Q3 2019 Earnings Call
Thank you all for joining us this morning before I turn the call over I need to advice that certain statements made during this call today may contain forward looking information.
Actual results could differ from the conclusions or projections and not forward looking information, which include but are not limited to statements with respect to the escalation of mineral reserves and resources, the timing and amount of estimated future production cost of production capital expenditures future metal prices and the cost and timing.
The development of new projects.
For a complete discussion of the risks uncertainties and factors, which may lead to actual financial results and performance being different from the estimates contained in the forward looking statements. Please refer Tms press release issued yesterday announcing third quarter 2019 results as well listen management's discussion and analysis for the same period.
Yes, and other regulatory filings in Canada, and the United States.
I would like to remind everyone that this conference call is being recorded and will be available for replay today at 12 PM Eastern time.
Replay information and the presentation slides accompanying this conference call and webcast are available on <unk> website at <unk> Dot com.
Well now turn the call over Q.
Mr Racine, President and CEO .
Thank you operator, thank you all for joining us and welcome to our third quarter Conference call.
With me on the call today's G.'s under the block our CFO . Other members of management are also in the room and will be available for the Q any portion of the call.
I'll start and as I do every quarter with Elk safety and corporate responsibility. The total recordable injury injury frequency rate continued to trend lower.
Points 58 don't home point 66, a year earlier, a 12, 12% improvement.
We didn't have any significant environmental social incident.
During the quarter.
That's off the third quarter, we began environmental monitoring programs all the operation with neighboring local communities.
These programs all else communities to partake in environmental monitoring improving transparency and ultimately strengthening our license to operate.
Zeal production during the quarter was in line with our plan at the cost.
678 per Geo and on the all in sustaining costs. That's 1039 bridge you.
All in sustaining cost reflects a company decision to increase exploration spend and concentrate sustaining capital spend in the second half of the year.
The I'd just on all the exploration spend allows us to build on the strong running result, being obtain across all the operation.
We show some of those resolved in the third quarter with exploration updates project will be now and can you didn't malartic and we'll be providing updates in Q4 fold Minera, Florida and opinion.
They're showing all sustaining capital spend provides greater sense certainty for Q4 and into 2020.
Historically Q4 is our strongest quarter and that threat that trend is going to continue this year and bring costs in line with annual guidance.
Talk more Sean more on that shortly.
Net earnings during the quarter of 201 million or 21 cents per share include a number of up item that might not be reflective of current and ongoing operation.
Most notably the 273 million gain on the sale of Chicago.
Well that there's an adjusted basis net earning a 52 million or five cents per share.
Cash flows from operating activities before net change in the working capital were 152.4 million or 16 cents per share.
We got school before dividend and debt repayment was 29.4 million compared to other was up 19.7 million a year earlier.
We declare a 100% increase to our dividend in the third quarter, raising our annual dividend to four cents per share.
And that's Jayson will discuss we we are looking to increase it further in the future.
It's wasn't eventful quarter with a number of positive developments, we decreased our total debt by 800 million.
Lowering our net debt by 810 million.
<unk> 949 million.
And we know how far greater financial flexibility to reinvest into business.
Whatever growth and increase shareholder returns.
1500 dollar gold doesn't that does not change our business plan noise will change the discipline with which we allocate capital a point I cannot stress I know.
But it doesn't mean, we will generate more free cash although it goes to further reduce debt and increased returns.
During the quarter, we provided the reserve resource and exploration update for Jack will be no.
Since year end 2017, I mean, all reserve increased by 20.5% and grade is up 5.3% increase support annual gold production above 170000 ounces.
Which was our previous guidance targets project will be no. Following completion of phase one expansion was expected in mid 2020.
Plans with bookings you drew approach our phase one target of 6500 tonnes per day at the recovery of 96.2%.
The remaining phase. So he is one investment is expected that consistency and stability to the process but.
The increase in mineral reserve and mineral reserve grade also supports the potential for the phase two expansion.
During the quarter. We also provided oppose it then exploration update for Canadian Malartic, including the discovery of New mineralized zone known as East Goldie.
I mean, there's at least I mean, the physician at these goldie hasn't been intercept.
But I do anything along 1200 meter of strike over 700 meter vertical extend across white intercepts.
In addition, the results suggest the potential for another zone between East Goldie and Odyssey.
Result, also indicated that he school D. As well. So you can see them zone or comes Virginia that suggesting that prospect for a large underground bulk tonnage opportunity.
The positive result drove our decision to disclose inferred mineral reserve resources below 1000 meter if what you smell stick at year end 2018.
Our 50% share was 1.48 million ounces, bringing our share of the total inferred mineral resources at these myopic to 2.88 million ounces.
Hundred then 6% increase.
Running at East go these ongoing and we expect a preliminary inferred mineral resources, what the deposit by year end 2019.
We initiated the burst Gees off can you didn't Arctic led by our chairman engaged in the purchase because of the cash flow from the operation and also the underground potential we conducted extensive diligence was only the audience. The potential was indentify at the time. We've concluded there was a strong potential and potential for a lot.
<unk> underground ore body.
Four or five mines are all underground operation and eventually all five will be with Canadian Malartic Rtms Yamana has years of underground experience.
As many as you know personally I spent over 25 years in underground mines in the that'd be TV.
There is this is a high priority for us after Jacoby now and we would consider the merits of getting some synergies from developing the underground while we still have open pits.
Turning to operation, we produced 239000 geo into third quarter, including 209000 ounces of gold and 2.5 million ounces of silver.
As mentioned, we choose to increase spending in the third quarter as it allows us to build on strong exploration results and set up for a strong Q4 and 2022.
Gives some added color, we expect fourth quarter operating cost to benefit from strong performance hotel opinion, and Minera, Florida from our lead to do with two great improvement.
We also expect to benefit from the start.
Production, a 400 gold mines at several mobile, including the I agreed Zoe underground mine.
Taking a lot that are in the visual mine, helping you on another strong quarter with production exceeding the same year same year earlier period as well as the second quarter of 2019.
The improvement was driven by higher gold and silver feed grade in line with that and that trend that we will continue.
We expect to continue in Q4.
We also expect that's helping you on production will exceed our guidance.
I think it's worth nothing that the recent mine development that helping you on us greatly improve the operation, but doctrine flexibility and follows a similar strategy undertaking that jacoby now, which once again exceeded its production plan and posted its third straight quarter. This year off record production.
Good subject will be not during the quarter were inline with expectation and lower than Q3 off 2018. The decline reflects the internalization of underground development activities that were previously under contract.
Chuck will be now is woke up this position to meet or exceed our river revised annual guidance of 152000 owns a g. audiences.
As mentioned.
We provided a positive exploration update for Jacoby now during the quarter and we continue to explore aggressively targeting New addition to mineral reserve at three grasberg done or better.
Production that they need and Malartic was in line with them and the mine is well positioned to mill to meet this school year forecast of 330 to 30000 ounces.
The extension project continues to advance as expected with modest contribution for Barnett anticipated into fourth quarter of 2019.
To wrap up will continue throughout 2020 with meaningful contributions sets to begin in 2021.
At Cerro Moro productions feed grade and mine ore grades were consistent with them, but lower than prior year period, and the second quarter of 2019 due to mine sequencing.
As a mention for underground mine are expected to being developed men and production during Q4, including the I agree there's only underground mine.
So I'm all continues to pursue an aggressive drill program 2 billion they do the a.
Near mine targets.
Test major and near mine and original structures at Minera, Florida. The production was impacted by lower gold grade and decreased with but due to the of Luffman challenges stemming for mechanical availability and mine sequencing compared to the prior year period mine management management, that's taking action to improve mechanical.
Visibility, which is expected to increase in the fourth quarter in relation to mining sequence, we shift production to the core mine to focus on exploration and development in the North Korea concession and prepare the P.S., but I go off and on the Opel do things for long term success over.
All RG steel production and costs are well on track to meet the 2019 guidance and now we'll add it over to Jayson to discuss the financials.
Thank you Daniel and good morning, everyone I'd like to start out with a thought to better cost performance during Q3 in recent quarters.
As you can see in the top left graph in relation to the first half of 2019 third quarter cash costs were stable at $670 per Geo.
Shifting to the upper right all in sustaining cost of 10 39 for Geo were impacted by the increase in our exploration budget as well as the timing of sustaining capital spend shown in the bottom left and right grass respectively.
Daniel mentioned the decision to concentrate sustaining spend in the second half of the year supports the highest quarterly rates of mining and production during the fourth quarter as well as improving access it flexibility in mining operations into 2020.
This strategy had been notably affected by Jacobean.
Resulting in higher production rates in recent years and quarter's ended up in your own where production levels have increased together with development rates there.
Higher spend leader in years sequencing and does not change our total annual guidance for sustaining capital of $167 million, nor did it impact cash margins due to the increase in the gold price during the quarter.
Sustaining capex in Q4 is expected at about $47 million, which were true up to our guidance for the year.
You think is expected to decline in the fourth quarter similar to the profile in 2018 and be in line with our overall annual guidance.
Following the improvement in the Companys financial flexibility one of the first decisions went to allocate a portion of our better casco profile to a higher dividend.
As such a doubling of the quarterly dividend getting dividends declared in Q3 and positions your mind it with one of the better yields amongst appears seeing here.
With an expectation of improving cash flow and cash balances the company will be evaluating future increases to its dividend rate.
Part of this appropriateness is how our dividend measures in relation to our revenue cash flow and on a per ounce basis.
There are factors, we will continue to consider in evaluating the level of our dividend and the sustainability about level.
With the growth in our cash flow and free cash flow profile, we intend to balance our reinvestment in the company through organic.
Growth opportunities in exploration with increasing cash balances and also improvements to our dividend.
Our expectation is there are opportunities for improvement across all of these measures.
Revenue in the third quarter with $357.8 million compared with.
$424.7 million in the same period last year.
The decrease reflects the company's current portfolio includes five mines compared to seven in the third quarter last year.
Yeah, a in the quarter with $21.8 million, primarily due to mark to market on stock based comp.
From share price appreciation during the quarter.
This was partially offset by the reductions in Genie announced earlier this year.
We continue to expect 2019, janey costs on a cash basis $68 million compared to previous guidance of $75 million.
Earnings attributable to you on equity holders in the third quarter were 21 cents per share.
Include certain items that may not be reflective of current and ongoing operations, mainly the 273 million dollar gain on the sale should pata.
When adjusted for these items earnings in the quarter were five cents per share more than double the two cents generated in the third quarter of 2018.
Cash flow from operating activities more than doubled in the latest corridor to $157.4 million from $64.5 million year earlier.
Free cash flow before dividends in debt repayments during the quarter was $29.4 million.
Reduce net debt during the quarter by about $810 million.
The performance during Q3 was a continuation of the inflection point on free cash flow that we had in Q2.
But we expect a further step change in free cash flow for Q4, with our best production quarter of the year.
Daniel mentioned, we monetize the gold price instrument during Q3 for $65.5 million in cash.
Decision to monetize the gold price instrument, followed a detailed analysis to determine the fair value of the instrument.
Our analysis of value factored in the forward curve in consensus views for the gold price gold price volatility and appropriately just counting the value of the instrument for risk and the uncertainty of the future gold price.
We concluded that a ferry of fair value cannot be derived by simply calculating the present value at the instrument based on the maximum potential payout over its five year tenor.
This view as corroborated during a price discovery process and led to the monetization of the instrument during Q3 for $65.5 million in cash.
Consideration represents immediate recognition of nearly three years or the maximum payment under the instrument a value that we mean that never have received due to gold price volatility.
As a reference we estimated the fair value of the instrument at around $35 million in April when the agreement to sell Chicago was announced.
On July 5th the Chicago closing date, and the recognition data the instrument as well we estimated the fair value at $54 million.
Monetizing assets when it makes sense for the business as it did in this case is another way in which we generate value.
And with that I will turn the call back over to Daniel.
Thanks, Jason It was a positive quarter for Yamana.
We delivered strong free cash flow growth and we will continue to do so.
<unk> costs increase in the quarter. This wasn't by choice and we will be.
We will bring costs in line with annual guidance during the fourth quarter.
We'll continue to evaluate our strategic assets and deliver value by advancing developing.
Where appropriate monetizing them.
Our upcoming Kinda. This includes exploration update for helping you on and I mean, it off and <unk> in Q4, and the reserve and resource resource update for the entire company in Q1 of 2020.
Results forms like will be knows Prefeasibility study are expected in Q1 of 2020, and we will be providing a preliminary inferred mineral resources for each school D and the same quarter.
And with that we'll be happy to take your question.
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The first question is from Stephen Walker with RBC capital markets. Please go ahead.
Thank you very much good morning, just wanted to ask Dan Yes.
Heard northern Star Barrick Newmont talking about streamlining.
Development cost underground and given your underground exposure down yet.
Could you talk a little bit about what we're seeing in the industry with respect to.
The development a.
Traditional development of a crude doing scaling bolting screening and then another crew coming into two do the jumbo drilling what we're seeing from the Australian and in some of the other underground mine here says that this now being streamlined to one.
Crews that has using the jumbo for that do you see the potential for adopting this modification in the underground Latin American operations is this something that could be a future cost benefit on unit mining costs for your manner.
Thank you Stephen a little each mine to each all underground mine is different than I think our costs are already I look at the close I'd tell opinion and I look at the cost that.
Jack will be not you know there are already quite low compared to the industry standard and then.
Look I think there's a certain might as you can do bolting with jumbos.
But thought reminds you need you need Boulder is and it's it's different it's in argues it's not different cutera crew, they're all part of the same cruel. There's a crew working to get or some are doing with the jumbo. Some are coming back after the to do the the mucking than than the bolt into the phase to be ready. So it depends all isn't degrade the I'm Aldo.
He says you have also and the priority you have a you know we don't have one single face off priorities. So we have we have many in our minds and then to be efficient.
That's the way you do it to your heart in many faces at the same time with the same crew. So I think each mine is different and when you have bigger mine with bigger opening then you can assume you can do it with the same equipment, but you know with the size of mine we have type of ore body. We have it's it's it's.
It's going to be challenging to be their friend, but like I said right from the starts were very happy you know when youre in the 2000 dollar per meter.
Doing development that you are mine I think.
It's challenging to go lower than that.
Great. Thank you and maybe just stepping back a little bit you've made a number of improvements to the operating costs on a unit basis do you see further improvements that are possible or are you starting to see cost inflation, whether its contract cost inflation maintenance cost inflation.
Are you starting to see impacts of.
Inflationary pressures on your unit cost or do you think deserves further benefits and improvement no. This further benefits of improvement that we've mentioned that 2020 and 21, we're going to continue to further improve we have great operational excellence and all our mines. They all work and share the benefit there do you see at each.
Over their mind, how to improve different area, we have implemented that that Jack will be in a few years ago and though it's implemented that all our mind they share their share benefits or ideas to improve cost and those are naturally as our production is going to go higher with grade.
And then we gonna been if it with lower costs, just by the debit or has it divide are being being higher so.
We we continue we will continue to see a cost going down 40 Amanda.
That's very helpful. Thank you.
[noise] thinking the next question is from Tanya Jakusconek with Scotiabank. Please go ahead.
Thanks, Good morning, everybody.
Couple of technical questions and then one for Jason.
From a technical side, maybe Daniel can we talk a little bit about that just on that challenge. It's like some of the assets fit very well back I mean, yes, I mean, I'd say I'm Laurel seen came to just be challenged in the quarter I appreciate that you're expecting stronger in Q4 footballer that maybe you want.
Happening now widest stronger Q4, and then does the guidance well I mean, there. He had 85000 ounces I can't give all sitting here in Atlanta Hunton parity for Cerro Moro. That's my first question Okay.
So I'll start with Cerro Moro I think Cerro Moro, we mentioned, we're going to be in the.
And for mines no underground starting this quarter, so you'll see a green going back up for Cerro Moro and then answering the second part of your question, we're very confident that several morals.
Production for the full year will be pretty close to the guidance.
For me that I've learned a great has gotten back up to what sort of level.
The 10 to 11 grams per tonne word to reserve grade is so above 11 that okay.
For a Florida, it's been more challenging I think we we've decided to a.
To a tool to change the way we were doing mining, we you're going to see cost decrease in Q4 production increase we're very confident it's though you dug a new meet the guidance probably is gonna be shy of guidance.
Globally will be higher than guidance, because like I mentioned opinion and.
And Jeff will be now will be higher than guidance Selmo will be.
That's close to guidance and metastatic who will be on guidance. So little bitty will meet the guidance for both gold and silver, but slowly though will be will be more challenging, but we see you will see great improvement in Q4 fulfill E. Though.
Okay, and maybe just some comments on where do you see this aspect going on that term Ang athleta.
I mentioned many times.
During this year that we see huge potential in exploration that the flow either.
You, though will be an 85 to 90000 ounces for a few more years two or three years. Then then we should see production going up and know what we're doing a new one is doing with the team at the minus is to adopt the cost without the reality of 85 to 90000 ounces per year.
And again I mentioned in Q2, and they'll see it again yos you'll have good surprises when will come with the resources and the reserve update in February four flow, either and many of our minds, but Florida and especially.
But we don't want to go two facets, though you the and go right away on these new his own and start to develop them in mind them without without doing the proper exploration before so we'll still very hopeful that flow. He though will will be a very good mine no or start to get this it's clear for the mine.
Make sure that we go to the best ideas, we ended up our cost to to make sure that them.
The mine is generating a cash flow and free cash flows.
Even if they're modest sites. These it's a it's gonna be into positive side of the their business and again I'm seeing good again, we're very optimistic on the future of.
Okay, and maybe you you mentioned reserves and resources that Trust My second question.
With all with everything that you've done this year I'm do you think you'll be able to replace reserves and resources, you know without changing that commodity prices.
Yeah, We said it also to it's clear that all our minds.
It won't change the the department or as we you was last year. So we used 12 50 to do our resources and the reserve last year resort and then we'll do the same this year. So all the same pyramid or is all the same exchange the same same value for everywhere, so gold price increases and won't increase the we.
Artificially or resources or reserve will using the same parameters as last year and yes, we're very confident that we're going to replace globally, our AR reserve and resources.
Okay and plug it dies, one one of the law will probably overperform.
Okay.
Perfect and then maybe Jason just coming back on I'm, sorry, your hedging policy for both currency and a golden I know, we've talked a little bit about you know you do have hedged guarantees going forward, just maybe talk a little bit about gold hedging strategy given that color you're pregnant.
Q4, and how do you see hedging 2020.
Yeah, I'll start with the currencies first that's the way you asked the questions Tanja and we've been a very steady state hedger of certain certain curries currency is when it made sense that's from a a a cash flow certainty perspective, I don't think anything has changed there. So you can continue a more of the same where we would hedge.
In certain cases between 50% is a 70% maybe up to 75% of a local currencies on the the girl question, Yeah, you're referring to the the color we put in place just for for Q4, I guess I'd start by saying and <unk>, we're not we're not going hedgers, we won't continue to.
Hey, it's called that was a fit for purpose.
You know for for a quarterly perspective.
We saw the opportunity with you know the rise up in gold prices and some of the dislocations that happened there and the volatility that presented an opportunity like that.
It really the purpose on Q4 I'll go back to that the comments I made a in my remarks about a profile of free cash flow.
We're very excited to have that inflection point in Q2 Q3 also delivered free cash like the Q4 is the one where we a you know we see a multiple of that free cash flow generation and really with the increase in gold prices were able to you know two to effectively locked lock that in that we can show that a current a trend upwards, but I would consider to that.
Hey, Oh, one and done as it relates to a gold hedging I think it also allows us to.
You know continue on our path of increasing cash of reducing debt levels. We don't have any real debt maturities due until 2022, we do have a more modest payment a fixed term debt in.
The first current quarter next year, so with that free cash that we've we've locked in we can you know the fees that are that upcoming got payment beyond that you should expect growing cash balances and Ah you know decreasing net debt.
So I didn't sign I understand that we would see.
No not played in nickel price I shouldn't be looking at your next quarter and thinking there's another caller coming but no name I wouldn't I wouldn't to conclude that no. Okay.
Okay, great. Thank you. Thank you.
Thank you.
The next question is from Michael Fairbairn and with Canaccord Genuity. Please go ahead.
Hi, guys. Thanks for taking my question, Jason just a question for you around capital guidance for the rest of year. I know you guys said that a in Q4, you expect to spend about 47 million for sustaining and first off I was wondering if you could give any more granularity around the.
Both the gross Capex stockpile, a capex at Malartic, and even that capitalized exploration or going into Q4.
And I also wanted to ask.
Around the percentage of exploration that would be capitalized I think at one point you guys had said that you'd expect to capitalize about 77% of exploration costs. This year I just wanted to know if that was still a fill the case going into last quarter.
Yeah, that's that's still pretty good might go and I'll try to run three though is if I forget something please just remind me as mentioned, we're gonna do our sustaining capital for the year I said 47 million on other calls you should expect that.
Expiration or you can see any disclosure we increased by $10 million. That's all capitalized exploration will go through there.
The expense portion is probably running a couple million dollars per quarter, that's still a good run rate.
On the growth side, we announced a few few projects. This year. So it'll be a couple of million dollars I'd say about guidance, but a big picture at call. It a call it online with with guidance.
On the.
On the stockpiling front, that's about a it's about a million tons at a at a at an allergic during during Q4 I believe so that's a pretty good number to use and just apply your and your mining cost of that.
Okay and are on a total basis are you able to give a any kind of guidance around you know what you expect that that total capex number to be.
[noise] on which vine and alike.
I'm just across across the board, including sustaining exploration stockpiling and growth.
Yeah, just to be it's effectively are all of our guided a oliver guided levels. Okay. All right. Thank you yeah yeah.
Thank you.
The next question is found that Mike gentlemen, with Bank of America. Please go ahead.
Oh, Hi, Dan or just a two questions first agora, because it looks like positive progress there a with your partners a tie them with Alhambra just wondering there might be a change and government Argentina very shortly a more or less Wayne just wonder if that would impact the.
Project pipeline.
And that I'm, just wondering on a Cerro Moro is yeah are you is it your mana getting cash out of the country with Ya Foreign exchange controls. Thanks.
Jason can answer the second part, but yes, we can I can see that we there's no. There's always show two to bring cash out of the country.
ER for Austria's and can give more detail, but that's not an issue and regarding your frequent first question.
After the first round over that action in Argentina.
Run up CAD to that Mr. Fund, then this even not even though week after that that that for a strong contact at all to mining companies to go meet them and then we were part of it.
And then we don't see any.
And the big change month on on on our part in the.
And in the country. After this this weekend's action. So it's the second round on Sunday were going to see the result, but so far we don't see major changes.
With with the potential new <unk>, new president of the country, we'll see what ought to resolve but we don't see any.
Any changes.
Yes, I like where we go studies going really well we've started the permitting process and and then.
Yeah, we're we're going through the phase of a of doing the p. The a that the fee study for mid next year.
Oh, Okay. Thank you, yeah, and Mike I wouldn't really add anything why the Daniels added business as usual and Argentina as it relates to a moving their money, we see no impediments to getting getting cash out and we've been operating in Argentina for for over 10 years and.
I have had experience in this before and we see this is a very similar similar aptus episode, it's it's a little bit more elbow grease, but it gets done normal course.
Okay, well thank you.
Thank you.
The next question is from Anita Soni must see RBC. Please go ahead.
Good morning, guys most questions have been.
Last.
January and February .
Coming into January are you Gonna do a production update as you normally do for the fourth quarter and then when we deliver guidance January or February .
Yeah, we we've decided as a company probably to do a pre production release twice a year. So January will probably be one.
Okay, and then July will be the other the other one so.
We don't think Theres, a purpose to do it to do it each quarter, but I think twice a year will be the wheel, we want to go into future. So you can expect that yes in January we going to pre release production.
On the on the guidance and then the resources and reserve. It's it's always a second week of February .
Yeah.
Thanks.
Thank you.
Thank you.
Once again, please press star one at this time if you have a question. The next question is from Stephen Butler with JMP Securities. Please go ahead, Oh, thanks operator.
Jason a interest payments how do you expect it will fall in a roughly what level in the fourth quarter. Thanks.
Oh, Yeah, Steve I guess, you can just you can build that up off of our Ah total total debt levels and gross that's about a.
1.1 0.05.
Billion, you can apply a 5% a rate to that that will account for the interest rates down standby fees and some other ancillary cost I think it's a pretty easy way to do it just divide it up for nine respectively, you'll need to take into account, our our free cash flow generation, obviously, and we'll see those debt levels going down so the interest.
Go down a commensurately.
Okay sounds fun, a then guys just on El pen Young I noticed your your ore mined approximately 2700 tonnes per day, just a hair above that and the ore milled about 3500 tonnes per day, just slightly less is the stockpiling strategy do you have a fair stockpile at opinion that can help sustain the mill.
That 30, 510 are pretty rate and maybe if I can give us essentially the tons and stockpile tons in great. If you have it.
Hi, Steve I going out and then I'm sorry, that's one here.
No one at this moment, we got about Oh, let's say 18000 tons of stockpile and we also have a low grade stockpile. So oh.
Oh, you can see I mean, we see that the contribution from the run of mine is increasing.
And country, sometimes little itself I use decreasing quarter over quarter. So this is a video strategy and displays.
On our Flexibilities to feed the meal someone of mine with more working in activities right. So into 2020 or 21 do you expect to be able to.
Sustain or even improve upon their run of mine from underground above the 20 710 pretty level.
I think we're gonna see improvement quarter over quarter nothing on I mean, we still working on our bunch up but thing on is trending Woody wells you know the rightsizing that we did.
And was I mean, it takes time you need to rightsize first a ton enough that after cost and we got the stays where we really rightsize our costs. So we see a really positive momentum and picking on and there's a we believe that there's going to continue over in 2020 and going forward.
Okay. Okay. Thanks, very much good yeah.
Thank you as a reminder, please press star one at this time, if you have a question.
There are no further questions registered at this time, so I would like to turn the meeting over to Mr. Daniel Racine.
Thank you operator, thank you everyone for joining us we look forward to updating you on our fourth quarter result in February .
For us at all or minus is business as usual. So we should have agreed Q4. They can we we mentioned many times a day in and in the past. Thank you bye bye.
Thank you.
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