MAC Copper Ltd (MTAL) 2024 Q2 法說會逐字稿

Thank you for standing by. This is the conference operator. Welcome to the Metals Acquisition Limited half year accounts conference call and webcast. (Operator Instructions) I would now like to turn the conference over to Mick McMullen, CEO of Metals Acquisition Limited. Please go ahead.

Thank you very much, and thank you, everyone, for joining us in particular in Australia on a very busy results day. I will try not to keep it around for too long. So myself and Morné, our CFO will be doing the talking on this conference call. So Morné, can go forward to the slide there if everyone can read the disclaimer at your leisure. So everyone knows where we've got an asset in Western New South Wales, super high bright EV is about USD1.1 billion today, based on where the share price sits.

And it's a very well established mine, we don't really need to sort of go through the detail of the operations too much today, but we think we've got one of the better copper assets I'm around, as you'll see from the financial results. I think they speak for themselves. So we can go to the next slide, Morné.

Again from a year ago, what did we say we do versus what have we done? We've sort of ticked all the boxes. I just checked, our shares from a year ago were up precisely 0.09%. So not so sure that actually ticking the boxes that matters. But we have delivered on everything we said we would do in the last in the last year and a bit.

Next slide. Thanks. We've put out our formal guidance into the marketplace. Now I would say to people that guidance is based on the information we had at hand actually from a year ago, the end of August last year. And as you will see from our production results and some of the things we're doing, we're getting increasingly more confident in our ability to meet and potentially go a little bit beyond that. So you can see there over the next couple of years, we sort of end up above the 50,000 tons of copper mark.

Again, we have only been able to base that on reserves. We have now inferred material in there. We have Q2 (inaudible) which is predominantly inferred. We are drilling that out right now. We do see that as having very good potential to add a little bit more. And I think some of the productivity improvements and mine design changes that we've been doing with some of these double live stopes that have allowed the site to pull a bit more high-grade copper forward. We are feeling increasingly more confident that we may be able to potentially do a little bit better than that over that medium term.

So the next slide, there please, Morné. Again from the highlights, Morné, I will go through all these in great detail, but a strong quarter for Q2. So again, we're sitting around about mid-point of guidance after the half. Obviously, Q2 was stronger than Q1. So sequentially, we're building through the year. Strong cash balance. We've increased the mine lives, very long mine life now, which I guess was one of the things that we said we'd do at the start of this exercise.

And as I said, guidance is gradually ticking up over the years as we sort of catch up on some of the backlog of development that we inherited as the drilling we are showing towards, we'll see at the back end of this deck. We are seeing significantly more copper units as the mine goes deeper. So we're expanding the ore body. So that's all looking pretty good for our future production.

So next slide, please. Safety look, this is a work in progress. We have seen the TRIFR roll down a bit since the June quarter. And we're a very big part of the community we operate in. We are the largest employer. We're about 80% residential now. We provide a lot of funding into the town by through donations, but also just our economic activity there. And I think that's a key thing for us.

Adding Cobar where our main approval authorities, the Cobar show a council that the people in charge of approving projects for us are the community that we interact with and impact with. So we think that's a great relationship. It does make CSI a little bit unique in well, much of Australia.

So if we can keep going into the next slide there, Morné. I'm going to hand over to Moray for all the financial numbers now. There's a lot of numbers here, but I think the underlying story is very strong, as you will, hopefully pick up as we go through this. Over to you, Morné.

Thanks, Mick. Good evening. Morning, everyone, and I will take you through the next couple of slides.

Slide 9 to 15, which covers the elements of the half year financial results for 2024. And specifically taking note that the presentation should be read in conjunction with the Appendix 4D and the auditor reviewed first half financial statements, which were released in the various markets.

Starting on slide 9, we have obviously the financial results overview there. Also a quick note that we report in US dollars. So all amounts are in U.S. dollars unless otherwise shown. All the great work that Mick has spoken about in terms of the operational side for the half and leading our goals that are reflected in the half-year results, which resulted in some record earnings for the mine under the MAC ownership. We are comparing first half of 2024 to the preceding half of 2023. And you will note all line items are considerably better in comparison, including the net revenue of USD182 million or a AUD272 million for the six months.

This is up some 29% compared to the preceding half off the back of obviously a slightly increasing copper prices and sales volumes for the half. I should note here that we did recognize the revenue and associated cost of sales for the concentrate presales at Glencore, has reported that the quarterlies as we did meet the requirements on the IFRS15 revenue standard. So this has resulted in our sales volumes increasing by about 5,000 tons and an additional revenue of $41 million for the half.

Increased revenue, together with the reduced cost of sales and admin and selling expenses contributed to a very healthy underlying EBITDA of USD91 million or ASD136 million for the half. And more importantly, our underlying EBITDA margin increased significantly to 50% for the half, mainly driven by a 22% increase in sales volumes, which absorbs more of our overall operating fixed costs and lower cost of sales as well, and as I mentioned, there was a 3% increase in the average realized copper price for the six months compared to the preceding six months.

Our statutory net loss of $95 million for the half was heavily impacted by non-cash change in fair value of financial instruments of $109 million, which was mainly driven by the increase in the copper price compared to the preceding half. It should be noted that the volatility around the fair value adjustments will be somewhat reduced going forward with the redemption of the private and public warrants, which accounted for about 36% of that $109 million of fair value adjustments, which was revalued just before the redemption of those warrants.

So overall, record revenue, underlying EBITDA for the assets on the net ownership with a very healthy underlying EBITDA margin of 50%.

Moving on to slide 10, we provide a breakdown of the statutory net loss for the period, selling the impact of the non-cash elements on the earnings with statutory net income from operations of $46 million as shown. The statutory earnings were also impacted by net financing costs of $32 million, with interest expense of $21 million and a realized hedge loss of $5 million for the half, with the remainder made up of non recurring interest cost on the Glencore deferred settlement payments and working capital facility.

I should also point out that as part of the cost of sales number, we reported an underlying corporate costs of about $10 million for the half.

Slide 11, here we show the reconciliation from the net statutory earnings to the record underlying EBITDA of USD19 million or AUD136 million as I said before, if we move from left to right on the graph, we start with the statutory net loss and then adjusted tax, net finance expenses, net change in fair value of financial instruments, depreciation, amortization, and then underlying adjustments relating to one-off items right into the ASX IPO completed early in the year.

In relation to the non-cash fair value adjustments of $109 million, the main underlying driver there. As I said, it's a fair value change in the driven by the copper price, but also the increase in the reserves and therefore, the increase in life of mine as well, which impacted that. And then the impacts of fair value adjustments on the hedges that remain outstanding included there.

As I noted earlier, the big value of fair value volatility has now been removed with the redemption of the private and public warrants as well.

On slide 12, our cash and cash equivalents have materially increased by 174% from $32 million at the previous data state of December 31 to more than $88 million as at June 30, 2024. From the significant cash generation by operations, we ended up with some $70 million of free cash flow from operations for the half. We received some much-needed boost through the ASX IPOs subsequent to 2023 at year end, which raised $325 million Aussie or the equivalent of about USD192 million after cost.

The raising of the equity provided us with some greater flexibility and a stronger balance sheet. And as noted in previous call, we are focused on the simplification of the balance sheet and you'd be utilizing the great cash flow generation from the operation, not only to grow our production materially, but reduce our interest bearing liabilities at the same time.

So since the beginning of the year, you can see there on the graph that we have certainly done just that in terms of we've repaid the deferred consideration to Glencore, which is some $83 million, including the working capital facility of $15 million. We also repaid the revolving facility of $25 million and then some principal repayments on the senior debt of $16 million for the half. We also face significant one-off liabilities in terms -- in the form of stamp duty, which amounted to $23 million for the half as well.

And then from a growth agenda perspective, we have commenced the exploration program. So we show a $3 million spend on exploration, and I've also commenced development of the wind project, which will further support the expansion of the CSI copper mine and drive that 25% uplift in production to 2026 based on the mid-point of guidance. The quarter before the $98 million of cash and a further liquidity of around 46 million, which includes the undrawn $25 million of revolving facility. And we also had some $21 million of unsold concentrate ready for shipment at June 30, 2024.

So overall, we are in a very healthy cash position and continued to build on our strong balance sheet.

Moving on to slide 13, so here we show the interest bearing debt waterfall, so demonstrating the significant deleveraging that we have undertaken since June last year. And as you can see, we repaid some USD160 million and interest bearing liabilities after starting out with around $430 million of interest bearing debt with the acquisition, increasing to December 31 and then a significant reduction of 29% to be at about $320 million at June 30, 2024.

Importantly, with the significant cash generation for the half, we have reduced our net debt position to USD232 million We are looking for further into obviously some big simplification and strengthening our balance sheet with our strong free cash flow and increasing production. Slide 14 as a result of our drive to reduce interest-bearing liabilities, you will note on the slide there that we've produced net gearing ratio over the last six months plus 25% from 41% to 31% as at June 30, 2024.

Furthermore, we provide an update on our debt profile there at the bottom of the slide there. And you will note that more than 80% of the shares or repayments of the asset in this is to be made in 2026 and 2028 respectively. As announced on slide 15, in June, we completed the redemption of some $50 million private and public warrants. It was almost 100% retained through the cash redemption mechanism available to the company. And we issued about 4.7 million shares to redeem some 15 million warrants. Our role in this means that we have 74 million ordinary shares on issue with still some financing warrants outstanding and our fully diluted securities now around that 78 million shares.

Also noted just confirming the net debt position, there are $231 million, taking into account as strong built strong cash flow and repayment of debt over the half.

And with that, Mick, I'll hand it back to you.

Yeah, thanks, Morné. And you look just a couple of points. I'll also touch on there. So if we look at the company from when we closed on buying them on 14 months, ago, we had about nearly USD450 million of interest-bearing liabilities or net debt actually. We sort of halved that in 14 months period. So gearing not just in the half.

But if we look at since we bought this mine, gearing has materially reduced in this business. We have a 50% EBITDA margin. I haven't served through all of our peers. But I think we're probably at the front of the pack there in terms of EBITDA margin from our operation. And look, I think the other point that's on one of those slides there is that it's all well and good to having EBITDA.

But I mean, if you spend it all in CapEx, is not much good to shareholders. We convert about 75% of our EBITDA to free cash flow of the ops. Again, I haven't looked at all of our peers, but I'm pretty sure that's one of the one of the better in the class. So I'm a little bit perplexed with where our share price is today. As I said, on 0.09% up in the last 12 months when we've actually completely not fully delivered but materially delivered the business. Ops are going very well, 50% EBITDA margin.

I'm sure a few of you have got your calculator there already and working out what our trailing EBITDA margin is. And I'm pretty sure you'll find that again. It's pretty low for the peer group. This is a quality, long-life super high-grade, high-margin assets. That's been a fantastic jurisdiction for permitting and operating. And we're getting a little bit frustrated with where the share price sits. And so from a strategy point of view, I think, clearly our number one goal is deleveraging and investing in the mine to -- if we can invest in the mine and grow value for shareholders by doing that.

There's a very strong internal bid for capital right now. So I think the team at site would say, compared to previous times, we are investing in that mine with a view to getting a return out, a strong return. What do we do? We pay down the debt. I think we continue to make the business as strong as we possibly can build as much cash in the business as we can and look at some point, well, I went into the market and bought $300,000 or $400,000 worth of stock a few weeks ago.

But at some point, if we view the business as being a really strong business that is undervalued, well, I guess at some point, one of the things we're buying is our own stock back. So I think we've done the team has done a great job getting this business sorted in the timeframe we just aren't being recognized in the marketplace for that right now, it doesn't look like we'll likely to get into the ASX 300 here in a few weeks' time. So we think that might be a good catalyst for the stock.

The other thing in that period in that 12, 14 months is copper price has gone up $0.40, a pound. So we were a little bit perplexed with the way we're trading. But I guess all I can do right now is just run the business as best as we can. And so that balance sheet out as much as we can and just make the story as simple as possible off the people. So you're not following my view on life on that we might just roll off.

So again, we put three year guidance. And as I said earlier, this is really based on information from literally a year ago. I do think we're feeling increasingly comfortable and confident, I suppose is the best way I could put it. We had been asked given the performance the last quarter and sort of where we're tracking now, whether we'll change guidance for this year, I think we'll stick with where we are. These new double the stopes.

We're under the second one, seems to be working, but that's really a probably a story for when we review our guidance for next year as to what we do with that. And I would say, May, June really shows what this mine can do. We did 4,000 tons of copper in May. We did 5,400 odd tons of copper in June. When this mine, it's well run and things all come together, that's the sort of thing this mine can do. So clearly, June was an exceptional month, but I think repeatable at times. Clearly well above the run rate of what we're telling people for guidance for this year, right?

So we had C1 costs roundabout $1.60, $1.50, $1.60 for those three months. So again, high fixed cost operation. If we get the production out, that's what you're going to get. Again, we announced some drill results after the quarterly calls also roughly what does that all mean on this slide. This ore body has been going well, really for 150 years. But in modern format since 1967. We've sort of doubled the reserve life since we've had it again on data from a year ago.

The drilling that we're doing now in sort of QTS North around where we're mining has extended the strike length of the ore body 20%, 25%. What does that mean? That means we're getting more tons per vertical meter, that means we need to do less development to get our copper tons out or conversely, once we have this ventilation in place, we have a lot more tons available and we have the vendor available to be able to actually produce more.

So we're very excited about what this orebody throws up. We continue to announce drill results at 20 meters at 10% plus or 15 meters, 20 meters at 15%. The market seems to yawn because it's sort of become more or less just a standard, CSA result. I would suggest if we are a stand-alone exploration company, announcing those things with zero infrastructure, the stock had probably doubled on the back of that, again pretty frustrating that people sort of yawn when we put those kind of drill results out when it truly is an amazing mine and those kinds of results underpin our increasing confidence about being able to produce more out of this business than what perhaps we thought we could a year ago.

So with that, we might just go to the closing slide. Again, very strong, strong 50% EBITDA margin, 70% of that's converted to cash flow, material deleveraging of the business over the last half and 12 months as well. So operationally, we think things are going fantastically always more to do. But yeah, I think it's a great asset. And I think compared to our peer group, I think we have many attributes that are towards the top end of the peer group, all barrage, of course.

So with that, I'm going to hand over to shareholders. I'm happy to take questions.

Thank you. We will now begin the question-and-answer session. (Operator Instructions) Daniel Morgan with Barrenjoey.

Hi, Mick and Tim. A similar question just relates to, can you give us a little bit of a sense of how the operations have performed post the end of the quarter, please?

Yes. Look, again, we've sort of left our guidance where it is. So mid-point of the guidance is about 40,500 tons. We feel comfortable with that. I did say on the quarterly call that, just from in the scheduling of the sort of high-grade stopes, Q3 will be slightly weaker than Q2 by up to a few hundred tons of copper. And quite frankly, that's as accurate as we can be. And Q4 looks like, but at least more.

So overall, no real surprises. I think is the short answer. We will say the one thing that we will see a bit more of now is we've done the geotech drilling out for that bend project and site development has commenced out there. So we will start seeing development meters pick up as we get into that project and we are moving ahead with that pretty quickly. And that's probably the only sort of real change, I think you'll see. But no other surprises.

And then, otherwise any latest plans to potentially exploit QTS South upper? When might we hear more on that potential project quite soon?

Quite soon, I think, we sort of have got the final things in from contractors. Look, I will make a decision in the next week or so. But I suspect that there's a better than even chance that perhaps we certainly have the people and the equipment to do it ourselves. And I think, the team at site are getting increasingly more confident as they saw at the bottom of the mine out in their ability to execute that.

But fairly soon, we are doing a drill program to upgrade that to measured and indicated. That has 25 holes going into that would be out of that half two-thirds of the way through that, that will allow me to call it a reserve which will allow me to then add it to guidance. It's not in our guidance right now.

Okay. Thank you for perspectives.

Eric Wilmer, Scotiabank.

Great. Thanks a lot, Mick and team. Appreciating my question. I had a couple of quick financial questions, but maybe just on the vent raise, can you remind us what the spend is there and kind of what the major deliverables we should expect, I guess through the end of the year -- sort of vendors.

Yeah. So there's a slide in the quarterly deck that we put out that's got the detail on it, but it's around about AUD42 million, not US, it's Aussie dollars. And that will be sort of we started that drilling really about six months ago, four months ago, and that will go through to about mid 2026 and more out on how much we've spent a lot of the big $2 million to $3 million, all the other, maybe US that we've spent on it so far. And do you have the number offhand, but it's in that order of things?

Yeah, I think familiar with I guess.

Right. So the deliverables are the sort of components of that project are the geotech drilling to make sure the grounds good out there, which is sort of done. And then there's the development made us to get out there, which would be on a pathway on the first draw out there. We've got to do it across three or four levels. So and then raised boring, we've just actually just closed the tender for the raise boring last Friday. Off the top of my head, I would -- I think we'll be out there raise boring early next year, maybe somewhere in that order.

Okay, great. Thank you. Appreciate that, Tom. And just on the concentrate sales, so obviously there was a big delay because of the rail issues. I assume that's all been sorted out now and any views on Q3 in terms of timing of shipments or what we can expect there?

(multiple speakers)

You can talk about the timing of shipments, but we still do have a favor to concentrate around. We produce a lot of concentrates. It's a good problem to have, I guess. But Morné, do you want to talk about?

Yes. Look, I think in terms of the timing of the shipments we spoke about at the quarterly call, that has started to be sorted out. I think in the call I did indicate that, that will take some time to clear but we're confident by the end of September, we'll have most of that sort of back in time in terms of the sequence with the trains, the shipping and obviously production as well. Maybe a little bit into October still in terms of clearing that sort of backlog.

But like Mike said, we've got a lot of constraint on site, which is a good problem to have at the moment. And as we indicated, we are able to recognize that revenue in any event from those pre-sales. So overall we are still getting the cash in the door from that perspective.

Okay, appreciate that.

Thank you.

And just a quick one on taxes. Any view on what we should model or think about taxes for the rest of this year?

Look, we've recognized an expense today of about $7 million for the half. So I think for the rest of the half, we did have a tax shield with the acquisition of the mine. That tax shield obviously shields you from some of the tax liability on a yearly basis. Not really sure in terms of, yes, in terms of the quantum of that and how far that will extend. I mean, obviously that will depend on the copper price as well. But we might slip into a slight tax payment by the end of this year. But again, and that's if you roll forward sort of the last quarter going forward.

So on balance in terms of where the copper price is now, I wouldn't expect us to be in a taxpaying position at the end of this year.

Okay, fantastic. Appreciate that. I'll hop back in the queue.

Thanks.

(Operator Instructions) Paul Hessey, Moelis.

Thanks. I just wanted to expand a little bit on the forward sales, but just trying to understand, I guess the working capital moves and whether I mean, clearly the sales number in your quarterly is not the sales number that's been reflected in the P&L. So how much of that stockpile has been pulled forward and how much of that is kind of a one-time deal? I'm just trying to understand. I guess on a go-forward basis, the relationship between the sales you reported your quarterly versus the sales that will manifest in the revenue line of your financials?

Yeah, I think and obviously with the anomaly at year end, that sort of had a material difference between production and sales. To start with, we recognized as additional sales and that sort of brought back in line with production matching up with the sales volume there. Going forward, as I just said by in a September, probably middle of October, we'll probably work back through that backlog in terms of the concentration and beyond even keel in terms of having a healthy inventory of concentrate on-site in the warehouse versus port versus what we're shipping out.

So I think by sort of end of September, beginning of October, we'll be in an even keel in terms of having a normal run of inventory, in terms of the copper concentrate running through, in terms of having that balance right. So I think, come December, you will be in full swing, I suppose, in terms of that sort of working capital movement. So I suspect a little bit more to go in terms of end of September, September, but then by December, given that from my perspective, in initially, so with trains and stripping and stuff?

So will we see higher sales because I mean, really those sales and then the sales, right, there's the regular sales and then there's the forward sales. So will we see forward sales as well at the end of September?

Look, we might do. I mean, as you can appreciate, as Mick just outlined, I mean, currently, we've got over 20,000 tons of concentrates still important in the warehouse. And we've obviously spent the cash to actually mine and process the ore to generate the concentrate. So if this store that sort of amount or close to that amount at the end of September. We would want to obviously get the cash in the door and obviously pay for that to get that cost right to that point in time. So I think there might still be at the end of September that sort of imbalance that we need to check in terms of the working capital and making sure we've got the cash balance right as well.

But then going forward by any issues on shipping or trains that should even out, we shouldn't be able -- we should be doing any presales from that perspective going forward.

(multiple speakers) We obviously can't pre-sell stuff that we haven't made. So you're we're trying to do is get revenue in the door from stuff that we've made and pay the cost of making, right. So my gut feel is we'll still have a bit of that stuff sitting in inventory at the end of September, just given what the month of September looks like. So yeah, I'm pretty sure they'll be that I guess in an ideal world, we'd like to end up with at the end of every quarter, carrying about USD10 million of inventory at most.

Obviously, we are sort of fortuitous if we can get it below that, like I think that's sort of about what you need to have sitting in the business. But clearly, at the end of June, we had $58 million worth, not that much. So we presold $37 million of it, which is recognized in the EBITDA line here. We're still at $21 million, which is still too much.

Right now, yes, that was a bit, I think about this week and another one in a couple of weeks. But yes, what we're trying to do is align production like you obviously can't sell stuff, you haven't produced mature material. And so all we're trying to do is catch up that lag of all this stuff. All this value we're sitting around, we want to be dollars.

Not accurate, but I can simply understand that. Just the reconciliation between the, say, the copper sold number, you're quoting the quarterly versus the, I guess the amount of tons you need to have sold to reach the revenue number when it comes to the financials right. So I mean, I'll be frank, I missed the discrepancy, right. So my financials download anything like your real financials because I heard you selling 16 tons, not 21 tons of copper.

Right. So just trying to understand the, I guess, the accordion effect in your inventory there and whether or not we're creating a hole in the future. But clearly you had a big buffer to begin with that. You're trying to work your way through, but I must admit I didn't appropriately factor in those additional forward sales on top of your, I guess, conventional sales for one of the big word.

Yes, but again for the half we produced one on where it was not enough. And enough times going to just under [20], if I'm just a simple [Bush Masco], I look at it on the basis, well, how much did we produce assume we saw a little how much money did we make on that? Then there's a working capital line that goes below that. But that's how I look at the business, right? If you assume that we sell whatever we produce and there will be some sort of working capital adjustment somewhere in there that will work its way through the system as more and I said.

I think we were very back ended in the half. If you want to think about it that way. We produced a lot of the metal that got us. There's a slide in there somewhere, but we produced whatever it would be not quite half 40%, 45% of the total metal in the last two months of the half.

Sure.

Now resolved the way that we will start with you then can't get on trying to get on a boat well, the cutoff date. So hence, while we've done that, for instance, as Morné talked about, that being up between publishing the quarterly and the half, there's been a lot of work go on with in terms of revenue recognition and meeting doesn't meet the standard for revenue recognition and answer this. So in an ideal world, we'd sell every time that we make and would be all about by the end of the quarter. And that's that it's a bit lumpy, right? So it's not happening in that way adjustment nearly.

Thanks.

David Radcliffe with Global Mining Research.

Hi Mick and Morné. My first question is just on, if I come back to one of the thesis for the transaction was obviously the big opportunity for cost out on costs have been sort of moving the right way, but I thought you maybe good to get a bit of an update on what costs you think still come out of the business and if there are you largely sort of we've gone through what we saw as the key opportunities?

I'd say headcount wise, we're there or thereabouts where we need to be. You know, again, Q1, we probably undershot on ADCAN a little bit. So with Q2 we've added on another 20 odd people back into the operation to make sure that we've always got operators. I think that component done. I think commercial contracts where we're part way through. There's still a bit of work to be done there.

And Morné and the team are sort of going through that. Some contracts we can renegotiate at short notice out as you sort of waiting for the contract around scores. And in our database, you have these turnarounds, you sort of get to a point where you can't really calculate the future profit and further profitability. So then you've got to grow production.

And I would say that that's the inflection point where we're at. And we clearly saw that in May and June, We look at the cash flow or EBITDA. We'll see one, whatever metric you want to look at. When we get that mine running at those levels, then that's really your cost out royalties. You'll see one really drops. That's where we are right. We need to get more production out of this thing, both from what we're doing in the rest of the mine, plus some incremental stuff like South Upper, that's the key.

Right. And then I know you're not a big fan of EBITDA, nor am I have actually stuck that metric in there of our EBITDA to cash conversion for you. I think that's the other casing news. We're not having to spend every dollar we make on CapEx.

Okay, thank you. Then I look at I think the numbers just trying to get the -- reconcile the revenue. So it's very helpful to get the sales number of copper tons sold because that sort of helps us square that away. But look in terms of how should we be thinking about this, what a normal inventory level should kind of be? I mean, you produce 100,000 tons, roughly 150,000 tons of coal a year and that sort of spread between, I guess, the mine on the way, but what is sort of a normal kind of level we should be thinking of is it sort of a month's worth of corn or such like? Because I guess we don't get the granularity on where it sits and that's causing a lot of us to, I guess, not be our estimate exactly where inventory is currently up.

I'd like it to be zero. But like I said, I think USD10 million worth of inventories probably. Morné, do you think we can do better than that?

I'm not sure we can.

Yeah, I think on this, it's we do that two times a week at full tilt. So I think if you were around that sort of a shiploads at any one point in the system for a little bit more I think that's probably what you're going to get to one. So that's about 11,000 tons. And that's about it's about 2,500 tons of copper. So yes, it's about that sort of number I would think. So maybe a little bit more than $18 million make, but it's probably not going to be much more than that. But that's sort of, I don't think you can get away with less than that because you need 11,000 tons sitting at Port 34 for the next ship, right? So this can be there or thereabouts.

Brilliant. Thank you. I'll pass it on.

I'm giving you a stretch targeted morning. I think this happened to strike with you that you load a boat on the very last day of the reporting period I don't think it's ever going to be zero is the short answer. There's always going to be some working capital floating around in the business.

This concludes the question-and-answer session. I would like to turn the conference back over to Mick McMullen for any closing remarks. Please go ahead.

Thanks, everyone. I know it's a very busy reporting day here. So if anybody has got any questions, we're happy to take them offline as well. But again, I think the ops are doing very strongly, and we still see a bit of room for improvement here going forward. Clearly, if we can get production up, you can see the impact on. So you want EBITDA free cash flow and everything. So that's really the key for us where we are on that.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.