Q3 2019 Earnings Call
This call at this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time.
If anyone should require assistance during the conference. The please press Star then zero on your Touchtone telephone as a reminder, this conference call is being recorded I would now like to turn the conference over to your host Mr., Mike Westerlund, Vice President of Investor Relations.
Thank you for joining us for Heclas third quarter, 2019 financial and operations results conference call, but actual results news release that was issued this morning before market open along with today's presentation and the Casa Berardi East Mine exploration Press released Tuesday are available on our website on today's call [laughter], Phil Baker, President and CEO Lindsay Hall, Senior Vice President and Chief.
Financial Officer, Lorne Roberts, Senior Vice President and Chief operating Officer, Kurt on director of exploration, keep where chief geologist and Larry Radford Chief Technical Officer.
Any forward looking statements made today by the management team come under the private Securities Litigation Reform Act and constitute forward looking information under Canadian Securities Law as shown on slide two or three such statements include projections and goals, which are likely to involve risks detailed in our Form 10-K Form 10-Q went into forward looking disclaimer included in the earnings and exploration releases and at that.
Beginning of this presentation.
These risks could cause results to differ from those projected in the forward looking statements. In addition during this call. We may disclose non-GAAP financial measurement you can find reconciliations of these measurements to the nearest GAAP measurements in the accompanying presentation, which is available on our website triple Belvieu Dodge Dart Hecla mining dot com finally in our filings with the FCC, we are only allowed to discuss.
Mineral deposits that we can reasonably expect to economically and legally extract or produce investors are cautioned about or use of terms such as measured indicated and inferred resources, which are not reserves and we urge you to consider the disclosures that we make you get our FCC filings with that I'll pass the call. The filmmaker Thanks, Mike and good morning, everyone. As you can see on slide four.
The third quarter was an eventful quarter for Hecla, we reversed the outspend generating 29 million of free cash flow.
Sure as result of that we were able to reduce our net revolver borrowing by 26 million.
We generated about 70 million of adjusted EBITDA.
We reached an agreement with the Union a tentative agreement with the Union at the Lucky Friday.
We expanded cast birdies east mines high grade mineralization and that mineralization could have material effect on future production potentially as early as 2021.
And we made great progress on San Sebastian Skews, and El Toro, where decisions on both could be made next year.
So let me take a moment and tell you where things stand with Union that we're glad there's a tentative agreement between the unions negotiating committee and the company that can be put before the membership for a vote well neither side got all that it wanted we think this agreement is consistent with agreements at other north American minds, unionized or not and.
Puts the Lucky Friday on a path towards long term success.
We don't know when or even if it will be brought to a boat by the membership we hope it soon lucky Friday being fully operational will be good for workforce or shareholders in the silver Valley community. It's just a good thing for everyone.
Now this quarter came in largely as expected we expected to generate this amount of cash flow in EBITDA due to our visibility of how these mines operate with the exception of Nevada. We have operated these assets for six to 61 years, we know generally what to expect and most of the issues we must deal with.
An example of an issue our shipments at Greens Creek, there's always a quarter or to every year, where we have a timing issue. This quarter, we had a timing issue because a customer declared force means your which delayed our ability to nominate a ship and then a weather issues delayed it's.
Coming into our poured it at Greens Creek, and so the concentrate didnt depart until October in response to that we sold the concentrates to a seller and to a trader we received the cash and we recognized deferred revenue, but it didn't show up as revenues. It was the first so it will show up.
In the fourth quarter, unless he is going to talk more about this.
So what do we expect for the rest of the year well, our production and cost estimate seven change and we still expect no revolver debt at the end of the year. We also expect sometime between now and the middle of next year to refinance the senior notes with which had been trading just below par since her last earnings call.
Significantly better than where where they traded after our Q1 earnings the improvement in the bond market for us and the bond market in general combined with our stabilized financial performance in progress on alternatives to the bond market gives us confidence that we can refinance with a reasonable deal. So rifai expectations are unchanged.
As you can see on slide five the share prices above where it was after the first quarter news release releases and we believe the shows along of course with higher metals prices.
Like the bond market the equity market has recognized the turnaround that's underway.
Our share price has risen over 80% since our Gen. Nevada announcement was made and we hope this continues particularly if we continue to deliver on our plans.
Before I turn the call over to lens the I'd like to thank glaring Radford for his service to Hecla. He advanced Greens Creek Kasper already San Sebastian Lucky Friday to all become mines with Great Futures and Larry you been really helpful and the transition to Lauren and so we wish you well in retirement now I'll turn the call him or do anything.
Thanks, Phil and good morning, everyone.
We're happy with the quarterly performance of the assets and the resulting strictly strengthening of the balance sheet. The 55 million of third quarter cash flow provided by operating activities was higher than the first and second quarters and after deducting 26 million of quarterly cash expenditures for the quarter resulted in us generating 29 million a free cash flow.
Before financing transactions and 24 million. After this was accomplished in a number of ways. Firstly you may recall that we projected our second half would be stronger than the first particularly for gold production and in Q3, we have reduced 16500 more ounces than the second quarter of this year.
This combined with higher metal prices added almost 30 million more revenue than this years second quarter. The cost of sales is about 10 million lesson Q2.
As Phil mentioned in this quarter, we sold two parcels of lead and zinc concentrate or the Greens Creek mine and receive cash in the quarter.
A record the sale during the fourth quarter. The sales recognition was deferred to the ship carrying the concentrate arrived late into Greens Creek port due to weather, resulting in his departure a couple of days after September thirtyth, Hence the reason for on the balance sheet you see a line item called deferred revenue of 20 million.
As you can see on slide eight silver margins are up over last year's Q3, 46% because of higher prices and lower cost per ounce due to the byproduct gold.
Gold margins are almost the same amount due to higher prices.
But the most telling thing is the improvement in margin over the past three quarters when gold margins were essentially eliminated this reflected in our EBITDA and cash generation.
Kassa, we knew we do we have than we would improve wouldve been prove that was a plan.
But for Nevada, we had to take the step a slowing down activity until we develop a new more achievable plan.
This quarter's increasing kept in the margin demonstrates progress.
Towards our leverage goal.
Two times net debt to EBITDA.
Clearly, we're not there yet on the last 12 months basis, but with this quarter and what we expect in Q4, we're certainly headed in the right direction.
Looking forward, we expect a strong fourth quarter, which should lead to full repayment of the revolver and some cash on the balance sheet.
Subsequent to the ended the quarter, we purchased the additional puts for forecasted production of gold and silver in the second quarter of 2020.
Establishing a solid floor of revenues in that into the near future.
All of these initiatives are focused on ensuring that when we enter into the financial markets to refinance existing 500 million, we do so from a strong financial position.
As an example, the revolver is a forecasted to be paid down by year end and a projected needs for liquidity purposes of a revolver. There's no more than 150 million essentially freeing up a 100 million available capacity that we currently have with the banks, which could be reconstituted as a term loan.
This is again provides another potential option available to us if we choose to refinance a portion of the ones portion of the bonds.
Rather than refinanced the Paramount.
Through the capital markets.
As well with our even with our debt to EBITDA ratio is improving and the tentative agreement at Lucky Friday, we anticipate refinancing the bonds on a timely basis.
And at appropriate cost of funds.
Lastly, as you can see at the bottom of the chart of the slide that our bonds are performing much better than they were in June .
So it was a strong third quarter and we anticipate a strong fourth quarter as well setting us up for 2020, I will now pass the called Lauren.
Thank you Wendy and good morning, everyone.
I've been on the job as COO for a little over three months I spent time at all the mines I would like to offer my perspective on each.
Starting with Greens Creek mine is performing very well the new mine plan, we detailed with the 43 one to one in April of this year reflects a continuous improvement culture at Greens Creek.
We saw the opportunity to reduce development and better utilize people and equipment with a new mines sequence that advances the high grade zones and increase is cash flow.
Result, as an increase in the mines value, while we continue to extend the mines life.
This is important because Greens creek represents about 40% of the revenue and as a consistent generator of free cash flow.
I see that continuing.
The third quarter. The mine produced 2.5 million ounces of silver and over 13000 ounces of gold.
Casa Berardi is another important mine for the company has shown on slide 12, the revised technical report earlier this year outlines the longer expected mine life and the importance of both underground and open pit production.
The mine produced 36.5 thousand ounces of gold in the third quarter and had a higher level of capital than usual, including 6.3 million for a tailings pond expansion and about 2.5 million and equipment purchases.
We talked about the middle issues earlier this year I think that team at Casa did an excellent job of nearly doubling that throughput of the plant over the past few years with very minimal capital investment.
With our throughput lard throughput target insight, we will turn our attention to improving the mills reliability through enhanced operations and maintenance practices overtime. We would expect these improved practices to lead to incremental throughput recovery and cost gains.
Don't forget the drilling at Casa which is very exciting with outstanding results at the 148, and 160 zones, producing high grade intersections and good with near existing infrastructure as you can see on slide 13.
I expect we'll be talking about them more in the coming quarters.
Moving on to San Sebastian I was very impressive. This operation we have excellent miners err on the site looks great. There are two exciting opportunities to extend my life and the existing mine there are sulfide zones underlying the oxides.
We are in the process of conducting test stoping and milling of one of these areas called the Hughes.
You can see report on slide 14 of the first Longhole stope panel from about a month ago.
The contractor has done a great job so far with this more efficient mining method, which is new to the property.
We processed about 13000 tons of bulk sample or at a third party mill in the third quarter and recoveries are inline with our expectations.
We need to complete our work to determine if there is a business case here.
Look for more information early in the new year.
We also have an oxide discovery called El Toro about a mile and a half from the mine, which is looking very promising.
The Lucky Friday produced a limited amount of board during the quarter as per plan, but the higher production than the prior year period helped asset to minimize its financial impact.
The workforce is composed mainly of our salaried staff and we're extremely proud of what the team has accomplished.
As Phil mentioned, we reached a tentative agreement with the Union and are waiting for ratification bonus.
We expect a significant increase in production over the next few years, So Lucky Friday ramps up to full production and make some capital investments that have been on hold.
I just got back from Sweden to see the RV, a machine, which is in the test mine, we're learning a lot and we will take the time, we need in this testing phase to make the modifications. So when we bring it to the Lucky Friday in 2020, we can minimize field changes.
I work 10 years, and the underground mines in Nevada, I was especially keen to see those operations.
The decision to curtail spending and to focus on near term cash generation was a good one because it sets us on a stronger financial pack.
We plan to mine out the developed oxide ores, which we expecting continue into the second or third quarter next year, depending on ongoing delineation work.
I expect to take a further pause as we assess permitting needs and hence our understanding of the ore body and secure tolling agreements for the refractory yours.
I worked heck low and Greens Creek was put on pause. It was the best thing for that mine and expect that will be the best thing for Nevada operations.
Midas will conclude mining to develop resource this year.
We would like to get to Hatter Graben development going again once funds are available and we will look for opportunities to move our made and machines there as fire Creek winds down.
Dr. Phil Thanks, Laura Let's go to slide 17, because but before we go to Q and Hey, I want to emphasize heclas commitment to the environment and health and safety of our employees.
The two awards that the Lucky Friday, when exemplifies that commitment our environmental program. There was recognized by the state of Idaho for our efforts to prevent pollution, we're making a real difference there and reducing our impact on the environment.
And and I'm most proud of the mine winning the signals of safety, which is an award.
It's been in existence since 1925 to win this award you can have a lost time accident or even a restricted work incident and then you have to have the best injury incident rate as reported to the U.S. mine safety and Health administration. So I mean, this is a very rigorous sort of requirements and it's.
Yes.
Based on the data given to Im shop, So it's incredibly hard to win and in fact in Heclas history. We've never won it before and at the Lucky Friday, They had no reportable says zero.
And.
As a result of that they one won this award and so my hats off to the team there for the efforts that they made.
And also to the culture that they've developed there.
If you're going to slides 35 to 46 later you can see more aspects of what we do in the SG areas, so with that operator.
Happy to open the line for questions.
Ladies and gentlemen, if you have a question at this time. Please press the Star then the number one key on your Touchtone telephone.
For your question has been answered or you wish to move yourself from the Q, Please and principal.
Your first question comes from the line of Heiko.
<unk> Wainwright.
Hey, guys. Thanks for taking my questions.
Sure thing I can.
Great Hi, Lucky Friday, I mean, so you're saying that ramp ups takes about a year.
I understand that the call. It the cash costs at site are probably going to keep going down quarter by quarter, but do you just have a you along it takes to really meaningful production and maybe to timing so the ramp up throughout the year as well.
Well it all will be could become a function of if and when the union ratifies the contract.
And and as we.
Prepare the mine for for people to come back to to work so.
And that will be the jumping off point is when that occurs and then then I'll take roughly a year from that time. If you go back and look at 2013, you can from the time, we start you can get a sense of the of how the ramp up occurs.
Fair enough.
All phrased the question My next one a little differently, how much did cost last time something like this was wrapped up.
She is I don't I don't recall, but we'll make further investments and the mine we want to.
Improve the two shaft, there's an upgrade that we're going to due to the electrical system there.
And then there's other investments that will will make and so we want to put the mine onto it from flooding.
And we'll take the time necessary and spend the money this year, but it's not it's not a huge amount of of investments. Most of these investments are investments that are less than five $6 million.
Fair enough and then something completely different and I guess those question from a clients a couple of weeks ago unsolicited proposal to you guys on this call.
The dividend at what metal price do you think which would seem to dividend go up and at what metal price should we expect you guys to maybe cut the dividend.
I mean I understand it's a.
Penny is not a whole lot of money I'm just purely curious.
I don't I don't think theres any intention of cutting the dividend that.
It would be significantly lower prices to see us could position, where we would do that.
As far as the dividend going up we have a policy that automatically causes the dividend go up is it possible that policy will change. It I think so at some point I think the board will well consider that but in the meantime, our real focus is on strengthening the balance sheet cutting or ourselves in position to refinance the existing.
Funds.
Fair enough.
Thanks for taking my questions and congratulations on Lucky Friday, yet again.
Thanks. Thanks.
Our next question comes from the line of Jake Sikorsky.
Roth capital partners.
Hey, Phil and team Thanks for taking my question.
Sure Jake should going back to Lucky Friday in kind of building on Michael's question are you able to give any additional color on the agreement I mean, I guess when I'm wondering here is where investments were made in what kind of causes this breakthrough negotiation.
Yes look it was just an ongoing negotiation with the nominate the negotiating committee of the the Union.
Yes, we both made concessions and at the end of the they were able to reach an agreement, but the key thing is going to be ratification by them the members and.
Yes, well, we'll wait to see if and when they do that.
Understood that's helpful. Okay.
And then switching over to Nevada, I mean, obviously throughout the year, we've kind of in shifting from production and development more towards exploration of it there.
This is a trend we can continue expect into 2020 and im just trying to get to handle on how you're viewing Nevada in the context the portfolio for next year in I guess, what we should expect as far as near term.
Production target looks over there thanks.
Sure sure Jake in Nevada. The intention is to continue to mine. The the currently developed or and that will be bind sometime out sometime in the middle of next year as we've we've previously disclosed.
And the and then in the meantime work on plans on how they do to go forward.
Cleaning had to deal with refractory ore. So we're certainly in conversations with places that we could mill that refractory or.
And.
Yes. So at this point, we don't have firm plans were still working through things and just stay tune because we'll be putting that together.
Question. Okay is that something you think you by the ended the year or.
More into Q1 or is there not much of it will be it'll be in Q1, it'll be in Q1 when we.
Announce all of our plans for it for 2020.
Okay, Perfect and then just lastly on the metals hedging program.
Great picked up a bit since you guys put the initial contracts on.
Yes, if any other land layer more on.
These modestly higher prices for the second half of 2020 or are you comfortable with with what you have in place now.
Well, we continue to look at the cost of.
Putting on new contracts.
And to the extent, we find it attractive you can you can see us do that.
We haven't done anything to limit our upside in the in what we've done.
With our pets.
And.
Where we think we're in very good position with the protection on the downside.
To be able to deliver the cash flows that we're anticipating lens anything Doug.
Phil said at all.
Got it okay that was off from me and congrats on the positive cash flow this quarter.
Thanks, Thanks Jay.
Our next question comes from the line of Matthew Fields with Bank of America.
Hey, everyone.
And some clarity on on timing on Lucky Friday.
Appreciate I appreciate that it has to go back to the union for ratification.
Then there's probably some other procedural steps.
Going back into the mine.
Maybe have to be rehired, some or existing or the old guys coming back.
And then a one year ramp up can you just walk us through the different mileposts of how that everything gets sort of timed out from here going forward.
Well, it's not been finalized by any means but the essence of it is there's there's a roster.
People that.
We're employees at the time of the strike and that roster is about 200 people.
Out of at the time there were 250, so you've had people that have.
Retired or they've quit and so they dropped off the roster.
So we'd be anticipating those 200 people coming back to work over the course of time during during 2020 as we as we ramp up and will will work out what those plans are.
As we we get as the Union Ratifies, the agreement and and as we do the capital projects that we haven't as we plan out the training Lauren anything to add to that.
Hey, good it will be our goal to bring back people as rapidly as we can and ramp up production as quickly as we can.
I mean is it just rough estimate at this point I know that theres not a lot of clarity, but like is it first production.
You know June of 2020 or is it like first production back in December of 2020 can you just give us a rough idea of whenever well.
Well, Matt remember the it's in production now where do we have never stopped producing.
So.
At the old levels.
It will take a full year to get to full production.
And so it will be a.
Relatively.
Slow ramp up in the beginning that will accelerate over the second half of that that year whenever that year starts.
Okay great.
Thanks, and then.
My second question I was just some of your high yield precious metal peers have taken advantage of the.
Pop in precious metals prices and corresponding stock prices to opportunistically raising equity.
To help with balance sheet risk and it seems like that it's been sort of receive positively by both equity and debt holders.
You know your stocks reacted positively to the to the gold and silver price is that something you're willing to do opportunistically to kind of help.
Refinancing.
Basically take refinancing risk off the table.
Sure we're willing to consider all options to successfully refinanced the bonds.
Okay. That's it for me thanks.
Thanks, Matt.
Your next question comes from the line of Cosmos Chiu from CBS I see.
Hi, Thanks, Phil Lindsay and Lori.
Maybe first off on Lucky Friday here.
I know timing is still very uncertain at this point in time as you mentioned, but I seem to remember there was a vote that happened earlier on in 2018 for something completely different for a third party arbitration.
It didn't go through but what was the timing that and in terms of vote and you know Ken can we draw comparisons to what's happening now in terms of timing.
Yes, my recollection is that the better part of a month six weeks sound right Larry sounds right now so it was about a month six weeks to.
To implement because remember they have all of these members that are working and other places that they.
Yes, the balance get mailed to them. They then get returned and then they get counted.
For sure and and then when you talk about majority.
A press release in terms of the ratification dot just a simple majority rail Uni is 15% plus one.
That's my understanding.
Okay, and then in terms of again, maybe too early to ask at this point in time, but Phil as you mentioned some of the Capex thats needed in terms of the restart shouldn't be too significant and so when it does happen. When you do restarting operations should we expect lucky Friday to be free cash flow positive fairly.
Quickly like what are we talking about maybe one or two quarters of Neutrolin negative free cash flow followed by a positive free cash flow is there any kind of color you can give us at this point in time.
No I look I think I think certainly the first year will be negative.
Free cash flow.
I would expect the net investment in the in the mine and then the following year to be.
Either neutral or slightly positive.
Yes.
And after that you then after that you're off to the races.
For sure.
And then maybe switching gears a little bit here in terms of financial options available to you.
Talked about the equity raise in the last question, but I guess my question as you do you still have the ATM available is that still active.
Did you use it in Q3 I don't think you did looking at your financial statements and how do you see the ATM potentially fitting into your overall financial strategy.
Yes, the ATM is active it's relatively small.
I think theres.
40, or 50 million available under it so.
It's certainly possible something that we could utilize.
Mhm.
For sure and maybe one last question here in terms of Casa Berardi.
Sort of touched on it for the company as a whole, but if I look at what you've done so far 100000 ounces. So year to date in terms of production guidance is 146000 ounces you need a better Q4.
Could you maybe give us up more color in terms of is a combination of grade and throughput or just grade or just throughput.
Primarily grade and its that's always been plan that there would be better fourth quarter. This whole second half the year for Cas is better and remember we also.
Had a shortfall in tons in the first the first part of the year. So.
Question.
So thats part of that.
So much better so yes for sure thanks, and congrats again on getting the a tentative labor agreement in place.
Okay. Thank you.
Your next question comes from the line of Adam Graf with B. Riley.
Hey, guys. Just a couple of quick couple quick questions here on the Bob and then and then Greens Creek.
I don't know if you have the numbers in front of view, but.
Could you could you tell us how many how many tons word mined in the third quarter from from each of the mines.
Mike and cost per tonne again at each of the mines.
Yes, well come back to you on that because I just have an aggregated in the room with me at the moment.
Okay.
And.
And then at Greens Creek.
With the with the lay there.
Maybe if you can give us.
Anymore anymore.
But cause there and who was the come.
The company that you were mentioning.
Force Majeure, well, it's well known it's tech right they had the incident.
At the trail smelter and so they they displace worst machines Twentyf I think was 25% of their contracts.
So as a result of that we didn't know exactly what the shipping would be and so we weren't able to.
Nominate a ship until late in the quarter and then weather held up the ship.
And so.
So as a result, we ended up doing to deal with trader, where we sold the the metal we got the revenue.
But unfortunately were not able to account for it as revenue. So its accounted for as deferred revenue and then that will show up in Q O Q4.
Okay.
Given that the current zinc Tc environment.
Were you did you have to pay effectively spot tea season of a significantly higher than your contract that you had with tech.
Now we it was we was given given the where prices were in our at the fact that we whenever we sell the product we sell forward.
For that short period of time, we actually have made out better than we would have otherwise.
And and Great and then and then just finally, just curiosity about skeptical of Safety Award.
I've never heard some of the details I was curious or are there years, where that award is never given now.
Yes, theres different categories and the answer is yes, if they if people do not meet that then then it's not awarded.
Well that's interesting just from a curiosity I appreciate that great. Congratulations.
Thank you, yes pretty proud of that.
Yeah.
Thanks, guys.
Your next question comes from the line of John Tumazos, with John Tumazos very independent research.
Thank you John .
Thank you for taking my question I want to congratulate.
Gary Radford on his retirement wish him all the best.
Want to thank all the good team for your services company.
Thanks, John in your mind.
Okay.
Forgive me I listen to Kinross at 830.
And then westrock containerboard than ours or minerals.
I might have missed some details, but I'm surprised that your stock is off today when you're announcing the good news.
Of the Lucky Friday.
Central restart and you guys and girls at Casa Berardi at the last Scott smaller and you repaid some of the revolver.
Do you think the market.
Is disappointing.
It might take.
A year to get Lucky Friday.
Coining sure do you think people.
Our disappointed that your capex and exploration, Phil or that you're not doing financing refinancing news quicker.
Right.
I think this is a good or.
Just tell me what's gone on yes.
Yeah, John we would agree this is actually very good release.
To be honest with you I think it becomes program trading that's based off the fact that our revenue line was not what the market expected and as a result, the net income was not what they expected and that's only caused by the fact that the ship was delayed at green.
Craig.
I think if you if you hadn't had that occur then I think.
I think the the market would have.
He wouldn't have had this program trading is that fair, Mike Westerlund, you've added a combination of weaker price leads to computer science, a huge volume right off the open I think logs computer trade yeah. So well look we were pretty confident that as we talked to people and walk them through the quarter.
You will see the.
The.
Tone about the stock improve.
We're we're definitely on track with what we expected to be on we're definitely.
Can see that by the ended the year, we will not have any revolver debt.
Drawn.
We can definitely see that.
We're in a good position to do the refinancing of the bonds at a very reasonable.
Interest rate.
Could you walk us through.
The lower Capex and the lower exploration expense, maybe some people are thinking you're cutting too much from the bonds. It looks like the exploration results are better issues spend less money base.
Okay.
Okay.
Yes that are already I've never thought there was a correlation between dollars and results I think it us smarts and good luck.
[laughter].
Well I will I've got that sitting in here.
Kurt and keep them there there is shaking their head, but [laughter], but.
Look we have not actually cut back on our capital.
In fact, the guidance that we've given for both capital and explorations unchanged, we made that change.
With the earlier in the year.
And so we think we're at the right levels and it's a level that allows us to generate free cash flow. I mean, you think about it we generated 29 million a free cash flow for the quarter.
I overload the last two days and then looking at other peoples.
Releases, and frankly relative to our peers I'm not able to find one that's produced.
Much more than we have clearly not everybody's reported so I'm not able to.
Make that assessment, but you know there's companies with market caps that our third or more higher than ours that had less.
Plus free cash flow for the quarter. So I think as time goes and we have the opportunity to talk to people and we are planning over the course of the next number of weeks.
Well, we will see the tone improve.
Thank you.
Your next question comes from the line up Dalton Beretta with Canaccord.
Thank you good morning, guys.
I apologize flow adult.
I apologize if I missed a fairly on the call, but can you comment on the nature of the agreement with the Union at Lucky Friday, just specifically I'm wondering you now have the ability to nominate people, where you want them to go.
We do we do I looked at this contract is consistent with other mines the way other mines in North America operate.
We'll have the same capabilities that other mines and yes throughout the US Canada, how they operate.
Well that's great. That's a big when do you guys can you talk about.
Maybe some what you gave out to get that.
Look I think this is a when forever everybody data is the first thing I'll I'll say its.
The the quid pro quo that we put to them was.
Generally better compensation package.
For them, we have particularly for the skilled trades, we had a lot of difficulty attracting skilled trades meant this this helps alleviate that.
And.
Yes that would that would be the primary thing that we ended up giving giving concessions on the on holidays and.
Medical benefits, there's there's just a variety of things having said that we see this contract as positioning the lucky Friday to be able to operate. It's now operated 75 years, we think it will operate certainly.
Decades more.
And this contract sets us up to be able to do that we weren't we weren't sure. We would have been able to do that under the old contract.
That's great Congrats guys that's a good agreement.
Okay. Thanks Tal.
I would now like to turn the conference back to Mr., Phil Baker.
Thanks, operator, well, we appreciate you participating on the call. We know this busy day with lots of people reporting obviously, if you didnt have your question answered or you'd like to talk more to us feel free to give Mike or I call. Thanks, very much have a great day.
Ladies and gentlemen. This concludes today's conference. Thank you for your participation and have a wonderful day you may all disconnect.