Q3 2019 Earnings Call

Good morning, everyone and welcome to our mining third quarter 2019 conference call.

This call is being recorded.

It's time for opening remarks, and introduction I would like to turn call over to Stacey Pavlova manager Investor Relations.

Thank you operator, good morning, ladies and gentlemen, welcome to disarm Whiting first quarter 2019 calls during which will provide an update on our business I never give our financial performance.

And I said they send somebody says it's got to women out there.

He has been filed on SEDAR and Edgar and that also available on our website. So company, our called Verizon <unk> and you'll find information to I. So I've got no and it's really really know today's call.

Right now that all figures discussed during the call or a U.S. dollar unless otherwise indicated.

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Well be making forward looking statements today. So please read the disclaimer has seen a relevant documents.

Yes on the call. This morning are pulled back that's president and CEO , Greg Martin our CFO , Kevin Okay, see Oh, Karl I like Vice President exploration, Oh, Somebody's dog <unk> Senior Vice President Isabel Novakov try to be now I would like to turn the call all but that's all for opening remarks.

Thank you Stacy good morning, ladies and gentlemen, I'm pleased to welcome you to I call to discuss how could quota 2019 operating and financial results.

Q3 was another strong quarter as we produced over 100000 gold equivalent ounces at Atthree operations, delivering improved margins and maintaining a strong financial position.

All three mines achieved solid results.

See be delivered a record quarterly production without a 32000 ounces gold, while achieving quarterly records in recovery and gold grade under <unk> ownership.

At Marigold, we produced nearly 53000 ounces go well stacking 6.4 million tons of all at a high quarterly gold grade 0.51 grams per tonne setting us up well for the remainder of the year.

The Qunar operations, where we consolidated 100% about wanting to ship in September we produced 1.7 million ounces of silver during the quarter.

This improved production goes coupled with an increased amount of all mines in advance of the rainy season.

The strong operating performance in production results are they sought position us well to meet or exceed our consolidated production guidance for the eight consecutive year.

From an exploration perspective at 29 team programs at Marigold, CB and put it out it continuing I caught will provide an update on eight shortly.

Pleasing to see positive exploration results to date at Marigold, MCV, which we are expected to add to reserves and resources at year end 29 team.

At the recently acquired Trenton, Kenyan property immediately south at Marigold, we focused on confirmatory work that we expect will allow us to bring some of the resources Newmont had identified during its starting to ship at the property into Allen said resources at year end.

Next year, we expect to fund the Diamond drilling campaign looking to tape out quite right so called targets.

We're also pleased with that financial performance during the quarter as we reported $28 million the jobs to the attributable net income and generated $53 million with cash from operating activities.

We increased our cash balance to $474 million at the end of the third quarter as we generated a 22 million barrels of free cash flow.

Notably a cash and $51 million in marketable securities Matt talked about half a billion dollars, which provides us with significant flexibility.

With that I'll turn the call over to Kevin will discuss the operational performance in more detail.

Thank you Paul as you heard our operational performance in Q3 and year to date continues to track well against our consolidated production guidance, which we improved at mid year.

We produced more than 100000 gold equivalent ounces during Q3, a consolidated cash cost of $759 per gold equivalent ounces at Marigold, We produced 52968 ounces of gold, 4% less than the second quarter, mainly due to stacking of or under higher locations under leach pads.

Which means it takes longer for the solution to reach the collection system.

19 million tons of material were mind inline with the second quarter, approximately 6.4 million tons of ore were delivered to the heap leach pads at a greater 0.51 grams per tonne gold an increase in stock gold compared to Q2.

The gold grade to the Leach pads was 34% higher quarter on quarter consistent with plan as we might higher grade ore in the current phases Iraqi pet.

The strip ratio was two to one for the third quarter.

Cash costs were $822 crowds, 2% lower than the second quarter.

Higher fuel entire costs due to longer hauls and timing of change outs were offset by lower labor in my maintenance costs.

<unk> costs were impacted by increased royalty cost with the higher gold price and lower deferred stripping offset by higher recoverable out so stock during the quarter.

Sustaining capital expenditure guidance has been increased by $10 million to $45 million.

Back to the delivery of a replacement hydraulic loading unit in the fourth quarter.

The loader was anticipated to be acquired and 2020, but due to favorable lead times marigolds advancing replacement before year end.

Subsequent to the quarter and Marigold received a positive record of decision that's Marigold mine Mackie optimization, yes.

Moving on to see the my produced a record 32345 ounces of gold in the third quarter of 2019.

22% increase compared to the second quarter due to higher mill feed grade, which more than offset lower throughput Cas cost were $373 per ounce compared to $526 crowds in Q2, 219, 20% lower 29% lower due to make due mainly to higher production from the higher feed grade.

The mill processed 842 tons per day over the third quarter, 13% lower than the previous quarter, mostly due to electrical transformer damage, resulting from lightning strikes nearly a full weaker production was lost from this weather related power outage.

Gold mill feed grade was 12.39 grams per tonne, 26% higher than the previous quarter due to the mining of higher grade stopes gold recovery for the quarter was 98.8% up slightly higher than the second quarter and a record quarterly result during our ownership.

The new underground equipment Commission during the second quarter continues to operate well underground development rates were flat for the quarter, mainly due to the power outages, we still expect to reach a mining rate and hence the processing rate of 1050 tons per day by year end to 19.

As we indicated during previous calls we're expanding the crossover tailing storage facility to accommodate the increasing reserves added during the past two years, we will complete 100% of the 2019 scope for the tailings expansion project. During the first half of Q4 219. The project remains on time is tracking well talk about.

Good.

Good operations produced 1.7 million ounces of silver during the third quarter, 12% higher than the second quarter of 2019, mainly due to higher mill throughput and silver grade silver sales totaled 1.5 million ounces.

Cash costs were $14 in 22 per ounces of silver for the third quarter compared to $9, an 80 cents per ounces silver in the second quarter, mainly due to lower byproduct revenues and higher operating costs.

During the third quarter or was melted at average of 3648 tonnes per day, 7% increase compared to the previous quarter, mainly due to improved from improved performance of the new tailings poking system.

During the month of September 2019, always milled at an average of 4539 tons per day.

Process or the third quarter contained an average grade of 165 grams per tonne silver a 3% income increased compared to the second quarter consistent with the mine plan, an average silver reserve grade the strip ratio during the quarter was 4.3 to one significantly lower compared to the previous quarter as we indicated during our second quarter conference.

Call.

In summary, the operations again delivered solid results during the quarter setting us up well for a record full year gold equivalent production with higher throughput FCB and the head grade at CBS Marigold near the reserve averages in the fourth quarter.

I'll now hand over to Carl who will take you through our exploration activities.

Thank you Kevin.

During the quarter, our exploration activities remain focused on supporting the growth of mineral resources and reserves that are three mine sites.

Well most of the activity occurred at our North American operations. We also began mobilization for a diamond drill program at our Pirquitas property at Poon operation.

At Marigold, we have been active on several fronts at Red Dot geotechnical drilling and engineering work advance towards the goal of declaring additional mineral reserves, well infill drilling continue that mackie and north and South Red dog.

Exploration drilling to define new additional resources continue that Bobby Cross fire and the east the salt targets in total during the third quarter, we completed 17000 meters of drilling in 51 RC drill hole.

We are encouraged by results received during the quarter from the crossfire target on the only property with results such as 48.8 meters grading 0.85 grams per tonne and 21.3 meters grading 1.17 grams per tonne into old space 75 meters apart.

These are open for expansion and located at minimal depth outside areas of pass mining and are expected to increase our mineral resources estimate at Marigold at year end 2019.

Late in June we announced the acquisition of the contiguous Trenton Canyon property, which almost doubles our land holdings at Marigold during the quarter, we began drilling on the project, which presents several interesting targets ranging from near surface oxide deeper sulfide targets.

We are currently focusing on near surface work to define oxide resources to be added to our mineral resources estimate at year end 2019.

Additionally, we expect to allocate budget in our 220 20 exploration program testing for higher grade deep sulfide targets on both Marigold and the Triton Canyon property.

Moving to CB, we've continued underground exploration of the GAAP hanging wall, Santoy, a and Santoy gap mineralized zones.

Most of the work centered on the 1200 meter long GAAP hanging wall zone, where we defined we're defining additional mineral resources and which we expect to report at year end 2019.

During the quarter 13732 meters of drilling was completed from three underground drill stations. In addition to the exploration information we published in July in the quarter. We received positive results from GAAP hanging wall, such as 16.3 meters grading 5.97 grams per tonne.

Five meters grading 10.9 grams per ton and 3.6 meters grading 11 grams per tonne gold.

Encouraging results were also returned from Santoy, a well we've connected in area between two loads of indicated resources with results such as 5.8 meters grading 19.8 grams per tonne and 2.6 meters grading 29.8 grams per tonne go.

Greenfield activities on TV in the contiguous Fisher project wrapped up for the season in the third quarter objectives here are to identify new areas with potential for inferred resources through soil geochemistry prospecting trenching geologic mapping.

The work is located numerous zones of anomalous golden bedrock and soil located near Batman Lake.

And an area 800 meters north of the gap underground workings as well as north and south of the Max own on the Fisher property.

Analytical results will be received during the fourth quarter of 2019 and will form the basis of some of our 2020 exploration work.

Shifting to put operations, we mobilized one diamond drill to our Pirquitas site to drill the Granada target, which is located 802000 meters below the area between the quarter Darice underground resource and the depleted San Miguel pit.

The drill target is the intersection zone of two major mineralized structures in the district, and we expect to report on the progress here next quarter.

Now over to Greg for a discussion of our financial results.

Thanks, Carl I'll keep my comments brief as the quarter delivered what our investors would expect with improving precious metals prices predictable operating performance, which delivered strong financial results at expanded margins.

All operations contributed positively to the quarter corporate and capital spending remaining on plan.

For the quarter, we generated revenues of $148 million, an income from mine operations or $52 million.

Revenue was similar to the second quarter as if you recall the second quarter benefited from a catch up and silver and zinc concentrate sales at put it operations.

However mine operating earnings increased 74% compared to the second quarter, showing a strong increase in operating margins at all of our operations.

This improved margin increased our bottom line significantly as we reported net income of $18.1 million or 17 cents per share and adjusted net income of $28.4 million or 23 cents per share.

Each of our quarter on quarter increases of 89% and 53% respectively on a per share basis.

You are likely noted the high tax expense in the corridor. This was driven by a larger than normal deferred tax expense.

So therefore noncash tax expense at put it all operations due to the significant devaluation of the Argentine peso that impacts the tax basis of the operation.

We continue to forecast not paying cash income tax in Argentina over the coming few years.

Turning to cash flow the story is even better.

Cash flow from operating activities totaled $53 million, an impressive 57% increase from the second quarter.

Cash flow would have been even stronger if we hadn't built gold bullion and concentrate inventories in the quarter due to timing of shipments from the sites.

Sustaining capital at all operation stayed consistent with guidance with capitalized stripping below expectations as both marigold and tuna mined at a lower strip ratio.

We made a top up investment in silvercrest shares of $3.4 million to maintain our 9.8% ownership.

Which was largely financed by offsetting sales in other marketable securities.

This investment takes the average entry price of our investment to Canadian $3, a 91 cents per share with their current share price about double that amount.

We ended the quarter with a higher cash position of $474 million as we generated $22 million into free cash flow.

Working capital stood at $636 million at quarter end.

Of note in the quarter was the acquisition of the 25% interest into an operations.

Since we already consolidated 100% of food as a controlling shareholder the impacts to our financial statements were fairly benign.

We recorded the minor cash payment and our investing cash flows.

With the remainder of that transaction being balance sheet changes as the non controlling interests previously reported was compressed into equity and the partner loan was eliminated.

Going forward the simplifies our reporting and gives us full economic exposure to the asset.

That Shouldnt Gs project has now effectively been completed however, some capital amounts will flow to the last quarter as we clear contracts and hold backs.

Well, let food operations just to comment on the reported cash costs, which jumped a fair bit from Q2.

I have noted previously that we'll see volatility and reported cash costs at tuna due to its nature as a concentrate producer with meaningful byproduct credits.

We had a quarter with low byproduct credits and low deferred stripping both of which impact on reported cash costs.

Also at both today and more so at Marigold higher metal prices well most welcome resulted in higher royalty charges flowing through cash costs.

Looking forward to the fourth quarter, our focus remains on delivering improved consistent and predictable financial results to close a successful year.

But those comments I'll turn the call back to Paul.

Thanks, Greg.

So in summary, another strong production quarter, which positions us well to meet or exceed guidance for the eighth consecutive year.

The solid operating delivery at all three mines translated into a strong financial performance for the quarter with improved margins $22 million of free cash flow and an increase cash and marketable securities balances by the half a billion dollars.

With this we completed the formal remarks about lending coal I'll now pass the line to the operator to take any questions you might have.

Thank you Mr. Benson, we will now begin the question and answer session to join the question Q You May Press Star then one on your telephone keypad, you will hear its own acknowledging your request if you're using his speakerphone. Please pick up your handset before passing any keys to withdraw your question. Please press Star then too.

We will pause for a moment as college trying to Q.

The first question comes from Mike Parkin of National Bank. Please go ahead.

Hi, guys. Thanks for taking my question.

Depreciation per ounce notice the trend.

This is dropping from Marigold CB seems for each quarter.

On a per ounce basis is that something that.

Like where do we see that kind of stabilizing on a go forward basis or should we benchmark that off like a per tonnage basis.

Yes, Thanks, Mike.

You know, obviously that the overall depreciation charges really broken into two components one.

Which is the pp in east side.

Which is really looked at if you look back at our at our accounting policies is done on a straight line basis. So thats more tied to the overall mine life. So with the success, we've had at both CB and Marigold.

Yeah, we've seen that charge you drop.

Because of the mine life extensions there so I look back at our reserve basis for those two operations to to look at how that any gets split over the coming periods.

The other pieces that depletion piece, which is the minute mineral resource part, which is done on a units of production basis. So again that should stay relatively stable within the year thought will decline as additional reserves are proven up.

And we can then amortize that.

Depletion over more ounces the part that does cut caused some volatility is really the deferred stripping piece.

Because that's done on a phase by phase basis will be amortizing that deferred stripping.

Over the existing phase and that one's a little bit more.

Challenging to predict but it's a smaller component of those three pieces.

Okay.

All right good a and then.

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I'm really so with their preferred strip bumps thing so.

Okay. That's good thanks, so much.

Thank you.

The next question comes from Cosmos Chiu of T.I.B.C. Please go ahead.

Hi, Thank you, Paul Greg, Kevin Karl and of course Johnny.

Maybe first off on Marigold here I'm, good to hear that likely we'll see some inferred resources come out.

Maybe by year end on Trenching Canyon, but I'm just wondering like when can we find a bit more detailed fight a bit more detail on these newest acquisitions, Trenton, Kenya, and Buffalo Hill, Buffalo Valley, and when they might potentially come into into the mine plan.

Yeah. Thanks, Cosmo I'll answer that one would be we.

The focus at the moment really is on the Q I QC and Conservatory wood on the results that Newmont ahead, and that's what we're talking that we expect to see some of that come into our answered results. When we do the update early next year.

And that's really do the work we're doing there at the moment next you will find exploration that sort of two levels one chasing the upside to see what we can.

Yes prove up there, but also I will start to fund the data exploration program targeting the high grade, so, but and that will start next year.

Because it would be a satellite operation.

We have to do the work we've got to do the any study to see how any discoveries. There are actually then brought into the marigold operation and that will play out over the next couple of years. Yeah. We're really excited by the ground we've doubled the land position.

And we already neither a targets there and hopefully we'll continue to find more <unk>.

And that sort of leads me to my next question herself.

So it's a huge positive that.

You are able to get the yes permit for the expansion at Marigold, now, including Red dog and the associated facilities, but then I guess, maybe this is too early but if we were to include some of the other acquisitions the true trenching, Kenya Buffalo value again could you walk us through what other permits you might potentially need and.

In terms of walking through that process of getting them back up and running.

As a.

Simple generalization you can't have more than one permit application in at any one time in Nevada. So.

We started that process back in 2015 around the same told me Board Valvoline says Elmi wasn't included in that.

So we now we have that record of decision on the Marigold mine property, we're going through a planning process to decide how we what we do next you know whether we can.

I will get might Val me with Trenton Canyon in Buffalo Valley.

Once we decide the best way forward on that obviously in full in the market in terms of the process. We're running the important thing or is that.

Dan at Trenton, Kenyan Yeah. There is there's just a ground if we're able to drill that already said that isn't held up but so yeah. We don't say it impacting delaying any about mining decisions <unk> push or.

And I noticed that for your sustaining capex for 2019 at Marigold increased by $10 million you did mention that it's for the hydraulic load or that.

Oh, sorry, you're going to bring in that was to be schedule for 2020 about but now brought into 2019 is Tim the entire 10 million for this hydraulic loaded because you know again 10 million seems to be a bit high in terms of just for one hydraulic load or is it just isn't those big rope shovels that I've seen on site right. This isn't it.

Mission to it.

Yeah, I'll pass it over to Kevin Thanks, causing Kevin It's high it is at hydraulic shovels and it's it's about halfway in size between our existing hydraulic shovels in the large rope shovels. So it is a large trouble.

And what we talked about last year was with the optimization study we were thinking we looked at whether it made sense to begin a big rope shovels. The issue. There. You also then had to increase the haulage plate sized significantly as well and that analysis said, we didnt need to do it just one is a bit big.

Then the existing hydraulics and it will give us significantly more flexibility and all it'll have a lower mining costs. The reason we brought it in this year is it just happens that theres one available it okay ready to go so it avoids the 10 month Whiting time, so it was.

Yes, we were lucky to be able to get that.

Of course.

Maybe switching gears a little bit here.

You know I noticed that you've maintained your 9.8% interest in Silvercrest and that's a question I got quite a bit.

And as well from investors.

[laughter], So maybe Paul if you can.

Kind of reconfirm or remind us of any stand still agreements that you might have in place and what's your current thinking right now in terms of that investment clearly you've made good money on it I think you got in with at about three handle now it's a almost doubled so what's your current thinking at this point in time.

What we've said all the way along [noise].

Yeah, when we took that position we like the project, it's a great project and obviously the standout aspect of it is a great very high grade and great always rules.

We kept down nine point I present position during the quarters that they did a further capital raise a the team they've done a tremendous job Bose.

In terms of geology, but also advancing the project I think they currently working to a pre feasibility.

In Q2 of next year.

And what we've said to our shareholders all the way along is that.

We're very happy with the project, we were benefiting from the exposure long term will either end up buying more of it or less of it but we will make a decision based on how we how we think it suits our shareholders and so we're happy to sit back at the moment and so you have that project develops HM.

I don't know again, if you can answer this question, but is there any kind of timing in terms of when you might be making that decision no. Yeah, we're happy to sit back and watch them Yeah is there.

I've indicated at the moment I think around maybe for the feasibility study.

And so we'll wait and see what happens <unk>.

And then maybe one last question accounting question here, if I may.

Greg as you mentioned, you're not you don't foresee pay any kind of cash taxes in Argentina.

And you know if I look at your financial statements. It doesn't seem like you're paying cash taxes overall as a company.

I'm just wondering if you anticipate that on a go forward basis in terms of cash taxes.

You asked a question because I guess I see that your deferred income tax asset has now.

<unk> decreased to almost no $63000 your deferred tax liability has increased and.

Based on my priority Korea, as a non practicing accounting.

I would be somewhat connected to how much cash taxes, you might be paying could you maybe walk us through that that aspect.

Yeah. Thanks Cosmos.

I think as a basis I just refer you to that cash flow statement in a clearly shows the income taxes paid line. So we are paying cash taxes at marigold.

And CB a there is mineral taxes payable on both of those and obviously, depending where gold prices end up.

Well pay income tax at those two jurisdictions and as well in Argentina, Yeah, we do pay royalties and other provincial taxes, they get reported as royalties not through the tax line because there are tied to an NSR not an income tax. So I certainly don't want to leave the impression that we aren't paying cash income taxes as that arc.

Hi station because as you can see we've paid about $15 million year to date of income taxes I. It was a bit lower in the quarter, but that's just timing as we file.

Our income tax returns at mid year that tends to focus the bulk of the payments in certain periods of time.

Okay and.

And then maybe since you mentioned, Argentina, maybe I'd mentioned Argentina.

You have been in Argentina for long time, you know you know Argentina well.

You know.

About two weeks ago, no there wasn't an election.

Left leaning party that you might know elected.

You know chinchilla, Argentina as a percentage of your and Avi is now a lot less significant than it would have been seven or eight years ago. However, I'm. Just wondering if you know we should be concerned any concerns that we should have in terms of Ah you know the changes in Argentina.

Oh yeah.

Obviously, the actual government changes in I think its December .

Certainly the president elect.

Has the previous track record of Yeah, I think thing you have very fiscally responsible so yeah.

I'll people on the ground, Oh, obviously paying attention.

But some way away a yeah, we've got to a good business there were significant employer in the who either.

And.

The business is running smoothly down there that Tom.

Well wait and see how things change in the country are they coming 24 months <unk>.

Right that's off upon team and congrats on a very good financial quarter here.

Thanks very much goes.

The next question comes from Chris Thompson of P.I. Financial. Please go ahead.

Good morning, guys. Congratulations on a really really good quarter and thanks for taking my questions I think kosmos onslaught of them and we received a lot of ounces. Thank you Carlos mine. So I have a couple of additional one so.

Really one question two parts a same theme I wonder if you could walk through the nice bump in grades.

<unk> and Marigold.

Specifically or are they sustainable by way of fee Marigold, sorry, My where the mine plan envisaged in the near term for each month.

Oh I'll talk to see then I'll, let Kevin talked to to Marigold with CB, there's significant variation in grade.

The across your body. The I think the average at the beginning of the was 9.2, we've obviously mind about that as the quarter, but that area that we mined was more or less in line with the model. So yeah. It was not unexpected.

And very much yeah, according to our schedule.

We've indicated that we expect grade to come back closer to reserve writing to full Kevin on Marigold.

Yeah, I mean as again at Marigold I mean, the variability in absolute terms is not as large a at marigold is as as CB.

As we indicated in the call the grades in the fourth quarter and going forward, we're going to be in the neighborhood of the reserve.

The reserve grade and so that's what you should expect.

Okay, great. Thank you for that and then just a final question I guess just moving over to Panna.

I wouldn't be just sort of update as my way of.

Oh plant optimization, specifically the balance between I guess.

I think.

Yeah zinc is the mine a product that.

We run the plant to maximize silver production.

And the Silva goes predominantly with the the laid a as a concentrate so everything's driven around maximizing the value. So silver is very much the does that product Kevin any other comment.

Not only do we run the plant that way, but we feed the plant that way from the stockpile. So that we we see the highest grade value first are highest value material first.

With the highest recovery, which is the silverlink combination.

Right. So do you think the I guess for Q3 Q3 grades we saw growth by way of lens incur a representative of what we should expect moving forward.

Yes.

Perfect Alright, guys. Thank you very much.

Any other thing I was going to size in terms of byproduct credits yeah. The we produce to call inside the laid column, which has a silver and zinc con and I get shipped separately in a different times. So that's why you can get variation in that as well.

All right guys. Thank you very much.

Yeah.

Once again, if you have a question. Please press Star then one.

The next question comes from Adam Graf of B. Riley. Please go ahead.

Hey, guys. Thanks for taking my questions and I'm just a quick you guys still are holding up Pedra Ria and Saint Louis saw the books just curious if theres any progress. There are you guys are have considered given current pricing.

Of the a of the underlying commodities, maybe potentially spending those out into a a separate equity.

Spin out and try to gain some value there.

Yeah, Adam I'll, just talk briefly to a pit array or and then I'll, let Gregg talked to San Louise Good pit area, Yeah, what Weve indicated is that.

The beginning of last few we said we're going to have a look at.

Configuration focused on the high grade sulfide adept.

And we said we'd only go ahead with that project. If it was a double digit Iraq during the year. We indicated the results what it was definitely NPV positive and this was a spot prices.

But it was single digit and we're sticking with that discipline. What we had noted however is that the resource and reserve modeling hit all being done assuming an open pit and the drilling is being done assuming an open pit. So it was.

Tends to be a vertical holes the high grade mineralization that dips tends to be sub vertical. So we knows that the drilling probably fall had the risk of underestimating the amount of high grade so well.

Looking at a project to see whether we extended the there's an existing declined that was put in in the 2000.

Extending that a bit to get into position way, we could do some horizontally infield drilling the objective there would be to see whether we can increase the size and all the high grade that would improve the economics of the project were just going through a process of free bidding on the development for that.

Matt and saying what's available data in Mexico.

The.

Probably checked all up order of magnitude if we went ahead with it.

<unk> figure would be about 10 million and it would probably take ita into 24 months when you consider the development and the.

The drilling that you'd do from that and I think yeah. It would make sense for us depending on what those.

Contractor costs come in for us to do that before we make any decision on the project.

And San Luis over to Greg.

Yes, [laughter] excuse me thanks, Adam.

As you as you know I mean, San Luis is at high grade high cash flowing.

Relatively modest sized asset. We've you know we've had some progress this year with that communities. We had step back for a couple of years just to let that situation settle down and we.

Started a strategy of Reengaging in late 2018. So we have you know we have seen some progress and were back into.

And just sort of at an active community engagement piece with both the a cashing coach abound. The communities that have signed some you know some recent agreements with them. It is you know it is still step by step. So you know we're taking it slow, but we're encouraged that theres. Some some progress in some better engagement from the community.

Side there yeah, all ultimately our strategy here is to position the project for maximum value and whether that comes through you know as a development project for us or as a as a different model you know, we'll make that decision as we as we get the project to a point that we really feel it stabilized.

Nothing I, just said I think.

Greg has led that same in country and when you look at.

The other news that's happening in Peru, where they're paying lots of issues.

Where people are gone backwards with respect to community relations et cetera. Yes. This is really Dana impressive result, you know we've been happy with the progress has been.

Slow and steady, but that's the way you didn't move these projects alone. So you know.

Yeah, hopefully, we'll continue to chip away at that over the next calendar year.

Excellent.

Look forward to hearing go further news from from those two potential assets.

Okay from the from what we can say the funnel coal so with that thank you very much for joining the coal and speak to again next quarter.

<unk>.

This concludes todays conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.

Yeah.

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HM.

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