Q4 2019 Earnings Call
At this time I'd like to welcome everyone to the agnico.
Eagle fourth quarter results 2019 conference call.
All lines have been placed on mute to prevent any background noise. After the speaker's remarks will be a question answer session.
If you'd like to ask a question. During this time simply press star and the number one on your telephone keypad. If you would like to withdraw your question press the pound cake.
Thank you Mr. Shawn Boyd you may begin your conference.
Thank you operator, and good morning, everyone and thank you for calling into our fourth quarter and full year 2019 results conference call.
Where we got into the slide Oh, please be aware that this presentation include forward looking statements.
I'd like to begin.
Hi, just summarizing 2019, and the fourth quarter.
In the fourth quarter, we had a record gold production as we brought on to mine.
We also have record cash generation in 2019.
With that.
Added production, we see 18% production growth.
From 2019 2022.
I will provide some details on that production growth in a minute.
Although we had a very strong 2019 in fourth quarter 2019.
We still have some work to do and none of us through the first quarter up this year as we ramp up.
Those two newly built mine. So we'll also talk about that.
Oh, when we look at the fourth quarter numbers in a bit more detailed oh, we produce.
Almost 500000 ounces into the fourth quarter.
Which is record production for the full year, Oh, we exceeded our full year guidance, which had been increased during the year. We finished at one point 72.
No we didn't ounces at a total cash cost of 673.
Dollars per hour.
Unit costs in the fourth quarter were impacted by the slower than expected ramp up and none of us ample talk about the details as we said.
In a minute with a record cash generated from operations in 2019, and the ability to continue to grow production.
Well generating free cash flow our dividend was increased in the quarter to a quarterly rate of 20 cents per share.
From the three year guidance perspective, as we said we've got production growing 18%.
Off with a record production level in 2019, we should see cost decline in 2021 2022, when we look at our 2020 guidance. Our number is down 4% from previous guidance in terms of total production to one point.
Seven five.
Million ounces, which is largely driven by a the Q1 expected Q1 impact.
As we ramp up.
And do additional ground support around and getting into details of that in a minute in 2021, there's no change in the production guidance, although our cash cost guidance itself.
$50 an ounce that's due to.
Increases in cost, but also Oh just inflationary.
Cost pressures in the business.
When we look at.
None of what and Laronde, starting with none of that as we said the ramp up the slower than we had expected and that's clearly on all Abbas.
We should have done a much better job in anticipating and reacting to some of these issues.
We have high expectations, and we Didnt meet those expectations. Fortunately, we continue to make steady progress in productivity and efficiency efforts that none of it.
Oh, we expect to see production increase and costs decreased in Q2 and three the second half of 2020.
At Meadowbank.
Essentially as we have to explain in 2019, Oh, we did get delayed due to excess water. We had has the entire pets was pumped out in October of 2019 and that allowed us to improve the efficiency in the open pit although.
We're still limited in the fourth quarter with a smaller footprint.
Due to having just pumps that are the pit in October.
We are seeing improvements in the mining right now in drilling performance there still optimization efforts around.
It's always initiatives in the pets.
We will also see optimized nation effort.
As we.
Ramp up construction and eliminate cost that's still our on site after the construction.
One of the areas that we're focused on its equipment availability and eight minutes. We've made major headway. There. The warehouse is now complete where it becomes a change over in terms of stocking that warehouse from Meadowbank. So all those things will help.
The performance at Amaruq and Meadowbank as we move through 2020, we're still assessing the underground opportunity there.
At Amaruq, Oh, we would expect to have more information in the second half of 2000 of this year and we could expect production.
To begin from the underground.
2022.
[laughter] Meliadine.
We continue to ramp up at Meliadine mining is actually going.
Well at Meliadine in December.
We were approaching budgeted levels in terms of mine performance.
We find almost 4000 tons of day date in December of 2019, which was a significant improvement over what we were doing in the third quarter 2019. So there's more work to do an underground makes sense on mobile equipment, but that's more optimization deficiency.
Where we did have more of a challenge is not in recoveries in the middle our recoveries are.
As expected approaching 95% plant can handle and good handle in the fourth quarter, an average of over 3500 tonnes a day.
What we're experiencing now is at the front at the plant.
In the apron feeder area. So we have a temporary effects there that's limiting the amount of tons that we can I get through the plant we should have that fixed as we move into the second quarter of this year, which will result in a much more efficient operation.
The plant. We've also decided that we're moving forward the phase two expansion that provides more flexibility in the mine plan and that is currently underway and we'd expect to see a production from that.
As we move through 2021 2022.
At Laronde, we decided that as we move into the West mine area, which is our.
Hi, yes, great area to add additional ground support.
As we said Laronde had outstanding performance in the fourth quarter It had record production.
From that mine it had cash costs of $422 announce it had an average grade in November of over seven grams per tonne. So that's a big part of the future of the buying that Milan and the cash generating ability of the wrong Laronde actually last year.
A record for safety performance, an all time record.
For safety performance as we moved in to the West mine area Geologies more complex and we thought that it was prudent and cautious to add additional ground support and the major infrastructure. So that includes additional bolting additional screening additional shot Creek.
We expect this to be completed in a few weeks at minimal capital cost and also has a very minimal effect on future our cost per tonne. So you combine that in the first quarter with a slower ramp up and in doing it but and you have the impact that we have on guidance going down 4%.
For 2020, but also you have the impact on unit costs at most most of that is being felt in the first quarter of 2020, and as we move into Q2 and beyond.
Not only does production increase but a unit costs.
Go down.
Moving beyond the three year guidance just on the production growth as we mentioned of production growth is 18% from 2019 2022 with a newly released guidance in 2022 of 2.1 million ounces with a focus now on the project.
Line to see which projects I'm actually makes sense to allocate capital too and grow the business in a steady measured fashion.
On 2022, so we continue to do work on Amber underground and on a Kirkland Lake on Odyssey.
He smell Arctic.
Our reserves, we use a 1200 dollar gold price to calculate our reserves our reserves were down slightly but our great increased almost 5% to 2.83 grams per tonne from 2.7 grams per tonne, but we saw a significant increase in our mineral resources and our inferred mineral.
Sources are indicated grew by 4% and or for grew by 19%. So.
Those resources.
In our project pipeline that we're currently studying now to see how we allocate capital which projects.
We decide to build to continues the growth beyond 2022 from 2.1 million ounces.
Just looking at some of the mine.
In particular in more detail in the fourth quarter, We mentioned Laronde had record performance when you combine laronde and more on complex 112000 ounces around almost 100000 ounces as we mentioned that for 22 per ounce. We also like good solid performance at Goldex, which continues to exceed budget.
Goldex actually had its best year ever from a safety performance.
Canadian Malartic steady producer, but cash costs at $630 an ounce.
Hello, better performance also set an all time record in safety in 2019.
You can see the impact of that'll bank in the fourth quarter, a little over 60000 ounces, but cash cost of 1400, which skews the entire combined cash cost number up.
And that's the.
Issue in Q1 of this year as we continue to ramp up at higher unit costs and none of it which you all of 2020. So that's why we're looking for better cost performance in Q2.
And beyond and in Mexico, We continue to get good cash generation out of that business from a financial highlight perspective, we mentioned earlier in the call. We had record our cash provided from operating activities of almost 900 million.
All orders in 2019 on 1.78 to.
Million ounces of production, which was also a record.
From a financial position perspective, we continue to add to our cash position.
We closed essentially with 320 million in cash at the end of December.
Our 1.2 billion dollar credit line is fully undrawn.
We have a debt maturing in April and you've got several options to pay that draw down some cash draw down a bit of a line of credit potentially terms some of that $360 million out.
Not all of it but we could do some of it interest rates would be less than half.
Watch what's currently paying on the 360 million dollar maturities, so really good financial flexibility as we move forward in a way that allows us to grow production as we said, 18% and generate free cash flow on page 12 in the slide deck, we see continued growth in all.
Operating margin coming out of the mines.
With relatively flat Capex as we go forward.
We still have decided how we're going to allocate that capex, we're still doing assessments on the pipeline, but our focus is on stretching those projects. So.
And stretching that capex and so well for growing we're still generating net free cash flow to invest in the business pay down debt and increase the dividends and before we take questions. I'll just end on the dividend slide our dividend is now 80 cents a share with the increase in the quarterly amount.
20 cents this quarter.
You can see that.
We've increased our total cash paid dividends in the last six years.
This during a period of heavy construction as we built the expanded.
<unk> platform.
So I'll close on that and the operator.
If you can please open the line up and we'd be happy to take care question.
At this time I'd like to remind everyone in order to ask a question. Please press star and the number one I know telephone keypad.
First question comes from line Us I hate torque from credit Suisse. Your line is open.
Hi, good morning, as for Hot from Credit Suisse.
You know what are their critical steps really to rightsize amaruq in Q1 Im just curious it sounds like the dewatering is kind of done this more to do with logistics like equipment availabilities moving to workforce like if you could just walk us through like what are the kind of steps that are needed.
To kind of get back on track at Amaruq. Thanks.
Well the Oh you to go we're presently the drilling is essentially a progressing very well drilling in Boston.
That's a that's pretty well under control at this stage.
Inventory broken material is also under control at this stage.
We are opening up more surfaces in a bit and getting access for the remainder of the.
Yes, that's under Lake beds, so a lot of.
Digging in these areas.
So that's still little bit of challenging because in some cases were still getting.
Some influence from the from the from the water.
But overall at this stage or other than.
Weather issues.
Presently.
He will progressively wrapping up and getting progressive increasing production.
[music].
On the DCP month by month.
And this will continue into the.
Pretty well into the second quarter mid second quarter, which point, we're pretty well be on the.
Rhythm of a normal mining going.
Okay, and just on like the the specifically in the release there was something on equipment availability moving the in the workforce and like what are the issues that you are encountering there.
Well I think in the.
Beginning in late December in.
Beginning of the year a lot of focus has been put towards improving our use of a bill user.
Utilization for the equipment that lot of progress in that area, where we're still lagging a bit and we're.
Getting some support internally an extremely is basically on maintenance and I think we've reduced.
Through their maintenance areas, where.
Because its delivery lead delivery of some of the infrastructure all or maintenance now gone on the long haul trucks is done exclusively through our meadowbank maintenance facilities.
And the Holly fleet and mining fleet that I'm route is essentially done that site with the warehouse president. So the re assembly of the team the redistribution of the people essentially who either in Q4.
During the process of.
But again the rest in place I think up till Q4, we still had a significant amount of a major rebuilt going on.
Those are.
Not ultimately, but through less of a burden on the total crew.
Basically just trying to get the availability up over the next.
A few months.
Okay. Thank you.
Your next question comes from the line Matthew Murphy from Barclays. Your line is open.
Hi.
Just a question on costs I mean, there are some discussion in the release about inflation, specifically consumables on labor and I guess.
How how recent have you been seeing that and.
To what degree do you think this is kind of a permanent.
A permanent move versus fight to sort of improved productivity and get costs back down.
Well I think the inflation has been relatively steady over the years I think one of the biggest factories, we probably dealing with is we still have a fair proportion of a contractor usage and I think the.
With the current economical cycle the quality of some of this plan forward in the productivity of some spend borrowers sort of.
Not necessarily helping which is contributing to some cases greater cost I think that has been more the issue and probably more predominant in Nunavut actually.
Okay, and I mean, depending on the trajectory.
For costs and the gold price I got a question on the dividend you know if we saw costs remaining fairly sticky.
And the gold price going back to 1400 or something like that what's the thinking on funding the dividend.
The dividend to 80 cents.
Is secure.
On a from a cost perspective, as we said in the release, we expect to have unit costs lower as we move through 2020 and into 2021 and 22.
And we have a growing production base. So a combination of the growing production base.
And costs that are trending down on a unit cost basis.
Allows us to pay that dividend of 200, roughly $200 million here.
Okay. Thank you.
Your next question comes on line of Josh Wolfson sang from RBC. Your line is open.
Thank you going back to the and innovate costs I think historically, if you had looked at the life of mine cost for Amarin guidance. When there was around 800 finance.
Leading was a in the low 600, France would you expect changes to those long term numbers and what sort of order of magnitude would that be.
The.
The cost for most part with the cost that.
Im route for now I think the.
This years 2000 numbers 2020 numbers are mostly.
Aligned with the higher stripping ratio and the lower rate overall than the pit.
Which contributes to the lower production profile.
Centrally a higher cash costs.
The we're also processing some.
Low grade materials also contributing to some of the cost structure for 2020 as we move in through 2021 onwards.
Strip ratio remains a little little bit hi, but the proportion of high grade or.
Increases and thus the.
From year to year production profile of I'm Roop will increase I think a 120000 ounces more next year. So the cost structure will will come down we've gone.
No he dean.
I think the.
We have available capacity in the plant and so far the mine has responded quite well and we'll continue to ramp up tonnage wise.
I think so for early in the year were surpassing 4000 tonnes per day from from the underground mine.
And we have spark and surface. So we will maximize that tonnage.
Through time, and the cost will also come down a bit and go back through the.
For mining numbers.
That we're showing assistant.
Okay, maybe maybe put another way on the I guess the historical cost targets.
These two assumed that the completion experience and end of it would be above that that roughly 3% to 5% those disgusting in terms of the underlying sort of input.
Related items.
Well I think the first half of the year Wells will show similar or some cost pressures, but as we.
Pursue pursue the ramp up and we get too.
I guess steady state costs are expected to go down because you've added quite a bit a resource.
To support a continuous improvements initiative.
To get.
Productivity and cost structure zones. So.
At this stage, we're expecting some and we've already seen some results so far.
But the we're not we're not.
We're not just hoping that costs will go down we're putting efforts and and an action plan in place to ensure that.
Okay, and then second question on the cost side of things.
Mexico, we saw a general increase in 2019 costs over over 2018 in the guidance seems to be similar year over year for 2020 should we be assuming.
Kind of steady state land Pinos altos costs going forward at their current figures.
In short yes.
I think the.
The cost that we saw last year.
Comps, we saw last year or from from some.
Instability that we had at Pinos altos, mainly that May indeed, it was.
The effect of clean the or but measures taken June 2019.
Were to mitigate those into the into bringing the costs down and bring the production up which is the interlayer in.
In 2022.
We will seek the cost reduce.
During 2020 Bucks.
It's actually.
Where we are.
Okay. That's very helpful. Thank you.
Yes.
Your next question comes from the line of Anita Soni farms JBC. Your line is open.
Good morning can you give me.
Yes, we can thanks I'm. So my question I guess I, it's a little bit more on a meliadine not to put a too fine a point on it but.
In terms of the throughput rates. How you mentioned that you were at 4000 in December. So once you have the apron feeder fix I guess in that in the first quarter would you expect to get back up to the 4000 tonnes per day is it just like really low in Q1, and then acute Q2 Q3 rebound.
Well the when they said you were at 4000 tonnes per day, that's the underground mine.
The mill has been operator, operator to actually in 2019 anywhere between 3000 up there almost 5000 tonnes per day. So once the once the crushing part D equation is.
Picture It is expected to bring back up.
Last 4000 tonnes per day, and then and in Q4 as the.
As we.
Sequence, a mining wise with the pit comes into play.
It's already expected that the bill will ramp up around 4600 tonnes per day at that stage with will probably be in a catch up mode before that.
Okay.
And then just on on the costs I'm not to beat a dead horse on the on Emmerich, but.
45, <unk>, how much of that is just equipment availability issues and how much of that is just the fact that the the mill is kind of.
Or milling rates are sort of 70 710 per day and lots of 10000 tonnes per day, no I like how much will it how much is it depend on getting I knew ore sources in in 2022.
Well I think at this stage is mostly.
Mining cost and greed.
That's the big Big issue I think are processing costs I'm going to.
In a little bit higher because we've been operating at lower tonnage.
But that's part of the reality is we're ramping up so true answering your question here.
I I think you are and then just in terms of.
The total Iran sequencing.
So you moving just sort of Athree hundred 53, 60, I level on the on the unit cost Rd, sorry on the I'm on the production side of the equation and are the unit costs I'm like ours is there room for improvement on the unit cost. Once you get you know that the rock mechanics issue debt issues settled and figure out how to improve.
On your mining there.
That's the say probably not but they are biggest challenge going forward is that the as we continue to advance the mining sequence the.
And then their own deep.
The overall tonnage per day keeps going down in life of mine sequence.
So productivity is actually going down so it will put pressure on the costs, we're doing some work on the.
Adopting.
Strategies around manpower and automation down the road.
Which will eventually become like a template for LR three.
At that.
I think that at this stage.
Thank their cost structure currently is.
It's pretty is going to stay pretty well in that in that range.
Okay.
Last one on Canadian Malartic, so when do I think there I was discussing with with brain last night that there was issues in accessing some of the a higher grades in the old stope workings. When when do you think that will be resolved and can you when you'll get back into sort of more stabilized mining there.
Well, just adding to the rone.
I think the.
Although tonnage will be going down the grade is going up and the as the proportion of a or B mine from the west in the sector of the.
Of the mine grades in that area or in excess of eight grams per tonne. So.
That's sort of stabilize although cost per ton are going up the cash costs are basically stay inside.
As far as my logic is concerned.
I think we have about two and half years of mining left in the pit.
We will continue to deal with.
Underground workings like we have in the past.
I think the the challenge will be too.
Essentially.
Continue to ramp up.
Getting good progress in Bernard.
We'll probably sequence.
Some of the burn not differently potentially.
But.
It's a it's a day to day challenged with the with the blasting and at this stage the biggest issues been related towards the.
What away.
Remote marketing basically that's the biggest challenge that we've had been we're finishing a sum.
Access work.
On the main ramps and on the walls that will be.
In the second half of the year will be easier for the for the operation.
Okay, and then sorry can I just revert back to I'm, Ron you mentioned, a higher grades of eight gram per tonne. Obviously, that's there to ore sources that right. So that's not going to be srini gram per tonne material.
That's correct, yes, but when you hit the grams <unk>, what does that due to the rest of the byproduct is as I read college at gold copper and silver zinc is <unk>. So you probably get higher copper, but lower silver and zinc correct. Yeah. Okay upgrade was up in the zinc is almost nonexistent.
Okay.
Right. That's it for my question. Thank you.
Your next question comes from a line of John Thomas Your line is open.
Thank you for taking my call and thank you for your services company.
Could you give us your philosophy on share buybacks, we all had volatility and we got a little taste. This morning.
And second could you talk a little bit about the stuff up in inferred resources this year.
Oh, He's got 55 60 million ounces total reserves and resources.
As a zones might get into reserves.
20, 2020, 122, I know the documentation always takes longer.
Sure just on a on share buybacks I think our focus with the increased cash flow will be to reduce overall debt.
At this point, we're not contemplating a share buybacks I think we prefer to approve the strength.
The balance sheet.
As far as the increase in resources, all that Gete provide some color on that.
So basically as you saw this year, we've been bringing more resources in kick in May for example, as we are continue to drill and grow the footprint of those it was at the same thing in.
Hi, My room, where we've been adding more drilling and April through a study on the portion of the deposit above the permafrost Smith to bring it into reserve in.
In the monarch as well where continue successful drilling at these gold the as.
Grown the.
You in school diesel.
On to lead this one I think more drilling will be needed so where we're going to continue to extend the footprint to infill. It. So I've got to ended up into the reserve anywhere soon because much more drilling will be needed to to get there and better assess the variability but were making.
Good progress annoyed expanding the footprint as well then in Mexico and it sounds like our through this where weve been a good contribution for the addition of in first so I.
I think we've been getting good news on several fronts from growing resources and as you can understand you know while the.
Once in a while some of those projects will will ended up being supported by is the dnbi convert into reserves. So what saw its an ongoing process. This year Weve route.
No.
Something like open pit at Meliadine into the reserves and brought them group underground and we're working on the Knicks Big block that will be moved from resources to reserve.
[noise] bushels small them Angie.
Yeah.
Thank you.
Your next question comes from line of Ralph Profiti eight capital your line is open.
Hi, there thanks for taking my questions.
Firstly, you know I see that you've outlined the proportion of the west area Laronde in terms of the ore feed just wondering what the plan or the mitigation strategy. If you get into 2020 and in 2021 and those ground conditions.
Don't really a you know support the mine plan as it stands now or your visibility what would be the mitigation plan then.
We're sort of applying not already into one because weve re sequence the development.
Into the use eastern sector to compensate for the last tonnage and the team has been quite successful with us.
I think.
Longer term to that were also in the process. So developing other areas within the satellite ore bodies like does zone.
You Levered three as we scale, which will bring some production down the road. So we are thinking all the time of both.
Providing a not just risks on it but also incremental tonnage through the plant because we've got to available capacity. So I think thats the plan at this stage.
As far as the.
The current period as far as.
Increasing support in the western sector is essentially too.
Ensure production in that area and we're pretty confident at this stage that the.
Yeah.
Activities that are being put in place will secure that production for the rest.
For the year.
I think I'll, just add I'll, just add on that Ralph as far as sort of strategy around the strategies.
Into as we go deeper to take a very measured approach. So essentially a cautious mine plan calls for about a 13% reduction in tonnage from the original plan as we move into the deeper part of your body.
And the strategy over time is too.
Ensure that we can access that higher grade material by boosting up the ground support in the major infrastructure. So that's that's just being cautious and that was a recommendation that came to us in January.
From the team there who have developed a pretty unique skill set around rock mechanics.
So I think that's critical to the future of Laronde took the measured as we go deeper but I think what we're finding in the activity as we look at.
Some drilling we're seeing on the old boost K property.
Drilling, we're getting add to east Malartic at East Goldie, there's still a lot of life and diesels camps, but in order to access and take advantage and build value.
As these resources grow like John said, you need the skills to be able to go deeper.
That we certainly see that also a kirkland lake another old camp where.
We have a buildable mine that upper Beaver So I.
I think the the opportunity is there a we had just have to measure cautious in the approach there, but we have some really good skills that had been developed that are all the in house and we sort of take our lead.
From a team there on how we should approach it.
Yeah Yeah.
Yeah. Thanks for that Sean if I could stay with you on a on a different topic you talked about this a 300 million 60 million dollar.
Payment due in April.
50% of it which would be refinance it differs a little bit from what I've heard before which is paying down debt as it comes due how are you thinking about sort of capital allocation has this changed sort of in the first half of 2020 or is this cost of financing just too attractive I.
I think its cost of financing is very attractive I think stocks were retiring now is 6.4% or 6.66 0.6, Dave reminds me.
And you probably replace that for Ah Ah an interest rate of less than half of that.
So we will repay some of the gross debt.
That's part of the plan.
But we're just reviewing those alternatives over the next week or two.
Got you have good clarity thank you.
Your next question comes from a line of Danielle Jakone Colin Smith from Scotiabank. Your line is open.
Good morning, I think that's me good morning.
Yes, I know right and they get a easier name.
I just wanted to circle back if I could data later on so that I, just I understand that what's happening.
How I interpreted that but Iran was saying is that we've had a change in the mine plan and that as we've gotten deeper went to the rock mechanics looks like this is going to be more actually hundred 60000 ounce long term.
Mine.
Is that correct way to interpret that.
I think the way you need to interpreted that we cannot sequence as quickly as we had earlier anticipated in the western sector and that has been evident from the start of development and that's on the biggest challenge that we have in that sector has not been mining so far it's been a development.
And the.
Protocols that are necessary in the various headings are like.
Much.
More importantly that area and the sequence that which we can adopt the rest of the sequence is like.
Yeah affected by it. So this this area is very high grade sector, and we just need to ensure that we do.
The the mining.
Properly and so far we've had we've added a lot of success production wise, we've had very little minimum minimal impact on the on the production side.
And we intend to keep it that way. So that's part of why are the reasons for taken Miss spas to.
Increase to support.
No I I appreciate that I'm, just thinking more from a longer term perspective, I think I can add when we talked about it was going to be ultimately about a 400000 ounce producer.
Camp is that still what you see excluding this this area that you've talked about I think we talked a bit about lowering that tonnage ultimately we've got to get to reserve grade. So I'm just wondering if the balance of lowering the tonnage and getting to reserve grade still keeps us at this 360000 ounce radar, we moved back to that 400000.
Now stand at times.
We'll be in between the two I guess, we'll be that 360% to 400 lot of it will come from greater production from Elds at five as we get more productivity from that side. You also have a lot more flexibility from I'd say, we're going to maximize it to make sure the complex.
Stays near its objective as much as possible.
Okay. Okay. That's helpful. Okay, well. Thank you for that if I can still just come back to none of that so that I you know again and it just summarize on my understanding of what has to be done. It never is kit to get the mine that back on track and it appears that in the pet I'm watching need to get is just more sir.
Yes areas exposures in that hit to to get to your your mining.
To put which you think you'll get there by mid year.
And it looks like the maintenance now has been adjusted between what you're doing at Amaruq site. Various says what you're doing at Meadowbank.
Is it just see utilization and because whenever utilization of equipment that still has to be done to get you there and if so what else what's the timing on that.
Well, it's getting everybody up to speed and its time I think the Oh, we are doing all of this we're trying to optimize probably the most difficult period of the year under and so.
I might have conditions so.
The speed at which we will do this into one news is one.
We will accelerate significantly in Q2, but this is more equipment availability, particularly on the loading side.
There's still some challenges equipment availability wise on the drilling side, but it's mostly on the loading side that we need to focus and.
I've got some of our Ah digging equipment.
With more hours the rest is.
Is okay at this stage.
Okay, and then I guess, maybe on the en route underground if I could just ask I'm. You know saw that you have some of the that guidance after production into your 2022 numbers and ultimately beyond is it safe to assume on the capital side that that's most of the spend is in that 20 to 20 to 2021.
It would be mostly a second half if we would do to prove it and the 21.
And most of that cash and it would be in that six it took a 700 million range that would be accounted for in that range and that tend items a range.
Yes.
Hello.
Yeah. That's for next year, Yes can you hear that.
Yeah, Yeah, Yeah, I think 650 to 700 and next year and actually I say, what the N.. Okay. Perfect and then if I could just ask one question on Mallya Dine, we talked about time, what's happening at the now in terms of dealing with the.
Hey, pain feeder and you know is that something that Dave on we've done in each of a place. So is it something that is fixable, you know sort term.
Yeah, we're waiting for parts.
It's a unit that's fabricated Italy to custom units.
So parts and delivery are very long.
So we're looking with the local suppliers to provide parts that are proper created the replaced them and the plan is to replace the unit after bird shoes and later this summer, but once the new parts are put in.
In March we expected to be back and running at normal capacity.
Okay, and then maybe just on the underground because we also have changed that the mining sequence and the end up bound for lower grade can you just talk about what happened there for the 2020 plan.
Oh, mostly.
I think the sequence was a pretty well the mine as plan, the only area or RP three area.
Which was you add little bit more ceiling water in that sector and we needed to understand the behavior in that area.
Some of these soaps or worse, Rick significant tonnage and significant grade, which sort of put pressure on the overall grade profile for the rest of the year.
This will resolve itself probably in the second half of this year and were expected to restart finding in that area. So there will be back on grade profile from there.
Okay. So second half there.
Okay, great. Thank you sound match.
Again, if he'd like to ask a question. Please press star and the number one on your telephone keypad.
Okay.
There are no further questions at this time I kinda call back over to Mr. Boyd.
Thank you operator, and thank you everyone. If there's any sort of additional information as a follow up to this call.
Please feel free to reach out and so we can set up.
Separate calls we feel like.
Thank you very much.
This concludes today's conference call you may now disconnect.
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