Q4 2019 Earnings Call
I would like to welcome everyone to the took quick Televisa <unk> Q4, 2018 financial results and we view of operations.
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After the speaker's remarks, there will be a question answer session.
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Thank you still want to tell you may begin your conference.
Thank you Joanna good morning, I'm looking at del <unk> head of Investor Relations Communications welcome to our fourth quarter and yearend 2009, Chief Financial results Conference call on Friday, We released our fourth quarter and year end 2019 results press release Mdna financial statements. These items are available on our web site.
See dark with me on the call our common our CEO look coltrane, our CFO and Joanne badly I see Oh this call and presentation includes certain forward looking statements and information we refer you to the forward looking statements section or the annual information form dated March 18th Twentytwenty supplemented by our M. DNA.
For the 12 months ended December 31st 2000, Nite, TV and now I'd like to turn the call over to our Chief Executive Officer.
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Thank you really and good morning to everyone.
Thank you for joining us for our fourth quarter and year end 2019 financial earnings call.
First I'd like to acknowledge the extraordinary situation, we're all finding ourselves in caused by the spread at the corner virus epidemic I know, we have people dialing in from various parts of Canada and of course to other parts of the world.
I hope that you your families and goes into your community as a healthy safe and managing the circumstances as best you can.
We are living it feels like truly unprecedented times impacting it goes out of course that lives and our business.
More to say on the corporate 19 later in this presentation and I suspect that the effects of corporate 19 will be with us for a while prompting us to provide you with a series of updates in what is a rapidly evolving global situation.
To start with so we will provide you with an update on our fourth quarter and full year 2019 operational and financial results, which we believe Friday last week after markets closed.
This was an update on all the key drivers or the business.
2019 was a year characterize that that's notable achievements and challenges are open pit operations posted another year exceeding guidance well underground development team continued to achieve significant milestones as we make progress towards completing the underground and ramping up towards.
A sustainable production.
Operationally the fourth quarter 2019 contributors to another strong year, well, you're totally open pit operations from a production cost and safety perspective.
Full year copper production.
46346 tonnes was in line with our original guidance.
Full year gold production of 241840 ounces was materially better and the original guidance.
This increase coal production hasn't had a positive impact on our costs for 2019, seaborne cash costs and all in sustaining costs.
Moving on $1.37 and $2, an eight cents compound corporate produced respectively.
As you well no safety is our number one priority and it's also critical to our continued success.
Well you talk was all in frequency all in.
Injury frequency rate 0.16.
In class amongst our peer group.
Next the safety first commitments that it's embedded in all your total gross culture.
Turning to the underground development.
We continue to work in a new mine design and anticipate its completion during the first half of 2020.
With the definitive estimates, which will include the estimated cost inkjet show for the underground project based on updated designed still expected to be delivered in the second half this year.
The critical piece of the infrastructure that accelerates the underground development shop to was completed in October 2019.
And has enabled the team to increase our current activity levels and begin the movement of underground development material to surface.
Looking forward to 2020 production guidance.
We'll go the midpoint corporate production range guidance is planned in 2019 rolled support cost in lower year over year gold production.
This is due to the lead to mine through lower grade material on the periphery southwest pit assays for PE sinks towards the highest gold and copper grades in department the pit.
It is now anticipated that accessing the high grade ore will result in a significant increase in gold production in 2021.
Finally.
The end of 2019, Turquoise Hill had 2.2 billion of available liquidity, which we currently expect to fund our operations and underground development into the second quarter 2021.
Let's now provide reach production summary of the results. We previously reported in mid January.
Breaking down our operating performance in the fourth quarter of 2019.
Open pits produced 32905 tons of copper.
And 24345 ounces of gold receive on cash costs or should almost 21 account.
Both copper and gold production was lower compared to the fourth quarter 2018, due to decreased head grade driven by the transition from the high a great phases for a and six eight to lower grade phases or be excuse me and start pots mill throughput during the fourth quarter because.
Very strong hundred 20000 tons per day persisted nameplate capacity of 100000 tonnes a day.
Turning to our full year 2019 production numbers on slide six as stated in the introduction of the combined approximately 846000 tons of copper and approximately 200 242000 ounces of gold exceeded our initial 2019 guidance our open pit.
Team.
It's been an excellent job maximizing the mill throughput and beating expectations, while achieving record safety levels.
Full year 2019, seaborne cash costs on $1.57 pounds of copper produced reflect the stronger than what kind of school production.
Slide seven you will see the strong continuation of our safety record.
Oh, the open pit operations and the underground development delivered another very strong safety performance you all injury frequency rate of 0.16 for 2019.
Best in class amongst our peer group and reflects the safety first commitment.
Embedded or you're talking a culture. So if we aspect of the business. If it competes on SIFI it will not be done.
A key milestone towards the progression of the underground development was the completion of shock to in October last year.
Shock to use is the world's largest production waste Moshe I can carry 300 work us down 1.3 kilometers into enough minutes at 36 kilometers an hour.
The production voice is equally as impressive with the capability to Oystein 60 tons skips and 59 kilometers per hour.
Sure to was completed with predominantly from Goldman workflows.
No that was the people and it took approximately 2.6 million ounce to complete.
And it has allowed our team to accelerate the underground development as we move into 2020.
Our team achieved a new record of 1809 equivalent meters of lateral development in December.
But now lifting underground development material to surface why are the shock to production August.
We are proud to have completed shop, too, which is considered to be one of the most complex mining shopped ever undertaken and we look forward to reaping the benefits office in 2020.
Primary crusher, one civil works are ongoing and the team has successfully court to six level the crusher.
Installs fear of preparation of course huh.
All of this is of course subject to any potential impact of corporate 19 related delays, which will come back to later.
Detailed analysis work on the mine design is still anticipated to be completed during the first topic. This year.
And the definitive estimates, which will include the estimate of cost and she will be underground based on the updated design of kind of zero is still expected to be delivered in the second half 2020.
Slide nine provides an overview of some of the critical infrastructure that we've completed to date.
Go through each component, but just like to reiterate that all the infrastructure completed to date.
It's not affected any changes to our mine design.
Let me now turn the call over to Joe and Luckily, our Chief operating officer.
Who will provide you with an update on our work to finalize the new mine design Joanne.
Thanks.
Hello, everybody play your 10-K slide 10.
You'll recall that third quarter appetite, we guided the market to expect team on design in first half its twentytwenty any definitive estimate.
Twentytwenty.
As of today, we believe they timelines and still applicable and look forward to providing the market we strive to clarity on the underground development to be held in line.
I think the Pos.
My second step towards completing the bottom line design, including the decision on the inclusion of need access to drive.
So I like to minimize stability risk impacting peach production.
Other design considerations, including all Pos like passion panel sake.
Non development productivity in clip and the days how on footprints on at the underground mine offer pricing.
The design unlike Haitian all the Alba my to infrastructure, such as shop and primary crusher are unchanged true capability study.
The design changes.
On the panels there on mining area, which is the highest right fine I told the underground undermined our priority targets.
Sorry estimates continue to indicate.
Dynamo press production could be to light spot extending to 30 month page, but the key wanting 2021 is less in the regional possibility steady garden in 2016.
And the development capital spending for the project My increased by 1.28 to 1.9 billion 5.3 billion plate previously.
I need probably going to work is underway to optimize performance.
I'll take the coordinate ongoing to God to fund.
Into when they said they tabs cost, it's nice, but she got no one development.
Recent GLEC, including the need access to occupation indicates that the shed tend to lag. The mine, we didn't see extinct they've not shrines bodies changing weiss from the lower end.
Mine design considerations include the consequential impact on cool shade, Joe and other key variables such as mineral reserves.
<unk> ramp up personnel and take production together with improvements seen underground and updates Oh productivity assumptions.
And I'm, sorry on the development capital shed Joe cannot be completed until these decisions that they gone lives.
The corresponding Prefeasibility study panels, there I design upping, the how to feasibility study planted in Sheffield and costed to form the definitive.
And as you in the second top of 2020.
In the interim well continue to focus on minimizing the impact to the project schedule and call.
Let's turn our detailed analysis and testing of each month on modification.
In addition to working closely with Riyadh seems high Tech with Hills engaged independent third party can.
To provide the company inside and technical support.
Planning and it's not crisis currently underway.
I'll be available crush question, but in the main Tom would you like to continue.
Thank you John let me turn to slide 11.
Our partnership and Corporation with the government of Mokoena continues to move forward on a few frogs.
Regarding the future power supply for the or you're told by mine.
You're talking to have submitted a feasibility study to the government Golia that is based on a 300 megawatt coal fired power pumps to be located in the top and Tolgoi coal mining district.
Amongst the other options that are being studied renewables are also one alternative that's being looked at.
We will continue to work with the key stakeholders to ultimately decide on a power solution that provides long term reliable domestically sourced competitive power what were your talk what.
In regards to the outstanding tax assessments and that's communicated previously we get told there has initiated formal international arbitration proceedings.
And in doing so we believe that both of your Togo as one of them and Golean authorities are able to take advantage of the findings of an independent.
See that's part of a pre agreed and pre determined resolution process.
In relation to the Parliament, you're working group a final report have been submitted to the economics, having committee and based on this report a resolution was dropped it and look forward to the Parliament all Mongolia that resolution was passed during a plenary session on November 21st last year.
Yeah.
We believe that that resolution reflects a commitment to work together to further support the development of the underground mine.
And it will serve as the basis of future discussions between the government of Goliat, Rio Tinto, and Turquoise Hill resources in relation to well your takeaway.
Let me now turn the call over to our Chief Financial Officer Colton to speak about the Companys financial performance, both for the fourth quarter and for the full year 2019 Luke.
Thanks, Ole and Hello to everyone on the call I do hope, you're safe and well.
If I could get you to please turn to slide 12.
Give you a summary of our key financial metrics for 2019.
[noise] focusing on the full year results revenue and plenty like gene was $1.2 billion.
As a decrease of 1% compared to 28 team.
This is primarily due to a 9% decrease in copper Avenue.
Which in turn was driven by 8% decrease in copper production.
Like the transition from mining base for a lower grade phase for b or and stockpiles.
This was partially offset by the higher gold revenue and that's driven by a 10% increase in average annual gold price in 2018 to 2019.
Net cash used in operating activities was 11.7 billion in 2019.
That compares with net cash generated over 180 million in 2018.
Cash generated from operating activities before interest and tax was 341.7 million in 2019.
And that compares to 363 million in 2018.
Primarily reflecting the impact of lower sales revenue and I'd say from unfavorable movements in working capital.
Oh Geez see White house cost in 2019 were $1.37 cents per pounds of copper produced.
The decrease from $1.59 cents in 2018.
Both of these are presented at the end up revenue from gold and silver ourselves.
All in sustaining costs in 2019 were $2, an eight cents per pound of copper produced compared with $2 in 20 cents per pound.
Copper produced in 2018.
The reason for the decrease in both metrics was mainly due to the impact of the higher gold and silver credits written by the 22% increase in gold sales revenue for 2018.
This also led to the 2019 see one cash costs coming in under the guidance range of $1.50 cents to $1.70 cents per pound of copper produced.
Total capital expenditure was 1.3 billion and 2019, that's consistent with 2018.
And it includes 1.2 billion underground development capital, which was in line with our 28 19 guidance range.
Since the first of January 2016, the total amount spent an underground development is approximately 3.5 billion.
In addition, Oh Gee had where their capital commitments of point 8 billion outlook, but 30 Onest of December 2019.
So crystal Hills liquidity balance at the end of 2019 was 2.2 billion, including 1.7 billion of cash and cash equivalents and a half a billion of Undrawn funds under the project finance facility.
The decrease of 1.3 billion during 2019 was due to additional drawdowns of project finance funds.
Three advance to OTI to fund the underground development activities during the year.
Turning to slide 13, which provide some additional detail for the movement and see when cash costs from 2018 to 2019.
Previously mentioned the decrease from a dollar and 59 cents to a dollar and 37 cents per pound of copper produced was mainly due to the higher gold and silver credits in 2019 versus 2018.
In addition, there were lower freight and royalty costs, driven by lower volumes of concentrate sold and lower sales revenue respectively.
These benefits were marginally offset by the downward impact of lower copper production on direct costs.
Turning to slide 14 now.
Okay cells liquidity balance at the end of 2019 was 2.2 billion with 1.7 billion in cash and cash equivalents and a half a billion up remaining project finance proceeds.
In addition, we expect to generate free cash flow at our existing open pit operations, so that subject to the impact of co bit 19, and this will also be available to help fund the underground developments.
We currently expect to how strong liquidity to fund operations in underground developments, including progression of Calvin Tolgoi based power plants into Q2 of 2021.
As a result of the incremental underground topics and further scheduling delay announced in July we looked and we will require significant incremental financing beyond this timeframe.
Completion of the mine optimization and doesn't it doesn't that will provide greater clarity on the amounts of additional funding or acquired.
As has been previously noted there then options raise additional external financing subject to required approvals to assist in funding development going forward.
Moving underground commissioning and ramp up.
However, there are important variables that you didnt yelp that ultimate amount of additional financing or acquired.
He is variable that includes the amount of it.
Incremental underground development and power capital required.
I mean of sustainable first production and that's resulting cash flows.
Ongoing debt service costs timing of project finance principal repayments and the amounts of cash flow that can be generated from our operating activities net of sustaining capital requirements.
In addition.
Central impacted told that 19 on Oh, Geez open to operations and underground development has to be considered and helpful addressed this in more detail momentarily.
Current estimates indicate the incremental funding requirement over and above the 2.2 billion and liquidity currently available because at least $4.5 billion.
Turquoise Hill as well progressed in its discussions with Rio Tinto regarding us proposal for sourcing incremental interim funding to ensure the company can progress the underground development over and above its 2.2 billion of available liquidity.
That's it that's it for me I'm available for questions. Shortly before that all know hand back to all.
Thank you Luke.
So at this point optical I would usually look summarized in our accomplishments and highlight the investment opportunity at hand, and I will do so shortly.
But in light of the impacts of the coal with 19 borrowers that it is having both on the health of our employees contractors, our customers and suppliers and their families.
Well as on business of course.
Let me take a moment and address this issue.
The first thing to say, it's mum Goliat has taken some very strong measures to contain the bars very early on as a result, there only 10 confirmed cases in Mumbai only ask for the latest information available.
That is a remarkable achievement and we would like to acknowledge and congratulate them and Golean authority, so being at the forefront.
I think this global condemning.
At the same time, where you tell you. When you talk on has also taken a whole range of precautionary measures to protect and safe got the health record Swift most.
As well is to keep the business going.
The mine site itself.
Oh, good business Brazilians team is meeting on a daily basis and is taking a considered and risk based approach to managing our response and actions for the prevention of Coke 19.
Scott of a range of broader measures, we have temperature and health screenings in place and the dedicated employees, who are on or off site to call in for advice or information sharing.
Well, you're told there has been cooperating and collaborating with the various I'm going to authorities to mitigate the impact of the pandemic.
Yeah, No cases of corporate 19, as well you talked about.
The open pit in operations have been able to continue to operate.
We've been able to continue to explore concentrate across the border.
We've also been able to receive inbound materials such as consumer books.
So that's very positive and testament to the diligence and regarding both of the Oyu tolgoi team as well as to local authorities.
Well, we are starting to see impacts.
It's largely in areas that require only the technical subject matter expertise.
Or supervisory functionality that requires international experts.
With the current travel restrictions in place, we're not able to bring in X Patrick to a quiet <unk> services.
The impact he is likely to be felt more in various aspects of the underground development than in the actual open pit operations.
To that end, we just wanted to is working with the authorities to investigate alternative arrangements that would be designed to help mitigate material impacts on the business.
We've given an update on the situation earlier last week.
And we will continue to do so once we have more clarity and visibility.
Any impacts that could be material.
At this stage, we're focused on identifying the activities that are unlikely to be affected and putting in place mitigation measures. We have you possibly time.
Clearly it is in crisis times like these where it becomes very visible how will your toga is benefiting for example from its very well trained and relatively high proportion local Mongolia national that's caught up its workforce.
Well you told me is also assisting the government or from gonia with the battle against corporate 19, where it can for example, you took a has donated a 100 million took looks to the government.
Through the or you talking responsive well you development support fund we further committed to 200 million took looks to the on the movie Emergency Committee.
For the 10 million took looks to the Handbook Emergency Commission for prevention support.
And well to sharing our prevention and hygiene controls, we which we have in place with local companies as they prepare to resume their operations and border crossings.
And finally, the management team of Turquoise Hill is closely monitoring the impact of the Qubic 19 bars on the business and the operations and we will continue to fit the market as and when appropriate.
So now wrapped up our prepared remarks.
Your toga remains an outstanding business, there's no doubt about that.
Durational performance safety track records are second to none and speak for themselves.
We faced a big challenge last year, when we have to recognize the increase in costs and shit, you'll can lay off the underground development.
Clearly a setback and it has been disappointing.
Since then bill the team has worked incredibly hard to progress the key milestone activities.
And the items that are on the critical path.
And your line is touched on some of that in her remarks.
The dialogue with the government of my goal is constructive even though we recognize it as a seven of work to do whether it is in relation to progressing the power discussions or to close down the outstanding issues Oh, the parliament you're working to produce.
The financing discussions that are designed to give us more time flexibility also constructive and progressing.
Yes, absolutely aware and cognizant of the fact that we need to raise substantial amounts of long term financing next year.
That is what we are laying the foundation foundation for now.
And finally, we are facing the challenges associated with cobot 19.
And on that I hope, we've been able to give you a little more than just a flavor for our preparedness Riga and our sense of urgency.
Everyone.
Absolutely focused on protecting the health a workforce.
Well its preserving the resilience of the business.
The weeks and months to come will inevitably continued to be challenging.
But we have a pad we're ready.
And with that let me now turn the call back to operate.
For any question Joanne back to you. Please.
Thank you.
Ladies and gentlemen, we will now begin the question and answer session.
Should you have a question. Please press star followed by the one on your Touchtone phone you will he always say Tom prompt acknowledging everquest.
If you are you still speakerphone, please lift your handset before passing any.
And your first question comes from Dalton Bravado of Canaccord. Please go ahead.
Hi, Good morning, guys and I apologize if any screaming kids you here in the background here.
First of all thank you very much for the incremental disclosure on another difference here. My first question as regards to be up $4.5 billion funding gap that you are you currently estimate.
Can you tell us what copper and gold prices that assumes and what that number would be like at current spot prices.
Oh and things for the question and like you were all we're calling in from different places so I'm going to act a little bit like the Moscow ceremony here.
Luke maybe is not a question that you would like to take on.
Sure I'll, yes, no I'm happy to do that and thank you for the question.
So I think the first sort of important thing to understand is that we're still at this stage and.
Our.
Deliberations in relation to the mine to mine design and the definitive estimate where we don't yet have that final mine design, which is meant to happen in Q2, and we don't yet have the definitive estimates.
That is meant to be delivered in the second half of the year.
So in terms of the variables that we use when.
Monitoring and assessing the funding gap, we actually look at it under a variety of different key assumptions and a variety of different pricing scenarios.
And that's all about kind of factored into the disclosure that you're now seeing in our Mdna in which we've discussed about on this earnings call.
The the incremental funding requirement could be at least 4.5 billion.
Sure I mean, I understand that but you know 4.5 days are pretty specific number and I'm. Just wondering you know that must be a copper and gold price assumption that goes into that and I'm. Just wondering how that number changes depending on what you assumed and where we're at today.
Yeah, no and listen I can I can certainly appreciates your desire to get a bit more specificity there.
We're not normally in the habit of giving a lot of details around the sort of.
In turn all sort of prices that we assume but I think in this particular scenario.
What I am able to say as that listen we've looked at it we've looked at it underwrote many different pricing scenarios.
You know and from that perspective.
We're comfortable with the disclosure that we have put out there that the amounts at least $4.5 billion. I mean, we are obviously cognizant of the recent impacts of Cowen <unk> Co.. Good 19, and what that has done to the copper price and obviously, we'll continue to monitor the situation.
And we'll continue to monitor the situation for that not only for that but also for.
The additional information that we hope to have later in Q2. Once we have that final mine design and then of course will further refinements as we get closer and were able to deliver that definitive estimate and the second half of the year.
Okay, maybe I'll leave that one there then just so just switching gears as a follow up on page 21 of your on DNA, There's the amortization schedule for the project financing facility and it looks like it's changed I am I reading that right is that a function of kind of discussions you've had with the lenders.
And if so is at the end of it or could we see further our changes that amortization schedule.
Yeah, so the discussion.
As you can appreciate we are still.
Looking at its you know various options in terms of meeting that incremental funding requirement that starts.
Kind of in Q2, 2021, and we're very very aware of the situation in relation to being in a position to have that incremental liquidity and have that additional timing that we got additional time that we need to make sure. We can continue to find the business and not to of course.
One of the reasons why were in discussions with Rio Tinto and those discussions are actually progressing very well in relation to an inter interim funding facility that will give us that hopefully give us that additional liquidity in additional time that we need.
And there are a lot of different variables that go into the sort of consideration around what that incremental funding requirement might be.
You're absolutely right that the amount of tee up.
Sensible repayments is a key factor that goes into that's that that that goes into that consideration that what that incremental funding got might be we have updated that table in the m. DNA. This is actually the first time that we've included those those principal repayments.
And that table of the M. DNA.
They aren't and based on any sort of re profiling of but that discussions that we've had with lenders to date.
So we're not in a position yet to have had that that particular discussion with the lenders. Although we are hopeful we well be able to do that at the appropriate time.
Okay. That's great. That's all from you guys. Thank you.
Thank you.
Thank you. The next question comes from Ralph Profiti of capital. Please go ahead.
Either and good morning, everyone.
I had two questions firstly, I, but thinking about this mid access drift for panels zero and I'm wondering what's once it comes into production.
What is the most important risks that are being factored into the design I'm trying to get a sense of the mining risks, which are separate from the unknown cost and schedule risks.
Okay, Yeah, given out okay. Thanks, Rob to go so John but maybe one for you to address.
And.
Yeah, maybe try and do it in a way [laughter] that is.
The answer is rounds questions without taking us off into too much detail there.
All right.
[laughter]. Thank you will.
Yes, I certainly coach with that question, you know intensive need access to drive decision.
What do you indicate in.
Some of what we've already talked about where you know that ground conditions in panel the right. Okay. Since the feasibility study and we're responding by changing the design and say Clinton's to minimize I'd agree.
Okay recovery or production right.
Size when needing to take out the long 10th each of them on.
You know that speaks to trying to minimize ice free trade taking at Monte gone approach that we have now.
And from an ongoing.
You know when looking at trying to make sure that demand is on its resilience as it can be on that a range is hum because the G condition didn't have variability this thought show.
Excellent X. gathering information.
Well in the some panel the right design outside.
Well had thing that are the key.
Value driver for them on production right.
And ran pop right at dice Con <unk> Con thing product TD.
So I think that didn't change to the with the same down and risk I understand that was actually I think there and squarely in the same true discussion.
Hi.
Does that answer your question.
Yeah. It does I think you touched on Geo technical ground conditions that source seems to be key issues.
In the parameters right up the design. So that is helpful. Yes. Thank you.
[noise] over prior to any coal that 19 related steps what was the.
2020 target for a total equivalent development because I believe the 2016 Technical report has just under 17000 kilometers and you know thinking about that it's I know, it's dynamic and it's probably changing week to week, but can you maybe quantify sort of a short term underground rates are the down.
10%, 20%, 50% and I know, that's changing on a week to week basis, and maybe give us a little flavor of how January and February performed.
Yeah, Rob So what I was just the thanks for the question right. When I would say is we've we've given you a fair bit of extra disclosure. This morning, yeah, right and in some respects. We've we've opted on side of doing that because we think is helpful. Even though from a timing perspective.
It is a little bit.
Premature in a sense not the question you're asking now.
We can probably be on so a little bit better huh. Once we've finished the mine design, which is in the first off of this year then of course with the definitive estimate later.
Into India, So what I would say Ralph the best on so I think to answer your question is that.
No we haven't disclosed in a month feel peppery rates at the moment, but if you look at December 30 is going well I think we have seen in general.
Isn't as to continue to to perform well end up was in my comments on the Corbett virus at the moment, we are sort of a bit of an inflection point inflection points in a sense that the operations have done well have been.
Actually not materially being affected by coal, but on the underground and that affects know a number of areas were getting to the point, where really the travel restrictions.
Wanting to have an impact and Pat has different effects on different work funds and sort of at the moment, where exactly at this stage trials, where we need to assess that.
To to then identify well.
What are the areas that are being impacted all of them mitigate mitigating measures that we can take if we can we like you need to support all.
No I'm going to authorities because at some stage, we will need for an expertise to come into the country.
On the call today ROE, we can't quite quantifiable, because where we are and how fluid things. So having said that in the weeks and months to come we will obviously no more and give you an update at that time, but today.
You know the timing on the call. If you like is we are in the middle in the middle of a very very fluid situation. So today, we can keep a specific number I'm afraid, but I'm, hoping that we've been able to give you a good picture as to where we are and what the types of impact so and how we plan to address that.
Yes, so far I agree I completely understand very helpful answers. Thank you.
Thank you Rob.
Thank you. The next question comes from Orest Wowkodaw Scotiabank. Please go ahead.
Hi, Good morning, everybody I've got some questions. This financing requirement of at least 4.5 billion. That's a really big number that's routes to market with though I think you make us details.
That if I understand this correctly design. So does that number include all costs up the power plant.
And what is that costs.
Yeah. Thanks ours loop, that's probably look I think you'll get a little expression of the call. This morning, I'm afraid I'm going to I'm going to us lucho to take this one as well if you're okay to do that.
Yeah, No of course I'm happy to.
So listen I'm going to try and be a bit as comprehensive as I can be here. So it might take a little bit a time, but I believe let me just sort of go through the key assumptions that I'm kind of go into the calculation of the funding gap and I will cover power as well.
So.
The 30 Onest of December.
As we all know the total amount spent on the underground development was 3.5 billion.
And then OTI hot for their capital commitments out point 8 billion.
No as I've said before the company will have greater clarity on its incremental funding requirement as the definitive estimate for grasses and those discussions progressed with the government of Mongolia on securing a long term domestic power supply.
Nevertheless, current estimates indicate an incremental funding requirement as you mentioned of at least 4.5 billion.
Not over and above the 2.2 point 2 billion in our available liquidity.
<unk>.
So while there remains the possibility of sourcing additional external financing subject to the required approvals.
I just want to make it clear we have not assumed any nor any possible re profiling of the principal repayments relating to the existing project financing facility.
And estimating the incremental funding requirements of at least $4.5 billion. There are several important variables impacting the estimated incremental funding requirements and I'm going to try and give you as much as well as much information as I can now in relation to those.
<unk>. The first one is firming up the amount of incremental underground development capital required as we announced back in July there is expected to be a capital cost overrun the between 1.2 and 1.9 billion.
The second is the timing of sustainable first production and that's resulted cash flows.
Recent work, including the mid access drive decision indicates that the schedule delay ranges, it's still within the 16 to 30 months as we've previously disclosed but it is trending away from the lower end of that range.
The third is whether its haven't told by based power plant is ultimately selected as the long term domestic power solution.
We did put out an announcement in February.
We do have a total project cost estimate for top quintile boy or for TPP that amount is up to 924 million its pending consideration of certain amounts yet to be finalized such as government fees licenses and certain reimbursements.
As per that happens all the way investment agreement.
But we've also noted that there are other options, including the renewables option. Those are also I think there. There are also under consideration, but there are fairly early stage at this point.
The next is obviously the timing of the principal repayments on the amounts currently drawn under the project finance facility as well as the related ongoing debt service costs.
You'll see an RMT an a. I covered this a minute ago that we have principal repayment obligations of $1.9 billion over the next five years.
The next important variable is the amount of operational cash flow to be generated as well out sustaining capital requirements in relation to that or the early years 2020, 2021, I would refer you to our 2020 guidance.
Well as our 2021 outlook.
And then obviously there the the new significant impact or potential impact of Kogut 19 on OTI is open pit operations in underground developments and as the adult talked about a minute go a minute ago were still in the process. It's very fluid at this stage, we're still in the process of a sad thing.
What that impact might be.
The other thing I can say is that as additional work is completed to better understand the impact of these variables on our cash flows liquidity and financing productions, we will keep you updated when appropriate.
We've also indicated that were well progressed in discussions with rail regarding its proposal for sort sourcing incremental funding.
And not to ensure that the company can progress the underground development over and be a over and above our current liquidity of 2.2 billion. So hopefully that gives you a bit more information I have tried to set out those important variables and giving give you the information that I can specifically touched on the power as well.
So so hopefully that's helpful. Okay.
Okay, that's a follow up to that.
Is it still your expectation the majority of Taco for the power plant will be third party debt financed.
Uh huh.
That's definitely still an option so I'm out I think that we've talked about and prior earnings calls related to TTP. There is the option to source you see a funding I'm off the back of those EGPC contracts, which I think we mentioned or are now in that because.
This is where they can be sign on to that is definitely a possibility you know the Chinese may still be and threats, maybe they'll be interested and in providing funding for four dots dot power plants, but listen it's also worth noting that we are investing but we are in that investigating.
Other options as well, including a renewables option and there may be other funding options available for some of those options, but worse, it's still relatively early stage. So so I can't give you a lot more details there but.
You can appreciate for renewables option for example, the pool of potential funding options, probably widens under that scenario versus something that coal based.
Okay, and the 1.9 billion of principal repayments, that's five years.
Have you started any discussions yet about terming goes.
Okay and that would obviously reduced psoc 4.5 billion.
Yep.
So.
Well, we're obviously, we do have regular discussions with lenders and not not just just see our Q, but OTI Rio Tinto is the manager we have all have had recent visits and discussions with lenders.
We haven't started the formal discussions related to the re profiling of the dots.
And I think you know you can appreciate the reasons for that.
We don't yet have a final mine design, we don't hot how yachts that definitive estimate and a lot of other information that those lenders are going to require to be able to make an informed decision.
We are very hopeful that will be yet we'll be able to have those discussions around supplemental data or re profiling of the dot in due course.
And obviously, we will look at you know when the best time to do that is that once we have Oh final mine design are the ones. We have a definitive estimates I'm Ken it happened before the definitive estimate does it need to wait for that definitive estimates and related technical reports et cetera, So so keeping costs.
Close contact with the lenders, but in terms of sort of hardcore negotiation that that have started yet.
Okay and the final question for me just with the Cobot no to Pandemics impacting.
Travel restrictions of goods and circuits people, it's not having any impact on the study work or is that just being done you know, what Australia, and so that targets that you're putting out or updating both a definitive study and other targets are still valid slate.
[noise] things always Joanne do you want to briefly just on so the question I think we sort of in directly address it before but then maybe or as before I want to come back just briefly to you as well, but John given its is take the question on impact on on study work and then.
And it back to me for a second.
Yeah.
Yes. Thanks, So sorry, my long wait a little bit funny at this at the wrong buying it was that the crying if our impact on study led.
Yeah, I was wondering whether at least for strict travel restrictions among hold.
On because some people is going to impact and all the timeline. So the studies or is that being done outside.
Alright. Thank you. Thank you take question apologies for that.
Yes. So you know that that is a good question and at the mine then a similar to what's happening at mine, we're not saying too much I mean patch the where kids.
Largely paying down off sosh in person.
And there its regular engagement and good communication facilities set up between the thought.
In Mongolia, and Bruce then a insider threats still regular communication coal thing input feedback from the team saw the study thing a lot of sleep bye.
Embraced then ER and the all they obviously has a right as far as precaution a employees.
Hi, how are the everybody set up all tied to be able to lift the might like so at this stage, we not anticipating a significant impact on Oh study shed Joan.
And and work is progressing added right bidding on Chinesepod this situation.
Great. Thank you.
Or is that just wanted to say one quick.
Comment in relation to your question on funding and.
But maybe it's an obvious statement, but I think when Luke took you through the components I think what do you and what others on the call a finding clearly is not.
There's a lot of uncertainty because there's a lot of building blocks in place here and each one of them.
Hi, a degree of rain tried and as we progress through the rest of the year that rate those ranges will narrow and therefore, the final will become narrow and narrowing will become more specific in terms of what the actual funding need two years when that's in relation to the underground whether it's in relation to power.
Whether it's in relation to the impact of corporate 19, so the slightly tricky thing and this conversation is that intellectually it's quite easy to identify the components, but each one of them has a range and you need so more and more certainty to narrow the range to then.
Certainly on the funding gap and it's really in that context that we are having discussions with real on the interim financing at the moment why well because we have a fast enough liquidity.
We want to make sure that wouldn't be come through the definitive estimate.
Later this year and we move into next year that we have some time in flexibility to be able to explore and then put in place whatever then the appropriate financing arrangements or because today, we have ranges, but we need to progress some of the work to to specify that and then as Luke.
Saying earlier to have.
You know more finality on some of the numbers to then have discussions with our existing lenders for example that sort of why.
Well, it's becoming more specific at this stage, it's quite hard because you have a lot of components in each one of them has a big range and so maybe that's an opioid statement to make but I just wanted to provide some context.
How how we look the look at the overall picture onerous.
Okay, No I appreciate that and I'll just just one completely clear on this can you give us a 4.5 billion how much of that specifically is related to existing got mature meeting existing debt matures.
So I mean that that's the one point that the 1.9 billion that I just that I tell them into a full 1.9 billion. This included enough for now.
Yeah, Yeah, so, though if you think over the yeah. The answer is yes.
I see okay. So if you can turn those though that in your funding commitment is a lot lower than for ethylene.
That's right and that's well sorry again, the just I want to be absolutely clear so that everybody understands we <unk>. The the disclosure is at least 4.5 billion.
There are scenarios, obviously, where the funding gap is is more than 4.5 billion, but if we are in a position to reduce that funding gap through our re profiling of those oh those exits the existing principal repayments and not yet.
Go a long way to reducing ultimately reducing that funding gap whatever it ends up being.
And then just going back to what all said you can appreciate there are a lot of variable.
Those variables all need to be made more clear the final needs to be narrow wiping netting narrowed as I think that was the terminology that off just used and we're absolutely committed to continuing to monitor monitor that to continue doing that as the situation does become more Claire.
And obviously provide the market with updates as we as we have about additional clarity.
Thank you.
Thank you then a question comes from Hayden Bairstow at Macquarie. Please go ahead.
Hello, Thanks to thanks to the cool I'm, just a couple of whom they just or just ready adamant that so I'm. Assuming you just be is taking all the expenditure accenture for the next.
Five years, I guess, just sort of isolated the debt repayments at sort of how the waking up more that shortfall number is.
But also how do we think about the original $6 billion and funding so to get cap within.
The current debt and the repayment should do a how that would play out if you're actually I would tell me what agreement on at least sort of securing this financing for that 60 to bill.
<unk> capitals go to questions say, Joe as well.
Yeah look do you want not picked up on.
I feel bad, giving you all the questions, but I think they're all [laughter] Freestor all yours, if you don't mind.
No I don't mind, yeah, though so let me, let me try and be a clear as possible on that so.
When we think about the funding gap and when we assessed the funding gap at the moment. We're just just adjusting it based on ours ours are look our current liquidity, we're not assuming additional supplemental that re profiling of.
The thing that et cetera. So we've currently drawn 4.4 on that 6 billion dollar facility.
Obviously in due course, we would be looking or we would we would be hoping that we would be able to source that additional 1.6 billion in supplemental that the current facility than it is not an accordion facilities. So we still have to go out into the market and we still have to source stops. So once we have.
The necessary information and again that will be off the back of finalizing the mine design finalizing the definitive estimate et cetera. Once we have that additional information we do want to start those I mean, certainly promise you argue perspective, we definitely want to have those discussions with the banks out the early.
It's possible feasible time around you know about additional supplemental data and possibly well definitely around the reprofiling of of the current debt as well and that lift and all of that part of a broader sort of.
Long term funding plan that we're still in the process of well that we keep updating based on current facts and circumstances. So so there are other options out there as well and all of that will be considered at the appropriate time and again going back to what else that that's why we're I'm focused at the mom.
And on getting that incremental sort of interim facility negotiated with Rio so that we will have the time that we need and 2021 about additional liquidity to consider some of these other options you know the supplemental that the re profiling of the existing dot and maybe some other options.
As well so.
So hopefully that helps answer the question.
Yeah. Thanks, they know when we discuss something on the sought to the there was some potential to what you're thinking about China, so well partially self funding.
All the definitive it or is it kind of that clearly repeatedly to case now and everything will be discussed with rail after its released to the Hell I think indebtedness.
Well if you look so when you take a quickly getting that I was the one who made.
I'd say, there's no black or white onto the that Hayden I think clearly.
If you have a formal conversation with the financial institution, having a so called quote unquote final number final model is because ultimately required as you know well that doesn't mean that one cannot have discussions previously and so from our perspective.
[music].
The Finalization of the mine design that we're having a in the first half is helpful data point and I think we'll just have to assess once we've gone through that process. So that's a process in the next.
Two to three months or so.
Whether on the back of that well what level of conversations we can happen a meaningful way, we just need to be mindful. We have discussions we have relationships by many many years, let me know people well.
We just need to strike the right balance between having meaningful conversations.
Helpful. As opposed to does wasting people time, so it's a very practical considerations, hey, we would like to do more sooner, but it just has to be helpful. If that's the simple answer.
Great, Thanks, and Joe and just one of them on the operational sort of things into development intellectual development rights do seem to be going extremely well in with the shop to nail done.
What is on the critical pop I Didnt think shops rainfall worst any utilize it shouldn't really better.
And then.
Is it just getting the develop the lateral development Regan red and the level sort of set up is that still but the key.
Critical path sort of timing to get that leases troll bill not necessarily sustainable production.
Yes, I think heighten great question are you know, it's a it's a very complex project with a number of pop that have to come together for the sale and then to progress tests assignable production.
Hi, there are number we're pacing that have the potential to pull on the critical ha Oh by the time for example at some point. They can buy this is my thought that help on the critical path and side. Its an example of the pace it infrastructure that we keep an eye on the.
Commissioning and full cost commissioning die and they all have they paces Nate today.
I.
I mean, I inoperable position no no Tom that second crashed habits that might affect material handling system there to shop.
And base and and value paces Nate today.
Imply.
<unk> to be able to progress.
Some point along the ramp up and said there are multiple connecting paces multiple time, that's facilities have to be ready to be able to they need until and I'm not trying to the advice even that answer, but just more back to tell to draw attention to it there are number of patients that they.
Puzzled that night come together, you know correct development is a very Kate spade <unk> going quite well.
The mine and I am we actually NOI on all of the infrastructure to say how how this is all going to come together and when the time to come together.
In that range that has been moved up published is that helpful.
Yeah. So in terms of first drove build all we need the infrastructure, we shops to is enough to push to the thought of first drove those lists.
Shops to use it is a key pay and it provides a ventilation as well it out or handling capability.
But we also need to o'hanlon <unk> footprint, Oh, Michele <unk> Today Commission.
And we didn't need ventilation capacity on becoming by shop full and potentially shocks clarient well site you know they thought they are important.
The puzzle no there's not necessarily one eight cents to to the ventilation not at the kids and clashing hobbies Ah.
Hey.
And choices can be mind about what where he's done a and how much ventilation you eat them. There is activity. So that's why you know they they paces I being monitored the wave I see.
In may conditioning, die and where they're actually recorded.
So we can't call it [laughter] al and sustainable production.
Okay, great. So there's no somebody undergrad lateral development, that's still impacted but don't have they expect sold so it is like in stores go ahead as though.
It is it didn't have absolutely progressing well I mean with <unk> Louis invested heavily in the development.
Allies call. It four I. They some really excellent work continues on thought intellectual development.
There there are other paces day, Nathan specialized said.
And we are you sure relying upon <unk> some niche service provided thing I've, Okay, Tekcomms thought to help on other pop Star project.
Okay, great. Thanks to that Oh said it was it.
Yeah, Hey, Nobody I know, Andrew and said that it sounds like way evasive, we don't mean to be and we need to be council that were not sort of using Kobe 19, as an excuse for everything but there is.
There was an element to that where you know at some stage everything's on the critical path right. If you wait for long enough and so that's what the team is monitoring at the moment is to make sure that what is the impact all the travel restrictions because it's subject matter expertise, it's supervisory capability at some stage you got to make sure you can actually manage your roster as well.
Right. If you can get people in and out for weeks in weeks, you end up with fatigue issues and things like that so.
There's a number of moving parts and the team is sort of looking at all of that to to make sure we know.
What is on the critical path and therefore, how can be find ways to manage that and I'm. Afraid today is just way too early for us to to quantify any of that on the call today, but rest assured that that works on going Hayden.
Thank you. The next question asked them Craig Hutchison FTD. Please go ahead.
Good morning, I'll try to be breach here I, just I hate to belabor. The issue. The 4.5 billion dollar funding requirement above the 2.2 billion, but can you just give us a sense in terms of the assumption you're using for the delay of the underground 16 to 30 months are you using the midpoint of that number or the upper end to that number to arrive.
4.5 billion and the same question in terms of Capex to 1.2 billion to 1.9 billion dollar capex over on are you using the midpoint to upper end just trying to get a sense of 4.5 billion I was out the copper range of what you think it's gonna be or is that serve the midpoint.
Thank you yeah. Thanks, Greg Luke I think that's another one for you I'm afraid.
Yeah no.
Listen Craig I'm I would love.
To be I'm I'm not sure how.
I'm going to try and be as helpful. As I can but I think the reality is and it goes back to what I said earlier.
There are a lot of variables and there are a lot of scenarios that are being run so it's not.
You know there is no one answer at this stage, which is why we're giving you at least 4.5 billion.
So where we're we're we're giving you multiple scenarios, we're giving you.
We're giving you I'm, sorry in adapting and monitoring the impact of.
Of this funding gap, we are looking at multiple scenarios.
Multiple points on the sort of spectrum.
Both in terms of the capital cost overrun and.
And the the timing of first sustainable production, well I mean, what I am able today as those scenarios at the moment do still fall fall between the 1.2 in the 1.9 billion in terms of the capital cost overrun in in terms of the timing of first sustainable production.
They do still fall within the six seem to 30 months, but again, we are trending away from the lower end of the range.
Okay. Thanks.
Your next question, it's a follow up some orest Wowkodaw Scotiabank. Please go ahead.
Well. That's your line is open you May proceed with your question.
Hi, Thank you for taking a follow up just Luke a follow up on the project finance facility maturity schedule I appreciate you.
Laying out that schedule on.
Page 21, but can you give us a bit more granularity there specifically of the 400 Fortys a 7 million that's due within one to three years can you give us the breakdown say 2000, 2021 22, and then the similar to 1.4 billion can you give us the breakdown between your.
<unk>.
[noise].
Sorry, you so there's there's the actual.
There is a table in the M. DNA is at the table in the M. DNA that you're referring to.
I think what we do and then that table is give you.
One year out then we give you one to three years out and then we give you four to five years out I mean, all of that as Robert for the calculation of the funding gap, but dogs that I mean, I'd add that they stopped the dot the level of detail that we've provided a market.
Okay. Thank you.
Yep.
Thank you My next question from Oscar Cabrera, I see I do see please go ahead.
Oh, Thank you a greater and good morning or evening everyone.
Everyone, Oh, I'm, sorry, I dropped out of the call I haven't been having problems with my phone just a couple quick things if I may and you know if you if you actually there's been some you know and I can go back to the.
The transcript, though the calling just read through it but on the on your statement that there may be delayed because the steady course production.
More than 16 months can you provide more color on what what are the different things that make you state that.
Sure Scott I think the covenant briefly but what was due July maybe you covered it briefly already do you want to have a very bright quick summary for Orest, why we're saying with trending away and what the.
The components or or the main component that contributes to that statement.
Sure.
Thank you see question, Oh, Scott cannot Oh, I guess, one of the <unk> you know Weve talked about the mid access strive to teach and odd that was night and it needs to the earliest shaped you'll die.
Right from the lower end right <unk>.
Hi, this combined with the design and change over if you need that seeing progress has given.
I better understanding of the range. However, they still ongoing optimization and planning work that needs to be completed and the final design has to be electing hi, it's too early to provide full outside of the I'd say right.
So it's a work in progress hasn't indicated that the final changeable fall outside the city mom.
And we are proposing any change to that range, but the range of results were saying, it's a with aggressive is trending life from the lower end.
Is that it's a helpful.
That's helpful. John but you know trending away you know two months five months.
I know, it's hard to pin point at this point of but if we would helpful just to.
Onto here, what what's your what you're seeing with with the different scenarios, you're playing with.
Right and you need to see.
I understand the kind of course that that's going on at the mine and there are number as.
Well advanced design options. They can sit it with an eye range is assumption applied to died and therefore, the right a range of outcomes that we asked saying and Sally the raising the language is leading the way here because I do we still would.
Going on however that need access to draw at decision really has meant that we have moved away from the 16 mom and we're not going to change the range that seem to cartridge to try to provide.
So the Cala <unk>, we provided the whole.
Okay Fair enough John Thank you very much and then to the second question. Please.
In your conversations with them on go then go Herman Oh, do you think that.
You can reach any conclusion with respect to why there the power plant.
Or you know there's discussion with respect to the potential sale of the 34% stake you know p. before the election.
Yeah. Thanks, Oscar So look I'll give you a break here because I know you normally kind of a power as well, but you've answered most of the question. So if you don't mind I'll take I'll take both of these.
Yeah look I think Oh, Scott say, if I start with how first with power. This quite a prescribed mechanism in place. It's called the palace source framework agreement, that's sort of governance the steps that we are taking to.
Make progress as sort of two two months periods. There one we have triggered a month ago.
And that allows us to review the current haven't told my coal fired power plant with the government and then if the parties decided that they don't like that proposal. There's a second two months period in which we could look at other alternatives and we talked about money.
We'll go spent there could be others.
If you just add up those two months periods. They think the clock started to take in mid February. So two times to will take you to the middle of June which is very close to the election. So.
First one I would say on how long it because it is business critical for us that is something where we are working closely with the government.
Where we own urging each other to make sure we make a decision sooner rather than later, because we don't want the business to suffer because we have uncertainty on power.
So that's a very very specific point the other issues that were identified in Hollywood meant you would report and the resolutions ranged from.
You know a number of issues I think there was a list of seven or eight or nine items.
And some of them are more complex than others. We've had a meeting we had a discussion.
Now it's been interrupted by the corporate 19 related travel interruptions I think we'll need to we'll need to work with the government to make sure we have a a timetable into game time that says.
Walked if anything can be resolved before the elections, and then what what needs to be dealt with after the elections and the truth is also got the moment a with the the impacts of the pandemic both on the business, but also on national governments.
You know will probably need to revisit that and we'll probably end up having to do more after the elections than we had initially anticipated when the the real resolution came came from us out in December.
Okay.
That's super helpful. Thank you very much and well divest everyone.
Thank you asked the same to you.
So no further questions I'll now turn it back over for closing comments.
Oh, Thank you operator.
Thank you everyone for being on the call.
I know we've run over the allocated time, but I'd like to think it's a positive that we have lots of questions and all that rather than a negative let's come from our perspective I think.
We had a long debate.
Amongst ourselves as to how much of the additional disclosure.
We should give will not give you feel like both underfunding side as well as on the on the shed fuel the trending away discussion, we just had.
Because we recognize that there are still lots of questions. Both on the funding side and Luke sort of admittedly trying to answer most of them as well as on the one of the underground development side, we decided.
In the end that we wanted to err on the side of providing more transparency rather than less.
Even though the degree of uncertainty at this stage is still a high because a lot of these items will need to be refined develop.
And as a result of that as we sit here today, you know we would love to give you more specific audiences, but in many cases, we're not able to because the work hasn't necessarily progressed to that's degree of maturity yet that doesn't mean that there isn't a plan and become see when that will be the case for.
Example of the underground we mentioned to you before that the mine design will be finalized in the second half of this year.
At that point in time, we should be able to give you more clarity and then of course by the end of the year. The definitive investment will you a lot more clarity, but there is sort of a roadmap.
That will allow us to be more specific.
On some of those items as we progress throughout the year and equally under funding side of things Oscar you asked a question on power for example, it's not the biggest component in the financing, but it's one of the contributes and so one once we get more clarity on how once we have finalized the mine design.
That funding gap, which we've given you the floor at the moment will naturally narrow and so as we go through the here.
We can give you more clarity at the moment. We appreciate it is still quite wide open, but we felt it was important to.
To provide you with a small under funding need as well as with the trend at least on the the underground shift you.
What.
I think is important though for all of us to take away from the call is we spend a lot of time to talk about those two things and we know why that is important but please also.
Forget that the business itself has continued and does continue to operate really well from an operational perspective, we think we had a strong year last year.
And we've said before on this call that the operations have continued to operate even in view of the impact on the corporate 19 prices. There's no site and there's no case on side. We continue to export we continue to import consumable and the business continues to operate.
And it does so safely that's important and lastly, I would say.
[noise] the underground progress has also been bien good we're now getting to the stage. We of course, we have to take hold with 19 considerations into account.
But up until now.
If you wind back the clock I think weve.
To to July last year, we've said, what we've done but we said we would do I think we've taken the decisions. We said we would take such as the one of them at Axis drive we managed to live a shot to in the end, yes. It was late but in the end. It was delivered to the revised timeline I think you're seeing some good productivity number.
It's coming through and we are maintaining.
The timetable for the mine design for the second half of this for the first somewhat this year as well as for definitive business. So I just want to make sure that nobody walks away from the call with just the questions. But also remembers that I think the business performance, especially in view.
These challenges that we saying today has been very very strong and among do and his team are working incredibly hard to two proof the business and has the business and of course.
People are to be protected and to be a facility in as possible and the corporation and the collaboration with the authorities in Mongolia is outstanding as well so all of that I want to make sure that we don't lose sight.
Off wouldn't be just focus on I know funding gap is important and the shift to update as important as well. The please let's make sure we don't forget some of the underlying.
Real business issues as well anyway forgive me for my long summary, but I wanted to make sure. We don't lose sight of that thank you for joining us. This morning apologies would take more time than usual, but thank you for your interest and a as we said before please oh be safe Ah stay safe and we.
Hope that to you your colleagues your family members or managing in these super a very very difficult times. Thank you for joining us this morning, and with that will will close of the call. Thank you very much.
Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and we ask that you. Please disconnect your lines.