Q3 2019 Earnings Call
Please standby your meeting is about to begin [laughter] warning.
Good morning, I would like to turn the meeting over to Mr., Jamie Porter Chief Financial Officer. Please go ahead.
Thank you operator, and thanks, everyone for attending almost a third quarter 2019 conference call.
In addition to myself, we have on the life enable John Mccluskey, President and CEO , Peter Macphail, Vice President and Chief operating Officer.
We'll be referring to a presentation during the conference call it isn't available through the webcast and on our website.
Also like to remind everyone that her presentation will be followed by Q1 day session.
As we will be making forward looking statements are in the calls please refer to the cautionary note in the presentation news release and Mdna as well as the risk factors set out in our annual information.
Nickel information this presentation been reviewed them from my Crystal Ball Inswinger, Vice President technical services on a call but person.
So please bear in mind that all the dollar amounts mentioned in this conference call or in the U.S. dollar unless otherwise noted that will turn over to John to provide you with no.
Thank you Jamie.
We reported another strong quarter, both operationally and financially driven by a particularly strong performance from our Canadian operations.
We produced 122000 ounce gold at significantly lower cost from a year ago.
Total cash costs and seven I'm $30 per ounce were down 11% third quarter 2018, all in sustaining cost diner $50 per ounce were down 9%.
Solid performance in the first nine months of this year, we remain well positioned to achieve our full year production and cost guidance.
Actually the combination where costs are gold price from or operating cash flow for changes in working capital to new record of $80 million.
Our internal growth projects continue to advance.
Well drive further improvements in our financial performance.
No about eight months away from starting to see the full potential young Davidson operation with the lower mine expansion on track for completion in the first half 2020.
This would be a significant driver of free cash flow.
Starting in the second half 2020.
On the goal continues to produce at a record pace and is well positioned to meet our or exceed the high end production guidance.
The operation also generated record free cash flow from 27 million in water, bringing the year to date totaled 55 million.
We continue to see positive exploration results, particularly in the area focus between the main at eastern extensions.
Already seen a substantial increase in the mineral reserves and resources since we acquired operations team.
It's on the ongoing success, we're seeing this year, we expect reserves and resource growth to continue and this will be incorporate into a phase three expense.
In Mexico, we completed commissioning of the cell phone crusher and fear circuits earlier this month and have started stack anymore.
We expect these initial production later in the fourth quarter ahead of schedule.
We are disappointed by the delays we are experiencing Turkey.
We are confident that's our mining concessions for ultimate ultimately be route.
I'll discuss this in further detail during the call.
And I believe the recent share price kind of performances.
I'll now turn the call over towards your whole, Jamie Porter to review our financial performance.
Thank you John .
We had another very strong quarter from a financial perspective near record revenues record operating cash from working capital changes.
Formats that are island goldmine, <unk> surpassed expectations record free cash flow 27 million in the third quarter and 55 million in the first nine months here since we acquired island gold at the end of 27. He mine has generated 72 million free cash flow. That's net of all capital spending in the 32 million dollar investment exploration.
Revenues for the third quarter were 173 million sales 119400 ounces at an average realized price them $1440 per ounce gold sales were 2500 ounces lower than our production in the quarter with those sales to benefit the fourth quarter.
Total cash cost of $730 problems and all in sustaining cost $950 per ounce, where both in line with guidance, but similar costs expected in the fourth quarter, we remain well positioned to achieve our full year cost.
Operating cash flow before changes the noncash working capital was a record 80 million or 20 cents per share marking the second consecutive quarterly record.
It was driven by an 18% increase in the gold price and 11% decline in total cash costs year over year.
Our reported net earnings of 80 million or five cents per share included unrealized foreign exchange losses, 7 million, partially offset by other onetime gains totaling one.
Excluding these items, our adjusted net earnings were 23 million or six cents per share or [noise].
Capital spending totaled 66 million in third quarter. This included 18 million of sustaining capital $44 million growth capital at 4 million of capitalized exploration.
Capital spending is expected to increase in fourth quarter of 29 eat primarily driven by the deferral of surface infrastructure projects at island Gold originally planned for earlier in the year.
Given lower spending at Crossley, we have reduced our full year capital guidance by 50 million to between 240 in 265 million.
We ended the quarter with no debt and approximately 202 million in cash and equity securities up slightly from the previous quarter, reflecting positive free cash flow generation.
We expect significant free cash flow growth starting second half 2020, we doubled our dividend earlier this year and expect further increases as we start generating higher level free cash flow in the meantime, we remain well positioned to fund our internal growth initiatives I'll now turn the call over to our COO, Peter Macphail to provide an overview of operations.
Thank you Jamie.
Our Canadian operations performed very well in the quarter, starting with young Davidson production increased to 50000 ounces of gold, reflecting higher grades consisted mining rates of 6600 tonnes per day.
As Mark at 10% increase in mining rates from year ago, 71% improvement year to date, reflecting a much stronger and stronger performance in 29 team.
Entry increased grades mine at lower costs from 6% decrease in our total cash cost to $781 pros and an 11% decrease in our blincyto cutting costs to $960 per ounce from the first half here.
It's worth inline with our annual guidance.
Also we made excellent progress, but a lot of mine development since we hosted multiple investor tours for the operation in June .
Hi, crush room excavations complete along with the installation of the shoots steel crane.
Physical installation of the crusher expected in December of this year.
You are passes from the upper mine, which will fees of course are bad crusher over 60% complete with 100% completion expected by the end of fourth quarter.
And weren't around the 89 40 level loading pockets felt largely complete including the shops bottom steel as well as ore and waste into the north and chef.
With that convention work complete mechanical installations under way the construction scale schedule has been de risk.
As previously guided and tie in of the upper and lower lines will require the northeast shaft down for approximately three months starting in March 2020, and ending in June .
Well, the north and chapters down or from the upper mining, we tried to surface from processing at a reduced rate.
Once completed we expect mining rates to ramp up to 7500 tonnes per day by the end in 2020.
Given the lower throughput rates during the first half a year or expecting productions decreased approximately 150000 ounces in 2020.
I don't gold produced 36700 ounces, 67% increase compared to the third quarter of 2018.
Milling rates of 1115 tons per day were higher than mining rates as mill feed with supplemented with surface stockpiles.
Total cash cost of $503 per ounce right. The other apprenda guidance and down 25% from year ago, reflecting higher grades mine.
Site, all in sustaining costs of $693 sprouts remained below annual guidance, reflecting lower sustaining capital in the quarter and year to date.
We expect capital spending to increase in the fourth quarter, resulting in higher monthly falling sustaining costs.
We continue to see excellent drill results with our large exploration program at island gold.
As required the operation in 2017, we've discovered initial additional 1.2 million ounces reserves and resources to the end of 2018.
Given the ongoing successes, we're seeing this year, particularly in the new area of focus between the eastern at main extensions, we expect our resources to grow further with our year end update.
We are excited about the potential of this new area for a number of reasons first every home we have drilled thus far said gold mineralization.
Some very high result, great results, including 103 grams per tonne over four meters.
Gary is close to existing infrastructure, including the 40 level exploration drift, which will allow us to start growing from this area underground next year.
Also drilling is confirming as it's all part of the same so on this or continue to close the gap between the high grade resources in the eastern and the main extensions.
Yes, My initial success and resource growth, we expect to see here and elsewhere will be incorporated into the phase three expansion study in the operation.
Results on study are expected to release in the first half 2020.
A lot those produced 32700 ounces total cash costs on 866 crowds.
And my side, all in sustaining costs $979 pros.
Production that costs were impacted by the winding down in production.
The second phase one as well as abnormally high rainfall in September over very short period, which temporarily restricted mining activities and the main molotovs pit.
The more contained ounces stacked during the third quarter and the end of mining at light you actually phase one are expected to impact the fourth quarter production.
With production expected to be in the same ranges third quarter.
Offsetting this will be new production from circle.
Where we have completed commissioning of the crusher income there circuit and the commenced stacking or.
Serp loan is our next higher grade high return to positive Latinos after like they actually phase one.
I actually phase one was a great success, having produced 60000 ounces over a two year period and generated $35 million free cash flow net of its initial capital only 13 million.
At our fully permitted Les I congratulate project continued to focus on completing detailed engineering and support a project design and economics.
Now I'll turn the call back to John for an update on the crossing project.
Thank you Peter.
Earlier this month, we suspended construction activities across the pending renewal of our Turkey mining concessions, which expired on October 13th.
It met all regulatory requirements for the concessions to be renewed we expected the renewal.
Before the expiration date.
And the preceding months, we've received all major outstanding permits required no crossley increased our workforce nearly 300 and commence majored works.
We are disappointed with this delay.
And then we're just disappointed that it will cause caused the delay in our construction schedule.
Belief that ultimately reaction to this has been overtime.
Our mining concessions have not been remote.
Nor have hard permits.
Not uncommon for mining concessions to be reviewed after the expiration date in Turkey. In fact, a 550 mining concessions for news since February of this year nearly 60% renewed after the expiration date.
We believe the delay in the concession renewal is related to the recent protests, which followed a misinformation campaign on social media.
We can successfully correcting this information by outlining the facts.
Alamos offerings in an open and transparent manner.
Doing right by all stakeholders wherever we operate.
It's part of our core values.
We recently received the best corporate social responsibility practice award in recognition of our lands a longstanding commitment to building in supporting communities in Mexico.
In the only mining company in Mexico to receive the some work.
We've made similar commitments in Turkey, where we've worked for 10 years or in this important at the local communities and the federal government.
In that time, we've invested 25 million in the local communities with one of the most significant investments began construction of the recently completed water reservoir, which will provide clean drinking and irrigation water for the nearby communities well beyond the life of mine.
The local communities of remain supportive business in Mexico pardon me in Turkey, even staging accounted protest in September and supportive across the project.
The government has also remain supportive as we continue to engage with Canadian Turkish government officials.
We're toward positive resolution.
We are confident our mining concessions will review given the ongoing support both government and local communities. We have been granted all major permits required to build crostley and we've met all the conditions for the concessions to be renewed.
Following the renewal of the concessions resumption of construction, we will provide updated guidance on the construction schedule.
Budget for cross.
I'd like to co posted presentation by highlighting where we stand on valuations given our recent share price underperformance.
They believe currently is more than pressed into this month.
We had to remove the entire average analysts value for all of our Turkish assets from our valuation.
We're still trading under 30% discount square peers.
Given the quality of our existing mining operations in Canada, and Mexico, which support the majority of our map valuation. We believe this discount to some warranted.
This concludes the formal portion of our presentation.
Turning the call back the operator, we'll open the line.
Your question.
[noise]. Thank you.
We'll now take questions from the telephone lines and you have a question and using speakerphone. Please pick handset before making your selection, but you have a question. Please press star one on your telephone keypad to cancel the question. Please press the pound sign. Please press star one at this time, if you have a question.
There will be a brief pause of participants register thank you for your patience.
And the first question is from Fahad Tariq from Credit Suisse. Please go ahead.
Good morning, Thanks for taking my question Encore Isley, what what are the discussion.
Like what are the topics of discussions with the Turkish Department of energy and natural resources and I'm, just trying to get a sense of the maybe the sticking points is it is it a matter of the government waiting until the.
As protests and the challenges to the mine cool off or is there something more that the government is asking alamos to do for example, maybe more environmental commitments or.
Something to do with reclamation after the mine closes any color on that would be really helpful. Thank you.
Thank you turn the government isn't out any more from the company than we've already done and.
Important to note that at this point, we paid in excess of $10 million in forestry fees, which is substantially more money than it would take to reclaim the area.
So.
The government is more than satisfied that we've been meeting all of our our commitments and frankly the.
The bar a set very high in Turkey.
Also worth noting that so.
Years before we even started the.
The Earth works on the project.
We've been involved with planting trees in the area. We we planted in excess of 14000 trees. In this area. So I think the government is satisfied but we have a strong commitment to the environment.
So theres nothing additional being out of the company.
They are indeed monitoring of the whole I called the activity going on in social media.
I am I'm happy to report that we've pushed back a long long way from where we started in August in terms of setting the record straight.
And by this point there is as much so social media commentary in favour of the company.
As the game, you'll never you'll never get rid of the negative commentary altogether. So this is actually.
I'm quite a.
A strong come back from our we started where.
On the campaign was initially kicked off virtually all social media common.
Was was running against the company that was because so much of the.
The information coming from.
Yeah.
The Geos and positioned parties were just based on false allegations.
Take some time to put a gd, let's step back in the bottle and see a.
Once the Activations have been made widely spread it takes some time to push back on that.
But by this point, it's clear we.
The great deal of success on that front.
And as far as a activity.
Should not go ahead itself has really.
Kind of way way back from where it was in.
In August so they are monitoring these kinds of things and it hasn't been there intention to certain time.
The renewal of our of our concessions with the.
With the waning of this as protests.
Okay. Thank you and just a quick follow up the counter protests that you cited in late September .
Who kind of organized or led like it was it.
Like.
It was really involved was it community members added another antero government members. So as we've said in the commentary the the counter protest was organized by the local communities themselves that had there was no involvement by the company and there was no involvement from anyone outside of those local villages and that's.
Very different from the protests that were held by our gate, which was essentially all from outside.
In fact majority of people from outside of the province of generically.
The leaders of the local communities have been strongly support of our our project.
We've been.
Hiring many many people hundreds of people impact from the local communities and we've been engaged with them worth the last 10 years.
We just Didnt show up last week.
We we put a lot of.
Effort into into building.
And maintaining.
Relationship based on trust.
We've spent a great deal of time educating them on exactly what this project entails.
We would go about developing mining it and ultimately reclaiming it.
They are.
Sure.
Support was very hard one it was.
It was several years of effort before we're we're confident nothing comfortable enough.
Two.
To give us their support.
Once once we secured it.
I'll say that the hub.
The stood by.
In a very steadfast manner I guess.
Tremendous sort of.
Influx of.
Outsiders and and.
Media both.
Social and and more broadly speaking the press on television and so forth.
Coming into their area and really causing.
Quite a an upside to their daily lives.
On the these community leaders.
Managed to get about 300 people to come over 40 kilometers to the capital and to hold the protests and.
At the city Hall, and the presented the.
Addition.
I think was over 1000 names on the signs that petition.
All from the local communities.
Asking the the mayor too.
Essentially.
Back off from the protests that he.
He didn't buy it.
So this is the source of the support.
And a very strong support and I think it goes a long way too.
One thing the.
The federal government that that's the company has been doing the right thing for a long long time and we're on the right track as far as development projects.
Okay. Thank you.
Thank you.
Next question is from Cosmos Chiu from CBC.
Hi, Thanks, John Jamie and Peter maybe moving onto a candidate here a good to see that a young Davidson you've been able to get to 6600 tonnes per day in terms of throughput underground.
Higher than what you had targeted maybe Peter could you remind us how you were able to get to that higher throughput.
Underground mining rate and does that it was there any kind of read through to the lower mine and the potential to lower mine.
Yeah, Hi, Cosmos. Thanks.
<unk>.
We spent a spend of urban at a time over the past.
Year to hopper, so improving the operation.
Looking at efficiencies of or movement through the past system Weve added some passes if you recall here and a half, but we had some challenge those at the upper mine passes and really it's just executing on all of those operational improvements put in place over over the last year. So it's all come together and edits.
You can see it in the kind of stay performance, we see on a quarter by quarter basis, but also on a month by month basis, we don't see any any fluctuations.
<unk>.
That I know in terms of the lower mine, you know you're saying that.
That will get you to about 7500 tonnes per day exit rate in your 2020 , how should we look at as they're going to be some kind of straight line ramp up.
The second how about 2020, you know can you remind us how we should model it.
Yeah, I think that would be right.
We probably come out of a backup to get again, where we where we left off and ramp up to that 7500 tonnes a day rate by the end of year <unk> yeah. Okay.
And then maybe turning to island gold here you know you did about slightly less 10000 tonnes per day.
In underground mining and Q3.
No there was a change in contractor and whatnot could you remind us again in terms of now that you have to permit for the 1200 times, but at the mill what would you need to do to get to 1200 times, but I don't underground to get up to that kind of mining rate I guess, you know weve.
You look at where we were last year, we're about to 850 tons per day. So we're up to just over 1000 tonnes a day year to date now, but a 15% increase and we see that kind of rate of increase in a continuing through here through the fourth quarter. This year end and into next year.
Absolutely 1200 tonnes a day is what were permitted for and we would expect to get there a pretty short order.
And I know you're working on the you know the phase three expansion on a different alternatives is there anything else you can share with us at this point in time in terms of what you might be looking at.
To get beyond the 1200 tonnes per day.
Yeah, I mean, we so first of all those number moving parts. One is that the resource that we keep finding more goal, which is an interesting calling that out in the middle of all of this.
And where it is and that actually helpful. Because it is higher up in the mind and.
Covers that we would have reported on a year ago, so pretty exciting new area for us.
Yes.
We ramped up from if you go back a couple of years or about 800 tonnes. A day once they went to 900, whereas 1100 thousand heading to 1200.
The next the next step would be step and we'll we're looking at a number of different options and.
And we'll see we'll see where it takes us I I'd hate to give you a number because.
We're working through it.
Sure.
Maybe switching gears a little bit maybe a question what Jamie here I'm, just trying to reconcile the capex guidance for 2019 versus what you've done so far a year to date I seem to be getting on your numbers that are.
Running at the higher or even like over the the highest end of your guidance here for example, young Davidson I think you're saying $73 million in terms of what's been spent the first nine months. Your full year guidance is 80 to 90.
And I'm seeing Dolphin mall autos and I didn't go what am I missing here because I think you. Your commentary later on you say you know I don't goals go to ramp up in terms of Capex in Q4 is it capitalized exploration what so could you help me reconcile those two numbers, yes, I think capitalized.
When it comes dial it's like we capitalized exploration that difference. Okay. If we if we got an asset by asset bases why these invested but 73 million year to date guidance range was 80 to 90 for the year, we've seen some some over and so I expect we'll be just north of that $90 million by the Okay. Here Island has.
Way under spent their capital this year.
And then so we are expecting and that's part of the reason why you've seen our all in sustaining costs come in well ahead of guidance throughout the first three quarters of the here, we will see that increasing in Q4 and I'm not sure that will actually be able to get all that capital spending done. This year. So some of it is likely to bleed into Q4.
You want.
Sorry that likely to bleed into Q1 net mulatto that we've been building.
A new mine in service loans I think we remain.
Secondly on schedule there, we should be if anything I think where we're ahead of schedule in terms of our capital spending is overblown.
So I'm sure I look at a Jamie in terms of those on page three and your Mdna, it's $44.2 million, while adding gold.
The full year guidance is 50 to 60, so what what number should I used to compared to your 50 to 60 guidance for 2019, so the number that you're referring to in the Mdna.
The the 44.2 includes.
$11.7 million of capitalized exploration.
Comparing apples to apples, so subtract out the 11.7 I should be able to get to a number that can compare to your 50 to 60, that's right yes.
Yes that would show us so I'm feeling we spent 18 point forward on growth 14.1, yeah. So a little shy or just sorry, just north of 32 million.
Today, and that's what you're comparing to the 50 to 60.
Great and then maybe one last question here moving to Mexico, clearly theres been some impact in terms of a heavier than expected rain.
You know I just want to go from this is more like a deferral of I also say like if I look out you're saying, it's stocking orders are leach curve. So you know if I can look into say 2020 in Q1 2020, it's maybe can I say, it's a deferral of ounces from you know 2019 into you know potentially higher Oh, Susan your 20.
20, Okay, it's a deferral of assets Costco and it's really we got pushed around a little bit in our mine plan. We had to go mine in other places because of some.
And part of the pickup we can access the bottom the pit for period of couple of weeks.
So it moved us around but those ounces are still there and you know we're mining them now.
Great. Thank you that's all I have thank you.
The next question is from Kerry Smith from Haywood Securities.
Thanks Chuck.
Peter just on island.
The last four quarters, you've been running about 1100 tons any mind underground and obviously milling.
Consistently more than that so how much do have left in the stockpiling. How long can you continue to mill and more than you might or are you expecting.
Q4 that the mining rate is going to push up enough to actually meet the mill requirement. However, we so I think in the in the third quarter, we might be Milt just over 100 tonnes a day more than what we might add and that really that actually brought the stockpile to pretty pretty close to two its end.
So it's it's a and we expect to fill the mill from from the underground mine it always always win.
Okay. Okay, so stockpiles basically done and on a go forward basis.
Okay. Okay.
Okay. Okay, great. That's that's that's helpful and.
Just on the hedging maybe maybe John or Genie is there any I know you have some hedges now through the first six months of.
2020 is there any plans to add anymore hedging.
Through the course in Q4 into Q1 or do you kind of got to the point, where you're happy with the hedge book.
It carries Jamie we yeah. If you look I mean had an impact in the third quarter produced a realized price by about $24 an ounce we'd expect with the same in Q4. These are hedges that we put on a early part of or early early part of the year, we have a less than 10% or slightly more than 10%.
Of our production hedged for 2020 add a floor of 14 33 and with upside to 16 35.
We might look to put on a you know a bit more but we'd be talking about 20 to 40000 ounces and we'd be talking about a color range. That's that nowhere near where we are currently you know that with the upside being 100 $250 higher than the current spot.
Okay, and so thats likely to happen before you were like sometime this year or would that be a next year event.
That we haven't decided yet carry what we Oh, we look at it on a daily basis based on based on the right.
Sure.
Yeah, I mean, the the key thing is that Weve.
Our hedging strategy is all short term.
Inside of above 12 months and the majority of its all within six to nine months.
Okay got you, Okay trying to get I was going to be pushed out for they're not okay.
And just on maybe Peter can answer this just on the Lee I can grow on day when would you actually expect to have the board approved construction actually started construction Peter how do you have you got there yet I think I think.
We'll be able to say something it are probably in our guidance or release about that okay. What should be in January I guess.
Yeah, well everybody there.
Okay. Okay, that's great thanks very much.
Thank you next question from Mike Parkin from National Bank. Please go ahead.
Hi, guys. Most my questions have been answered just one on island.
Meters develops came down a little bit.
Q3 at 1200.
What do you see that kind of.
I've known historically, there's always more development being done and was really necessary.
In the amount of tons coming coming up the ramp.
Versus.
Or meant for the mill.
More heavily weighted towards development, if I recall correctly.
Where's thinking that kind of.
Thank goodness sustain at around 1200 or potentially drop off a little bit more as you open up the deeper portion of the mine more.
Yeah, we were a little later.
In the corner, Mike We I don't know if you notice we changed out our development contractor.
To that in the in the press release and while we you know one was evolving in the other one was moving anyway.
Theres period of probably six weeks, where we had no contract development going on just just our own forces. We do we do two thirds of the development with our own workforce and we have a contractor that.
You can turn them on and off and that's why you have a contractor.
Two.
Get the peaks.
With the valley so.
We we would expect development, we need to continue to develop that you know it's kind of our the rates you would've seen in the first half of the here so that'll that'll come back up a bit.
Okay.
So explains what.
Opex will be a little higher in Q4.
Yeah that that would drive some of that correct.
Okay. That's it from you guys. Thanks very much.
Thank you.
Please press star one at this time if you have a question. Andy next question is from Lawson Winder from Bank of America. Please go ahead.
Oh, Hey, Hello, everybody. Thanks for taking my questions.
John Thank you for your comments on Turkey. Those are all very helpful. Just to sort of small follow ups on that for me I mean, one.
You may not want to do this a bit risky, but I mean could you maybe handicap.
Sort of timeline, you're thinking before this gets resolved are you thinking sort of like any day now months or quarters, and then just as a follow up to.
What what should we think of roughly in terms of holding costs well.
There's no construction activity happening at the site. Thanks.
I'll address your last question first I would them.
Right now are our costs are rip cost that.
In Turkey or about a million dollars spot.
We would.
To start.
Bringing back those costs to some extent.
If we don't see.
Any progress with respect to the.
License is getting renewed.
It's almost impossible guess whenever licenses will be renewed anything I'd like to save would be a guess.
It's it's a political decision it's.
Nothing other than that so.
So and it's really quite binary well they haven't read you didnt. There's there's there's nothing we can really do and when they do risk renew it weekend or we can get back to work at full force.
So.
It really doesn't help anybody for me to guess because it's just a does it's just that meaningless a comment I wouldn't be making.
But we are.
You know looking very closely at our at our holding costs and that if we don't see some movement to the next.
Meeks with respect to.
Getting allowing us to get back to where we'll be taking steps to reduce costs. So from the current level.
Okay I appreciate you being so Canada.
And then Jamie just from just one question for me for you.
Tax rate at least versus me was a little high in Q3.
Can you provide any guidance for Q4 as to what you might be expecting there on the effective tax rate like to the income statement, yes. The effective tax rate is a highly.
And foreign exchange rates is that has an impact on our deferred or net deferred tax liability.
[noise] all else equal.
You'd assume at 35% to 40% effective tax rate, but again highly variable depending on.
Where the Canadian dollar Mexico, Mexican peso said at the end of the year.
Okay fair enough. Thank you.
Thank you. The next question is from Sherry Dang from Scotiabank. Please go ahead.
Good morning, guys and thanks for taking my call. Most my questions are already answered maybe just one follow on Turkey. So in relations to the NGL than opposition party since Youve heard hotel construction do you see them like this do you see them, gaining momentum or dying down or and job since you made that.
Educate them about the asset pasta reception, but then also but what what are they demanding.
There are a chance to meet the mine to mill.
First of all we were there's we're not educating the the opposition or the.
The protesters or told that.
Within this into this but their eyes wide open their their efforts at misinformation were really quite deliberate 80, new the fact, they published something else.
So the the effort to reach out to.
Correct that narrative and put back.
Toxins and the.
Public discourse it was really.
To reach beyond those are.
Committed.
This sort of.
Anti mining stance and in other words the.
The greater public with in Turkey, who were picking up on a on all this misinformation either true.
Wherever they source it online or through the press, where the filtered into the.
So I am proud.
Once people started with you.
Realized that all those allegations that they've been hearing earlier, we're just hasn't evolved and of course many of the worst of those could be a verified by simply looking at them [laughter].
Once that sort of happen then the broad based support that.
Opposition initially enjoy it.
Probably Wayne.
So there is nowhere near the the level of a protest against our project that there wasn't initially.
The government is always feared that seven that this was just a.
The tip of iceberg got the opposition was really going after something much broader.
That is all.
All natural resources and enforce stream within the country and its at a point in time, where as the.
Ruling party was coming off.
Some pretty serious losses in the melting elections in the spring.
And and they were feeling quite vulnerable and so.
Oh It takes a Turkey is is there are really a rather talk talk t. turvy world. It. It says something that you can find yourself I'm quite ended inadvertently pulled into it.
And knocked around by that's just for a period of time I think ultimately the.
Our government has a serious.
Uh huh.
Sure as policy for seeing natural resource development.
And that is very responsible not natural resource development with in Turkey, and that they see that as a key way of helping diversify and expand the Turkish economy, and they've never back off from that so from that perspective. So we feel were part of a a much bigger story with respect to.
The ongoing growth and development of the Turks economy, and we think ultimately that won't be the the story that prevails currently will eventually go into production.
In my mind.
Great. Thank you for the colors that that's helping me. Thank you.
Thank you.
Question Kerry Smith Hayward Haywood Securities. Please go ahead [noise].
Thanks, operator.
Can you maybe I can just follow up or John just on Turkey as I remembered win.
When you put out the press release on.
The renewal of the permit.
I think at the time you tend to spend five 6 million in Q4, and then the holding costs should be a million a month or after John's comment was started suggesting it was 1 million now so just wondering if.
If you've accelerated that five to 6 million. It's all been spent or maybe that number was a bit conservative and that was either November .
I suspect we were being a bit conservative, but I'm trying to give you as an accurate or an estimate as like.
To provide on the call here, but I don't think is any material difference between I'm guessing that I've provided and.
What's actually happening yeah, I think the only difference there carrier with would be we would've pads. So.
Carry over a accounts payable outstanding from.
From from construction of the reservoir than we would have included in that five cents million to our ongoing kind of operating costs for salaries and then.
And then maintenance for operations there are about a million dollars about.
Okay. So has that five to 6 million number actually been spent already then Jim.
No that was the forecast for the entire fourth quarter. So the 1 million in our operating cost per month, plus an incremental one to 2 million in a carryover accounts payable.
Okay. Okay got it okay, I understand and just maybe if I can follow up again on they are not in the contractor that you've got into an island is I'm not sure how long he has been there. It sounds like you bought in the quarter has he been there long enough to get a sense, whether he's going to be able to deliver the meters that you need or how.
Yeah, you know they always says started a little slower than you'd like but they're a the ramping up and a there they're making the meters now carry okay.
Okay. That's great. Thank you very much.
Thank you.
No further questions at this time.
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