SSR Mining Inc (SSRM) 2014 Q2 法說會逐字稿

Good morning, everyone, and welcome to the Silver Standard's second-quarter financial results and project update conference call. This call is being recorded. At this time for opening remarks and introductions I would like to turn the call over to John Smith, President and CEO.

Thank you, Nicole. Good morning, ladies and gentlemen. Welcome to Silver Standard's second-quarter 2014 conference call during which we will provide a review of our financial performance and give an update on our business.

Our financial statements and management's discussion and analysis have been filed on SEDAR and EDGAR and are also available on our website. To accompany our call there is an online webcast and you will find the information to access the webcast in our news release relating to this call. We will be making forward-looking statements today, so please read the disclosures in the relevant documents.

Joining me on the call this morning are Greg Martin, our CFO; Alan Pangbourne, Senior Vice President; and Carl Edmunds, our Chief Geologist. Also present is John DeCooman, Vice President of Business Development and Strategy, and Kelly Stark-Anderson, our Vice President of Legal and our Company Secretary.

This is a significant time in Silver Standard's future as we move forward now with two large producing mines following the Marigold acquisition. We have now fully integrated Marigold into Silver Standard and are delivering gold production 10% ahead of plan this quarter, as well as seeing early successes in operating efficiencies and costs.

In the two operating mines our production an equivalent terms is up 81% on the first quarter and revenue has almost doubled. We are on track for improved results as we move into the second half of this year.

Notwithstanding the physical and financial benefits of having two large operating mines, we also have decreased the overall portfolio risk, given the [lift in locations] of our business, an important factor for some investors. The acquisition was also fully accretive as the all-cash purchase of Marigold did not involve any equity dilution to our shareholders. The transaction provides us a business and a team in Nevada from which to grow our position regionally.

So all-in-all a strong acquisition that has many elements of value for us both directly and indirectly.

Pirquitas is well on track for meeting annual production guidance with approximately 4 million ounces of silver produced in the first half of this year and early Q3 production supports this view. We also continue the trend of lowering costs a further 7% down from this time last year when we were already substantially lowering costs. This will be our third straight year of unit cost reductions at Pirquitas.

Turning to future growth, we are up and drilling on the Bonita zone in our San Luis project in Peru with local community support and permits in place. Carl will cover this later on, but for now let me pass to Alan to discuss operations. Alan has assumed responsibility for both operating mines, Marigold and Pirquitas. This helps us align the two operations as part of a single organization to leverage on the performance.

So, Alan, over to you.

Thank you, John. Today I will address our operating performance at both Marigold and Pirquitas. First, I will discuss Marigold's results.

As you have seen from our previous press release, we closed the transaction on April 4 and completed the integration of the asset into Silver Standard during the second quarter, ahead of schedule. In Q2 we produced 22,060 ounces of gold, which exceeded our quarterly guidance of 20,000 ounces and puts us slightly ahead of our plan and on track to meet our full-year guidance.

During the quarter, work commenced at site on a mine-wide optimization program and we have already started to see improvements in the new mine equipment production rates. For example, the tonnes per operating hour of the new road shovel increased by 12% over the last three months and in July we achieved the highest monthly average rate since the shovel commenced operating. Additionally, the new drills have increased their operating time by 10% over a similar period and the drilling rate per operating hour has increased by 9%.

As these and other improvements become embedded in the mine operating practices, we will be able to ensure that we operate the lowest cost equipment. These changes will then flow through to the overall mining costs and efficiency of the operation. This initial optimization program is expected to continue until the end of the year with more results being seen in Q3 and Q4 as the program examines all areas of the mine and rolls out the new operating practices and processes across all areas.

Additionally, a comprehensive review of the current geological models and mine plans continued. The work program is on schedule, allowing for the 43-101-compliant reports to be released as planned in Q3 and Q4. These two initiatives will allow us to optimize the mine operational effectiveness and put the best margin ore at the lowest cost on the leach pads.

As we did last quarter we provided guidance regarding the production for Q3. Based on our current plan, it is expected that we will produce around 33,000 ounces this quarter and the balance in Q4 to achieve our guidance for the three quarters of this year. During Q2 we've seen a 70% improvement in the grades of the leach pad and an 85% increase in the contained ounces sent to the leach pad.

These improvements are associated with better ore availability and grade as work progresses in the Mackay pit and grades return towards the average life-of-mine grades. We expect this trend to continue as planned in Q3 and Q4. In Q2, the total all-in site costs were 12% below plan and cost per ounce produced was 16% lower.

Now moving to the Pirquitas mine, in the second quarter Pirquitas produced 12 million ounces of silver, higher than the 1.9 million ounces produced in the first quarter, as a result of improving grade and higher availability of ore in the pit. The mine also produced 9.3 million pounds of zinc and zinc concentrate in the second quarter as the zinc feed grade continued at higher levels.

Over Q1 and Q2 the tonnage of available ore and ore grade have continued to increase month by month as planned. This trend is expected to continue in the second half as the pit advances into the main high-grade sulfide areas.

With the production achieved in the first half of the year and our plan for the second half, we maintain our guidance for the full year of production at Pirquitas. In Q2 the mine operations team moved 4.1 million tonnes of material, 4% less than Q1. This small variation is in line with our expectations as we move down the pit in Phase 2 and strip ratio starts to decline.

Approximately 402,000 tonnes of ore were milled during the second quarter, levels similar to the first quarter. Ore was milled at an average rate of 4,423 tonnes per day. Ore milled during the second quarter contained an average silver grade of 213 grams a tonne, higher than the 204 grams per tonne reported in the first quarter.

The average recovery rate for silver increased to 74.3% from 72.1% in the previous quarter due to accessing a greater portion of fresh sulfide ore in the pit. In the second quarter we achieved cash costs of $12.18 per payable ounce of silver sold. This continues the downward trend and remains below our full-year guidance range of $12.50 to $13.50 per ounce.

The lower cash costs are a result of our cost discipline and will continue to deliver additional benefits throughout 2014. This trend has led us to reduce our full-year cost guidance for Pirquitas to between $12 and $13 per payable ounce sold. Pirquitas continues to deliver production as planned quarter on quarter and additional cost savings have allowed us to consistently lower our operating cost base.

I will now hand over to Carl, who will take you through our exploration activities in the second quarter.

Thank you, Alan. Throughout the second quarter, the exploration agenda centered on two key activities at San Luis in Peru. Ensuring the delivery of required permits from the regulators to initiate drilling activities at the Bonita zone and maintaining close ties with the Cochabamba community as we begin the exploration program.

The Bonita zone is located exclusively on Cochabamba community lands were an exploration agreement is already in place. In May, the local water authority approved our application to take water required for the drilling and in June we received the approval from the Ministry of Energy and Mines to commence drilling activities. During this period we have had frequent content with the Cochabamba community, informing them of our programs and involving their members and contractors in employment opportunities for the upgrade of the access road to the exploration site.

In July, one drill rig was mobilized at the Bonita zone and we are now underway drilling the first hole. The initial 10 holes of the 40-hole 5000-meter diamond drill program are targeted at the highest grade portions of the 650 meter long structure. These initial holes and their relation to the geology of the target are shown on slide 6 in the accompanying presentation.

At Marigold, we have completed 6,800 meters of reverse circulation drilling in 48 holes on the North Mackay and 5North target areas. We are almost at the midpoint of the two-phase 15,000 meter program where 48% of the design meter is infill within the projected Mackay pit, while the remainder is aimed at extending resources in the 5North, [5Northeast], and 32 section areas. Longer-term exploration is working towards developing and testing new open pit and deeper underground sulfide target concepts that lie outside or beneath resources that have been exploited to date.

At Pirquitas, we continue to work on extending the mine life of the operation. Now over to Greg for a discussion of the Company's financial results.

Thanks, Carl. I am pleased to report on the financial results of the Company for the second quarter of 2014.

The first quarter we have been a multi-mine operator with the integration of Marigold into our portfolio and the impacts of Marigold on our financial results are apparent immediately, one of the benefits of acquiring an established producing mine that we highlighted upon acquisition. Despite Q2 being a low production quarter at Marigold, both our revenue and income from mine operations approximately doubled in the quarter relative to the first quarter of this year. So we are pleased with how things are starting off at Marigold and the continued stable performance at Pirquitas.

At Marigold we completed a post-closing adjustment with the sellers towards the end of the quarter that resulted in a return payment to Silver Standard received early in Q3. These adjustments reduced our net acquisition costs for the mine to $268 million. All commercial items of the purchase and sale agreement are now closed off.

Also included in our financial statements is a preliminary purchase price allocation and, quite unique in this industry, no portion of the purchase price was assigned to exploration potential, nor was any goodwill recognized. Therefore, any upside value we can unlock at Marigold has no burden of amortization related to this deal.

Revenues for the quarter totaled $64.3 million on the sales of 22,000 ounces of gold, 1.9 million ounces of silver, and 5.3 million pounds of zinc. With the addition of Marigold, revenues increased 97% from the comparative quarter of 2013 despite a 13% decrease in silver ounces sold and a 12% decrease in realized silver prices.

We sold 5.3 million pounds of zinc, a 140% increase from the comparative quarter, but significantly lower than the first quarter of 2014 due to the timing of shipments and a port strike that temporarily affected the quarter. Income from mine operations was $11 million, representing a 20.7% gross margin and a significant improvement from the loss in the comparative quarter of 2013. Income from mine operations benefited from positive contributions from both Pirquitas and Marigold as cost improvements at Pirquitas and the addition of Marigold more than offset lower silver prices.

General and administration continued at its lower level of approximately $4 million per quarter of cash expenditures combined with non-cash compensation expense of approximately $500,000. We recognized $3.1 million of expense related to the Marigold acquisition in the quarter related to fees and expenses through closing. Overall, the remaining expense items were in line with expectations.

We incurred significantly lower foreign exchange losses of $1 million compared to Q1 of this year and the comparative period as the Argentine peso remained quite stable and the Canadian dollar appreciated in value relative to the US dollar, our reporting currency. For the period, we reported a net loss of $7.3 million, or $0.09 per share. On an adjusted basis, excluding the one-off business acquisition and marketable securities impacts, the loss was less than $2 million for the quarter.

Shifting to cash flows, operating cash flow before changes in working capital was $6.7 million. The build in working capital was largely due to the build in inventory with the lower zinc sales and a decrease in payables on tax payments related to our exploration property sales.

After non-cash working capital, cash from operating activities was approximately breakeven versus $4.1 million in the comparative quarter of 2013. Despite the addition of Marigold, investments in our business declined relative to the comparative quarter, reflecting the lower capital intensity of Pirquitas and Marigold in 2014 and the timing of investments through the year.

We invested $5 million on PP&E, $6.6 million in our property portfolio, and $10.5 million in deferred stripping. These investing activities were supported by $3.3 million in VAT collections, the receipt of $10 million of deferred consideration on the San Augustine sale, and $10 million from the sale of Mandalay and other shares.

VAT recoveries in Argentina continued to progress well and we were able to reclassify approximately $19.5 million of the balance to current receivables during the quarter. So with the Marigold acquisition completed and associated costs incurred we closed the quarter with over $100 million of cash, maintaining a strong liquidity position. Marketable securities increased significantly during the quarter and, despite the sale of the Mandalay position, the portfolio value closed at $180 million.

Working capital declined to $428 million from $587 million at the end of Q1, a reduction of only $157 million despite the $268 million cash acquisition. This reflects the fact that we acquired significant working capital as part of the Marigold transaction and the other positive impacts to current assets I previously referenced. So our balance sheet remains very strong as we move forward with our combined portfolio.

Moving to cost performance of the assets during the quarter, Pirquitas again reported lower cash costs of $12.18 per payable ounce sold despite the lower volumes of zinc sold and, therefore, lower byproduct credits. The underlying cost of inventory continues to trend down and this has given us the confidence to reduce our annual guidance range to between $12 and $13 per payable ounce of silver sold. We continue to drive hard to keep these costs trending down.

Production guidance remains at between 8.2 million and 8.6 million ounces and capital and other guidance is unchanged. Marigold performed to expectations in the quarter, reporting cash costs of $1,103 per gold ounce sold. We have now been able to review the 2014 mine plan in greater detail in the context of our IFRIC 20 deferred stripping policy and are restating our cost guidance.

We expect cash costs per payable ounce to average between $800 and $900 for the full April through December period, while capitalizing approximately $20 million to deferred stripping. On a combined basis, we see cash costs marginally lower than our original cash cost guidance at the midpoint of our production range. Sustaining capital guidance has also decreased to $15 million from the previous guidance of $20 million.

In our MD&A we have introduced some equivalency metrics to assist with comparing Silver Standard to our peers and on an equivalency basis in the second quarter we produced 3.2 million ounces of silver at an equivalent cash cost per silver ounce of $14.34.

To conclude, the second quarter started to demonstrate the financial leverage within our multi-mine operating model with Marigold expected to increase its contribution in Q3 and further in Q4, combined with Pirquitas continuing to deliver to plan and at revised lowered cash costs, and with a more constructive backdrop to both gold and silver prices, we are well set going into the second half of the year. I will now turn the call back to John to wrap things up.

Thanks, Greg. Ladies and gentlemen, that gives you a good sense of how we are progressing at Silver Standard. This quarter has set us up strongly for the second half of the year. Our company has certainly seen the benefits of being a dual-mine producer with a significant pipeline with our cash position and balance sheet allowing us to take advantage of growth opportunities.

At Marigold, management and employees continue to devastate their commitment and capability to adapt to their key role in Silver Standard's future. We are well on track to complete the 43-101 resource and reserve work in the second half and publish our life-of-mine plan. Our team at Pirquitas is delivering safe and stable production at lower costs, which is a testament to their focused drive and ability to adapt to their business environments.

We are now drilling in the Bonita zone in the San Luis area in Peru and this is a positive sign for the future. All activity, be it at Marigold or Pirquitas or San Luis, will have a significant impact on Silver Standard as we are at a launch point for our future. The success we have demonstrated to the market commercially and technically we are in a strong position to make this happen. It is an exciting time.

Now with that, our presentation concludes and I will pass you over to the operator to take any questions you may have.

(Operator Instructions) Brian Yu, Citi.

I've got a question just on a cash costs and deferred stripping. Greg, I think you mentioned that you guys are now going to capitalize $20 million. So just to give this accounting change, does this imply that the life-of-mine stripping as you see it now pre the 43-101 report is going to be lower and that's why you are capitalizing the greater portion of it or starting to capitalize a portion of it?

Greg?

Thanks, Brian. No, it really doesn't reflect any differences currently to the mine plan. As John and Alan mentioned, we are on track with production of the life-of-mine plan and when that's produced we will re-look at this issue.

The change really comes about from our just better understanding of the mine plan. Pre-closing we were working off information which was done on a more consolidated basis for both the Mackay and target pits, which is the two pits that our production is being done from at the present time. When they are blended together they show an average strip ratio that was pretty much forecast average to the life-of-mine ratio, but when we were able to get into the details and break it down into a pit by pit and phase by phase basis, it shows some significant stripping at points in time through this year.

So it is really just a reclassification of the application of our existing policy, which is consistent with the requirements of IFRS under the IFRIC 20 basis. I think what is important, as we said, is we see overall marginally lower costs. When you neutralize the impact of this restatement at the midpoint of our production range we see costs marginally lower. The first quarter really performed exactly to our expectations on a combined basis between our cash costs and deferred stripping reported.

Got it, okay. Then the second question is regarding the VAT recovery. I think you guys mentioned you have reclassified close to $20 million I believe it was. So I guess that would also imply that you've got some pretty good visibility that those funds will be released the next 12 months. Is that correct?

Yes, that's correct. Greg, do you want to add a bit more?

Sure. I think, as we detail on our MD&A, we look to reclassify the VAT when we have the applications approved by the tax authorities down in Argentina and that is the case that allowed us to reclassify this amount into a current receivable at the end of the second quarter. And those recoveries are expected over the coming 12 months.

Obviously, it's a situation we continue to monitor closely and we continue to be very actively involved with the tax authorities down there around this issue. But we are encouraged with the progress we are seeing right now around the pace and amounts of VAT recovery.

Great. Thanks and congrats with just the progress you guys are making on Marigold.

Thanks very much, Brian. Thank you.

Jorge Beristain, Deutsche Bank.

Good morning, John and team. Again, congrats. I think it was a very solid quarter. First question I had was just in terms of when would you expect to have the Marigold mine plan update released?

Morning, Jorge. We had said to the market that we are trying to get the 43-101 resource work done third quarter and the reserves in the fourth quarter. Now, clearly, we are trying to do it as quickly as we can and we recognize that that's important for everybody to understand our business. So priority is in getting that done and things are progressing well so we will certainly be within that schedule.

Okay, maybe to Greg's point earlier, how was Goldcorp previously handling this? You were saying they were doing everything on a consolidated basis, so they did not have to apply this deferred -- sorry, capitalized stripping. Could you just explain how their accounting was?

Greg?

Thanks, Jorge, and good morning. I can't really give you a lot in terms of what Goldcorp did, Jorge. We haven't gone back and looked at it. I know they have a deferred stripping policy that is very similar to ours, but exactly how they applied it at Marigold we haven't gone back and done that kind of diagnostic work.

Okay. Is there any tax, potential tax changes related to how you're accounting for the stripping now? Is it going to lead to a higher potential tax rate?

No, the tax treatment of operating costs is different than the accounting treatment of operating costs, so we don't see this categorization under IFRS having any kind of application around our effective tax rate for Marigold.

All right. Okay, thanks for the clarification.

Andrew Kaip, BMO.

Good morning, guys. Just a question regarding on a go-forward basis with respect to stripping at Marigold. In your production report earlier, you indicated that the strip during the quarter was 6.8 to 1. Now a decent portion of that was capitalized and I'm just wondering -- you've outlined $20 million of capitalized stripping.

Can you give us some clarity on how much you intend to incur in Q3 and Q4 so we can better understand the difference between when you report a strip ratio and then really what you are expensing versus what you are capitalizing?

Thanks, Andrew. I will pass that to Greg.

I think we can give you some directional guidance there, Andrew, which is consistent with Alan's comments to how we see Marigold perform through the year. As you can tell from our guidance, we are seeing sequentially quarter-on-quarter improvements in the production and I think you can imply from that we see sequentially quarter-on-quarter improvements in the amount of ore delivery.

And because they effectively operate at a consistent total tonnes moved, the commensurate waste amount in those periods would be lower and, therefore, the strip ratio would be lower. So we saw about $7 million in the first -- sorry, in the second quarter here related to Marigold and we would see commensurately some lowered amounts through the balance of Q3 and Q4.

It's really a function of where we are in the pit in terms of stripping on down and you can see that our second quarter is our lowest production quarter. You take our third quarter it's higher and if you extrapolate the fourth you can see almost in the fourth that we do the same in the fourth quarter in terms of ounces that we did in the second and third together.

So it really is a pit progression and pulling through the metal to product. It does improve from here, the second quarter really, as we are coming down through that Mackay pit on stripping.

Yes, look, I understand that. It's just I guess the question is, if you report in the third quarter, say, a strip ratio of 5 to 1, based on that should we -- based on the approximately $13 million remaining in your capitalized program, should we kind of benchmark that? Half of that strip is probably going to be capitalized versus expensed; is that the way we should be thinking about this?

I will pass you to Greg's to give you an answer on that one.

So, Andrew, as we said, the policy really comes down to a pit-by-pit, phase-by-phase approach so at times the blended strip ratio may not tell the complete story. Again, what we expect to see going forward is improvements. If you neutralize that impact, we expect to see sequential improvements, Q3 better than Q2 and Q4 better than Q3.

Okay, I guess another way to ask it is what kind of life-of-mine strip ratio are you applying, or on a quarterly basis can you give us some sort of guidance on Q3 and Q4 of what that expected, based on life-of-mine stripping program, that strip ratio is going to be in those two quarters?

Andrew, I think that's a good conversation that we can have after we put out the revised mine plan. What we are talking here is a very short interim period until we have a revised mine plan that we can more thoroughly give you some better long-term guidance. So we are talking about here a pretty short transitionary period where we are still working off of the mine plan that was in place when we acquired this asset to a mine plan that we think sets the asset up for our views longer-term. And work is going on with the mine team around that right now.

Greg, it's fair to say that the stripping is a localized stripping. You are not doing a global stripping for the whole of mine, so it's particular to areas as you work through that calc as well.

Yes, that's correct. It is the requirements of IFRIC 20. And, again, we are not doing anything unique here. This is all stuff that is required under the IFRIC 20 guidance.

It requires that you componentize your pits and we are following a very similar policy, as far as I am aware, that everybody in the industry follows in terms of the application into an asset like Marigold where you are mining multiple pits at any given time.

Thanks, Greg. Thanks, Andrew.

Adam Graf, Cowen.

Thanks, guys. I don't want to belabor the point on the stripping and the mine plan. Certainly I think we're all looking forward to that and that kind of clarity, but maybe if you could just -- I know you have kind of hinted at it, but give us an idea of maybe the stacking rate per day that you guys see at Marigold in the third quarter, the fourth quarter, and sort of the sustaining rate once you've gotten all the equipment fully utilized and the mine optimized.

Good morning, Adam. I'll get Alan to answer that question for you.

Morning, Adam. We -- coming out of Q2, which was our worst quarter from a production point of view, we are seeing the tonnage of ores move up and the grade move up, as I said earlier, as we move back towards life-of-mine average grades based on the previous mine plans. And that implies that we get back up to the 40,000 tonnes a day and the grades keep coming up towards that 0.52 all through Q3 and then continuing on into Q4.

Okay. Then kind of hold -- and then going forward the plan is to be at that rate or above that rate once you have all that new equipment and all of the pits optimized to be able to utilize that equipment?

We are obviously planning to utilize the equipment in the most efficient way we can to ensure that we get the lowest operating cost per tonne moved. As far as moving forward, we are still working through the development of the life-of-mine plan, and once we have got that we will be able to discuss in much more detail what happens in 2015 and onwards.

But the focus is it's almost a flat fixed-cost mine and it's to drive down the unit cost per tonne moved as low as we can get it and put the best margin ore on to the pads as soon as we can.

I think that's a fair point when we're talking about Marigold. It really is a dart-moving exercise. What drives it is the amount of ounces we produce each quarter, which is effectively part of where we are within the pit and the float. So it really is our low production quarter is the second quarter and as we get into the pit and into more of the grade material and ore you will see that rise in the third quarter as we indicate in our guidance. And then come up even further in the fourth quarter.

So for us we are exactly where we think we should be, maybe slightly ahead on that basis, Adam, so all things are where we expected them to be and plan to be.

Right, very good. Then just again hitting Marigold; what's your thoughts on exploration requirements there going forward? Obviously you've got a big reserve sitting ahead of you. Does that mean exploration and infill is really unnecessary for a number of years?

They've done a good job over the past years down at Marigold of doing inflow drilling and basically adding back the reserves that's consumed over a period. And I think that will continue to happen. If you look at the pits and you look at the resource, I think you can see there's some room for that continuing process. So we will continue that most likely as we go forward adding in and filling in areas as we go, so I think that's probably going to continue, Adam.

What is sort of the expensed exploration there running you about a year, a couple -- like $4 million a year?

Carl, you want to add?

Well, we haven't really talked about what the specifics are of exploration for the entire year during the transition, so it really falls into what we are spending on the capital there which I think is $20 million. Is that correct?

Yes. So in our initial outlook we had indicated about $2 million of drilling, Adam. That is the kind of rate we are looking at this year with regards to that program. Going forward, like everything else, that's going to be an area that we take a look at and we will make decisions that we think are in the best light for the asset. But, clearly, it's our objective to continue to grow the reserve base there through the coming period.

And I think, just to conclude, I think that's the kind of level expenditures so you're not seeing major expenditures in that region that you are going to see in --.

Very good. Then one final question on Marigold and related to the stripping. When you guys come out with the reserves and the new mine plan, will you guys breakout the capitalized versus the expensed stripping for us on an annual basis going forward?

Greg, can you answer that?

Yes. Certainly within the reserve disclosure portion of the 43-101 there is a cash flow schedule required and that will provide some information on that basis, Adam.

Perfect. Thanks, guys.

(Operator Instructions) Mark Mihaljevic, RBC Capital Markets.

Thanks. Good morning, guys, and congrats on a solid quarter. Again, most of my questions have been answered. I think we've gone through Marigold in about as much detail as you guys can provide at this time so I will switch gears a little and just ask if you can provide a bit of an update on the operating climate in Argentina, what you are seeing there now after the, quote-unquote, default.

Mark, look, I think we are monitoring the situation and at present we don't see any impacts on our business in Argentina. We have been working there for 20 years and our team have proven to be very competent at dealing with issues as they arise.

So for us when you look at the exchange rates, where they are going, both the government exchange rate and the blue market rate, there's always an issue about where the exchange rates are going and where the inflation is going, but that has been a climate that we have been working in. So for now we are not seeing any major impact in our business.

Okay, thanks. And just to touch base on the exploration results, when do you think we can hear something out of San Luis?

Carl?

Yes, it's going to take about two months to drill that first phase so we should be releasing by the end of the quarter.

Okay, that's it for me. Thanks.

Thank you. I am showing we have no further questions. I would like to hand the call back over to Mr. Smith for any closing remarks.

Thanks, Nicole. Thanks, everybody, for participating. We look forward to keeping you updated, so have a good day.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Have a great day, everyone.