewhere about CAD 500,000 quarter or more. That's come down dramatically. We're still seeing a lot of added cleaning, a lot of extra testing, a lot of lost hours because of testing, loss in productivity rates. It certainly has gotten better. Our worst two months were March and April, so the end of Q1 and the beginning of Q2. I don't think we're ever gonna see a point, Cathy, where it'll be completely behind us. I think the bigger risk is behind us, and I think we are more prepared, and we're keeping our guard up. We're not letting our guard down and making sure that we're very proactive when it comes to our COVID situation. We've got a COVID team in place. We're making sure that we're taking all the right precautions. You know, remember we were one of the first groups, even early on in 2021, to have full-time nurses and do a lot of our own chartered flights. We did a lot of things right out of the gate to make sure we managed this well. I would say it's never completely behind us. It's always gonna be something we have to keep our eye on, and we can never fumble the ball there again. Cathy, I hope you guys heard that. I hope I wasn't on mute. Oh, yeah. No, great. Thank you. Okay. I was like, "God, was I on mute?" Over to you, operator. Yes. We'll go next to Michael Fairbairn with Canaccord Genuity. Morning, everyone. Paul, Oliver, congrats on a strong quarter. To you and your entire team there. Most of my questions have already been asked and answered, so just one from me, around growth CapEx guidance. Just wondering with some of the costs for the Beta Hunt decline being brought forward into 2022 and you not going forward with the Higginsville mill expansion, just wondering if you think there is an opportunity to reduce growth CapEx guidance in 2023. Yeah. Oliver, we've had this discussion numerous times. Why don't you go ahead and respond to that one from Michael? Yeah. Yeah, for sure. Hi, Mike, good to hear from you. Yeah. There, there's a couple things that are moving around. We've talked about accelerating some of the capital into 2022 for the second decline 'cause that's tracking ahead of schedule, which is fantastic, of course. We've got a bit of mill capital that we're putting into 2022. In 2023, remember, we're gonna be building this albeit lower cost capital wonderful new nickel project, right? We do have some of that capital entering into 2023. Again, as we go through our budgeting process, we'll see net net what the impact of that is, and if we'll be able to shave off some of the growth capital. Of course there's, you know, equipment and then as outlined in the PAs and capital items that are associated with that. We'll be refining that later this year, but there certainly are some opportunities there. Okay. Perfect. Yeah, look. Well, thanks a lot. Yeah. Yeah. No, Michael, I was just gonna say, anytime we accelerate spending capital for the decline, it just means that we're running on track or ahead of schedule. You know, in our case, it's certainly not that we're overspending. We're actually tracking slightly under budget. I'm extremely, absolutely thrilled that we're spending that additional CAD 5 million this year. As I pass it over to the operator, I think we're hearing a lot of people have most of their questions responded. We're okay to take one more question, operator, and then we'll say thank you. Once again, to ask a question that is star one on your telephone keypad. We'll go next to Majid Mohammed with Canadian Imperial Bank of Commerce. Hi, Paul and Tim. Thanks for taking my question. Most of mine have been answered too. Thanks for the color provided on the cost pressures. My question was really just around the NCIB, and how do you think about that as part of your capital allocation priorities? Thank you. Yeah, thanks, Mohammed. Look, that's a very good question. We just got permission to put it back in place. We're always going to use that NCIB whenever we see pressures on the stock. Looking at our long-term plan, we obviously wanna support our stock wherever we can. We believe it's very undervalued at this point. But we have to take the long-term view as well. Like, you know, the last thing you ever wanna do is buy back your stock and then find yourself in a situation that you need to raise equity. We're certainly not there. I don't want people to go, "Oh, Paul, you're considering it." That's not true. We just need to be mindful of how we use it. The fact that we've got it now in place and available for use. Look, we can't use it while we're in blackout. There's a lot of situations where we're not allowed to use it, but we'll certainly use it when the stock is depressed or lower prices. There's not a whole lot I can add besides that, Mohammed. We have to take a long-term view approach on any time we use that NCIB. Appreciate that colorful. Thank you. Yeah, thanks. So, operator, with that, I think we're going to just say thank you to everyone who joined us on this call. We know and understand and appreciate how valuable each one of your time is, and we thank every one of you for listening into our call. We thank you for the questions. To be quite honest, I gotta admit, as CEO, I'm extremely proud of what this team has accomplished in the second quarter of Q2. It was a lot of effort, a lot of sacrifices. I'm just thrilled that we managed to make a record quarter on ounces produced and a record tons. We managed to do so many records while reducing AISC by $200 an ounce. With that new PEA on nickel coming out, I'm looking forward to some brighter future for our shareholders and I look forward to the second half of 2022. Thank you, everyone. Have a wonderful day. That will end our call for today. This concludes today's conference. We thank you for your participation.