Q4 2019 Earnings Call
[music].
Please standby your meeting its about to begin.
Thank you all for joining us this morning before I turn the call over I need to advice that certain statements made during this call today may contain forward looking information and actual results may differ from the conclusions or projections in that forward looking information, which include but are not limited to statements with respect to the estimation of mineral reserves.
And resources, the timing and amount of estimated future production cost of production capital expenditures future metal prices and the cost of timing and the development of new projects.
For a complete discussion of the risks uncertainties and factors, which may lead to actual financial results and performance being different from the estimates contained in the forward looking statements. Please refer to Yamanas press release issued yesterday announcing fourth quarter 2019 resolved.
As well as the management's discussion and analysis for the same period and other regulatory filings in Canada, and the United States I.
I would like to remind everyone that this conference call is being recorded and will be available for replay today at 12 o'clock PM Eastern time replay information and the presentation slides accompanying this conference call and webcast are available on them on its website a Jim on a dotcom I'll now turn the call over to Mr., Daniel Racine, President and Chief.
So that kind of officer.
Thank you operator, thank you all for joining us and welcome Port fourth quarter, and your and conference call.
With me on the call to this isn't the block our CFO other members of our Great management team are also in the room and will be available for the Q any portion of the call.
2019 was by any measure a very strong year for Yamana.
Production exceeded guidance cash flow increase that decline reserves grew project events and the amount out was one of the top performing stock and then its peer group.
These are just some of the odds of the year without calibre and good or greater detail, what first look of our health and safety performance.
Our total recordable injury frequency rate in 2019 failed to zero point 57, a 5% decrease from 2018 and 24% decrease over the past three years.
Helping you on I'm pleased to inform your company that its second street to year without a lost time injury, marking 8.9 million the more car without a lost by my Timex incident.
Yeah, MADA didn't have any material environmental or community incident for the fourth consecutive year.
Turning to our production result, weixin exceeded.
2019 guidance for both gold and silver with silver significantly outperforming its guidance.
Geo production also exceeded guidance of 1.0 with 24 million versus 1.01 million.
Cash costs of 667 per deal and all in sustaining costs of 978 or in line with guidance. After the inclusion of adjustment noted during the year.
Susan will discuss skus in greater detail during his remarks.
Total depth decrease in 2019 by 711 million and were nearly valves, our net debt to 889 million significantly strengthening our balance sheet and financial flexibility.
And with greater financial flexibility good things happen.
One of those things was the 25% increase to our annual dividend announced in Q4.
We now have committed to for the increase our annual dividend by 150% to five cents per share from two cents per share in less than eight months.
In September we announced the discovery of East Goldie, a new mineralized zone at Canadian Malartic.
We said that drilling results indicate that Goldie and these taught us xone curbing converging.
Increasing our confidence in the economic of the underground mineral resources at Canadian Malartic.
The joining the amount agnico Eagle partnership that owns and operates the mine is evaluating scenarios to optimize the project, which includes discussion with royalty holders and and other stakeholders depth and that's the economic over the project.
Given the amount a robust but pipeline of development project, we do not currently anticipate the.
Anticipate approving the project for that Rothman unless this is the discussion our successful and the project economic our improved.
In addition to Canadian Malartic, we issued positive exploration update for helping the Anselmo Minera, Florida and Jack will be now in the second half of 2019.
We also advance phase one of their check will be not optimization and we expect a prefeasibility study to be completed.
In Q1 that they evaluated economic scheduling and expansion scenario for phase two.
We increased mineral resources on the consolidated basis with inferred mineral resources, showing a substantial 27% increase.
Jack will be no. It was a standout in this regard increase in mineral reserve by 19% from Erie and year end 2018, I'll talk more about reserves in a moment.
Another positive this past year was the progress on a go recur last March we signed and agree and integration agreement with Glencore and newmont under which like Aurico would be develop and operated using the infrastructure and facilities of the Alumbrera mine.
The agreement significantly de risked development with reducing the project complexity and environmental footprint.
In July we announced positive grizzly be Prefeasibility study result for the project that underscore other work as one of the longest life lowest capital intensity copper project in the world.
Facilities. This study is expected to be completed by year end or early 2021, we continue to advance studies to further enhance project economic.
Finally, we completed the sale of shocked by the mine in July receiving upfront cash consideration of 800 million. In addition, daughter consideration.
These next slide cover our fourth quarter highlights I want to walk you through all the numbers, but I do want to I'd like cash and liquidity, our cash balances declined by climbed by 59% to 158.8 million from 99.9 that.
End of Q3.
This is yet another barometer of our improved financial flexibility and strong free cash flow, which climbed to 73.4 million in our latest quarter before dividend and debt repayment up from 29 million into third quarter.
With that flexibility, we are not only able to do things like increase our dividend. We can also continue to reduce our net debt, which we did by nearly 60 million in Q4.
This slide shows our Q4 production and cost.
Isn't will discuss costs in greater detail during his remarks.
Looking at production Jack will beat up posted an all time quarterly and full year production of 41000 ounces.
74.
774 ounces and 159 499 ounces, respectively full year production was also well above our poured the revised guidance from 152000 ounces.
The success of this operation as a testament to what can be done with planning patients and great people and there is more to come.
Phase one of the expansion is on track for completion in mid 2020.
This will bring totaled would put to a stable and sustainable 6500 tonnes per day.
Which would put into fourth quarter was approximately 6200 tonnes per day.
The increase in mineral reserve that I discussed earlier, we will support phase one throughput, but also support the potential for face the second phase of the expansion.
This phase call for production to increase to 200000 ounces per year at 7500 tonnes per day, and 225000 ounces at 8500 tonnes per day.
A prefeasibility study is expected to be completed in the quarter on quarter.
Helping you on the reported its highest quarterly and yearly production since we completed the Rightsizing three years ago gold production in the quarter was 48131 ounces with full year production of 159 and 515 ounces.
So with Jacoby no additional mine development has greatly improved production flexibility and the expectation for 2000 twentys to process or.
The process or will primarily be from run off of mine with reliance on low grade stockpile, our supplemental supplemental or to the meal.
Canadian Malartic produce 85000 ounces.
On a 50% basis during the quarter and 334 or 596 ounces for the full year.
In line with budget.
Canadian Malartic extension project continues to advance.
As expected with a modest contribution from Barnett of 3137 ounces during the fourth quarter.
[noise] Minera, Florida. This had its strongest quarterly performance of the year in Q4, I highlighted by an outstanding month of December doing which it produced 80 to 100 ounces of gold.
Quarter on quarter toward puts increase as did great than men and mechanical availability. We're very pleased with the mine performance and we are confident that this is a sign of things to come.
Several mobile produced 26658 ounces of gold in the quarter and 1.6 million ounces of silver the full year production was 120800 into ounces of gold with silver production coming.
Above plan at six point 32 million ounces why the strong silver production at a positive and back on Geo production. This was partially offset by higher Geo ratio goes by outperformance of gold versus silver.
We expect silver to continue to be a more meaningful contributor to deal in 2020.
Taking a lot that taking a look I look at our gold mineral reserve will replace the depletion in 2019 existing the year with seven point 86 million offices of mineral reserve compared to seven point 84 million at the end of 2018.
Measured and indicated mineral gold resources were also increase year over year to seven point 69 million from 12 point.
49 million ounces.
Inferred gold mineral resources increased by 27% to 12.07 million ounces from nine point 53 million ounces. As you can see also Canadian Malartic was a big contributor.
Silver mineral reserve ended the year at 63 point 82 million ounces measured and indicated came at 40 344 point 63 million ounces up 22 million, 22% from 2019 or entered silver came at 45.2 million ounces.
The gold and silver resources and reserves show our success in exploration the increase in gold and silver show our success in exploration at Canadian Malartic with the discovery of East Goldie and these malartic below 1000 meter we increased the mine inferred mineral resources by 111.
Percent in 2019.
On the 50% basis is go the added 12.8 million tonne at three point 34 grams per tonne for hunt for one point 37 million ounces does own continues to be open in all directions.
With the resource defined to date the potential on the ground is impressive.
But like I mentioned before to different scenarios need to be optimize and the partnership do not do not anticipate approving the project for development under the current economic results.
Last year, the LPG on mine to replace gold and silver mineral reserves above and beyond depletion by 15% and 20, 521% respectively.
It was the thirds three tier that's helping you on increase mineral reserves for both middle well beyond the patient.
The operation Gold measure and a decade and mineral resources increased by 66% from year end 2018, with silver rose 70%.
We recently indicated their newest overdraw interpretation of faulting and the depot resolving that our opinion is helping to define new I agree.
Minerals that mineralization with potential to increase mine life I hope the message is clear l. opinion to continue.
To show a remarkable ability to grow mineral resource reserve beyond depletion and we are confident that it has plenty of mine life ahead.
Measured and indicated mineral resources increased modestly et cetera model in 2019, while gold and silver inferred mineral resources rose, 25% and 10% respectively.
Exploration will continue to be focus on drilling potential target including that.
Project will be now in the mid year exploration update for the mine, we announced that mineral reserve increased by 8.6% from year end 2018.
We continue on improvement project will be enough cost structure and development productivity. The operation was able to incorporate or previously categorized as mineral resources into mineral reserves. The inclusion of this supplemental or which is encounter as all the halo for the core mineral reserves.
Slightly decreased total mineral reserve grade, but significantly increased economical mineral reserves ounces.
We have effectively and profitably mine some of discipline supplant fundamental a little over the past few quarters.
We are prioritizing the mining of core mineral reserve with a great of 2.4 grams per tonne and deferring the majority of the mining and processing of the supplemental Halo until late inject will be knows mine life.
At Minera, Florida, others result, last year on the consolidated property, including a new veins at better than life of mine grades underscoring the potential that we see this operation.
The increase in mineral reserve reflect positive result, but tagless done the overall Doe fantastic NPV Estore.
Among solder along with block models revisions I will also like to highlight gold and copper mineral reserve growth at Legwear recall last year.
Gold mineral reserve increased 13% from 2019 to 7.1 million ounces and copper mineral reserve rose, 21% to 11.8 billion pounds.
This slide shows or our three years production guidance, along with our cost guidance for 2020.
We see growth in gold production over the next three years with 2020 production that 557.
1000 ounces 2021 at 873000 ounces and 2020 322 at 885000 ounces.
Silver production will be 11.5 million ounces. This year 11 in 2021 and 10 in 2022.
Geo production of 990000 ounces this year and 1 million ounces in 2021 and 22.
Our guidance for both metal and Jio is plus or minus 2% for 2020, and 21 and plus or minus 3% for 2022, we are confident to achieve and exceed these numbers.
As a previous year production will be stronger in the second half of the year with approximately 54% of the production in the second half.
Cost of sales for 2020 will be between 11, 11, 30, 211 70 per Geo arms is.
Cash costs. This year will be between 642 680 per geo and all in sustaining cost between 980 and 1020 per deal.
While we are forecasting a marginal increase in sustaining capital expenditure, we do not anticipate any impact to margins.
With the higher production waiting in the second half of the year. The company anticipate unitary cost to also trended lower in the second half in relation to the first half of the year.
I will now I'll turn it over to Jayson to discuss the financial.
Great. Thank you Daniel and good morning, everyone.
I'll start off with a quick recap of some of the financial highlights of the year revenue in the fourth quarter was $383.8 million compared with 483.4 million in the same period of 2018, the decrease reflecting that the company's current portfolio comprises five lines compared with seven last year.
Despite the lower volumes, though gross margin was flat as metal prices were up significantly year over year.
Net earnings earnings attributable to your money equity holders in the fourth quarter were $14.6 million are two cents per share compared with a lot for $61.4 million or six cents per share last year.
The current quarter included certain items that may not be reflective of current and ongoing operations totaling $12.1 million.
On an adjusted basis than earnings were $26.7 million or three cents per share or flat with last year.
During the quarter. We also had our lowest cash cost performance as the year at $656 per Geo, even compared with earlier in here when we own chapin.
Jacobean announcement, helping you on in particular had a great Q4.
Our Q4 results were best characterized by the strong cash flow in free cash flow performance is that we had been expecting to end the year.
Cash flow from operating activities increased 75% in the latest corridor to 201.1 $1.7 million from $114.8 million year ago, while cash flows before net change in working capital were $176.6 million compared to 115.8 million.
Free cash flow before dividends and debt repayments during the quarter increased to $73.4 million up sharply from $9.5 million year ago.
This drove a commensurate reduction in our net debt at $60 million during the quarter to $889 million, which is our lowest aggregate net debt level since all the way back in 2013.
At this time last year, we said to expect our inflection point on free cash flow during Q2 after an investment cycle as several years.
That would lead to sequentially, increasing free cash flow in Q3, and Q4, which was all the case.
We will be generating free cash flow and further reducing both gross and net debt during 2020.
We have a scheduled debt maturity of about $56 million in Q1. This year that will repay from cash balances at year end of a $159 million flex free cash flow generation.
Along with our financial results last night, we also released guidance information, including goes on capital for 2020.
Expansionary capital spending of $89 million in 2020 is down about $6 million last year.
Sustaining capital of $164 million is up about $18 million last year, mainly attributable to Cerro Moro as we concentrate more on underground development there.
Total exploration spending of $84 million is up from $68 million last year.
$20 million of the total exploration spending will be expense with with the balance capitalized in 2020.
With respect to the exploration spend we're allocating $40 million. Our total this year to our generative escalation program to advance many highly perspective opportunities in our portfolio.
The program will target the company's most advanced exploration projects, while retaining flexibility to prioritize at merited by our drill results.
For the increased budget that we are targeting over the next three years, we expect to use the proceeds from the monetization of non producing asset to find this budget.
This will create a better balance between investing in new projects and maximizing sustainable free cash flow from our operations.
While we have a number of perspective land packages. The program is mainly focused on projects in Canada and Brazil.
As you can see here production, we waited towards the second half of the year, representing 54% of the total.
Cost will also follow that profile with lower cost as a year progresses from the unit cost benefits of the higher backend loaded production.
I also wanted to reference back to the strong free cash flow generation. We saw in Q4, 2019, which was our strongest production quarter every year.
With that production and cost profile, just mentioned for 2020 free cash flow will follow a similar trend this year with second half free cash flow above the first half.
On average, though for 2020, we expect to generate quarterly free cash flow during year that we conservatively approximate our experience in Q3 and Q4 up 2019 on average at spot prices.
So that to say a very healthy free cash flow profile, which were quite excited about.
With that profile, we can reinvest in our business continue to improve our balance sheet and target higher sustainable dividends and dividends per ounce for our shareholders.
Yamana has positioned itself as a dominant gold company with a portfolio of high quality assets, writing stable and increasing cash flows optionality growth and prospects for additional Monetizations within America focus we operate in the best mining jurisdictions in the world and with that I'll turn the call back over to Daniel.
Thank you Jason.
Last year, our slogan was at the beginning of what's next given our progress it makes sense to revise that to the beginning of what's now.
And what's happening in dollars that our free cash flow us growing to a point or are we are able to reduce debt significantly. It was in cash from treasury, while supporting higher dividend and continuing to grow the business. We are confident that this sustainable this is sustainable as.
As our free cash flow profile continue to improve we will be in an even better position to advance our growth projects and exploration program was further reducing debt and increasing shareholder returns and with that I'll be happy to answer your question operator.
Thank you Mr. machine will now take questions from the telephone line. If you have a question and using you speakerphone. Please mr. handset before making your selection if you'd have a question. Please press star one on your telephone keypad cancer of the questions. Please press the pound sign. Please press star one at this time if you have a question there will be brief.
So if I can register thank you for your patience.
And your first question is from had two weeks from credit Suisse. Please go ahead.
Hi, Good morning, Thanks for taking my question I Jacobean can you maybe walk through the reason for including the lower supplemental or in the reserves and was this the only kinda reason for the reserves, increasing 19% year over year.
I will look Buchanan, our senior our VP of technical service will answer the question fat.
Hi, there.
First of all we did increase the high grade reserves as well as you saw in the middle of the year and then we replaced depletion again by the end of the.
In terms of the lower grade.
We previously too conservative approach to downgrade those reserves.
Measured and indicated resources.
But by demonstrating over the past civil quotas that we can that we can sustain the low operating costs pretty confident that we can include these in reserves in the later part of mindless.
One of the improvements was internalization of development.
For the past year, which is.
Resulted in improved productivity and lower cost.
So just thinking how is the time to add those lower grade reserves back.
Back into reserves.
And are included in the mine plan.
And just thanks, and just as a follow up or it can you remind me what the capex would be for the phase two expansion.
In 2021 in 2022.
In 2021 and 2022, if we go ahead right now we have said many time as be is going to be below 50 million dollar.
So we'll company. This study this quarter are we going to commit in April with the the exact numbers, but for now it's going to be below 50 in and you can assume a.
A script, so 25 in 21 and in 22.
Great. Thank you.
Thank you.
Your next question is from Ralph Profiti from eight capital. Please go ahead.
Good morning, Thanks for taking my questions Firstly, Daniel when we talk about primary development versus secondary development Jacobean or can you help us with how far ahead you are on on development and maybe put that in context by comparing to say, where you were see a year ago.
And also like to get a sense of how many zones.
You have opened now and how many are going to be required. If you hit the upper end of that expansion phase at say 8500 tonnes a day.
Thank you Ralph all that to you on answer this question.
Good morning, Ralph.
Just to answer your question here I mean last year, we were doing about 1500 to 1800 meters of development per month. This year, we see a development and arrays of 12 to 13 hundreds so we're already decreased.
And now I would say expansionary capex of next year.
We indeed put some more development because we believed that the phase one expansion on may yield a little bit more throughput. It has been previously thought so want me to meet to make sure that we're going to be able to support the phase one expansion in case.
That's where.
I would say, okay that were being a bit more higher than the 6500 tonnes per day targeted.
We decided to put some more capex in our budget this year in that aspect.
Maybe to answer your first part to evolve.
Five six years old goal, we were just in time and development. We are now about 18 months ahead in the development into the production of the next six to nine month is already all double up and ready to be mine. So that's adding a lot of flexibility duty Jack will be no mine in like you'll end just mention I think.
When we have complete our 6500 tonnes per day, the mine already things that with the new equipment and we will install week, we might be able to process Morton more than 6500 tonnes per day.
Okay got it thank you.
The second question is on Argentine export tax just can you help me maybe reconcile this new regime that talks about sort of fixed percentages as opposed to the four to one ratio and going forward until this expires is that going to have kind of around the same impact sort of 60, 70, maybe up to $80 an ounce.
Impact.
Hey, Ralph.
Yes, So we mentioned that 12% tax which has been announced its not approved and finalized yet, but we've we've assumed that 12% tax prospectively and are planning for that.
The next years and really it's you know aegis way to do it on a per ounce bases, 12% times the times the gold price and I will give you the per unit impact that.
I'd.
At Cerro Moro or take that number divide through by our 990000 ounces guided you to consolidate packed.
And have you had discussions with the government sort of face time with them to discuss sort of the impact and how they're thinking about it.
Yes, Ralph we did that the discussion with the government.
Peter Our executive Chairman was there two weeks ago, three weeks ago to discuss the directly with the president of the country and they understand that we just build Cerro Moro, we spent $330 million to build it then and we got it with with these taxes I think this the understand their listening.
And then this this there's going to be follow up on this regarding.
What should be the right level of tax you know as we have.
Stability agreement tax a 5% at Cerro Moro.
So we're still contesting each time, we pay the tax both were contesting distech, saying, we should be a maximum of 5%. So we're going to see what's what's what happened in the future.
But right now we see we should be a maximum of 5%.
Understood. Okay. So encouraging thank you.
Thank you Ralph.
Thank you. The next question is from Mike gentlemen from Bank of America Merrill Lynch. Please go ahead.
So.
Hi, Dan and Jason is that a question on east Gouldie, that's impressive start there with the resource I guess.
2.8 million ounces of gold with your partner share.
Yes, Dan just on the mine ability would would you access it looks pretty deep what would that be accessed by a decline ramp from at Canadian Malartic Pandora, New Shah often looks pretty good thickness is what do you mind like gold ex FARA economies of scale and I can be my first question I have a second one on his Cody.
Okay. Good morning.
Mike Yeah, it's quite impressive two to have already or resources of 2.8 million ounces on 100%. Thus there on a one year of exploration.
You're right, it's quite deep right know it between 800 meters to 1.51 0.6 kilometers below surface.
But it's a open going towards surface going east west and that deadline. I think this is our main goal. This year is to find I'll close with surface is going and then east and west and deep.
Also.
It's quite interesting what you saw US resources, we think its is going to be a lot higher than that in in the future. We have just to continue into two drilled it it's going to be.
Similar type of mining than than gold ex now with what.
The Fayetteville, Bob any fitting into still there quite wide still and big.
We're studying right melting, though as you know to start around we were studying to start to ramp to go to east metastatic and Odyssey right. Now is go these a bit too deep to be accessed by ramp but again, if we find that does own comes closer to surface.
And then we might access it by the around this is why we have also delayed their ramp last year and that was clear to time. This morning that we have no intention to start to ramp this year.
As we want to understand better wordy East Goldie zone go up to surface, but also we have.
We have some issues being higher quality for underground mines.
Okay I guess, that's my second question.
Their patients.
It's really agnico release, just encode discussions with the royalty holders have discussions started yet.
Yes. They have started they have started before Christmas they're still ongoing with the main loyalty older.
And then it's progressing so we're going to see what will happen in the next.
Weeks and months.
But for now for US nothing has really changed we're going to continue to drill we have a quite a big exploration program, it's about $20 million, so 10 million or half of it for E School. The this year so.
We believe and the potential but.
As you know and it's clear in our press release, we used 1200 dollar per ounce gold when we do our study and our resources and reserves.
At optic and that the using that number the economic is not really good all the cash flows going back to the world holders.
Yeah, I guess, well, obviously I guess, Oh, Cisco has another 5% NSR does abitibi have a 5% NP is that correct no.
Their debit to be as a lot smaller percentage.
All right. So the main ones just for gold royalties on their 5% NSR.
Yep.
Right, Okay, well. Thank you good luck. Thank you.
Thank you.
Next question is from Gary Macquarie from Canaccord Genuity. Please go ahead.
Hi, Good morning, guys. Maybe just another question on Malartic now that you've got east Miller tick on to see school will be just wondering what sort of development options, you're thinking about in terms of.
Tons per day or our size.
Hi, Good morning carry right now there's no. We're doing this study as we mentioned last year. So 2018 that we started this study on east might uptick and AADC alone. The discovery and then with the discovery obvious Goldie at the end of 2018, it completely change or plan to two to look at.
The underground.
Projects. So we have restarted the we're just we're starting this study right now to would be the 2.8 million ounces, we just announced in the resources. We can start to look at a PK study internal PK study to so to see all we can integrate.
The three zones into mining, but we're just starting school.
At this time, we don't have any indication on tonnage and stuff like that will come later this year I think both partners. We agree that we would come later this year and then.
So our plan for that matter FSIC, what we think it would be but it's too early to say now.
Okay, Great and then maybe on Cerro Moro I know you guys had a.
Target of 1 million ounces of.
Gold equivalent over or some time period and deserves came down this year I'm just wondering how your.
What's the outlook now and exploration on term or you're still comfortable you can get there or is your view changed there.
And we want to answer this one.
Yes, good morning Kerry.
We talked last year really about increasing our sort of inventory of targets some at Cerro Moro.
We haven't done that over the year, we've had a very strong and aggressive exploration program. We've seen some new discoveries and we're starting to see small but significant contributions to the inferred resource at Cerro Moro.
So I you know by the end of 2020, we should start to see some of those converting into measured and indicated and we'll see dust gradual growth much like we do it beyond that the terms like.
Great. Thank you.
Thank you.
Your next question is from Kenya decreased connections Scotia Bank. Please go ahead.
Hi, Good morning, everybody I have bad just a couple of question.
One technical and just one for you Jason on the capital side and maybe just Daniel starting on the technical side, just looking out for the three year guidance. When you provided the 885000 ounces.
Twentytwenty to.
What have you assumed in that guidance, well or Minera, Florida, Jackoby, Ana and jacket Bina.
Well, we don't has you know good morning Pan out as you know we don't provide my mind.
Guidance after after this year, but to assume that Dick will be now we have already said what will be the production with the increase the throughput.
Florida will be we I've always said, it's going to be stable for the next.
Three years, so no the 80 to 90000 ounces.
Okay, and then when you say Jacobean and we'd be increase to are you, implying the 6500 tons today, yes, okay. Yes.
Yes, no no would there's no in our capital that Jayson discussed earlier, there is zero money for an expansion that Jack will be not like we said before we want to wait to see this study coming this quarter.
Then we're going to decide if we go Ed we going to tell the capital needed to do it but so far the three years as assuming 6500 tonnes per day.
In the production profile and in the capital yes.
Okay. Okay. That's good. Thank you on that front and then maybe just on the capital front and maybe just moves Helguvik Jason.
We I think Daniel mentioned under 50 million, if we let kick out to the M.
7500.
We intend to day of Tachibana.
When you look out the next year, yes is that really the only to 2022 is that really the only development capital you see in your portfolio right now.
Yes, I know it with Daniel we'd reference back to recall at that.
Bucket of $50 million to $75 million, which was which would say a steady state. So we're a little above that this year you know the primary differences.
Spending on on Agra Rico with feasibility and some of the stuff, but really to your point after we get out past this year that that capital drops off pretty significantly there's no. There's some margin sides across the portfolio, but it said, it's a fraction of what we're going to spend this year or in 2021 and 22 at least what we.
The on paper right now so when we do come to that decision.
On on jacket, Bina, sorry, I'm, assuming that will be spent over multiple years, we'd be well within that 50 or $75 million bucket.
Okay, and then sustaining thought going in that 165 million range.
That's a pretty good number.
Okay, and then maybe just on the.
You mentioned that midstream capital expenditures doesn't include the development at the acceleration ramp at Odyssey and East My life Tech.
Is that because you're not going ahead with Ed or is that just another numbers that.
Well, if I what is that capital number maybe unwary that being allocated.
No. So there's no no capital allocated tenure and as I think what Daniel had mentioned is we're still wrapping our arms around the project to find out the best sequencing and everything so we're not at the point of approving and developing that underground ramp yet.
Okay. So I guess, the 10 million an exploration was the only expenditure that you've been having that's going to be coming through the acceleration that yeah. That's right yeah.
Okay. Okay. That's my question. Thank you. Thank you.
Thank you.
Next question is from any for Sony from see obviously, please go ahead.
Hi, Good morning, guys I just wanted to ask a question on LP on I think you touched upon most of it but just can you delineate Blair and we know she has some good exploration success, there and can you just only what the go forward plan with L. pianist.
Yeah. Good morning, good morning Anita.
And we will answer the question on that on exploration, but you know our opinion.
You saw last year was an amazing year. The last three years. It was an increase in in gold production and then they maintain silver production I think what we saw last year. It's a good good number or what we guides for this year. So good number for the coming years for helping you on that but as we drilled and discover more gold.
And then more silver ounces.
No, helping you on the potential to grow production in the coming years as you. All know we have a 4000 done for the mill, that's helping you underwear processing our own 20, 827 2800 tons produced so we have extra mill capacity at del opinion once in awhile now we're processing some of the stockpile is that incremental.
Or is bringing ounces to the to the mail and then that cheap cost. So this is huge potential that Adele opinion about outlet and we answered a question on the potential on the exploration.
Sure. Thanks Daniel.
The Anita we had a very strong year last year and I think as we mentioned we combine some some sort of new techniques, including the machine learning at opinion.
That developed some.
Strong targets and we were able to chase some of the principal veins like a rental to deps and that will be continuing to do that 10 to 2020.
Combined with looking at some of the secondary veins that have been very productive for us in the past.
And we've also stepped out of the core mine and we're going to put a significant budget. This year into some follow up drilling on targets looking for for new veins that could extend to mine life beyond what we're seeing currently.
So were really on a very similar program, we plan to keep on showing a growth in our resources, there and to continue to replacing depletion on an annual basis ongoing.
Okay, and then maybe you could talk a little bit about that the jet degenerative program that you have gone from Ritchie said 14 million budgeted for this year and then going forward you guys you're planning to them.
Fund that plan is that in a similar levels that you said you're going to fund it based on.
Net sales I guess noncore assets are things that are more tied up in the balance sheet now generating cash flow.
Like could you talk about that plant in how you see that going forward.
Yeah, Anita due to the toll is around 53 million for the next three years. So 14. This year as you can see it will increase in 2021.
2022, and we will give the detail out of it and then you're absolutely right. All the funding for this will come from the non producing assets or either their world portfolio.
Sale, some selling of our the gold shares or money coming from where we go we don't intend to use.
Cash flow from operation to two to provide that.
Exploration that already a generative program and the past few years. So for this year was was easy to 14 million was already mostly in the the budget. We had already is just we move the the money that was going somewhere else to generative exploration program in Canada, and Brazil, but and we can give more detail.
Yes, certainly you know what we've we've we've built a very strong portfolio of properties, some particularly in Brazil.
And we been slowly moving those ahead, what we'd like to see with the use of the monetization funds is a very stable exploration program. This is independent of gold price independent of some of the.
Cash flow restraints, we've seen in the past.
So we'll be basically moving ahead there are internal projects aggressively. This here and then with increasing budgets over the next two years with as Daniel mentioned about $53 million total budget over three years.
Okay. Thank you very much.
Thank you. Thank you.
Thank you there no further questions registered at this time I'd like to turn the meeting back over to Mr. team.
Thank you operator, thank you everyone for joining our call and stay tuned for Q1 the release in April and our continued no cash flow free cash flow generation into the coming month and quarter. Thank you and have a wonderful Valentine day.
Bye.
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