Q4 2019 Earnings Call
At this time, all participants are in listen only mode.
After the speakers presentation, there will be a question and answer session.
To ask a question during the session you will need to press star one on your telephone.
Please be advised that today's conference is being recorded.
If you require any further assistance please press star zero.
I would now like to turn the call over to your speaker for today Murray extra President and CEO. Please go ahead.
Thank you operator, and thank you everyone for joining lundin mining fourth quarter and full year 2019 results call.
I would like to draw your attention to the cautionary statement on slide two as we will be making several forward looking statements throughout the course of this presentation.
On the call to assist me with the presentation and answering questions. Our Gen. He Mcgee, our senior Vice President and Chief Financial Officer, and Peter Richardson, Our senior Vice President and Chief operating Officer.
2019, with the successful year for Lundin mining on several fronts.
Operationally, our safety performance improved over 2018 as measured by the total injury frequency rate.
Which is why we remain in the top quartile of the Western World miners.
This was achieved while successfully integrating Japan and managing a large increase in exposure hours as we progressed projects like handler Eagle and that was horrible.
Our asset base has grown to five operations with the successful acquisition and integration of the Jakarta copper gold mine in Brazil last year.
We have had an excellent first six months with copper and gold production at achieving guidance and corporate cash costs better than expected.
All operations achieved or exceeded the company's most recent annual metal production garden with cash cost inline or better than guidance that most operation.
I candle area, we're beginning to see the benefits of the reinvestment initiatives in our operating and financial results. We began sourcing higher grade from phase 10 of the open pit and mid 2019 and mine first ore from the Candler, a sell sector underground mine in third quarter. The mill optimization project is also nearing completion on track for later.
This quarter.
We continue to make meaningful progress on those up I'd never score Volte underground and on surface. The project is advancing for stage commissioning during the year with phase ramp up to full production by the end of 2020.
Eagle Easter she is an important milestone with first or extracted at the end of September and processed early in the fourth quarter. The team successfully achieved this ahead of budget and schedule.
Finally, we remain focused on value creation through disciplined allocation of our shareholders' capital well focus in 2019 with actionable I'm M&A any eventual Jakarta acquisition.
We also executed on our normal course issuer bid and we will look to continue opportunistically with this program throughout 2020.
Additionally, we received 100 million from Freeport cobalt following the successful sale of the noncore Coppola cobalt refinery and the associated cathode precursor business.
With that I will turn the call over to Gen. He to highlight the full year 2019 financial results Ginny.
Thank you Mary.
Looking at a summary of ourselves talked lifestyle operation aggregate over 430000 tons of B cells 19.
In addition, we produced 142000 ounces of gold and 29.
Decreased to 82% you over here as a result in the acquisition integration and to try to make here.
We sold on what you had in 91000 [laughter] table base metals 20 years and generated revenue of approximately 1.9 billion.
Billion dollar [laughter] fourth quarter revenue totaled $568 million, which includes modest provisional pricing adjusting prior period sales of $9 million or one cents per share a detailed breakdown is included in our DNA.
But 2019, [laughter] because I never revenues are generated from copper sales.
Harry up from 64% in 28.
With the contribution of unencumbered gold production from Jakarta, and increase nickel price goal contributed 9% why revenue an increase of 4% in the prior year.
Inc. nickel and write contributed a combined 22% to total revenue down from 29%. The prior year largely a result to try to acquisition.
We remain predominately leverage to copper and well diversified geographically.
Okay.
Slide six presents a summary fourth quarter and full year financial result, the details the bulk of <unk> financial statements and Mdna issued last night.
2019 revenue was 10% higher than last year, mainly attributable to the acquisition that you had in mind.
Gross profit was slightly higher with when do they just had acquisition offset by higher depreciation lower realized metal prices and higher treatment and refining charges.
You will note that we have introduced certain non-GAAP adjusted financial metrics. These measures are presented to provide additional information that we believe investors and other stakeholders used to it that the company underlying financial performance.
Attributable net earnings from operations were 23 cents per share for the year.
Fourth quarter net earnings were positively impacted by higher gross profit and additional anchor the equity investment before cobalt, partially offset by higher income tax expense.
Adjusted earnings were 22 cents per share for the year uncertainties. That's for sure for the fourth quarter detailed majestic, earning during a mdna issues last night.
We generated EBITDA of over 700 million in 2019.
2019 cash flow from operations recycling $65 million and adjusted operating cash flow before changes in non working capital.
Well its $551 million by 75 cents per share.
Fourth quarter capital expenditures on cash basis, where hundred $40 million, bringing the total for 20, Nike to $665 million marginally below the most recent guidance of $695 million.
We ended the year with $250 million in cash and cash equivalents and $60 million in debt.
This is an increase in the net debt position compared to the net cash position last year, mainly reflecting chip how does not purchase price of $757 million funded with cash on hand, and a drawn down on the companys revolving credit facility.
Our board of directors declared regular quarterly dividend three cents Canadian per share totaling 12 cents Canadian grow share.
2019.
Yesterday, our board of directors approved an increase in the next quarterly dividend discourse that Canadian per share or 16 cents per share on an annualized basis, an increase of 33%.
We remain in a strong financial position.
Ill now turn the call back to me to this better operations and subjects.
Thank you didn't he.
Moving onto slide seven candle area had an excellent year. It remained our state this operation achieving excellent safety performance as it continues.
Importantly, we commence mining and processing the higher grade ore from face 10 of the open pit in mid year and made excellent progress advancing our investment initiative.
Copper cash cost of 154 per pound as copper were better than annual guidance and an 8% improvement over the prior year.
Preproduction development of the candle area South sector Underground mine was successfully completed and the project was transferred to operations ahead of schedule mine production from Canada, Larry as North and South sector underground mines ramped up to an average of 13500 tonnes per day during the fourth quarter.
Our targets are generally to produce up to 11000 tonnes per day from the north sector and up to 4000 tonnes per day from the south sector. So that in aggregate, we will meet the permanent limit of 14000 tonnes per day from most of mine.
Our minds fleet reinvestment initiative is essentially complete 83 of 85 pieces of equipment are delivered an available on site.
But the remaining two pieces pieces of ancillary equipment to be delivered in 2021 and 2022, respectively.
The mill optimization project is progressing well insulation continues to correspond with expected mill maintenance stocks as to minimize the disruption to our production.
Overall construction was approximately 83% complete at the end of year 2020, Capex guidance for candle variants, approximately 15 million to complete the mill optimization project.
Candle areas position to deliver over 30% production growth by 2021 with improving cash costs medium term annual production is forecast to average over 180000 tons per annum over the next 10 years, including 190000 tons in the years 2022 through 2025.
Moving on to try to on slide eight.
Our results demonstrate that we have had a very successful first six months integration progress better than expected and we remain excited about the exploration and expansion opportunities.
Copper production for the year exceeded guidance and gold production was inline with expectations.
Copper cash costs were better than guidance with higher precious metal credits lower operating costs and favorable foreign exchange effect.
In early October we filed the technical report for Janata to support the mineral reserve and resource estimates, we announced in September as well as make clear our near term operating capital expectation for the mine, we follow that up with a successful analyst site visit in early November.
Similar to the incremental and entered of improvements we've been able to achieve at Kendall area. We believe there are significant opportunities to create value that should potter with aggressive copper flows focused exploration leading to improved mine plans and production improvements.
We are continuing to optimize the production schedule at the current 24 million tons per annum throughput rate, while evaluating options for mine and plant expansion as well is working on prioritizing exploration programs and understanding the potential for resource expansion.
A significant increase in exploration efforts are underway largely focused on near mine targets with results to be incorporated in any expansionary plan.
[noise] operationally never Scarborough had an excellent year, achieving the most recent copper and zinc production guidance 2019 saw record or hoisted record tonnes processed in the zinc plant and the best copper recovery rate since 2015.
Copper cash cost of the dollar 59 for the year were in line with the most recent guidance.
The think expansion project advanced wells during the quarter in accordance with the revised schedule and budget for the phase startup production during 2020.
Total preproduction project cost estimates are unchanged from our last update as is the 2020 guidance that was released with our operational outlook in late November.
2020, Capex guidance includes 115 million to complete the think expansion project I'll now turn the call over to Peter to walk through the project progress in a little more detail Peter.
Thank you and Maria.
Continue to make good progress advancing the underground aspect does that project since earlier in 2019 Slide 10 shows some of the progress achieved in the quarter materials handling civil works progressed, well and are nearing completion as seen in the photograph on the left civil works and the Crusher chambers complete and mechanic.
Well installation of the job crusher and supporting equipment is nearing completion.
In the middle photograph construction of transfer taller towers number three of the conveying system is nearing completion. The first phase of the hoist shopped upgrade was completed in December 2019, with installation of new higher capacity skip some rooms.
Not showing in these pictures installation of the 3.5 kilometer of undergone Kobe systems are well above.
And mine development of the lower sold is continuing development of the first two sub level axes of are undergoing and the lower along with ore body.
On slide 11 surface construction continued to advance during the quarter with work focused on mechanical and electrical installation of the surface material handling system installation of the Sag mill flotation circuits tailings and water supply piping systems.
Picture on the left shows the Sag mill include into the grinding cyclo stations.
Federal photo shows up that progress made with the flotation circuit piping installation and the portal on the right shows a new thing concentrate filtration building.
Overall Zap is advancing on track for commissioning to complete this year on real phase approach ramp up to full production by the end of 2020.
I'll now turn it back to where we need to go through our remaining operations where we.
Thank you Peter.
On slide 12 Eagle performed well in 2019, the mine achieved full year nickel and copper production guidance production trended lower throughout the year, reflecting planned lower grades due to the mine sequencing ahead of Eagle lease coming online cash cost for the year were higher than guidance, primarily on lower sales volumes.
Development of Eagle East reach a significant milestone with the first or extracted at the end of September ahead of budget and schedule first orla successfully processed at the Humboldt Mail on October Onest mine development continued in the fourth quarter, allowing for full access to higher grade ores in 2020.
As a result, 2020 nickel production is set to increase more than 3000 tons or 22% over 29 team.
Reduced cash costs as higher grade Eagle or you go east or contributes to the mill feed.
Eagle remains well positioned to generate significant free cash flow and the coming years.
And finally, I think proven on slide 13 thing and copper production achieved annual guidance ranges. The fourth quarter was the best quarter for production since 2018 second quarter think led and copper production were higher year on year in 2019, as a result of sustained improvement in metal recovery ensync or head grades following that.
Continuation of our focus planning and execution efforts to improve our dilution and or losses.
[noise] production is expected to be consistent with prior years going forward.
Exploration efforts continue on existing ore bodies, as well as targeting Dolby and flotsam deposits, which remain high priorities exploration drift in progress ahead of schedule.
The Dalbey mining session was granted in July and Dutch online design work is ongoing.
We have another active exploration program planned for 2020, following a successful 2019, which saw 60000 meters drill we expect to draw the same amount 6000 meters at the driven this year as part of our 15 million dollar exploration program.
On slide 14, as previously mentioned 2019 Capex of 665 million on a cash basis was modestly below our most recent guidance of 695 million differences due to slightly less spending at our European operations.
The 2020 capital expenditures and excluding capitalized interest are unchanged from our previous guidance of 620 million.
Our reinvestment initiatives that candle area are heading towards successful conclusion. The operations 2020, Capex is to decrease compared to the two previous reinvestment years, and B 265 million as our initiatives to increase value of the operation are completed.
<unk>.
Expenditures at Eagle to bring equally is online are now fully behind us and we anticipate sustaining capital throughout the remainder of its life to be very low.
Never spar above 2020, Capex is estimated to totaled 230 million in 2020 of which 155 million is remaining preproduction capital for the zinc expansion.
Planned exploration expenditures are expected to be 55 million in 2020 10 million lower than our previous guidance. The majority of the decrease is due to a reduction in the planned activities on regional exploration stage projects in South America.
Turning to slide 15, a familiar slide from our current assets, we have an excellent growing production profile, we're guiding over 30% growth copper production from our current assets are 2019 to 2021 to growth is primarily attributed to realizing the benefits of the low risk investments we've been making it.
And delivery over the past two years in addition to the Japan acquisition.
We saw improvement during the second half of 2019, and we expect to build on that momentum through 2020.
A greater than 50% increase in totals in production forecast over the same period as the zinc expansion at an average Carbos Commission this year and fully ramped up doubling zinc production from that asset.
And lastly, nickel production set to increase as a higher grade ores of Equaliser brought online.
Before opening the line for questions I would like to reiterate that the investments we've made over the last two years has set the company up for multiple years of production growth decreasing cash costs and free cash flow generation.
We started to see the result of these efforts reflected in our operating financial result in the second half of 2019, and we expect to build on that momentum through 2020, as we complete and ramp up to think expansion.
We look forward to updating you on marketing continuing efforts in coming months and with that operator, I would like to open the lines for questions.
Certainly.
As a reminder, if he would like to ask your question. Please press star followed by the number one on your telephone.
Withdraw your question please press the pound or hash key.
Our first question. This morning comes from Orest Wowkodaw from Scotiabank. Please go ahead.
Hi, good morning, the performance that sure pot continues to outperform I guess expectations.
First let me give us an update on.
Where are your heads out with respect to the expansion at your pot and whether you know we're leaning more likely towards a slow phased expansion or whether it will be more of a larger onetime expansion and timing on when you think we you might be in a position to give us an update on that.
Good morning, or some are thinking really hasn't changed on the expansion I mean, we are studying the various scenarios and right now or in the study stage. So we haven't concluded on what exactly the optimal expansion will look like and so for the next to you know 12 months, we're going to be.
Drilling drilling drilling.
To understand as much as we can do about the ore body and in which weighs is trending and at the same time advances studies. So we'll probably be you know 12 to 18 months before we will have a definitive answer on where the optimal expansion will be.
Okay. Thank you very much.
Our next question comes from Ralph prophetic from a capital. Please go ahead.
Hi, good morning, Thanks for taking my question.
But when I look at the cash cost guidance for 2020, it's your partner, we're seeing $1.15 a pound and the the technical report has gold coming down a little bit.
In 2020, maybe that accounts for the large.
Impact relative to where you came in a 2019 I'm just wondering.
How's the gold reconciliation looking how does it look in 2019 on the goal signature product and also does that lower gold.
Production account for the rise in cash costs relative to 20 lighting.
I don't think there's any magic in the gold I think with there's no big change and every rates or anything like that Ted's just according to the grades and and the throughput in the plant and if you look at it might be related to the byproduct credits.
We use gold at 13 50 this year of course.
For the six months that we own the operation Gold's trended much about that thirteenfifty, so that will have an impact.
Also the currency.
We use the real that 375 in order to run our models for the costing whereas this year. It's been over four so the currency has been in our favor as well Peter I don't know if you have anything to add on that'll so.
Okay.
Yes, and then you touched on.
Copper focused exploration at your potash is distinct from targets that are copper gold focused and is this sort of lundeen being selective and could or could that change with either a more positive gold environment or just strategy on the exploration side.
What will you see copper focus because there are some holes that we followed up on that hadn't been followed up on the past that had good copper so but didn't have that grade of gold grade. So you know just changing the strategy a little in terms of.
Prioritizing the copper.
But also you know in terms of training, we really need to understand where the ore body is trending and when we're looking at where to move infrastructure and things like that so you know, we're doing exploration aggressively and as with all of our sites, we do our cut offs and and look at the optimizing.
On an NSR basis, so were agnostic agnostic as to whether its copper gold, but we will be prioritizing copper and those drill holes that we follow up.
Okay Yeah.
Thanks very much.
Our next question comes from Jackie probably asking from BMO capital. Please go ahead.
Thanks, very much in congrats on a good quarter guys have a couple of quick ones for you first of all I guess in July I think it was on your Q2 earnings you get you're talking about running and airborne Geophysical survey it candle area or later this year or later last year.
Just wondering if you could just couldn't be to give us an update if that started and how it's been going so far.
Yet we did complete that Peter just talk to that.
Hi, its gets completed so it's it's evaluate and were being evaluated yet so we're generating target than we're following them up and this in this year's drilling program [noise].
Okay. So we won't we won't hear anything more on that it will just served a flow into the the drill program, Okay and Ah I mean, maybe just a follow up on or his question a boat shoe Pata, you kind of a and C. One cause for 2019, you really exceeded the guidance and even your revised guidance.
You did you guys did very very well there is is there.
Similar a buffer or conservatism built into the 2020 guidance your view or how have you guys seeing.
The performance there given given how well you did in 2018.
Well I think Jackie again coming back to the assumptions that we use when we ran at and you know we put our assumptions there for everyone to run different ones, but the gold price running Rick had a big impact on that in the byproduct credits. So when we run that Thirteenfifty gold and then that's coming in at 15 50 that has a big difference on the.
Cash costs and similarly, with the with the currency if we're running it out 375, and we come in at what was the Gen. He for 21 or something like that the not going to have a considerable different. So I think in terms of the you know the operating productivity, the and the tonnages and grades and things were fairly accurate or not.
And where we were able to see the benefits there on the currency in the gold prices, where the differences in our estimates so we try to be as accurate as we can with our estimates.
Okay. That's helpful. Thanks very much.
Our next question comes from Yunus must food from Morgan Stanley. Please go ahead.
Hi, just hi, good morning, a few questions from my side or on the spending the first and came so forget ultrapar, though if I think about if I look at how much you're spending an exploration not a isn't driven versus Japan.
It's striking about your known to really willing to spend more than $10 million.
Then you offered which seems to have a lot of girls technology comes you explained in logic for him to do we see potential for the spending a late in the year.
Yeah.
Spending spendings quite different at the two locations and I try to your drilling from surface drill holes are fairly shallow going maybe 300 meters, whereas I think group when you're you're drilling is going down like one whole you're going 1500 meters.
Also in the zinc and is in Gruden program will have exploration drifting in there, which is a quite a bit you know that costly as well.
So the cost per meter is quite different when you're talking about this has been another area exploration and Japan as costs in your of drilling is the lowest in the company and it you know half of what it would be in Chile, So even though we're spending more I think group and the meter edges pretty much the same and if we can do more.
Meaningful spend I, Japan, we will do that I do note that that $10 million is the biggest exploration budget they've had in the history of the mine. So it's not that were not wanting to fund there it's that.
You know we want to spend the dollars in a very methodical and thoughtful way in order to get the best result, and really find out what we need to find out about the ore body. So if we can spend more and get meaningful information, we'll do that and we think that right now it's a good program not to the team has established there.
Yeah, that's sort of clear and a follow up around capex.
So you have a lot of growth they are coming online in the next two to three years, how should we thinking about 'em sustaining capex level. Once you hit the full run rate, let's say by 2022 or so across all operations.
Yeah. So in terms of the Capex when you look at.
Profile right now you can.
Take out the you know the expansionary capex for the zinc expansion would come off I think candle areas. Capex. This year is a fairly good number it'll probably trend with then you don't plus or minus 50 million of what we have now.
You know, Japan, I will have some expansionary scenarios that too will change that profile quite considerably but that you know we'll have to give the answers on not at a later time, we have more clarity eagle Capex will be very low for the remaining mine life. So I don't anticipate that it would be much more probably.
Less than it is this year.
Never squirrel, we'll probably see an incremental you know 2020 122, maybe a little higher than current and then there should come back down to say 60 to 70 million range I'm, just because we'll be doing additional development post commissioning post commercial startup of the SAP on than lower lumber door ore bodies and lending grew.
Evan typically is between you know.
45 to 55 million and it may vary from that five to 10 million, but that's it. So we do have a fairly stable sustaining capex. After this year and it's just.
So whether we bring new areas into zinc driven mine plans, which installed the and you know that whether we decide to do underground development I cant alair again, so the sustaining capex should be fairly stable. So that was a lot of should answer but I hope it answered the question.
That's very clear. Thank you and then maybe I'll just last question on my side, just a instead of 29 two topics just spend a bit less than you were guiding for mainly comes from the European operation. So can you provide a bit of color on that then is there similar sort of buffering twentytwenty.
Yeah. It was it there's there's not a buffer per se in 2020, <unk> was mainly Jenny I think it was the leases that never score of all that we didnt none none.
Under spend on the on the equipment.
And I don't understand done some project of relevance, including.
Yeah, So nothing nothing a two exciting there just you know some some leased equipment that got deferred into this year.
That's great thanks very much.
Okay.
Our next question comes from Oscar Cabrera from C.I.B.C.
Please go ahead.
Oh, Thank you operator, and good morning, everyone, Boston, where are you if I may just start with it.
Larger picture question.
You focus on M&A and did you mention in your opening remarks. The in 2019, how are you looking up in March it now and.
Are you still you balance sheet is very strong. So are you still looking to add another chips that are like I said.
In 2020, what kind of opportunity so you're looking for a into current environment.
Yeah, Good morning, Oscar and I think it would be great. If we could add another trip how to like asset if we could find one that's the challenge and we'll continue to be active our team has continued even after execution on candle area. The m. the corporate development team here, it's very active.
And not getting out there and trying to.
Turned over those stones and look for new opportunities. So we're still working but again, we'll be patient and make sure that we that if we do transact that it would be something that makes sense for lundeen in our strategy and our shareholders.
Great and then after the fulfilling Chris in Chile.
At the end of last year have you seen anymore Neil.
Okay tour things that made you concerned with <unk>.
Operations and kind of Larry.
Well, it's been very quiet over the last couple of months Oscar I think the Christmas season in holiday season has been a bit of a quiet time for that.
Now, we do expect that there could be an increase in demonstrations and activism that will take place from March onwards, leading up to the elections in April. So we are quite cautious at the moment that you know we may see a resurgence of some of the activity that we saw in October November.
So we're monitoring that.
Yeah, Great and then lastly from me on our own their spend your lot could you remind me when are you looking to move this this deposit into your kind of malaria mine plan and.
What are what are their requirements, we should be permits and conflicts.
Yeah. It's in the plan. So it's in our then the light technical or third.
The plan is right now we're preparing a actually we should be submitting it.
If not this week and eminently ARQ <unk> 2014.
And so that incorporates the bringing <unk>.
Less than going into the mine plan and so the plan is for the age take 24 to 36 months, saying then we could start the pre strip and it comes in and we start the pre strip and 2024 and and it comes in about 12 months after that Peter.
Shallow yeah, Yeah, and then the this the stripping would be incorporated in our in our technical report mine plan I don't have the exact details of the stripping for less money on my fingertips, but it should be there mark can follow up with you. After if you need that yeah, that's great and I should be should bring them on already just.
Short term memory, thanks very much.
[noise]. Our next question comes from Gordon Lawson from paradigm capital. Please go ahead.
Thanks for taking my question just just one left for me.
Could you talk about your tax assets.
Going up is callable and what rates, we should expect over the next year or two.
Sure I will pass over to Gen. Hayes is done a lot of attacks over last two months.
Oh, hi, good Whiting, so our tax rate at Eagle in the U.S. is 21% and in Portugal, that's at 29.5%. So generally we guide people to use the Dod statutory rate.
I don't think Theres anything that sad that particularly unusual we do get some tax credits from time to time so in Q4.
In Portugal, we did recognized about $10 million and tax credits that we received but those are things that we can not necessarily a planned out a model that those we will record as we get those that tax credits.
And so therefore, you would've seen the Q4 taxes, where I'm, hoping that incorporate the $10 million tax credit from Portugal. We also have other foreign tax credits that we received.
And debt and then also the Chilean tax rate for withholding taxes went down from 15% to 10% and therefore I'm thrilled to see some recovery there as far as the the taxes on Eagle assets. There's nothing unusual there we do have.
Significant losses that were why TBD using so cash taxes in the near term, we don't expect to have to pay out differently in the last couple of years, though we we do expect some cash attack Pam.
If that answers your question.
Well that's very helpful. Thank you very much.
Our next question comes from stuff and I want them from Cormark Securities. Please go ahead.
It's very much had great to see the answer that production trajectory growth going forward here just wondering on the exploration you'd mentioned on the regional front, you sort of you cut out $10 million or previous planned efforts in South America. It just kind of curious was that sort of project specific or or more sort of country specific or what kind of drove that decision and I don't could you provide maybe a bit more color on that.
Yeah. It was a we haven't active it program down in Peru, and based on our drilling of this year, we didn't feel warranted additional budget for next year. So our original a budget would have been reduced by the amount of the of the program in Peru.
Okay. Okay, and then just looking sort of in Michigan with obviously you know you go east sort of winds down in a few years. It doesn't look like you have any sort of significant exploration earmarked for Michigan.
Lundeen as a company do you guys feel sort of compelled to look for additional nickel versus other base metals or are you sort of still base metals agnostic or even copper focus going forward.
Well for exploration, we're doing mostly near mine and in countries where are we have active.
Active exploration programs and at the moment copper focused yeah, yeah. Okay. Okay. Thanks, very much guys.
As a reminder, at star one on your telephone in order to ask your question.
Our next question comes from Dalton Barretto from Canaccord. Please go ahead.
Thanks, Good morning, Murray and team I just wanted to ask very quickly about the feasibility study you commenced on them.
Uh huh.
So when we once had a couple of years ago, we talked a little about potential sizing it infrastructure constraints and so on well what's the current thinking in terms of how big the expansion could be what the infrastructure needs are and so on and when can we actually see the feasibility study.
Yet where we're working on the study now Peter do you want to talk with the purchase and why it commands a couple of weeks ago. So we're basing it off on the Prefeasibility study. So it's a looking into 26000 tonnes, a day increase or up to 26000 pounds.
So the progress and we hope to finalize the feasibility study joining me here.
Okay, and what about kind of.
Metal infrastructure needs in terms of.
Conveyors trucks water, that's sort of stuff you got to that level.
Can you repeat the question.
Sure I was just wondering in terms of incremental infrastructure needs. I mean can you do that with trucks do you need a conveyor.
Well the feasibility studies is looking at putting in a conveyor [noise].
Okay conveyor system [noise].
Yeah, I know that well useful for dust reduction or initiatives environmentally [noise].
Carbon reduction thing all those things.
Okay.
Okay.
I have no further questions in queue at this time I'll turn the call back to marine extra for closing remarks.
Great. So thank you everyone and we look forward to updating everyone.
On our progress with our first quarter results call in April.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating and you may now disconnect.
[music].