Q3 2019 Earnings Call
Fire assistance throughout the conference.
As far as far as they're all your telephone keypad through two large operators.
This time it is my pleasure to turn to pour over to your whole Carlos.
The relationship manager for the floor is yours.
Thank you.
<unk> financial and operational we sold goal for the third quarter of 29 team.
Today, we will be using the webcast presentation, which will be controlled by us to donate representation. Please go to our website <unk>.
Well, you W.W. Fortuna silver Dot com.
On the Investor staff.
<unk> click on the financial sometimes under Q3 2019 click on the earnings call webcast link.
Okay. That's all I know, some fresh <unk> CEO and director.
He is ideal I know CFO will be hosting the call from EMA, They do in Vancouver Kinda, respectively.
Before I turn over the cold to policy I would like to indicate that these earnings call contains forward looking information they based on the company's current expectations estimates and beliefs.
These forward looking information is subject to a number of.
Uncertainties and other factors.
Actual results could differ materially from my conclusion forecast or projection.
We're looking information.
Additional information about the material factors that could cause actual results to differ materially from that conclusion.
Yes, our projection.
Forward looking information and the material factors or assumptions nowhere else Tonight in drawing the conclusions or making enough forecast or projection as we exit in the forward looking information is contained in the company and all the information for and Mdna, which are publicly available on SEDAR.
That company assumes no obligation to update such forward looking information in the future except as required.
Okay.
I would now like to turn the call over two hotels that doesn't know Sop prescient CEO and co founder opportunity.
[laughter]. Thank you got a little Sun and good morning tool.
[noise], along with lease or CFO will be presenting at reveal for Q3 financial results for men development across your broadly extended operations in Mexico, Peru and Argentina.
[noise].
[noise], if we go to slide six.
Under highlights in the presentation.
On financials.
[laughter]. This quarter is marked by a net loss of $7.7 million, mainly driven by an unrealized FX loss.
<unk> point threemillion relating to light construction receivables.
Argentina and exploration write downs in Mexico.
Here, we want to stress that on the strength afford to operating mines an improvement on crisis, we generated adjusted EBITA of 19 million with strong free cash flow from ongoing operations will stand point Sixmillion.
Its financial metrics, how are you despite a challenging quarter from an operating perspective I saw a mine sequencing at San Jose yielded lower grades and we experienced a deep in our quarterly cost for the year.
Most of our production and cost are expected to be aligned with her back in Q4 and week one firm for full year production and cost guidance.
[laughter], that's all it goes over the quarter, where reportedly <unk> de <unk> hundred 12 million.
Which has been enhanced by the successful closing ordinarily adorable for convertible debenture for a total amount of $46 million.
Management believes the company has any required probably not sure what makes you really need to meet its capital commitments under various scenarios in particular as we prepare to lounge surely they don't break into operation certainly next year.
Well these while maintaining a modest level.
Once drone according to our funding plan.
Our debt to EBITDA ratio will stay below two.
So the end of October .
We report construction of lean digital is 81% complete with construction spending at 85%.
At the end of Q3.
We continue to work with the aim of first gold in Q1 2020.
[noise] well before work well secured on Oh, let's say, Dan we did try you'd also life [laughter] contractor scoop drum, operator, I'd ever San Jose mine in Mexico.
We believe we can line and operate in an accident free work environment and over the last two years kind of made significant strides towards that goal. These try you close has been difficult sort of 4500 people who come to work every day at for doing this operations.
[noise] in slide seven.
[laughter], we present for the first time in the web cast or main consolidated safety <unk>.
These are 12 months rolling figures.
For the period 2016 due October 2019.
You can see in the first two graphs I can hear trend improvement for total recordable incidents and lost time into.
On the series D rate, whereas we see the part though for August 18th loss, but in spite of these we also show a declining trend in say radio vaccines.
It's important to note the.
During the course as it appears represented in the graph, we have almost double mine hours and complexity.
With the Lindero construction.
Two years ago, the company initiated a move from Hey, reactive health and safety culture Dombrowski, one with more holistic approach will sustain I mean.
These encompassed producing I diagnostic developing a corporate wide plan reassessing position profiles, and creating new positions incorporation well from management HSS equal meeting naming a cheap seats, the officer and creating a sustained I really think of media their board.
Extractive industries are subject to new and heightened concerns from stakeholders My message Jeez, we hear you loud and clear and we're taking action.
[noise] slide eight.
[noise], we read their age or blocks from Guy that's for the year or eight to 9 million ounces of silver and 49 to 54000 ounces of gold.
Q3 was particularly shoretel announcers compared to previous year, but not significantly off when compared to where internal for years. The lower production. He said attributable to lower grade said, the San Jose mine.
This is a function of two things one area, where they production starts are cycling in the quarter and to five days a voluntary stoppage you'll find underground operations as a result.
Our next year.
For the investigations and to carry inspections of mine equipment for the status.
Oh human safety make any [laughter] during the day, so stoppage no grade stockpiles were fit to the south San meal.
[noise] slide nine.
[noise], 78%, though sales in the quarter were attributable to precious metals, 51% to silver we benefited from big prices in the last two years for both silver and gold.
[noise] like that.
In spite of for lower silver and gold production sales were 3% higher thanks to higher precious metal price.
Or EBITDA margin of 31% was below or run rate for the year due to the impart to assure price appreciation and share based payment higher cash goals that both mind and increased exploration costs.
Adjusting for and fixing that didn't Dina and exploration write downs in Mexico, We show a net income of 1.9 million.
Slide 11 [noise].
[noise] here, we present all in sustaining cost for the quarter, a nine months the quarter, what's impacted by lower production higher cash cost and lower base metal prices.
For the nine month, all in sustaining cost remains within our guidance range and we reiterate our guidance for the year [noise].
[noise] slide 12.
[noise] or can be done probably you sound like that's largely in line with her plan.
With the completion of Lindero construction early next year, we plan to increase again brownfields exploration budget seem they do and Mexico, both or got your mind, San Jose mine, our operating that steady sustaining capital levels.
Next slide please [noise].
[noise] moving on to lean they don't Linda it's starting to four to Novartis from what it provides for the opportunity.
For a 50% growth in gold equivalent ounces as shown in the graph.
Well you show for a long to do so they show up production is planned to be constructive door, 40% EBITDA margin objective at a corporate level.
And third NATO has reserves for 13 years of operations with potential to increase.
Which improves every surveys profile well for us.
In the portfolio, we each year or a year horse around five years I'd tell you all months outsourcing.
Slide 14.
[noise]. This is ideal for asset portfolio. The center for attention then capital allocation has been and we'll continue to really did all over the coming months.
[noise] Slide 15 thing.
[noise] here, we present, a view of some milestones <unk> schedule, we're working towards start placing orient the leach pad before the end the year because of the Christmas and new year holidays. We are addressed go slippage into early January we cannot retained value.
The representatives on site, we're working on a plan for these we aim for first gold in Q1 off next year.
Slide 16.
[noise].
[noise], that's so the end of October .
We will report an advance of 81% stores <unk> completion.
We have committed 99% don't topics for that project with 44 million topics funding remaining.
We forecast I topics to completion of $298 million, which is an increase of 21% with respect to guidance provided two year cycle.
When the construction decision was made the forecast still includes 4 million in contingency funding.
[noise] next in the.
Yeah the webcast.
We we show you and sharing with you.
In recent features photos, stating that the lindero construction site.
It's like 17 pretty since.
Hey, photos, so for mining operations, we started drilling and blasting.
Early September .
Well the first benches.
Yeah, we're accordingly, stockpiling or in preparation for a start off crushing operations.
We initiated the night shift.
It's three weeks ago. So we're working day, she nice lightship now so they might you said advancing according to a steady plan no Uh huh.
We have the entire operational and trained personnel on site.
Next slide.
[noise].
Slide 18 shows a theory, so ER views.
Oh for Leach pad, which is complete and ready to receive or.
Yeah. We also show is [laughter] views of floor, a fonts area next week, Yeah and are also live phone construction is complete we're really working on.
Electromechanical installation of Oh.
Yeah, I'm fighting in ER and the fund there looks like.
[noise].
[laughter].
Slide 19.
They book of.
Mechanical installation.
For the crushing sick with an agglomeration, which encompass its primary crashing secondary crushing tertiary hbr crashed.
Agglomeration East concluded.
Yeah, we are starting the pre commissioning phase some commission fee.
While we work on final electrical installation, we are really pleasing and bell rather build something on the conveyor frames.
Yeah, we commissioned in two weeks ago.
The transmission line and transformer stations and electrical rules.
Hey, crushing and agglomeration here.
On the following slide.
Like 20.
It just more of use so the crushing and agglomeration area, a silo say see nice size those search b H fees are you all all of the mechanical installation he's done a good work not always focusing on electrical and a pretty commission.
Slide 21.
This is the AG our glass.
I view from the outside and they say they are needs to be operational by February .
And Ah we are advancing according to plan on schedule.
Yeah like here, we show some of the installation, though sunk sounds box work, that's taking place within the building.
Looks like.
[noise] like 22, he's a.
You are they sorry, Matt.
Sorry, glad he is not a mission critical for they start to have a.
Gold production.
He needs to Lee operational early we expect these will be towards the end of Q1 started a few to disarm plant will be a radian and operational but certainly not mission critical for they started for the gold production.
And is advancing according to plan on schedule.
It.
All the structural steel erection. He's a concluded and we are not working on a mounting off attacks and ER installation of filters and seekers.
Next slide please.
On slide 23.
We show a panoramic view of that process area, where you can see a yard.
Our plan structural SAR and make a lot.
So there is a stake in shape rapidly a.
We did mine its operating crushing and agglomeration area.
Our quarterly on liquidity over the past.
For starts off or crushing operations and stocking up for which will allow us to start irrigated and again.
And I'm, sorry need to follow in its early next quarter in Q1.
So with that I will let us know a week. It takes you through a review for.
Quarterly financial results.
[noise].
Thank you called him.
HM.
So on slide 25.
On slide 25 sales for the third quarter were 61.3 million.
Slightly I bought from 2018, as a result of higher silver and gold prices, which were partially offset by lower production during the quarter at school Hey explain.
We reported a net loss of $7.7 million compared to net income of $6.9 million in Q3 of 2018.
The loss was driven by an 8.3 million dollar foreign exchange laws sooner or be a deconstruction receivable in Argentina in the context of the strong devaluation of the Argentinian peso.
Following the results of the primary election in the month of almost.
Yes, it net income was $1.9 million compared to $9.6 billion in Q3 2018.
The lower adjusted net income once every sold off the combination of factors, namely how your share based payments of $1.9 million as we recorded a charge of $1.5 million in Q3 of this year compared to eight credit Oh boy and 4 million.
In Q3 of 2018.
Hi, your cash cost of around $1.8 million.
Higher spending in exploration and evaluation activities of 1.3 million daughters.
And a high effective tax rate in the current quarter or 77%.
Adjusted EBITDA was $9.2 million compared to 24.2 million in 2018.
And free cash flow from ongoing operations was $10.6 billion compared to 13.6 million in the prior year.
The following a slide.
I.
26.
When breaking down our sales performance for the quarter, we can see the lower metal production had the highest impact when compared to Q3 of 2018. This was true in particular for silver.
This effect of lower production was more than offset by the higher realized silver and gold prices, which increased 17 and 23% year over year.
Also we have mentioned in previous earnings goals creeping in refining charges in 2019 have deteriorated compared to 2018.
Moving onto the next slide.
Slide 27.
When looking at our segmented results. So of course, it sounds lets say shows an improved EBITDA over Q3 2018.
The result of higher silver and gold prices and Inspite of.
Lower production and the higher cash cost of 11%.
Got you almost EBITDA decreased 47% compared to a year before it's every sold all the combination of hired cash cost and lower think OLED price.
[laughter] gas cost at both our operations were above the high end of our guidance for the year.
We expect cash cost for Q4 as well as for the full year to be within our annual guidance range.
The next slide slide 28.
The odell as GE, a knee or $6.4 million worth 38% above 2018 for the quarter as we had a 1.5 million dollar charge of stock based compensation. In Q3 2019 is that I had already mentioned compared to a credit.
In Q3 of 2018.
Outside of the phase or general and administrative expenses were in line with a prior year guidance provided for 2019.
Our effective tax rate for the quarter on an adjusted income basis was 77% seed was impacted by their combined effects of foreign exchange volatility and withholding taxes.
For the full year, the effective tax rate on an adjusted income basis was 55%.
Still above the expected range of 48% to 50%.
Due mostly to withholding taxes into your related to repatriation of fun.
The next slide slide 29.
Our liquidity until the end of September was $112 million comprised of gosh of 72 million $40 million of available under our bank credit facility.
I predicted minimum liquidity position throughout their construction of the NATO has increased to between 55 and $60 million. That's a result of the issue of convertible debentures for draws aggregate proceeds of $46 million closed on October 2nd.
As of the end of September or total debt outstanding was $110 million, representing a that we need the ratio below 1.5.
With this I conclude and I pass it back to you kind of those thank you.
[noise]. Thank you released.
We would now like to turn the call or to any questions that you may have.
[noise]. Thank you.
Floor is now open for questions. If you do have a question. Please press star one all your telephone keypad at this time questions will be taken in the order. They were questions will be taking into what are they were coming in.
Again, ladies and gentlemen, if you do out of question. Please press star one or your telephone keypad huh.
[noise].
[noise]. Our first question comes from Chris then with P.I. financial Please state your question.
Hi, Good morning, guys. Thanks for taking my questions apologies, if it's just a general I guess, a general question, but I Wonder if you could just talk to the I.
I guess, the Argentinian investment climate moving forward, especially as Weve as we've seen a new changing government [laughter], whether with maybe a focus on export export taxes.
Yes.
Hey, good morning, Chris.
We are you not be area, though [noise].
On Dudley certainly have enough uncertainty.
Yeah, Hi, the new lower men take Sophie's on December .
Okay. That's.
No.
Yeah, we are currently modeling.
And they export taxes.
With that they might go to government implemented or towards the end of their mandate.
Hey, which is to the fixed at their around a four basis to their daughter [noise].
No.
Yeah, we've been.
Looking at a one does this mean.
Comfort in from the perspective, I don't know tax burden.
Hey, compared to the other jurisdictions, where we operate.
They do and Mexico.
And.
In Peru, or overall tax burden.
Hey horse around 42%.
In Mexico overseas around 43% I.
I mean, Argentina around 32% D. C. Oh of course takes into consideration and workers part D. C base shown system provincial royalties.
And they're retentions in Argentina.
That are a that were brought into into effect by [noise].
I agree I will read last year.
Yeah, so that he sort of you do they.
We we are cautiously optimistic.
We are viewing.
Closely monitoring closely.
It's two things one is what is a new president elect saying what message is he telegraphing.
I'd say going Hey, who is he working with [noise].
So are the people he's closely we associating himself with.
It to lead these said face Oh, a transition as he thinks always.
They the message is that he's spending.
Okay, and those are really accessible in the media.
Are you know.
Give us room do we of course is optimistic that he recognizes the importance of the.
Oil gas mining and agricultural sector.
Drivers for Ah growth.
Yeah.
Second that he understands that restrictions.
Yeah on further deepening of capital controls will pose a challenge for him to attract much needed dollars into the country.
Yeah I answered it did people he is working with we we understand are regarded.
Sprague Magic.
And.
On the economic front so.
Yeah, those are things that we viewed positively.
Again, we are cautiously optimistic that as a way to put it.
The country easy in a difficult situation they they will have to seat and negotiate.
In what will be a difficult negotiation with their international lenders.
And.
You know we believe the Argentine that will go through Oh phase, so well just meant and and Ah.
Yeah.
You know.
[noise] and we'll need to wait until December 10th to see some of these and new measures and actions take place.
But do they what we view is what we have in place and on when we compared to the other jurisdictions, where we operate.
Yes still rates favorably.
So that is sort of you Chris.
Okay. Thanks for the comprehensive onto their Jorge just one more question.
On on I guess, where we sit right now is lindero.
Well, when you're going to be starting to place or maybe I missed this more on the pad and when will you start everybody.
Yeah.
[laughter] or [noise].
We are working.
Towards is launching all the entire crushing circuit.
Before the end of the you know.
No. We are today in the pre commissioning phase starting the pre commissioning phase, where the <unk> commissioning and pre commissioning we'd have change in hearing we have the entire it commissioning team on site working what are people.
Hey, we commissioned two two weeks ago. It our it generation power distribution to crushing and agglomeration is substations electric a room. So we're engaged with that.
Hey, I am concerned right now oh or the holidays in the us or Abili T to retain other key at the critical junction.
Yeah, Hey, vendor representatives on vendor technicians on site.
Okay.
If we are pushed into those you know past December 21st <unk>.
It is even though we're working on a plan I concern there you saw risk to launching this year with.
Yeah Winslow.
Yeah.
Around those dates their operational risks and also safety risks associated with that so we're working steel tuned to be able to do that.
Yeah.
Before we come into the holiday season, but we're very tight and if we go into.
There are some minor slippage.
Yeah, we go into those holiday date.
We need to a says the risks of launching this year, which through the holidays or we just might have to wait.
After.
But if it's not.
Hey, you know me December .
Which we're still working for you it will be narrowly January but everything that needs to be place is basically in place. We already initiated brea commissioning activities. We are working on electric car connections, placing you know.
Belt or belts funded conveyor frames.
Yeah.
And are doing just minor fixes on the crushing where stockpiling more.
I remind you saw operating everyday.
So.
That is where we are to the Chris.
Right again, thanks for the a comprehensive answer thanks guys.
Okay. Our next question comes from Gary got again with Goldman Sachs. Please state your question.
Hey, guys, Hey, Jorge Luis and scare with Golden Monkey Analyst Youre write down of your that asset over the previous quarter.
How comedian hedge the peso exposure to that.
Yes. This is Larry so.
Hedging hedging the the.
Our exposure to RMB 80 receivable is.
It's its complicated and I think risky on its own given that we we don't know we can't forecast with us sufficient rescission that timing will try that recovery of that'd be a D.
That that's probably a the main and main issue I would say the main complexity around any attempt to hedge exposure to a pencil.
On WT receivable I I should say that.
I mean, they see an unrealized loss in terms of U.S. dollar.
We do have the option of course to use those specials that we eventually.
Recover due to fund the the business locally.
Data of course.
Is.
It's I mean limited to an extent.
That auction compared to yes, repatriating those those are the recovery of nearly 18 terms of U.S dollars. Eventually it's also impacted by the fact that we are still Karen apparently experiencing relatively high inflation rate. So it's not a perfect solution leads up basis locally and you're going to fund the business.
But devaluation has her Ali.
Advance faster than inflation and it's an assumption that we have and had of course to redo the impact of that that loss in terms of purchasing power.
HM Okay, and then you know I'm curious it just seems like an ongoing devaluation that occurred in 2015 happened in 18 to happen to get a 19 you guys are gonna have how are you gonna manager periscope, there's a risk going forward.
I mean.
Going forward devaluation. The devaluation has Ah works has worked against US in this context, given the large be receivable that going forward.
Around 40% of our.
Got it will be incurred in local currency.
So.
Nation, a in that context, if anything will be would be helpful. In terms of our overall cost expressing USDOT.
Right, Okay, what about the cost with associated with repatriation your funds back to dollars.
I mean do they what we know is that any any.
Proceeds from U.S dollars from from exporting out of the country, a we'll have to the.
Converted into vessels in the very short term.
If that is the case that.
Ah poses a challenge that needs to be assessed on and then and we don't know how we don't have at this stage he.
A well laid out plan to to manage that they fix exposure, but it's not clear this stage I that that's going to 17. So as quota has expressed we're currently I'm waiting as everyone else to understand as he wetter.
Or what's the environment, we're gonna be facing moving forward. So I think it'd be too early to you know starts are discussing detail what should be the the plan to address FX exposure.
Do you think it's too early with production beginning in less than a month and you know the final decision occur in December 10th.
Seems like.
You might want to have a plan in place with only a few weeks ago. It.
It is our expectation it isn't the emphasis here is that we need to understand what are the what's the environment. The weather rules that we will be facing and a anything that we the rules that we see today are to the best of our understanding temporary and we are exposure.
They seem to have more information in the beginning of the new year, yes.
It is it is so it is clear that were in a theory of uncertainty here as the new or women will likely either mundane or modify it.
Economic measures and unredeemed, so we a plan for us to layout plans do they.
It will mean potentially very little.
In December Dan or December 15th or January 1st. So we are monitoring closely although these developments.
But we know.
Today, we know what the picture is today, but today as I expressed before the tax burden what does he drapery, saying that thought that's Bender steel you've started to do not competitive today, we need to X. I actually said dollars to meet the demands so that business.
Okay for importation of consumable sort of capital goods, we have access to that market today, we need to repatriate capitelli that word to me that case.
Or service that we have access to the official dollarsin the market.
It but again, we believe that there is some potential for all those things to change and we just need to be.
Hey, I be patient here and see what are the rules that the new government is when I said.
For for US it we're not.
Hey, Joe seeding box, we were monitoring all of these closely listening to what they're saying meeting with them in Argentina through the mining chamber a lot going through the mining chamber is through the Canadian Argentinian and business Chamber.
Okay. So so we're very active but in terms so fast but it is specific plan Guy right you know.
We need to wait a bit more.
Okay that sounds good I appreciate it thanks the answer.
[noise] <unk> gentlemen, if you do have a question. Please press star one or your telephone keypad at this time.
[noise]. Okay. Our next question comes from towards Bollywood Citic income. Please state your question.
Hi, gentlemen.
Our choice itself once you've done so far.
Especially doing their convertible I was good move.
Nobody called me to say, thank you for the idea.
But anyway, you tell me how important the 80, our plan is to producing gold.
Does it do and why does it start in February with that but production gold out until February .
Yes. Thank you for the the question.
Yeah.
And ER the areas mission critical.
Oh, Hey, this is Dave plant that will manage they extraction of gold from the pregnant solution.
Yeah.
So it is mission critical for first of all production.
It is aim to be a quarterly plan are scheduled to be commission and operational in February .
Okay and ER by then we will have enough it.
And then solution.
To to started running through the suit so.
Hey, the our plants are very standard in these type of five heap Leach operations.
And ER, our critical parts of the process.
So there won't really be first gold until February or March.
Yes, what we will have a is yeah solution, where we are building a an inventory of breaking that gold in pregnant solution no, but we need the our plan to and Angola room to extract the gold from the pregnant solution through the use of carbon columns.
Yeah, I know, there's and Ah produce first doughty.
Oh and that is planned for a.
Favour.
Hey.
Oh.
[noise] Oh, that's that's Oh my God. Thank you very much.
Thank you.
Okay. Our next question comes from Michael build the Davenport. Please state your <unk>.
Good morning could you just remind us as we sit here today, what they are estimated life of San Jose is it that roughly the current production rate and maybe comment on.
Exploration efforts are both successful or unsuccessful.
To extend the life of the mine.
Okay. Thank you clearly based on reserves.
We are predicting a fight about five years, so well for life of mine.
Yeah.
With some additional resources for for another year or two.
Hey that could potentially be converted to reserves.
Okay.
In terms of exploration.
I have to say that yeah, San Jose mine enjoyed tremendous exploration success.
Some three four years ago, which led us to make significant expansion.
Into what do they ranks among the 12th largest stuff primary silver producers in the World seems then our exploration success has been very limited.
Hey, we've been able to achieve.
Its success.
Locally.
Yeah on marginally in areas within production songs.
We've been able to help a deal with the depletion a by bringing new resources through expansion of known areas.
But in terms. So we have also discovered two new mineralized structures.
Where we have been able to either over last couple of years. Some additional resources, but in terms of something is stay large and meaningful like these minor how does I cost him to no. We haven't had that kind of success.
So a san Jose today, so big Miami consumes about a million tons so far.
And every year.
And are what I see a or or exploration programs too. They are mainly geared doors or have been over the last year. It would geared mainly mainly towards exploring the gneezy. It extensions of known mineralization and ER San Jose East North.
A simple vein either I see a one structure a mineralized feature it's a series of Stockwork sewn Sun and coalescing. It mineralized structures do we need a hanging wall is still works owned by low amount I mean all of them in.
One general area. So a lot of work has been focused on a further exploring the connection interconnection and expansion somebody's related mineralized Saul's, where we have had some margin now success and that has helped us deal marginally.
Depletion.
Hey, we have 60000 hectares of exploration ground around or San Jose mine.
If you will know that ER surface access to a lot of these ground.
It's challenging in West Africa, I will say that too they probably two thirds. So that ground is not accessible to us on surface.
So a we continue working trying to generate new exploration areas, where budgeting for next year, a accessing some over the areas, where we do have surface access to further bush expiration into these new sewn some of them located that few kilometres away from San Jose mine.
And also continue or a work in the immediate vicinity Osats, we'll see we have started two years so to bring more science into the exploration Osats, let's say we have.
Advanced with.
Deep or structural study.
Okay, with two and and Uh huh.
Hey, Joe Cameco studies to further I understand there.
Page and mineralization controls.
From the structural point of view from digital gaming to a point of view, we're trying to use all the tools that science boots.
A resource in front of house.
Trying to two to help Ah you don't bring my mine life additional mine life, but we'd five years I think you know it is what you.
Typically see not underground the policy seen in epithermal deposits being mindful underground methods.
So so studies, where we are this year, we had a modest budget of around $4 million for next year would you will see some increased budget, probably closer to $8 million on exploration.
Thank you.
No problem.
Again, again, ladies and gentlemen, who do have a question. Please press star one all your telephone keypad at this time.
[noise], Okay and it doesn't look like we have any further questions I'd like to turn the call back over to Carlo.
Thank you talked about if there are no additional questions I would like to thank everyone for listening to todays earnings call and we look forward to you joining us next quarter have a great and have a year.
Thank you. This concludes todays copper Oh, we thank you for your participation you may disconnect. Your lines at this time and have [noise].