Regis Resources Ltd

ASX:RRL

Earnings Call Transcript

[Operator]

Ladies and gentlemen, thank you for standing by, and welcome to the Regis Resources Investor and Analyst Conference call. [Operator Instructions] Please be advised that today's conference is being recorded.I would now like to hand the conference over to your speaker today, Mr. Jim Beyer, Managing Director and Chief Executive Officer for Regis Resources. Thank you. Please go ahead.

[Jim Beyer, CEO, MD & Director]

Right. Thank you. Good morning, everyone, and thanks for joining us on the Regis Resources December 2019 quarter update. I would note that the quarterly report was released this morning earlier today, and we'll make occasional references to some of the diagrams so you might find it useful if you've got it readily at hand.The quarter has seen an improved performance by the Regis team with gold production at 90,849 ounces. Our cash costs before royalties were $866 an ounce, these are all Australian dollars, which is down just over 5% on last quarter, a continuing trend from the prior quarter as well. Our all-in sustaining costs were $1,219 per ounce, which is also down slightly on the prior quarter. During the reporting period, we sold our gold for an average price of $2,104 an ounce, which was a 5% lift on the prior quarter.Looking at our cash balance over the period. The operational performance of our mines contributed a very solid $100 million to our cash. Netted off against this were some items that -- some large items, the $32 million in capitalized mining. This was made up of around $10 million on deferred waste, just under $13 million on the Rosemont Underground and $5.5 million on prestrip. We also had cash outflows of $15 million on income tax payments, $10 million on exploration and feasibility projects. And then there was $17 million on other CapEx, the largest items of those being, for example, the $5 million upgrade to the airstrip, which was completed, that allows us now to fly jets in, which is actually great for morale, cheaper seats and it's got around about a 2-year payback so we're really pleased with that project. We also spent just under $4 million on the TSF development for Garden Well, $1.7 million on some major assets associated with the underground, the transformers and other bits and pieces, $1.3 million on lifters and liners and then a whole bunch of other relatively [ rats and mice ] type of stuff from the normal operation that added up.Now this was a pretty good -- all this, gave us a net cash and equivalent increase for the quarter of $21.4 million. So at the end, we had a cash and equivalent balance of just under $169 million.Looking a little bit more in detail at our sites. At Duketon South, that's Garden Well and the Rosemont mills, in the quarter, production lifted relative to the September quarter to 65,971 ounces for a slightly lower all-in sustaining cost of $1,219 an ounce. This is a good performance, especially when considering that we had an unplanned mill outage at Garden Well where we lost a little bit over 3 days, I think it was, thereabouts, over the Christmas period due to an issue with the main mill motor and that involved changing it out to the spare that we had. I would say the team did a great job to get it back online safely, quickly, especially under the circumstances of having to mobilize things over the Christmas, Boxing Day periods. Now this downtime that we had was offset by better grades and recoveries, so a pleasing outcome in the end.At Duketon North, we also had better production relative to the prior quarter at 24,877 ounces of gold produced with virtually the same all-in sustaining costs at South at $1,219 an ounce. The solid increase in production from the North resulted from higher throughput and improved recoveries.Now off the back of this performance and our look ahead for the rest of this year, we remain confident in our production guidance, which remains unchanged for the year at between 340,000 to 370,000 ounces of gold.Looking a little bit more closely at our costs. The cash cost before royalties for the quarter was $866 an ounce, which is down relative to the September quarter where it was $914 an ounce. This reduction was driven by the higher gold production as well as some other ongoing capitalized development for satellite pits during the December quarter.Now for the quarter, the overall all-in sustaining cost for Duketon was $1,219, which is down by about $15 an ounce -- $15 an ounce relative to the September quarter, and really, this was driven by higher production.Looking at our year-to-date all-in sustaining costs relative to guidance. I'd say there are probably 3 factors that have kept the unit costs high relative to our full year guidance. The first is the average gold price that we have received. Our guidance was based on a gold price of AUD 1,750 per ounce assumption. And the higher price delivered is -- the higher price that we've been receiving, which does of course give us significant financial benefits, it also accounts for about $18 an ounce in our all-in sustaining in the first half. I did flag this last quarter and just wanted to ensure the message was clear and understood.The second area about -- of the elevated costs relates to overall mining volumes, which year-to-date were ahead of plan, and this was due to some one-off opportunistic accelerated mining that was -- occurred in the first quarter. And this equated to approximately $23 an ounce in the first half of the year. Now this is a one-off timing issue. This was something that was done, as I said, in the first quarter. It's not something that's flowing through. And therefore, as the year plays out and the production increases, the unit cost impact of this on our average year-to-date all-in sustaining will wash out, and we don't expect it to have a material impact on our costs.The third item that's impacting, we're seeing some elevated costs in the drill and blast area, and this equates to approximately $30 an ounce. The cost is being driven higher by unexpectedly harder rock being increased in a number of our pits, Gloster, Rosemont, and as a result, we're having to increase the powder factor, which of course increases drilling and explosives cost. Now this has got potential longer-term implications, and as you would expect, we've got a project underway to identify ways to reduce that and reduce the impacts on this area.Now in light of these factors outlined, the company anticipates its full year all-in sustaining to be at the upper end of the current guidance. Our current guidance was $1,125 to $1,195 when normalized for the gold price. As I said before, it's important to note that, that guidance was on the basis of $1,750 per ounce with a higher gold price that's currently contributing an extra $18 an ounce. If gold price continues, we'd expect that. But if you normalize that out, we're anticipating it will come in, in the upper end of our guidance, primarily driven by the drilling and blasting costs, as I just mentioned.Now look, turning to other key areas. Rosemont Underground mine continues with over 1,500 meters of development for the quarter. Development ore mined for the quarter was again significantly above expectations at just over 30,000 tonnes. Specifically, work is now underway on the southern escape rise as well as also the first leg of the primary ventilation way air return, and we're expecting that to be completed this quarter. Now completion of these will significantly improve operating conditions and the flexibility underground, and that -- this will allow us to safely ramp up our -- continue to safely ramp up our development rate.We're also seeing an ongoing underground stope definition diamond drilling, which is being completed in [ copper ], which has -- so it's been concentrating on the upper sections of the South and also the Central Zone first areas of production. We're still planning and on track that our first stoping trial's planned towards the back end of the March quarter. So we're quite happy with progress with Rosemont at the moment and look forward to giving you an update at the end of the March quarter.At McPhillamys, the development application, along with the EIS, which was submitted in July of last year, was publicly exhibited for 42 days and closed at the end of October, which I think was just when we had our last call, on the 24th of October. Now this provides an opportunity for public authorities, organizations, regulators and also the general public to make submissions on the project to the Department of Planning, Industry and Environment, the DPIE.Now subsequent to the end of the quarter, all the regulators that were required to review the EIS have provided their submissions. I think all up, there was about 671 or a little bit over. And that all the regulators provided their submissions, and none of them were registered with objections to the project. Now this completes another key stage of the development application process. We're in -- now in the stage of reviewing all the submissions. As I mentioned before, that totaled about 671. And I -- we're certainly encouraged to see very solid support, especially in the local area close to the project with people recognizing the value in both jobs and the economic benefits to the region. Now Regis will work on producing a response to the submissions, and we will then submit that to the DPIE, and we'll do that in due course. It just takes a while, while we assess all of the questions that were raised. And when we've got all of that work completed, it will be submitted.Now the DFS, the definitive feasibility study for the project is also progressing. But as I mentioned before, completion of this is controlled by the need to incorporate any additional requirements that the project may emanate from the development approval process. So for that reason, it will tend to run in parallel. But the bottom line with McPhillamys is it's great to see that it's continuing to progress.Look, I'll turn my comments now to our organic growth options on the exploration front, which are pretty exciting. A total of 41,000 -- just over 41,200 meters were drilled during the quarter. And first off, if you look at the Rosemont Underground, the deep drilling program that we've been talking about for the last half year or so continued with the testing looking for this mineralized quartz dolerite at depth. We've put in 2 more deep diamond holes, are targeting about 750 meters or so below the surface. We did hit the targeted quartz dolerite. The first hole ran 750 meters down, and the second, about 650 meters down, so about 100 meters above the first one. And these holes both hit quartz dolerite. The upper hole intersected about a 9-meter true width of the quartz dolerite, with alterations that we would normally associate with gold mineralization. And we -- there was a narrow vein -- in fact there was visible gold in it. And we had a zone that was assayed at 0.3 meters at effectively 44 -- 43.9 grams per tonne. Now this was, as I mentioned, was about 650 meters down plunge of the planned underground development at the southern shoot. Now just to help out, if you have a look at Figure 4 in the release, you can see where that is sitting. Now this is really exciting. This is what we were looking for. We were looking for evidence of traces of gold at depth below the existing work, and that's exactly what we found. So further work will now be undertaken down plunge of each of the high-grade shoots. And if you look at Figure 4, you can see the areas that we've identified down plunge of all the existing design areas that we'll be targeting through this program. And we're particularly excited about this. This really supports our proposition that Rosemont will continue at depth. So a very pleasing outcome there today.At Garden Well, the underground story continues to get placed together and gain momentum. The high-grade gold shoots that we've identified that measure between 4 and 10 meters in true width across strike about 80 meters to 100 meters high and dip to the east for about 500 meters and open at depth, Figure 6 is a clear one to look at there. Drilling now has been focused on some infill drilling work where we aim to get some increased confidence supporting us for an estimation of the maiden underground resource and reserves. Look, first stage modeling of this area -- in the area that we show in red on the diagram, it's outlined in the zone in Figure 6 has been completed. And now a PFS is expected to start this quarter. So we'll be watching to see what the outcome of that is.We also continue testing at Baneygo, Figure 7, to see those, with some very encouraging results continuing to be found there. Look, I'm not going to [ look out through ] and list them. You can see them on the diagram. But the key here is that we're finding grades, both near the surface, which obviously has implications for potential or possible growth in pit size but also some very significant intercepts at depth. And the style that we're seeing with the swelling out now that we saw pinching and now with swelling is very -- I guess, the [ GAs ] would describe it as reminiscent or similar to what we saw at Rosemont. So there's some particular excitement around how that's starting to shape up at Baneygo at depth as well.We also had some very good results as well at Gloster. I'm not going to go into the detail there. I'm happy to answer any questions if there are any, but you've seen them. It is exciting that we're putting some diamond drill holes there and clearly getting some indication of underground potential there as well.Taking a little bit of a broader step out on greenfield exploration. During the quarter, grassroots work continued with over 2,600 surface soil and lag samples collected across the acquired tenure. And if you have a look at Figure 3, you can see where the focus is, shaded down in the southern area, for now as we continue to build a comprehensive surface geochem database that can be merged with our existing dataset. Work continued across our new leases on several fronts.284 AC and RC holes were drilled, a total of just under 25,000 meters across our high-priority targets. Drilling was undertaken on some of the poorly explored western margin of the Duketon Greenstone Belt as we continue to test the western shear along strike from Rosemont and also on the eastern limb, as you can see areas identified on Figure 3.But it's still very early days in the program, but encouraging assay results are already being seen from a number of areas. The one that we do spend a little bit of time on in the report is The Ranch, at Figure 8. It's located 20 meters -- sorry, 20 kilometers south along strike from Rosemont Gold Mine. Very similar in geology. It's trending north-south. The majority of the drilling is tested in eastern unit with the western unit in the area remains yet to be tested. We consider this area an exciting opportunity for additional shallow gold resources. Significant results include 4 meters at 16.2 from 36 meters down, 12 meters at 1 gram from 24 meters down. There's a number of other results there, all very encouraging. The key point -- some pretty -- some encouraging results here that are shallow and open pittable deposits. Particularly pleasing. So as you can see, some very encouraging results from across our business.Finally, look, it's very pleasing for us to see that we've filled the position of the Chief Operating Officer with Stuart Gula starting back just before Christmas. Stuart's got some great gold experience, most recently at Sihayo Gold in Indonesia on a project. But he's got both gold -- a lot of gold experience. He was with Sino Gold quite some time ago. He also has open cut and underground experience. He was working with Nyrstar in North America where he was overseeing about 8 underground mines in the Mississippi Belt -- Mississippi region there for Nyrstar. So North American international experience. He's also a GM at Rosebery and, as I mentioned, at Sino Gold quite some time ago. So Stuart's hit the ground running. It's great to see -- having said that, he's actually taking a couple of weeks leave that was prearranged. But it's great to have him on board, otherwise, he'd be here on the call.So wrapping up, I'd summarize by saying a very good quarter, on track with production guidance, albeit with an expectation of coming in at the mid- to upper end of the range of our all-in sustaining, once we've taken into account the increased gold price effects. Rosemont Underground is progressing on plan with material production in the latter part of this second half as we commence trial stoping. Real progress continues to be made in the formal approval process for McPhillamys with the submission of the DA and the preparation of the RTS or the reply to submissions. Ongoing building with confidence in the underground potential at Garden Well. Some pretty exciting gold mineralization at depth beneath Rosemont Underground and a range of very encouraging results from exploration across our leases, Baneygo, Gloster and others. And finally, as I mentioned just before, with Stuart onboard, we're really getting -- moving along now with rebuilding the team. I think we've got an excellent group in place now to continue to build on the history of Regis and also on the great opportunities that we've got sitting in front of us. A good business performance for the quarter, a lot of work underway where we continue to make progress and get encouraging results that are setting us up for the future.So look, I'll pull it up there, and I'll hand it over for questions that anybody might have. Thank you.

[Operator]

[Operator Instructions] Your first question comes from the line of Daniel Morgan from UBS.

[Daniel Morgan, Director and Analyst]

My question relates to -- you've called out in the release harder ore, which you're encountering. And it seems like based on your introductory comments on the conference call that you believe this may be a little bit of a longer-term trend that you're going to face. You've also had a couple of unplanned outages on the plants over the last couple of quarters. Just wondering about the processing plants and their sustainable operating rates. If you're encountering harder ore, does this mean that you might need to upgrade the plants? Do they need also upgrades anyway because they are getting older? Just wondering if you can talk about the sustainable processing rates and the CapEx you might require on that going forward.

[Jim Beyer, CEO, MD & Director]

Yes. Okay. I have to -- I'll try -- I think I've got the question. I'll separate it into 2. Do I think that the harder rates -- the additional [ power factors ] requiring -- were required for the harder ores in the pits is going to be continued? Well, in part, the answer to that is yes because as all pits get deeper, the material gets harder. Because this is -- some of this area we haven't been to before, I think we probably -- I didn't quite make sufficient provision in our drilling and blasting costs. That doesn't necessarily mean that we haven't made the provision for it in our mining and milling rates. Sometimes when you get harder rock and it's not blasting, you might overdesign the drill and blast to make sure that you don't get problems with oversight, and then you back off until you get the optimum on the D&B front. And there's still -- basically, that's a little bit of a process that we're running through. We're also -- we are starting to open up other pits. The newer ones, Dogbolter and [ Tooheys ], that, of course, they're up in the oxides and don't have the hard rock. So we're continuing to also feed into the mill the balance of oxides and harder rock.So as I said, the second part of your question is around their implications. We really have -- we've taken into account that harder grinding index, for example, and additional crushing capacity. We've got a mobile crusher you may recall we're putting up across there. I think it's probably about this time last year. And so we have that side covered.I think the mill motor issue that I mentioned, that was just something that was more isolated as much as anything else, and we're looking at -- yes, there were some components in there that looked like they were wearing faster than we were anticipating. And we had changed supplier of them. So we just made some decisions that it was probably going to be quicker and easier for us to change the motor out than to try persist with that. And that particular issue is completely unrelated to the metallurgical characteristics of the rock. So I think at this point, I'm not -- I'm quite comfortable with things as they are. I think on the processing side, anticipating the material that's coming forward is something that we've got covered. I mean you're always going to, every now and again, likely to have some -- a piece of equipment that might behave the way you weren't expecting, but I wouldn't see that as being related to the higher -- the higher ore -- the harder rock in the -- from a drilling advisory perspective.

[Daniel Morgan, Director and Analyst]

So maybe I could drill down more simply. What would you consider the sustainable processing capacity that you have going forward across the mills?

[Jim Beyer, CEO, MD & Director]

Pretty much what we're running at the moment. If we ran with a completely hard rock, it will probably be less -- it would obviously be less than this. But our plans are always to run with a mixture of -- as we bring the hard rock in, we mix it with the oxide. And at the end of the day, I think our guidance that we provide is on an ounce basis, and that's probably the best thing to measure our output by. And we've provided that guidance before at least for the next 3 years or the next 2.5 years. That takes into account the changes that we're anticipating in any -- if there are any in any [ mix of 2 ].

[Operator]

Your next question today comes from the line of Michael Slifirski from Crédit Suisse.

[Michael Slifirski, Managing Director]

Jim, I have a couple of questions, again, really a follow-on to what was just asked about that hard rock. The additional drill and blast costs that you've suggested, does that also capture additional milling cost? I mean is there any higher power consumption through the milling? Or is it -- is that a sort of secondary risk or not something that exists at all?

[Jim Beyer, CEO, MD & Director]

Well, it's all been going through and hasn't been a flow-through on those costs. The reality of it is that there were some elements of the drilling and blasting that we hadn't made sufficient provision for and we haven't identified. So -- but from a milling point of view, we had an understanding, and we've done the work to understand what the impact that would be on our mill throughput rates. So this wasn't an issue of coming into hard rock and going, "Oh, we weren't expecting that at all." It was being expected, but what we hadn't fully, I guess, appreciated was the amount of additional drilling and blasting that had to be done to get the fragmentation right to suit our productivities in the pit.

[Michael Slifirski, Managing Director]

Okay. I understand. So the wording unexpectedly harder rock being encountered is not quite right. The harder rock was known. It was expected. The mill had accounted for it in its budgeting but somehow it's not been recognized in the drill and blast budget?

[Jim Beyer, CEO, MD & Director]

Yes. Okay. Now I understand the question of yourself and Dan and why you're asking that. Yes, it was -- the wording was, yes, it was unexpectedly harder and more challenging from the D&B point of view, but it had already been -- the grindability and crushability was already something that was -- had been factored in. So it was underestimated in one area but adequately estimated in the other.

[Michael Slifirski, Managing Director]

Yes. I get it. Great. Secondly, the Rosemont extension dips, potentially, the -- that's a new model, [ approving ] of that geological model. More broadly, in the district, does that have implications? I think you suggested maybe for Garden Well. But does that make your geos relook at other areas that might follow that same model? Or is it confined to those couple of deposits?

[Jim Beyer, CEO, MD & Director]

No. I think -- well, Garden Well continued to dip. We -- if you have a look at Diagram 6, which is -- that shows the -- the red outline is where we're currently doing a prefeasibility. But where it's dropped down the bottom, left-hand corner there, it says that's open at depth, we've drilled some holes further down, and we see that continuing on as well. So look, we think that any of these open pits that turn out -- turn into undergrounds, up near the top, there's nothing that we're seeing at the moment to suggest that, that doesn't continue on at depth. But Rosemont is really the only one where we've got to drill -- where we have actually drilled quite a deep hole to test that. What we've been doing on all the others is just stepping out maybe 10 or 20 meters or 30 meters on each one. That is certainly something that the geos anticipate is a model that runs across the district. And it -- but it is not the only focus of exploration. The exploration geos are all -- now that we've picked up that much broader attractive ground, the 3,000 [ square K ], we think there's plenty of exciting opportunities for more surface discoveries as well, which is of course what we'd like to find, too. The underground gives us a real sweetener. It's the open pits that give us the baseload, and that's what we're also chasing.

[Michael Slifirski, Managing Director]

Yes. Got it. And then finally, with respect to McPhillamys and all the -- I think you said 600 or 700 submissions. Having perhaps scanned at those, is there any particular amongst those that were less supportive? Was there any particular theme to those that maybe weren't supportive of the project?

[Jim Beyer, CEO, MD & Director]

Look, I think if you're immediately in the district, there is some concern that's been expressed about a perceived impact on the Belubula headwater at the Belubula River. When I say perceived, we sit right up at the very [ head ] or at the very earliest, in the catchment stage of the Belubula, but we represent quite a small fraction of what actually -- if it does rain, what actually runs into the river. And so I think there's a small group that sees that as being something that they are concerned about and we can understand that. We can understand why they're concerned if they don't fully understand the science of it and so our task is to try and work with them to explain it.The departments -- the various departments that we have to interact with, I think they -- the Department of Water and also the Department of Planning and the EPA because they've got a pretty -- they understand the detail of -- and the sophistication of the modeling that's done. But this is as much a process of doing our best to ensure that -- I mean the regulators understand the science, of course, but also doing our best to make sure that the public can understand it. I think in the end, there is likely -- like a lot of things, there's likely to be an element of the community that will always struggle with change in new development.But what we found is that an actual -- as we went to the smallest area, because we were able to have a look at the demographics of -- I think the number was about 40% of the submissions were positive and supported and which is quite unusual, but normally, it's much lower than that. So we saw a lot of people that saw some value in expressing their support for us. And when we actually break the numbers down into local region, it was quite an even balance. So we were pretty pleased with that. Having said that, we still need to make sure that where people don't understand the science and what's -- the detail of what's happening, we've still got quite a bit of work to do to engage with them and help them to understand that.

[Michael Slifirski, Managing Director]

Yes. Makes sense. And then finally, with respect to water from the initial plans, your initial water concepts. But have there been any changes in availability in terms of what you would have assumed you could get versus what might become, I'm not sure what the technical words are, but sort of emergency supply constraints on your plans?

[Jim Beyer, CEO, MD & Director]

No.

[Operator]

Your next question today comes from the line of David Coates from Bell Potter.

[David Coates, Resources Analyst]

Just a couple of quick ones. So I'll just follow on the, hopefully, not the [ depth of the milling theme ]. You run -- it sounds like it's all within expectations, but just a question on the age of the plants and sustaining CapEx going forward. What are you guys -- are you guys seeing that maintained at a sort of steady rate? Or are you seeing that -- expecting that to increase over the next year or 2? That's the first question.

[Jim Beyer, CEO, MD & Director]

Yes. So sustaining CapEx on the plant is, at this stage, not anticipated to be anything remarkably different from recent history. If the concern is that we blow -- we have problems with a motor in the mill is a sign that the plant's going to fall apart, I think there's an overinterpretation of what's happened. The new motor just needed to be replaced. Periodically, these things occur. I think the -- it's -- I'm just trying to remember which quarter it was, but it wasn't the prior, it wasn't September, it was the one before that, we had a problem with the mill shell and we had to replace the bolts because for quite some time, they've been -- the way shells are put together, it hadn't been put together or it was -- hadn't been put together properly, it was probably related to the initial install. And we had to stop and pull it apart and regrind it, and we haven't seen any problems with it since then. We don't have anything else like that around the plant. That was a one-off. And we just sort of decided to bite the bullet and fix it before it became something more significant. They're the only a-- I think, coincidentally, they're [ probably back ] as a sign of metal. We don't -- we didn't see them related and don't see it as being the beginning of any trend that we need to be worried about.

[David Coates, Resources Analyst]

Great. And then in relation to other costs, you've been through the drivers, the royalties, drill and blast and the mining volumes. I mean, essentially, we're certainly seeing general input cost inflation across the sector. I know it's sort of like, I guess, external factors coming through, I guess, any more than they already have. What's the -- how are you sort of seeing the input cost inflation situation for you, guys?

[Jim Beyer, CEO, MD & Director]

Yes. Look, I think the fact that if you back out those 3 specific things, we're virtually spot on our guidance. So if things sort of, on the operating front, are kind of running where we were anticipated, which means there isn't anything that's come out of the -- come out of left field in increasing our costs that we weren't anticipating. Having said that, I think there's -- on the later front, particularly in some of the specialized areas, it's probably an availability. There's a bit of tightness in availability that we're just keeping a close eye on. And we're always reviewing to make sure that we're competitive there. But it's not something that, at this stage, is causing any cause of -- any cause for concern on our guidance than what we've provided for.

[David Coates, Resources Analyst]

Okay. And just finally, one other quick one. The scoping study on Garden Well, if that should be nearing completion. Are you guys going to release that to the market? Or will we be waiting for the PFS?

[Jim Beyer, CEO, MD & Director]

Look, we'll wait to see. We've only just started that, coming out of Christmas and all that sort of thing. So we'll -- the plan is to get started on this quarter. Once we have a look and see what the results are like and how it's shaping up, I mean we've told people that it's there. So we want to -- and we are hopeful. We're certainly hopeful that it's something that we can add to the portfolio. We wouldn't be spending money on it -- continuing to spend money on it if we didn't think it had some potential to get legs. But when we've got to a position of a reasonable level of confidence, we'll be letting the market know. We won't be sitting on it and keeping it a secret.

[Operator]

[Operator Instructions] Our next question comes from the line of Al Harvey from JPMorgan.

[Alistair Harvey, Research Analyst]

I'm just wondering if you could sort of let us know sort of the next steps in the process for permitting at McPhillamys and sort of your anticipated deadline for completion of the DFS.

[Jim Beyer, CEO, MD & Director]

Right. Okay. So the next steps at McPhillamys, we're currently in the process of pulling together what is formally called the reply to submission. So the number of around 671 submissions, we -- our team -- the first thing that they have to do with that is review them all, and we basically have to reply to all of them. Now some of those submissions are comments rather than a query. A comment might be, "I think, it's great. It's going to bring more business and jobs to the community. That's a great thing." That's a comment. And there'll be some that are positive and some that are negative. You don't really need to answer that because it's not a question.Others might say, "What are the implications of dust where I live?" And the report was -- I can't remember how many thousand pages now, but -- and our response might be, "Well, it's a good question. If you go to Page 6,422, Paragraph 5, it talks about the implications." Because it's a large document, people -- we help people find out where it is. It might be that the department -- one of the departments might say, "Look, we'd like a little bit more information about how you plan to manage the water flows around your containment ponds because we didn't think there was enough info." And we'll look at that and say, "Right. Well, no problem." Either we'll point to where it is in the report or we might have to go and do -- prepare a -- check the engineering and provide them with the detail that they're seeking. Now at the moment, I think that the work is finished on categorizing it. And I think they have worked out is that overall there's about 150 individual questions. Some of those can be grouped. There might be 20 people that ask the same question. For example, there's about 150 questions that need responding.So we've looked at that. It's going to take some time to pull that together but -- by the time you go and answer those, and some of them require a little -- as I said, maybe a little bit more work, a little bit of -- the department might say, "Look, we understand the concept and the design that you put forward for the tailings dam, but we'd like to get a little -- can you provide us with a little bit more confidence about factor A, B, C?" It might be that we've got to go and get the engineers or the consultants to prepare a supplementary report, and that will all get bundled up and put together. How long that takes, at the moment, we're assessing that. I think it's going to be quite a bit of time. If you have a look on the website, the Department of -- the DPIE said we'd like a response by the 28th of February. I think they said. They have -- that the -- that's consistent. They have these sort of statutory times that they need to provide. We anticipate it's going to be quite -- it will take us quite a bit longer than that to pull together a good quality response. It could be later on, certainly, later midyear, something like that. Don't hold me to that because we're still trying to figure out -- well not trying to figure out, but we're still working our way through how long that will take. But that's maybe a gut feel.Once that's submitted, then the DPIE considers all of the responses. The Department of Planning, they then say, "Yes, this is a thing that we think is supported." Or otherwise, if it's supported, then it goes to the IPC, the Independent Planning Commission. They assess it, and they obviously go through their process, which also involves a public hearing where people get an opportunity to follow up with anything that they have. How long is that going to take? There's no statutory time lines for any of that. I'd really like to think that we get something stamped by this time next year. We were always told that realistically, if you -- the average is 500 days, which is 18 months, which would put us probably more likely, I don't know, heading in towards -- how do I describe it, the latter part of the first half of next year. But I really -- I don't expect to get it -- I'd be very extraordinarily and ecstatically surprised if we got approvals and we got this process done before Christmas this year or before the end of this year. I'm anticipating it to be sometime in the first half of next year. Sorry, was there another question? Or was that it?

[Alistair Harvey, Research Analyst]

I guess, no. That's all good. I think that's pretty much clear.

[Jim Beyer, CEO, MD & Director]

Sorry, yes, you asked about the DFS.

[Alistair Harvey, Research Analyst]

Yes.

[Jim Beyer, CEO, MD & Director]

Yes. So the DFS, we're working on that now, and we're working on all the optimizations, but we can't finalize that until we at least get some decent kind of handle on is there anything that we're going to have to materially change or modify as a result of the planning process. Somebody might -- one of the departments might come back and say, "This is all really great, but we want you to paint everything orange." And we find out that orange paint costs us 10x more than normal paint, then we're going to have to factor that into the DFS. Now, of course, it's a rather extraordinary example, but it's just illustrative. They -- we've done a huge amount of additional expansion scope of the project as we went from the PFS to the stage that we're at now because we've had a lot more engagement with all the various government departments and regulators while we've been pulling together the EIS. And that's one of the reasons why we've indicated that the capital cost for the project, which is at the PFS stage, was $215 million, plus or minus 25%, that we think that with what we already know and what we've modified between that PFS and the reality of what the regulators sort of more expects, is that the bottom range of our new capital is likely to be the upper -- the top end of the old range, so that would be, say $215 million, plus or minus 25%. The plus 25% is likely to be the lower -- low end of our new range because of all the things we already know that we have to do. We're just trying to be a little bit cautious about charging out with the updated DFS without knowing exactly things that we might have to take into account, for example, in the first couple of years on [ sand ], and therefore, we have to modify our schedules in our mining plant. And that's why we -- it runs in parallel with the approval process.

[Operator]

[Operator Instructions] Jim, it seems we have no further questions on the line today. Please go ahead.

[Jim Beyer, CEO, MD & Director]

Okay. Thanks very much, everybody, for joining us, and we look forward to keeping you up-to-date with how things progress. Have a good day.

[Operator]

Ladies and gentlemen, that does conclude today's conference call. We thank you all for your participation. You may now disconnect.