Caledonia Mining - Q2 2024
August 12, 2024
Transcript
Mark Learmonth (CEO)
Good afternoon or good morning, depending on where you are. Thank you for joining this presentation to review Caledonia's results for the second quarter of 2024. I'm Mark Learmonth, Caledonia's Chief Executive. I'm joined by Chester Goodburn, our CFO, and also Victor Gapare, who is another executive director. James should have joined us, but he's traveling somewhere in Zimbabwe, and I suspect he's got communication difficulties. Okay, shall we. We've got a relatively short presentation to run through, so Chester's driving it. Chester, could you move through the. Right, so overview. It was an excellent quarter. Production up, the gold price up, costs down, and that all flowed through, as you'll see, into a very strong financial, very strong financial performance.
In terms of production, we produced just under 21,000 ounces of gold in the quarter. Comfortably up from the 17,500 that we achieved in the second quarter of 2023. So a very substantial improvement there. Also, during the quarter, although not a focus for this presentation, because we've already discussed it at some length, we published a Preliminary Economic Assessment of the Bilboes Sulphide Project, which reiterated the fact that it's got a very strong underlying economics. It'll produce 1.5 million ounces over a 10-year mine life, all-in sustaining cost of below $1,000 an ounce, so highly cash generative.
In addition, we also published a revised Mineral and Resource Estimate for Blanket Mine, which effectively doubled our resource base, our reserves, by it doubled our reserves. And means that now we have a life of mine based on reserves at Blanket out beyond 10 years, which is a very healthy position for a mine of our nature. Based on our internal life of mine plan, which includes some inferred resource as well, we've got a life of mine plan now out to 2041, which, you know, significantly underpins the business going forwards. It's also worth noting that the increase in gold ounces was a result of not just more tons, but also higher grade, which is very healthy.
Just as a matter of administration, some of you may have, if you've seen it in the, in the MD&A and the, the, the news release that we published this morning. For administrative purposes, we're rescheduling the declaration and hence the payment of our quarterly dividends to bring it in line with the, the quarterly board processes to approve and, review the, the quarterly financials. It's just purely administration. There's nothing else, nothing else to it apart from that. Okay, so just turning to the results summary. Stable in terms of safety. Clearly, there's always more that we can do, and this continues to be an area of management focus. But it's, it's pretty much the same as it has been in previous quarters. As I mentioned, production up, quite significantly.
Clearly, as we all know, the gold price is higher, so we realized exactly $2,300 an ounce, substantially higher than the $1,949 in the comparative quarter. All of that flowed through to a significant increase in revenue, just over $50 million for the quarter. As you'll see in a moment, lower on-mine costs means that gross profit more than doubled, up from approximately $11 million to nearly $23 million in the quarter. That flowed through to a significant increase in net profit attributable to shareholders, which was nearly $8.4 million for the quarter, compared to a loss of $500,000 in the corresponding quarter. Obviously, that then flows through to an increase in earnings per share.
I think we'll move forward now and, I'll ask Chester. Oh, sorry, James was gonna join us. Unfortunately, he has a communications issue. This is a slide that we've used many times. It just shows the long-term development in terms of tons milled, grade, ounces produced, and recovery. And during the quarter, pretty much everything went as or slightly better than planned in terms of better tons, better grade, and the recovery remains very efficient at sort of 93%-93.5%, and that then flows through into better ounces. So frankly, there's nothing funny to explain here. It was a good solid quarter, and you know, hopefully, we can see a repetition of that in future quarters. Shall we move on?
Okay, I'll ask Chester to run through some of the financials in a bit more detail. Chester, if you could do that for us, please.
Chester Goodburn (CFO)
Yeah. Thank you, Mark. A very, very good quarter, and I'm pleased to share these results with our shareholders. Our revenues were up 35.4%, that's on account of additional ounces, as well as high gold prices that we've received. Royalties are up, that's due to the higher revenues. Royalties remain flat at 5% of revenues. Production costs, in absolute terms, that is down, on a consolidated basis, and our on-mine cost at Blanket, it's reduced to $906 from $915 per ounce in the previous quarter. Depreciation has increased due to higher fixed asset cost base, and it was good to see our gross profits increasing by 110%. That's $12 million up from the comparable quarter.
Other costs are down by $1.6 million due to lower foreign exchange losses. It was good to see that the volatile RTGS was replaced on 5 April of this year by the ZiG. That has so far been more stable. And should that continue, we should also see lower foreign exchange losses. Our net finance cost is lower. That's due to additional cash in the group. That's reduced the interest charge, and our tax expense is normalized to in between 30%-33% of our effective tax rate. That's due to higher profits and less proportion of non-deductible expenditures. It was also good to see our EPS up to $0.43 and Adjusted EPS of $0.51 for the quarter. That's all produced in the three-month space.
Looking at our production cost per ounce, that's come down significantly on an all-in cost basis due to the Bilboes Oxides cost has come down. That's reduced our all-in cost by 13.7%. Power and labor is up. Power, mostly due to consumption and higher maximum demand charges. We're seeing higher maximum demand charges due to exceeding some of our limits on the electricity use in certain times of the day, and we are working on that. We've got some power factor correction equipment that's in the budget that should help with that, and we're also looking to create some efficiencies when it comes to labor overtime and the power consumption. I was quite pleased to see the consumables coming down by 3%.
This is a time where you see your consumables increasing, and you see a lot of inflationary pressures across the globe, but at Blanket we've managed to curb that and actually reduce our consumable costs due to good procurement practices. On our all-in sustaining costs, that's come down mostly due to the on-mine costs coming down, and what you'll see in that other costs would be the royalties, and that's due to higher revenues that we've generated over the quarter. We maintained production guidance at $870-$970 per ounce for all mine costs, and we also maintain our all-in sustaining cost guidance between $1,370 and $1,470 per ounce.
It's good to see our costs being in check while we are producing more ounces, and also at these record gold prices. Administrative expenses are approximately $3 million down. That's due to $3 million of expenditures that we expended last year to complete the finalization and acquisition of the Bilboes Sulphide deal. That added 3 million ounces of resource and reserves to our group, and it's good to see us going en route to becoming a multi-asset gold producer. Employee costs has also increased, and that is, that's by about $500,000 that previously was accounted for as oxides operating expenditures. We've moved those employees and those resources over to the feasibility study, and we've also reallocated some of those resources to the Motapa drilling.
Good to see spending some costs on furthering our business and our strategy of becoming a multi-asset gold producer. Now, with our revenues being up, costs being down, and in check, it's good to see our cash generation increasing. We've generated just over $20 million in the quarter, and that's more than we've generated in any quarter over the last two years, so really good cash generation. Overall, on a net basis, we've added $12.8 million worth of cash during the last three months, so I'm really pleased with these results and the cash generation that comes with that. Over to you, Mark.
Mark Learmonth (CEO)
Okay, well, look, I mean, this presentation focuses on the financial results for the quarter. We've discussed in separate calls the work on the PEA at Bilboes and also the upgrade in the reserves and resources. So really, these results are very clean, very good, quite easy to talk to. In terms of our immediate strategic focus, we are continuing to run Blanket to achieve our targeted production range of between 74,000 and 78,000 ounces for the year, and then thereafter, similar levels from 2025 onwards.
Also, making good progress on completing the feasibility study in respect of the sulfide project, and in parallel with that, we're refining our own internal work that we've done on funding structures for that asset. Initially, we're focusing on refining our understanding of the debt capacity of the project, but given the fact that it is so high margin and has such a quick payback, we are confident that a high proportion of the overall funding requirement will be capable of being funded by debt. And then, in parallel, we're also continuing with our initial exploration at Motapa.
That exploration work started in the second quarter, right at the beginning of the second quarter, will be finished towards the end of the third quarter, and then subject to the capacity of the assay labs, we'd expect to get those results out before the end of the year. It is fair to say that the work to prove out Motapa is, you know, about five years behind Bilboes in terms of of exploration. So it will take a considerable period of time to do sufficient exploration at at Motapa to prove up a significant resource. But so far it's all looking very good. So with that, it's a very it's a brief presentation, but I think it's on point. We'll open it up to questions. Typically, we prefer questions, you know, spoken.
If they're typed, the risk with a typed question is that, you know, we don't really understand the nuance, and we may answer a slightly different question from that which you actually wanted answering. So please, if you are able, if you could, just open the line and ask questions verbally.
Operator (participant)
I'm gonna start unmuting people.
Mark Learmonth (CEO)
I do see one typed Q&A. Let me just go to that one.
Operator (participant)
Tatira, you're unmuted.
Speaker 4
All right. Thank you. Can you hear me?
Operator (participant)
Yes.
Mark Learmonth (CEO)
Uh, yeah.
Speaker 4
Okay. I've been noticing over the past few months that there's been an increase in, I think, the US asset manager, BlackRock's, shareholding in the company, and I wanted to find out if your company is going to continue with selling a, you know, a significant stake of the company to BlackRock, and what their increased stake in Caledonia will mean in the long term. Thank you.
Mark Learmonth (CEO)
Okay. Well, just to clarify something about that. We're not a BlackRock. BlackRock's participation in Caledonia is as a manager of a passive fund, so it's an index tracker investor. So we're in something called the Russell 3000 Index in the United States, and that means BlackRock run a fund which tracks that index, okay? And so to make sure that the fund mirrors the performance of the index, they have to buy shares in the underlying companies. And because there actually aren't that very many gold companies, if any, other than us in the Russell 3000, BlackRock have to buy and sell our shares from time to time, depending on what our weighting is within the overall index. So that's the first thing. They're not active managers, they're purely passive managers.
Typically, you'll see that as our market capitalization goes up, they'll have to buy more shares to increase the weighting of Caledonia in the overall portfolio. Conversely, when our market cap falls, they'll typically sell shares. They're only buying and selling shares in the market. There's no way... They're not having shares issued to them. So I hope that answers the question. Does that answer the question?
Speaker 4
Yes. Yes, thank you.
Mark Learmonth (CEO)
Okay. So I can before we move on, I can see a typed question. Modest increase in planned CapEx spend for 2024. What led to the $700 million upward revision in planned CapEx for the tailings facility Phase 1B, against the expected $4.7 billion in Q1 2024? Chester, are you able to
Chester Goodburn (CFO)
Yes, but-
Mark Learmonth (CEO)
Quite a detail, quite a detailed question. Are you able to answer that? I hope so.
Chester Goodburn (CFO)
Yes. Yes, I am. It's a compressor that we're planning to implement at Blanket, just to improve the pneumatics underground.
Mark Learmonth (CEO)
Okay. Now, the second part of this question relates to water at Blanket. For those people who aren't in Zimbabwe, Zimbabwe is suffering from a very poor, very bad drought situation. The rainy season normally is sort of November to February, and the last rainy season was extremely poor, and so there is a big shortage of water. And the question relates to what the impact of that of that water shortage has been on Blanket. One of the... I'm happy to say that one of the unexpected, but very welcome, side effects of the new tailings facility is that because it's a lined tailings facility, it means that the water that goes into the tailings facility doesn't escape underground.
Which means that we can now recycle much more water from the tailings facility than we could from the old one, which was unlined, and therefore the water used to percolate into the ground. That's the first thing to say. Second thing is that we are, and we have taken measures to reduce our water consumption, but for the time being, water has been released into the Blanket Dam from upstream, and at the moment, we're not seeing, and we don't expect to see over the course of the next, before we get to the next rainy season, any adverse consequences. Clearly, if the upcoming rainy season is as disappointing as the last rainy season, that may cause difficulties. We do have boreholes, which we've, what's the right word?
Sort of, not renovated, but, you know, we've got them, got them going again, and we, we, we could look for other boreholes. But it is a risk, and it is one that we recognize. One further question: How's the production grade profile playing out at Blanket? The grade profile is lower than it has been in previous years. The grade at Blanket is lower than it has been in previous years, but is improving. I don't, I don't see Blanket as getting substantially above 80,000 ounces a year. I'm comfortable giving guidance for Blanket in the range of 75-80. The range, the grade will improve as we, as we move forward. But I think for, to... I can't really give guidance that Blanket will be, you know, producing substantially above 80,000 ounces a year.
I can see a... Sorry, has someone got a hand up, Camilla?
Operator (participant)
There are a few people with their hands up. So, Ian Joscelyne, you're unmuted.
Speaker 5
Foreign exchange, which you briefly mentioned, and the role it plays in Adjusted EPS. Obviously, Adjusted EPS is something that says, "This is—these are the earnings you would normally expect," and, the difference between the Adjusted earnings and the IFRS earnings are one-off, plusses or minuses that won't reoccur. But a comment you made as part of your presentation implied that, because of the volatility of the currency, you tend to systematically lose money on FX, and I just wondered how you can relate that to basically stripping it out when you put your reports-
Mark Learmonth (CEO)
Okay, that's a very fair question. Historically, we have actually incurred... Let's be clear, the Zimbabwe currency, formerly the RTGS, now the ZiG, has been very volatile. Historically, we have actually incurred very substantial foreign exchange gains. There was one quarter, I think, Chester, it was, was it like $tens of millions of dollars-
When the deferred tax liability devalued. And so as the, as the tax, as the dollar tax liability in dollar terms became much smaller, we had a, we had a gain. And so initially we started, and we thought that was, whilst it would've been great fun to keep that in the, in the Adjusted EPS calculation, it was kind of misleading. So initially we went into Adjusted EPS to try and remove things like that which were outside management's control. You're correct that in the last 2 quarters, particularly the first quarter of this year, and to a lesser extent, the second quarter of this year, we have reversed out substantial foreign exchange losses. So in the first quarter, the foreign exchange loss was $4 million. In this quarter, the foreign exchange loss was $2 million.
And let's be clear, that $2 million loss in the second quarter was incurred in the first five trading days of the year, because the RTGS was discontinued on the fifth of April. So that $2 million was incurred in the first five days of the year. Since then, with the introduction of the ZiG, the official exchange rate has been very stable, and if it continues on this basis, the incidence of foreign exchange gains and losses will become, well, if I say immaterial, I'm, I don't mean like in an accounting way. It will become not such a—it'll become a much, much less noticeable factor. Okay?
But it is, it is clearly disclosed every quarter, and there is a full reconciliation in, I think, note 10.2. Is that correct, Chester, 10.2?
Speaker 5
10, yeah. The end year note.
Mark Learmonth (CEO)
Yeah, in the end year note, you'll see a full reconciliation between IFRS, EPS and the Adjusted EPS. So I hope that— Does that answer your question adequately?
Speaker 5
I was just wondering—I mean, it sounds, I mean, clearly you've got different elements on your balance sheet that will be affected in different ways, as you pointed out with your deferred tax. I guess it's all about whether the government in Zimbabwe intends to try to run a firm money policy or whether it will go back to what it historically has done, is obviously devalue the currency. And this is just an opinion I'm asking of you: Do you think the government in Zimbabwe is less likely to devalue the currency to nothing, as it has done in the past? Is it, has it turned over a new leaf with the ZiG or-
Mark Learmonth (CEO)
No, let me answer that. I mean, the elements of the balance sheet that give rise to foreign exchange losses are the RTGS receivables, which is the relatively small proportion of our revenues for which we sell in local currency, and where we receive the cash sort of a week or so after the date of the transaction. Then the other component is the refund of VAT. So it's both of those two things that drive foreign exchange losses. All I can repeat to you is the conversations I had with the Deputy Minister of Finance, with the new incoming governor of the Reserve Bank.
The governor of the Reserve Bank changed at the end of March, and with the permanent representative of the IMF in Harare, all of, all three of whom were very confident that, you know, the Zimbabwean, having broken the RTGS, there is a clear determination not to make the same mistake with the new currency. But that's all I can repeat. You know, I can't give a view as to whether they're gonna stand behind that or not.
Speaker 5
No, no, I understand.
Mark Learmonth (CEO)
But, uh-
Speaker 5
I understand. Just a view of what you've been told.
Mark Learmonth (CEO)
But that doesn't... Don't forget, nobody, the collapsing of the currency doesn't help anybody. Doesn't help us, and it, the government ends up chasing its tail as well. So, it's in everybody's interests to maintain a stable currency, and the government and the various, and the governor of the Reserve Bank seem absolutely determined to maintain that. That's all I can say.
Speaker 5
Do you think the timing of those VAT refunds was timed to coincide with the collapse of the currency?
Mark Learmonth (CEO)
I don't think so, no. No, we've not seen any blowout. We haven't seen any sort of untoward lengthening of credit. No, no. No, we haven't seen that.
Speaker 5
You don't see it in the timing either. Our timing of our VAT receivables are between 60 and 120 days, and they're very during those days, you know, throughout, and it's been doing so for the last couple of years. So it's been very constant in terms of how regularly we receive those VAT refunds.
Mark Learmonth (CEO)
But the bigger one, the one that's got more volume, would be the payment of the RTGS component of our revenues, and that's much shorter. I would hate people to think it's 120 days for that, Chester. That's much shorter, isn't it?
Chester Goodburn (CFO)
Yeah, for the bullion receivable, it hovers between 14-7 days that we receive it from delivery at Fidelity. And that's just for the 25% portion of our, our gold sales.
Speaker 5
Okay, and, and that portion you have to sell, that's a standard requirement for you to do, is it?
Mark Learmonth (CEO)
Yeah, we have to sell 25% to government. The balance, the 75%, the remainder, we export ourselves, and we sell that offshore for dollars.
Speaker 5
Got you. Okay, that's been very helpful.
Mark Learmonth (CEO)
That actually is a relatively recent development. The ability to export our gold is only something we started doing in April 2023, so we've been doing that for just over a year now, and that works extremely well. We'll deliver a bar of gold or several bars of gold into Dubai on a day, say, a Monday morning, and we get sort of 90%-95% of the revenues that day, and the balance two days later. It works very nicely. Thank you.
Speaker 5
That's good. That's been very helpful. Thank you.
Mark Learmonth (CEO)
Okay. I see a question from Tatira Zwinoira?
Operator (participant)
There's Nick Billings. I'm just unmuting Nick.
Speaker 6
Hi, Mark.
Mark Learmonth (CEO)
Hi, Nick.
Speaker 6
Okay, just, there was a follow-up question to that earlier question by Ian. It's not really a question, but it's an observation that, obviously, your suppliers are skeptical about the future of the ZiG, and, I see that black market ZiGs are now trading between 20 and 22. Does this... Is this an early indicator of a robust parallel market starting to develop?
Mark Learmonth (CEO)
Victor, do you wanna talk about that? I mean, I would say that of, clearly, our visibility of, of an illegal foreign exchange market, Nick, is, by definition, zero. I would just say that. But Nick, sorry, Victor, are you able to help with Nick's question?
Victor Gapare (Executive Director)
Yeah. Thank you, Mark. Nick, I mean, basically, let's just focus on what we as Caledonia do. Number one, we get the ZiG from the Zimbabwe government for 25% of our gold production or our sales. So basically, what we do with that ZiG is we match the bulk of it with the payments we have to make to government, because government has set in place payments to it, which are paid in ZiG. So basically, that you are matching in terms of the exchange rate. The balance, which is a very small amount, we actually buy local products. So in terms of having visibility, what's happening on the parallel market, we don't really feel it that much.
We don't, we don't see it that much at this stage, other than, maybe when we talk about the exchange losses, when the ZiG officially devalues or something like that. So I would say we don't have visibility on that. We couldn't comment on that.
Mark Learmonth (CEO)
But Nick, sorry, Victor, could you just talk about the measures the government took to put liquidity into the market recently?
Victor Gapare (Executive Director)
Yeah, okay. When there was a bit of pressure on the market about, I think it's about two or so weeks ago, we actually did see the government releasing about $50 million into the market, right? Because what they've basically said is, the ZiG is backed by gold and some, foreign currency. So all they did is they converted the gold, which they are keeping, which is the gold and currency which they have. The gold, they get it out of 50% of the royalties we pay. We pay in, in, in physical gold, and also the other producers give them money so they can have reserves.
So what they're doing is they're trying to manage it in the sense that if they think the ZiG is, or the market is under pressure, they're actually releasing money, through the Reserve Bank onto the market. So you see the currency, the rate coming down, actually.
Mark Learmonth (CEO)
So, I mean, Nick, I'm not an economist by any means, but if you have a currency which is backed by something, gold or US dollars, you should, in theory, when people wanna sell your currency, you should, in theory, be able to take that, those ZiGs off those people who want to get rid of those ZiGs and give them the asset backing. Give them whatever it is, the gold or the dollars behind it, until you get to such a point that the money, the supply of the ZiG is so restricted, that the ZiG exchange rate has to strengthen, and that's the theory. Now, I don't—I'm not an economist, and I'm certainly not a central banker, so you've kind of exhausted my understanding of how currencies work.
But, I think what we saw in the last couple of weeks, where in recognition of the movement in the parallel market, government did release dollars. I think it kind of suggests that they really are running this currency as an asset-backed currency.
Speaker 6
Okay, excellent. One or two other little questions, if I may.
You had a rockfall in Eroica. Is there a read-through into a broader picture of what's happening on the mine, or is this an isolated incident?
Mark Learmonth (CEO)
No, it's an isolated incident. It did have an adverse effect on production in July, as you'll have seen from the MD&A. Production in July was about 6,000 ounces. We've now got all the crews back to other areas, and they're now working in productive phases. And the area that has been affected by the fall of ground will be recovered. So it's not symptomatic or systemic of any broader problem, Nick.
Speaker 6
Okay, and then last question is that you've obviously got quite a bit of CapEx lined up for H2. That's still going to amount to $31 million-$32 million by year-end?
Mark Learmonth (CEO)
Yep.
Speaker 6
Okay, excellent.
Mark Learmonth (CEO)
Great.
Speaker 6
Thank you.
Mark Learmonth (CEO)
I mean, so to be clear, what we did is we, having seen a disappointing production towards the end of last year and a slow start to the beginning of this year, the first 6 weeks of this year, we put the brakes on CapEx, because, you know, we can't. We've, we've seen this movie before, where production promises an increase that will get back on track in terms of production, and in the meantime, could we, could we please carry on spending on the, on the CapEx plans? And having been bitten by that before, this year, we, we said, "Well, hold on. The production's not there. The cash isn't flowing as it should be, therefore, we will defer CapEx." Now, as clearly our cash generation has improved, that planned CapEx will be released in the second half of the year.
Speaker 6
Sorry, one more question, Mark. There's a commentary about additional studies to enhance this solar power panel project, the capacity there, at the same time you're talking of selling. Is this an adjunct too, or will the study disappear once you've sold?
Mark Learmonth (CEO)
No, it's part and parcel, part and parcel of the same thing.
Speaker 6
All right.
Mark Learmonth (CEO)
So the idea is that we will—well, not the idea, it's happening—that we will sell the solar plant in terms and we'll have a long-term power purchase agreement on the same terms as we currently enjoy, and in addition, the new owner will construct a second phase.
Speaker 6
Okay, excellent.
Mark Learmonth (CEO)
See, the point is, we're selling, we're selling it to someone whose core business is building and developing and running solar plants. It's not our core business. We don't need to own this.
Speaker 6
Right. Excellent. Thank you very much, Mark.
Mark Learmonth (CEO)
Okay.
Operator (participant)
There is another question from Albright.
Mark Learmonth (CEO)
Is there another question?
Operator (participant)
Yes, there is. Albright, I'm just trying to unmute. Oh, but you're on mute.
Mark Learmonth (CEO)
Is someone asking me a question? Because I can't understand what I'm hearing properly.
Operator (participant)
Well, I think it might just be-
Speaker 7
Question here. Huh? Because of production.
Mark Learmonth (CEO)
No, sorry. I really can't understand.
Speaker 7
Like, I had a meeting here, the production now.
Mark Learmonth (CEO)
Sorry, Victor, can you help on this? Because I really can't hear this properly.
Operator (participant)
Albright is now muted. I think-
Victor Gapare (Executive Director)
Yeah, but I think they're having a background conversation among themselves.
Mark Learmonth (CEO)
Yeah. Okay. Well, when they've decided, when they've stopped the background conversation, and they've decided the question, we'll try and deal with it. But,
Victor Gapare (Executive Director)
Yeah
Mark Learmonth (CEO)
... I couldn't hear that properly. Any further, any further questions coming? I can see some-
Operator (participant)
There are some written questions. There, there are a few written questions.
Mark Learmonth (CEO)
Okay, hold on. Let me see,
Speaker 6
We've got a question here from Albert. Albert says-
Mark Learmonth (CEO)
Just a minute, I'm working through them. I'm just working through them.
Operator (participant)
There's one from Justin Baring, that's, that's the next one.
Mark Learmonth (CEO)
Can you comment on the proposed changes to the FX regime and how,"... I think, I think I've dealt with that. The expectation is that for Bilboes, Bilboes will operate on a 100% US dollar basis anyway. So I think, I think, I think we've dealt with that. I hope, I hope, Justin, we, we dealt with that question. I think we've dealt with another question about the July production issue. Again, I think, I think we've dealt with that. It was a fall of ground, affected Eroica, which is a high-grade area of the mine. It affected us in July. It's been sorted out, and the mine, in the last week, has been running within 1% or so of plan. So it doesn't. It's not a long-term impact.
A question on inflation. I don't know what the monthly inflation rate has been recently. Victor, do you know what the monthly inflation rate is?
Victor Gapare (Executive Director)
Yeah. Actually, in the last few months, when the Reserve Bank has released something, or rather the Zimbabwe Statistical Office has released something, it was actually very minute because the ZiG has been very stable in the last few months since they introduced it. So I think it was almost like 2% or something like that.
Mark Learmonth (CEO)
Oh, 2% a month?
Victor Gapare (Executive Director)
Much more.
Mark Learmonth (CEO)
2% a month?
Victor Gapare (Executive Director)
Much less than that, Mark.
Mark Learmonth (CEO)
Okay. Okay.
Victor Gapare (Executive Director)
Annualized, yeah.
Mark Learmonth (CEO)
Okay. Annualized, okay.
Victor Gapare (Executive Director)
Yeah.
Mark Learmonth (CEO)
Nice, that's better, that's better than a lot of other places.
Victor Gapare (Executive Director)
Yeah.
Mark Learmonth (CEO)
Any further questions? Camilla, can you see anything?
Operator (participant)
No, I don't think there are any more.
Mark Learmonth (CEO)
Okay, well, look, that was relatively brief, but I think the numbers, the numbers speak for themselves. Thank you for your attendance, and we'll do the same thing again in mid-November after we've released the third quarter results. Thank you all very much for your participation.