Capital (LSE:CAPD) — Full Year Results

0:01 Good morning, ladies and gentlemen. Welcome to the CAPITAL Limited Full Year Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time using the Q and A tab just on the right hand corner of your screen. Simply type in your questions at any time and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review your questions submitted today, and we'll publish those responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll and your participation, I'm sure, will be greatly valued by the company. I'd now like to hand over to CEO, Peter Stokes. Good morning.

0:34 Good morning, everyone, and thank you for joining our 2023 investor call. I'll just start through a couple of the early questions. I also have with me Rick Robson, our CFO, and Conor O'Reilly, who's our Head of Investor Relations and Corporate Development. Our standard disclosure or disclaimer slide. The next slide just gives some of the highlights from this year. I'll only touch on this briefly because we'll go into this in a lot more detail through the presentation. Pleasingly, revenue continued to improve this year, although disappointingly, we had some headwinds during the year and fell slightly short of our guidance. We did have guidance of $320,000,000 to $340,000,000 and and finished up at 318,000,000 still an improvement from last year.

1:23 The adjusted EBITDA improved again from last year as well. And we've, we'll come to the, the dividend payment as well, and Rick will delve into the net debt, and I'll talk about the investment portfolio as well. I think underpinning at a couple of key things which we'll talk about as well. Very strong safety continued throughout the business with a further 40% improvement from what was already an exceptional outcome the previous year. And we've continued to deliver strong returns with a ROCE of just over 21% in the business. Highlights for me for last year, a couple of really big ones. On the right hand side, the picture that you see is our new Elko workshop where we were kicking off with Nevada gold mines over the next week or two.

2:11 We've won a significant drilling contract there for 10 drill rigs where we see a lot of opportunity to continue to improve. We're bringing new technology into that operation, looking to drive efficiency, bring some new ways of operating into that business as well. And, you know, we we start off with a relatively small number of 10 drills, big contract, but relatively small to the compared to the total size of the drilling that's happening in with Nevada Gold Bines. And we're looking forward to, you know, hopefully, is the start of a big long term relationship. We also, on the back of the drilling contract, were awarded a really significant labs contract for MSA Labs where we will be implementing three resource units in Nevada.

3:00 And that will really add to nearly more than 50% of the current labs business in one single contract with Nevada Gold Mines where we'll be processing all of their gold sampling as well as their other wet chemistry and some other test work that we're doing, including preparation of all of the samples for that, so some 80,000 samples a month. We also, during the year, in Gabon, were awarded our second major mining contract with Fortescue. It's a brand new operation, Belinga Mine owned by the company, Sabindo Iron, of which Forest View is the majority owner. It's a new mine well known high grade deposit, but has never been developed.

3:45 So we originally were awarded drilling down there and also subsequently then awarded an initial mining contract. So it's a relatively small scale mining to start with, and over time, that'll start to grow significantly. The drilling contract has also grown significantly from our first award, and we see opportunity for us to be there long term in that contract as well. The rapid growth of Chrysos continues across the business. We're now the largest distributor or implementer of the Chrysos photon technology in the world. We've got 10 labs installed. We have of the 21 that we've committed to with Chrysos, and we are 21 of 49 units that have now been committed to the Chrisos group, by various other parties and our assets, and see that continuing to grow during this year. In the next few months, we'll see the three units going to Nevada, and, we've just implemented another unit into Kibali in the DRC with Barrick.

4:51 So we've got two units there now. I think, as I said above, we've now got a number of really large new contracts during this year, all of which we see significant opportunity to grow in the future. Reco Dick that we've gone back into in Pakistan, we were drilling there in the mid 2000s. We've started there initially with two drills. We'll now have four and have another couple coming into that operation as well. It's early days in in that huge project. It'll ultimately become a top 10 copper producer in the world and will also be one of the largest gold mines in the world. So a really big opportunity for us to work in an area that we know pretty well. We've drilled there for three years previously. Nevada Gold Mines, as I said before, we've got a really big start there already and I see further opportunity there too. And the Bollinger project with Fortescue, it's a long life, large scale iron ore deposit that's in its very early days. We see working closely with Fortescue a lot of opportunities to build local capability in Gabon where there's very limited mining.

5:59 We've demonstrated how we could do that in Sukari in Egypt already, where we've built a full mining workforce and drilling team up there as well as all the maintenance around that. We want to do a similar build a similar sort of capability in Gabon. Our innovation team continues to focus on a number of really interesting opportunities for us, the mine power solutions, which optimises solar and diesel use on largely start ups and camps and start ups of mining operations where permanent power is not yet in place. We see that as a great opportunity for us to grow. Our Wellforce business, which is our downhole survey business, is starting to bring some new tools and capability into the market. So we're leveraging different tools that we haven't used before into iron ore. And then as I mentioned above, we're building an international apprenticeship and competency academy. We've already got that in Tanzania, and we want to leverage that into some of our other countries in Africa, but particularly in Tigebon in the short term.

7:05 In Tanzania, we have now issued over 1,000 safety passports, is an introductory safety program. We've also done a large number of mining specialised training programs, working at heights, working confined spaces and the like, and are now starting to build out programs around apprenticeships for trades. And then really interesting for me, one of our key projects during this year, which we kicked off September last year with Epiroc, is to build what will be in conjunction with them be the first battery electric blast hole drill, which is a drill type that we use already in our business, but this will be a plug in and tram on batteries. So in places like Canada and other places where there's renewable power, these drills will be able to run without any diesel consumption.

7:56 And as I mentioned on the front page, we've continued to drive an exceptionally strong safety outcome, and I think it's so important that we drive this in our business, look after our employees and continue to build local capability in each of the countries that we operate in.

8:16 Just to really focus on a couple of key projects that we've got now, the Nevada Gold Mines, we talked about with Nevada Gold Mines Company, which is a 50% joint venture sorry, a joint venture between Newmont and Barrick. Barrick is 65% and the rest is Newmont. It's a large contract for us to start with 10 drills and lots of opportunity to grow with a three year contract. I think we're in historically, we've had shorter term drill contracts. This is a large contract for three years locked in upfront. The lab contract, like all of our mine site labs, is a five year contract back to back with Chrysos with a further extension opportunity. Belingaro talked about the opportunity to grow there and Recodick as well. We've still got a large presence in Africa. We're still driving a lot of growth and opportunities in Tanzania.

9:13 In Saudi, we're seeing opportunities there beyond our current operations with Jabal Syed, which is a barrack run operation. The Sukari business, we just recently renewed or extended the drilling contract for a further five years. The drilling the mining contract there will finish in the middle of the year, which is within the contracted volume that we had, although we've removed the contracted volume six months ahead of the four year schedule. So also a great success for us. And it was a really key thing in being awarded the Gabon project to be able to demonstrate the capability that we have up there as far as high quality mining operations that are really optimised to ensure that customers are getting the best outcome that they can.

10:01 In West Africa, we've still got a strong presence, although we have reduced some of the focus that we've had in Mali, particularly with some of the more recent challenges around the mining legislation being somewhat unclear. Some of the work that we had near mine has slowed down, particularly at Fekola for B2, but we're still continuing full bore on the the mining operation there on the pit itself, doing grade control, and we've been doing some supplementary blast hole work there as well. In in Guinea, we're still working with on the Bankham project for predictive. We're still doing pit work for Sadiola and Mali as well.

10:47 We're seeing some really good contracts and then with Perseus with Urore. Unfortunately, during the year, the Sudan project stopped due to the civil unrest there. We're hoping to be back in there sometime later this year. I think it continued, I guess, for us, still a very strong base in Africa with assets in key locations in the main mining districts. We are looking further south in Africa, in Namibia and Zambia. We see some good opportunities in those countries as well in much more stable economies than what we've seen particularly in Mali. We're still focused on tier one assets with blue chip miners to really focus on long term opportunities wherever we're going in our business.

11:37 The other thing I'll mention on this slide is we are doing more in copper now with our exposure in Pakistan. Iron ore is new for us this year, so new commodity, new location, and that's been, I think, really proven that we can pick up a lot of our skills and do the same great job that we do in Gabon as we do elsewhere. And then another large gold mining operations in Nevada gold. I think importantly on this one, we've continued to really develop our long term relationships. We've somewhat repositioned our portfolio. If you look at the graph in the centre, we now have a smaller number of customers with a similar number of contracts.

12:25 So where we had 21 customers in 2020, we now have 10 customers and we still have 20 contracts, but they are larger contracts. So rather than small customers with some smaller contracts, we've been very focused on places where we can build a long term capability, can really establish ourselves well. And as I pointed out on that first slide, buying a facility in Elko in Nevada where we've won that Nevada gold mines contract has really established a strong presence for us in that city and enabled us to attract the right sort of people that we need to to start up that contract. It's been having new equipment, a yard of our own, bringing some of our capability underpinned by our strong safety record has been a really important part of it.

13:15 We have a long term relationship with AngloGold Ashanti, particularly in the drilling space in Geita. We're now starting to talk to them about other services including assaying. With B2Gold, we've had a good relationship, a very good relationship with them in Mali and Ivory Coast. Barrick, our relationship continues to expand and it's really exciting to be seeing the opportunity that we announced late last year on expanding our MSA footprint into other Barrick operations to provide a CHRISOS capability for gold. Over time, we expect that will be for some of the large copper mines as well. I'm very excited about the Sentiment extension. We'll, at the end of that five year term, we'll have been working with Sentiment for over twenty five years, so a fantastic opportunity.

14:07 And then with one of the largest iron ore miners in the world to start that operation in the early days, Gabon is also very exciting and will be a long term opportunity for us to continue to grow. We've continued to focus with all of that growth. It would be easy to lose focus on underpinning profitability and return on our assets. I'm really pleased to say we continue to deliver EBITDA margins adjusted EBITDA margins in the high 20s for our business. Rocky remains well above 20%, which is an exceptionally strong outcome in our sector. And then we've got and a lot of that's due to the long life, high Rocky focused projects that we've got. You've got time to establish yourself and then drive profitability and performance out contracts.

15:02 We're able to invest in the early stage of some in our industry through the CAPITAL DI and I'll come to that in a minute investments, which have really proven to be very successful over the last several years. There's a lot more areas that we could invest in, but we're very selective in how we do that And we're balancing those capital investments versus capital that we need in the broader business. And we're coming to a point where some of those investments are starting to get towards maturity, and we expect to be recycling some of that capital during this year. That'll really demonstrate the long play that we've made on some of those assets that will drive really good returns for the business and then either fund returns to shareholders or enable us to keep investing in growth in the organisation.

15:55 Underpinning the business remains a very strong macro supportive environment. The exploration budgets are still well underspent compared to the peak. What's really been clearly outlined is going to be needed to continue to replenish, particularly copper, iron ore, and to a lesser degree, some of the other key commodities of nickel and some of the newer ones like lithium and also replenished gold. Key major customer in Barrick is very focused on replenishing the resources that they are mining each year, at least, on all of their assets and they do a very good job at that. But that takes ongoing drilling across their mining operations, as do Newmont and Agnito Eagle, the other biggest gold miners. And each of them are spending large amounts of cash on drilling. But generally, the market is still underspending.

16:54 Juniors are really struggling to get funds, as we talked about. It makes some good targets for some of the majors and there's been a lot of acquisitions or investments in junior companies by the major companies. I think on the bottom slide here really talks about the significant reduction in specialist capital going into markets. It's very clear from the two graphs on the bottom there just how much that's reduced over the last number of years from 2010. So I think thereis a strong story here that underpins our business. We really see opportunities to continue to invest in through CAPITAL DI, Whether we do that through equity or whether we do that just as direct capital injections, we've been successful on both fronts.

17:45 And I'll talk a bit more about CAPITAL DI in the next slides.

17:51 For those who are not too familiar with the business, we really talk about five key pillars in the company. I've talked a lot about the drilling. Underpinning our drilling success is just under 130 drill rigs of all different sites. The key thing that we do that is different to many others is we're very mine site focused. So our drilling contracts, 85% of the drilling contracts we have now are at mine sites. And that ensures stability through ups and down cycles. The mines that we operate all have long term life, so we're seeing really good volumes continuing through those operations. In our CAPITAL LIMITED business, we really started with our first major contract. We've done a couple of smaller contracts previously in 2019 at Sukari with the investment of the fleet there to do the waste removal for a cutback. And that, as I said earlier, will come to an end in the middle of this year.

18:51 And then winning our second major contract in Boalinga was a huge achievement as well. The other thing that differentiates us from other mining services companies is we're unique in having a labs business. We're an early adopter of the Chrysos technology which can do gold, copper and silver assays, much higher speed and larger samples to give a much more representative view of ore bodies. We're seeing expansion in that space. As an early adopter, I think we have a really big competitive advantage in that and we're seeing that as we roll out the units. CAPITAL DI, proactive investments to date only in Africa that's been a big focus for us. We've got a lot of knowledge in our business having worked across many places.

19:41 Founders have a lot of experience in Africa too and are really able to leverage that to find good properties or really understand the likelihood of success in properties and people who've got the right experience to operate them in Africa. And then the CAPITAL innovation, we formalised last year, is really formalising something that CAPITAL's been really good at for a long time, which is innovating, finding new ways to do things, leveraging technology to be more efficient as a business. The picture at the bottom is some of the new software that we've developed in our Wellforce group for directional three-dimensional view of directional drilling, which is supporting both our directional drilling and a number of our competitors. If I just delve into each of the sectors in a little bit more detail, we continue to drive strong utilisation across our drilling portfolio. At the end of last year, we finished up around 73%, slightly below our target of 75%.

20:42 We're continuing to move and optimize the fleet. So when drills are not drilling, they're obviously not utilized.

20:50 We're moving some of our fleets out of Mali particularly and relocating that into East Africa and into The Middle East and some into places like Guinea and Cote D'Ivoire where it makes more sense. We've continued to drive a strong RPORE in the business with a slight improvement up to 186,000 last year. As we move into The US, the RPOREs for the drills will continue to improve. Again, labor makes up a much bigger percentage of drills, so by that alone, it will drive

21:21 up the RPORE and we see some opportunities for some very efficient drilling with some of the new capability we put on the ground in Nevada. The contract renewal at Egypt was a highlight of last year, early this year. I'm very pleased about that one as well. And then expanding out into further Tier one contracts with Balinga, Reco Dick and Namada Gold Mines has been a really important one.

21:47 As I said on the last slide, 85% of our drilling is on mine sites. You see that up on the graph on the far side, 40% to production specifically, 28% to development around the mines, and then 17% is underground, which is development and production underground.

22:12 In our mining contract, really delighted to win the work with Fortescue this year. The picture on the right is some of the early mining trial work that we've been doing. Underneath, you can see an aerial view of the same. The business is continuing to expand. As I said earlier, our drilling operations are continuing to grow. The mining fleet that we've got there is supporting drilling with creating drill pads and roads through fairly dense jungle there in places.

22:42 There's a lot of work in setting up each drill pad that we're working there. We're just in the process of implementing our early stage crushing to do some larger scale trials for Fortescue lump versus fine ore out of the ore. For those in the know, the ore there is very high grade. It's a long term project. It'll become another mine like one of the larger Pilbara mines there for

23:09 several tens of years as they mine through the resources there. So very exciting project to be in on the early stage there. So we've got an up to five year contract, three years locked in with an option of another two, starting at revenue of around $30,000,000 and looking to continue to grow that over time. I talked about Sukari, the Vindo contract we covered already.

23:36 And there's still we're not stopping there. We still have an active pipeline. I think one of the attractive things about Gabon is it's a bite sized chunk that we can swallow the capital within the business, implement the new fleet that's operating there now and then grow with Fortescue as that operation grows. Larger contracts like Sukari are more difficult. The scale of capital that needs to go into that one upfront would generally mean we would be looking to do a raise. In the current market that probably doesn't make sense, certainly with the current share price that's more difficult.

24:20 A couple of slides on Chrysos. Highlights for the year, the Nevada contract, it has a value around £140,000,000 over the five years. As I talked about, the key differentiator of the Chrysos technology is one, is faster turnaround. We can put a sample through about every two minutes. We have labs running at capacity of 35,000 samples a month or more, and we've pushed those out to over 40,000 samples we've done some months in some of the labs. It means that unlike the traditional methods, fire assay for particularly gold and copper, where typically turnaround times are several weeks. We're getting samples turned around in days. We do that with a much lower ESG footprint.

25:11 There's no hazardous waste, much lower CO2, much lower energy consumption without furnaces and things running 20 fourseven. And it's also from a process optimisation perspective, it's also a non destructive process. So we can rerun samples if we needed to, or give the ore back to the customer and they can then put them into their mill or dispose of them. And it's also largely automated. The picture that you saw earlier on, can see we feed them in batches and they go through the machine. And then two hours later, that whole batch of 120 samples comes back out again and they can either be stored or disposed of. The sample volumes are continuing to grow. So this year, we grew revenue to $38,000,000 slightly under the guidance that we've given of 40,000,000 to $45,000,000 but still a significant improvement of nearly 40% on the $27,300,000 the prior year. The number of samples last year was 1,800,000, up from 1.3.

26:16 The mix, as we grow, moves to more and more Chrysos, but currently we sit at about 50% of our volume is on crystals samples and 50% is more traditional different methods. We also run the first lab that we when we bought the business is a large multi element lab, is doing a lot more of rare earths, lithium, and other battery or new energy transition materials that are going through that lab. And so in some cases, we've got customers who are putting samples through Chrysos and then doing more detailed analysis, or going directly into the hub lab in Vancouver. Just showing the footprint, we now have 28 laboratories including six franchises around the world.

27:06 Part of last year was really to focus on growing the footprint. The early labs that we have with Chrysos have a geographic exclusivity. And so what we've been able to do is put them into locations and the Canadian Belt or the Abbotibi Belt is a great example where we've put commercial labs into Prince George Timmins and Val D'Or and pretty much cover east to west across the Abbotibi Belt with key locations there. Each of those labs has 100 kilometre exclusivity around the Chrysos unit. So while we can add additional labs, our competitors can't for the first five years of the term. We've also built a couple of prep labs into Northern Canada to feed into into Chrysos and or into the Langley lab.

27:55 And so we're building a presence. You'll see there with marked Nevada, those first labs go live in the middle of this year, and we'll have three Presos labs running by the end of this calendar year. In South America, we've got three franchises and we've got one fire assay in Guyana. And then you see on the other maps, we've also added a couple of more Chrysos units, one into Geita in Tanzania. So in the township right near the Geita mine, but also near a number of other gold mines. And similarly, we've added a Crisos unit into the Obuasi township which is right near some of the flagship mines in Ghana. The model for MSA, just really talking through the economics.

28:46 So as I outlined there, there's a couple of different types of Chrysos. So the technology is the same, but the way we implement them is slightly different. We have a mining site model and you can see that on the left hand side up here where the example there is a great example of how that works is at Kibali, for instance, we implement one month, the next month we basically fill the lab. And so that is a very quick implementation. On the commercial labs, so that's where we build our own lab. Then build a volume through that lab. And a good example there is Val D'Or, where we put the lab in place in June 22. It really took until really six months until that lab's got to really a commercial volumes that we want to run through it. We typically, through commercial labs, are looking for a higher return. So we're looking for adjusted EBITDA returns closer to 20. And for the stability and volumes that are going through Commercial Labs, we're driving for EBIT adjusted EBITDA margins a bit more closer to 15% or slightly higher in some cases.

29:53 So during 2023, we spent a lot of time putting the Commercial Labs out, locking in our cape our footprint and as well as winning some mine sites like Nevada and a second lab for Kibali, which is now going live in the next month. But equally, we now need to 2024 early twenty twenty four is about filling those commercial labs in Africa and Canada, and we're seeing success from those, particularly the ones in Canada initially, though in a bit earlier, and and we're still very focused on growing the businesses in the African business as well. Last slide for me, focusing on the investments.

30:42 So as we talked about previously and this is probably a little bit of a change since we spoke last time, the allied businesses, Floated Allied Gold, is now a listed entity in Canada. Previously, it was privately held and we had to do an estimate of the value. The majority of what we hold now are listed entities. And so it's very easy to do a mark to market for us on the portfolio. As at December, it was $47,200,000 The value of the portfolio has continued to increase during this year. During 2023, we followed our money in Weir, which has turned out to be a very successful business now with we own just over 19% of the Weir business. It's a a very prospective area in Namibia with currently with a resource nearing 2,000,000 ounces.

31:38 And then the biggest investment we have is with Predictive, where we're just under 10% of that business, and it makes up 60% of our portfolio. It's getting towards permitting during hopefully the first half of this year, at which point we'd need to consider whether we stay in business because it'll likely be a takeover target. That's a good for us, the sort of point that we'd look to trigger a divestment out of that business. The capital investments business has been a really successful tool for us to grow revenue in the broader business. So over the history history of this since 2020, the CAPITAL DI portfolio has generated north of $100,000,000 of revenue for the business. So it's been successful on two fronts: one, the investments and two, as a business development tool for the business. It's not the criteria that we use.

32:38 We don't have to win the contract. We, for instance, we don't drill that contract. It's been a really good investment. We're able to, I guess, support the business as we can with our knowledge of Africa. And we bid for drilling services there and predictive on a commercial basis. Last one on innovation. I've talked about most of this before, so we might if there's any questions, I'm happy to pick this one up in the discussion. But I think on that note, I'll hand over to Rick Robson, our CFO, to go through the financials of the business. Thanks, Rick. Thanks, Peter, and good morning, everybody. Just looking at the the the financials for for the group, many of the headlines have been mentioned already, but revenue up 10% year on year.

33:33 So continued good growth on the top line. We as we know as we presented previously, we're presenting an adjusted EBITDA figure at 91.8 for the year. That's adjusted for as a reminder, that's adjusted for the IFRS 16 leases basically to reflect the true underlying profitability of of the business. So it's primarily the Chrysos leases in the labs business. But as I say, to reflect that true underlying profitability, we're showing the EBITDA adjusted downwards for the cash cost of the leases. That 91.8 is a 20 just under 29% margin, so consistent strong margin year on year.

34:19 At the EBIT level, we recorded $60,000,000 of EBIT marginally up up on the year before at a at a broadly consistent margin of 19%. NPAT level unadjusted NPAT is 70% up year on year. But, obviously, NPAT on an unadjusted basis reflects the investments gains and losses, of which was a mark to market loss in '22 and a small mark to market gain in '23. So a couple of rows further down adjusting Genpact for those investment gains and losses shows a 16% decline year on year, and that's reflective of our heavier interest burden in the business where we've got higher gross debt load, as we'll come on to talk about, but also a full year effect of a higher base rate in the in the underlying interest charge.

35:17 And just looking at the net debt waterfall, dotted box towards the left there is that's that's the sort of the EBITDA on an unadjusted basis at a 100 mil adjusted for the lease payments at 8 mil, giving us that adjusted EBITDA of 92 or 91,800,000 for for the year. Working capital, we we saw another working cap draw in the year that reflective of of mobilization and an inventory build in Gabon for the Balinga mining contract. CapEx at just under 70 mil, which I'll come on to talk about. And then I guess the other notable, and I've already referred to it, is the interest and tax payments there elevated year on year and, again, due to the higher interest costs that we we picked up.

36:02 Finishing the year at at at 70 mil net debt, which if you were to adjust for the mark to market value of the investment book, that gives you a net debt of 20 just under $23,000,000. So looking at our CapEx, we had initially guided twenty twenty three to 50 to 60 mil for the year. We then increased that guidance midway through the year when we announced the Bolinga mining contract, increasing that guidance to 65 to 75. So we came out at 70 mil or just under 70 mil, so in the middle of that reguided range. Looking forward, we're guiding $20.24 to 70 to $80,000,000, which reflects our ongoing sustaining CapEx in the business reflective of our fleet replenishment program, which is still very active.

37:01 We also have, importantly, the growth CapEx associated with our our emergence in in The US with our contract suite at both, at, well, at Nevada Gold Mines for both the drilling and the labs business. And then just to to sort of cap it off, the top, the darker gray box there, that's that's our other category, which is primarily the facility that we purchased in Elko, Nevada and to really support our growth in in the region. So looking at the at the balance sheet, particularly the debt, gross debt increased 29 mil year on year. And component wise, what does that comprise? So we we increased our RCF, earlier on in the year from 25 mil to 50 mil, bringing on a second lender.

37:50 So we brought on Nedbank alongside Standard Bank. And at the year end of December 23, the RCF was was 45 mil drawn against that 50 facility. We've also taken on a new tranche of asset backed financing with Macquarie, and that's secured against the fleet in Gabon. That was $8,000,000 tranche, which takes our overall Macquarie outstanding principal to about 30 just over 30,000,032, I think, for the year at at the year end. The other component of debt that we brought in in a year, a new component was CAPITAL LIMITED. So we've taken on a small facility with CAPITAL LIMITED, $5,000,000, just to get them on the on the books, get some runs on the board with them, and develop that relationship further.

38:42 And that's as you as it probably suggests, that's for us purchasing cat Caterpillar parts and new cat equipment in the group. The other two components of the debt relate to our OEM facilities with Epiroc and Sandvik, primarily Epiroc, where we maintain strong relationships with both. We've continued to purchase rigs from each of those OEMs, and we continue to be able to finance those rig purchases as and when they as and when they roll off the factory line. And so at the year end, we had $16 of debt outstanding with Epiroc and and 4 with Sandvik. However, with Sandvik, we have signed a new facility, which with about $10,000,000, I believe, which is reflective of our rig purchases in 2024.

39:34 And then overall for the year, the net debt with a twelve month trailing EBITDA is just under point eight times. So still pretty conservative and certainly well within our covenants that are embedded in the the RCF and the Macquarie facility. Dividend for the year. We declared a a final dividend of 2.6¢ flat year on year, reflective of of the, obviously, of the growth that we're we're bedding down in 2024. We've always said we'll take a very disciplined approach to to our capital management, so we we want to, keep a strong balance sheet. We obviously want to deliver the growth ahead of us, and, importantly, we want to consistently return to investors where we can.

40:24 So as I say, a flat year on year dividend, 2.6 in the final. It's also flat 3.9¢ on the total debt for the year as well with a payment date May 15. So looking at the guidance, I've already talked about the CAPITAL guidance, but to looking at the revenue guidance for 2024, we're guiding the group to $3.55 to $3.75, which at the midpoint is about a 16% growth year on year. MSA is a component of that. We're guiding 50 to 60, which at the midpoint is actually an over over 40% growth year on year, and that really is reflective of the of the higher growth potential relatively speaking in that business as we roll out the the the laboratory network, particularly reflective of the Chrysos units that we're going to be deploying during the year.

41:23 So part of it will be the utilization of the commercial labs that we put in place in 2023. So those labs wrapping up in '24, and part of it will be new units going on to mine sites in in 2024. And that's it for me. I'll hand over for q and a. That's great. Thank you very much indeed, Peter Rick, for updating investors. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of the screen. Just while the company take a few moments to review your questions submitted already, I'd just like to remind you that a recording of this presentation, along with copy of the slides and the published Q and A can be accessed via your Investor Meet company dashboard. Connor, if I may hand back to you for moderating today's Q and A, and thank you to all the investors who have submitted questions today.

42:09 Connor, if I could ask you to read out the questions where it's appropriate to do so, and I'll pick up from you at the end. Thanks. Yeah. Thanks, everyone. And, look, keep putting questions in. I'll I'll I'll get through them as best I can. We want to start with a few labs, operational ones. I guess, for Peter, it's understanding we've spoken before about having to relocate one of the laboratories last year. Can you talk to that and and and what the plans are? Yep. So the lab we relocated was the Marilla site, which we've moved into Bamako. So we've set up that lab as a we we've moved it into Mali, we've got a unit in Bamako operating now as a Chrysos unit. We're just in the process now of working out whether we keep two in Mali or I'll leave or just leave one. So at the moment, that lab hasn't been recommissioned, but we've been working with Chrysos on how we manage that process in the you know, while that you flip units offline.

43:15 Thanks. Maybe we'll take off a couple of financial ones for Rick, I think. The are all the heavy trucks under mining equipment in the balance sheet? And if so, what is classified in vehicles and trucks? Yes. So heavy mining equipment includes all of the heavier trucks that would move earth for us and the excavators, dozers, graders, etcetera. So all that what we call a heavy mining equipment. The vehicles and trucks is primarily our well, two thing two things. The the light vehicle fleet, which we we operate across all sites, but also the slightly larger trucks that mount the rigs, turn the rigs, etcetera, around our site. So it's the the the quite distinct from the distinct categories between mining and and drilling effect.

44:13 Okay. Thanks. And maybe sticking with you, the accounts have shown an increase in receivables past thirty days. Could you talk to this and and talk to the probability of recovery? Yes. So, I mean, at the worst end of that scale, we're fully provided against the the Marilla position. Technically, part of that debt is on a payment plan, but that remains to be seen. So we have taken a cautious stance and fully provided the entire position. Hence, the increase what the the most of the increase year on year in a provision, it relates to exactly that. As for the working down the aging, I. Becoming newer, the 12,000,000 or nearly 13,000,000 of debt in the category 31 to 60 is is as most of which has been paid since the year end.

45:04 So not a recoverability issue at all. If you look, the expected credit loss against that is particularly low as a percent, and that's reflective of of of that post year end payment. Okay. Thanks. Maybe one for Peter. When we look at our revenue guidance and the visibility we have on it, can you talk to where the growth is coming from, I. E, existing contracts or is there a sort of unbudgeted big percentage in there? So mainly from existing contracts. So the growth of Nevada is a big one both on drilling and labs. The growth in RecoDick and then in Gabon in drilling. So there's three major contracts that will contribute the bulk.

45:50 We tend not to we tend to only put a small percentage to unidentified new business. So it's not a it's certainly, you know, part of what we need to do each year, but we find find that our current customers, generally, we have growth. And we've seen that across a number of our other contracts as well where we're seeing further opportunity for growth where we're already working as well as the new contracts I mentioned. Thanks. Maybe maybe one for both of you. Just on we've talked before you know, upcoming recycling, maybe a cash in the investments. How do you look at investments now against the sort of growing debt book we have and in the context of increased interest rates, etcetera? Do you wanna go first, Rick? And then I can Yeah. Sure.

46:42 So, look, we we've we've got a quite a defined investment strategy with respect to the investment book. I think it's obviously a concentrated book. And, you know, we we have, let's say, certain sort of expectations of what might happen this year and and, you know, if if certain things happen, we will look to realize value. I think so we're we're working on a, as I say, a case by case basis there, but the the strategy is is still playing out with respect to that investment book. As it pertains to higher interest costs, what we're what we're doing now, we we actively tender on opportunities, and we are factoring in the higher interest cost, the higher cost of funds. We're factoring that into our tenders. And so from that perspective, we're we're covered.

47:32 But, yeah, Peter, I don't know whether you want to add more on the on the investment book yourself. Yes. So the only, I guess, sort of an adjunct to the investment portfolio is our mining fleet at Sukari. So when that comes to the end of the term, there's two options. One is to find another site to redeploy it, and we're actively looking at that. But the other option would be to sell that fleet and reinject those funds back into the business too and or pay down debt or return some to shareholders. So there's a few options around how we do that. I think on the investments we've got currently in CAPITAL DI, I think we're coming, as I said in the presentation, coming to a point that some of those are, you know, it's an it'll be an attractive time to realize the the investment.

48:19 But they have been exceptionally successful and certainly are returning higher than, you know, our cost of debt at the moment. And we need to just, you know, work out with at the right time that it would make sense to liquidate or sell down. Thanks. Maybe stick with you, Peter. Just a, I guess, more general question on ESG. You know, you've mentioned the electric rig partnership with Epiroc. Maybe just a a broader question. How does CAPITAL sort of look at ESG and integrate it more broadly across the business? Yep. So with so the ESG on the sustainability side, we're definitely you know, we have a focus across our business. The fleet that we're putting into The US is all tier four vehicles as required. So a whole lot of different things that we're investing in there. We've put four Rivian electric pickups into that site too to start testing some alternatives to running traditional pickups across the operation.

49:16 So we're continuing to challenge ourselves on those sort of things. We're looking for and testing technology across our diesel fleet to reduce consumption. So we're looking at some new technologies there that's in relatively early stage of testing. But I think more importantly on some of the other things, we're investing a lot in our people in the business. So we're over 92% nationalized in our business now with very senior people growing into nationals growing into senior roles in the company. So ahead of Tanzania, ahead of Egypt are both nationals from those countries. Our national workforce is also, African workforce is getting great opportunities to continue to build their skills moving around the region. And we're also really focused on building some gender equity where we can. So in Egypt, we started employing females now that we're able to have females come to the mine site. That was not allowed until recently, and we've been doing that working in conjunction with Sentiment.

50:20 We're looking to have our first female drilling crew in Africa in the next few months as well. So we're really trying to challenge ourselves and move out of the old way of doing things, I think, around our operations, both on our people, but equally on efficiency of our fleet. Thanks, Peter. And I guess another one, now that we are, you know, becoming more global in nature and across our operations, are you experiencing any issues with supply chains? We're definitely seeing continued challenge in supply chain. The Red Sea issues are certainly not helping. It's not like it was during COVID where lead times from Europe into Africa and Middle East could be up to six months depending on where you are going into.

51:08 So just shipping lead times, let alone manufacturing. That's come down, but we're starting to see some of those blow out again particularly on around East Africa and into The Middle East where it's been pretty challenging to to get shipping. That's generally the biggest delay on supply chains. The other part, I guess, is manufacturers are continuing to ramp up after really slowing down during COVID. So lead times on drills still challenged. Typically, minimum is six months. Some of our drills are, you know, are taking up to eighteen months. So we're we work closely with our big manufacturers to lock in slots and start to plan out our likely demand, which is both replenishing our current fleet or replacing older units as well as building for new business like we've just done in Nevada.

52:01 And I think the close relationship we have with our major OEMs on that one's really helped us to get a fleet into Nevada in in very short time. Okay. Thanks. There was very one very specific question looking at our balance sheet ten years ago, so I will come back to them on written answer. So we'll finish with one last question. With With the rapid growth and expansion into new geographies, guess, specifically The US in this case, how are you finding, attracting, and also retaining talent? Yep. So as a business, before we kick off in The US, we we run a our attrition is less than 3% as a group. So exceptionally low. We I think that the programs that I talked about in addition to the community investments we're doing into local hospitals, sporting clubs, education and the like of our employees and their families is really driving very low turnaround in in our business.

53:04 As we go into America, we expected it would be fairly tough to get employees. We went past the net pretty broadly looking for different sorts of skill sets. And I think really positively, we've been able to engage a number of our first drill crews completely well ahead of when we expected to. I think being the new player in town with new equipment and, you know, we've got a and a new attitude and focus on how we're gonna support our teams and give them the skills to be effective, I think, been sent a strong message in addition to things like buying the property. And that's enabled us to get all of our workforce in place in The US. I expect that we'll see higher turnover in The US than we have in other places though. So we've seen a bit of that in the labs in Canada in more remote locations. But it's about getting the right people and finding people who want to live in some of those places longer term rather than trying to fill the gap. It's really getting the right person.

54:03 I think that's been a really successful strategy. That's great. Peter, Rick, Connor, thank you very much indeed. You've actually taken all the questions from investors today. Thank you so much for your time this morning. Peter, I know that investor feedback will be particularly important to you and to the company as a whole. I'll surely redirect those on the call to give you their thoughts and expectations. But if I may, Peter, just come back to you for a couple of closing comments. Thank you, Mark, and thank you all for joining the call today. Really appreciate the questions. There's been a really big mix of questions that I think really show that people are very interested in our business. 2024 is really exciting for us. We see a fantastic year this year with Nevada, Reco Dick and Belinga, as I talked about, in addition to our historical business. So look out for CAPITAL. I think we're onto bigger and better things into this year and look forward to talking to you all this time next year or now, investor presentation with another, successful year. Thank you very much. That's great. Peter, Rick, Connor, thank you once again for your time this morning. Companies ask investors not to close this session as we now automatically redirect you for the opportunity to provide your feedback in order that the company can better understand your views and expectations.

55:17 This will only take a few moments to complete, but I am sure will be greatly valued by the company. On behalf of the management team of CAPITAL LIMITED, we'd like to thank you for attending today's presentation, and good morning to you all.