Q1 2020 Earnings Call
All participants please stand by your conference is ready to begin.
Thank you all for joining us this morning.
Before I turn the call over I need to a sign that certain statements made during this call today may contain forward looking information actual results could differ from the conclusions or projections in that forward looking information, which include but are not limited statements with respect.
Mineral reserves and resources, the timing and amount of estimated future production cost of production capital expenditures future metal prices and the cost and timing of the development of new project.
For a kind of seat discussion of the risks uncertainties and factors, which may lead to actual financial results and performance being different from the estimates contained in the forward looking statements. Please refer to the amount of press release issued earlier. This morning announcing first quarter Twentytwenty results as well as the management's discussion and analysis.
For the same period and other regulatory filings in Canada in the United States.
I would like to remind everyone that this conference call is being recorded.
You'd be able to look for be pleased today at <unk> PM Eastern time.
Replay information and the presentation slides accompanying this conference call and what counts are available on your on its website <unk> Dot com.
I will now turn the call over to Mr., Daniel Racine, President and CEO.
Thank you operator, good morning, everyone and welcome to our first quarter conference call.
With me two days, Jayson lipsey or yeah.
These are challenging times for everyone and I hope that you and your loved ones or LT I'd say.
Okay, and my though we're doing everything we can to put their current beliefs and their families.
And working closely with our oldest communities.
Support their needs during this challenging Korea.
On this slide Youre seeing some examples of the efforts at the company's Oak reassuring.
Our making to support our oldest communities.
It was up dolls are not dollar that's been a located.
Setting up.
Oh support phones for communities in the coming weeks and months you can find more detail in our mdna.
There are currently no comfort or suspected cases of Corbett 19 that any of our operation.
Well it depends they make has impacted our business.
Two of our minds Canadian Malartic on Cerro Moro.
Were temporarily impacted late in the first quarter.
The government restrictions related to call it 90.
The suspensions and the gradual ramp up or mining both suspension that impacted our 2020.
We are forecasting gold production for the year 786000 ounces silver production has been revised to 10 point 25 million ounces.
And you on says our projected.
During the 90000 ounces.
Well the mine by mine basis, or 50% Cheryl Cole.
Production at Canadian Malartic is not expected to be 275000 ounces.
We are projecting 2020 gold and silver production that several mobile.
Ladies 6000 ounces and 6.2 million ounces of silver.
Would you production all seen at <unk>, and then 60000 ounces.
Explains the difference in the next slide.
I would like to know that we are taking a conservative approach to our revised guidance for several more <unk> and Canadian Malartic and believes there is potential upside.
I'm pleased to report that we are increasing our 2020 production forecast for Jack will be the 268000 ounces of gold.
The increase come after the mine posted yet another record quarterly production due to higher grade and increased throughput.
They've been doing is forecasting to produce a 162000 ounces of gold and 4.3 million ounces of silver.
Geo production this forecast at 200 in 2000 ounces.
The changes entirely attributable.
Attributable to our revised Geo guidance ratio, which is due to their relative outperformance of gold price to silver price.
Well the auction guidance told me that I feel good though has been revised slightly to 85000 ounces of gold.
The revision reflects the temporary workforce reduction that was implemented in March in conjunction with local authorities and unions.
They did the workers war lots from the region, and then social just sensing and reduce the possibility of community infection.
These note that our revised guidance is being provided based on the web its currency.
There continues to be uncertainties that may impact corporation and affect production cost.
Like helping you on our updated jewelry show impacted you put guidance for several mobile reducing our geo production forecast by 11000 ounces.
The government restructuring restriction introduced on March 20, it resulted.
Periods when production that several mobile was limited ordinary.
This restriction included a troubled Dan and I meant that the resourceful isolation order.
Even after restrictions on mining or listed reduction was limited due to the consultation with government aroma reinstating traveled to settle mobile.
The into limitation of protection every measure and the overall workforce remobilization.
To wrap up of operation began late this month and we'll continue to already made with the gradual increase in production.
The suspension and subsequent to wrap up required a change in might not that's expected to extend into mid June.
That's part of this the stockpile that will be eliminated and for certain period. This will limit, but that's the processing level.
Well the stockpile is not immediately needed.
Enable future processing flexibility.
Due to the suspension of thing gradual resumption of operation higher grade or that we had planned to mined and processed late in 2020 will be deferred to future period as part of normal mine sequencing.
As mentioned production guidance is being conservatively estimated and we believe with strong execution in an efficient threat book that may do better.
And they didn't Malartic was temporarily suspended on March 24, and resumed operation on April 15th after that get that government lifted the restriction on mining.
Processing operation resumed within a few days.
And the remote blazing work group.
The ramp up is expected to take two to four weeks with the full attention health and safety protocols.
Moving temperature check and and then screening for anyone seeking entry to the mine.
And that's always social dispensing and then then screening and disinfecting.
Device guidance assume a conservative right.
Due to the temporary suspension and gradual ramp up we will be deferring the processing of I agree or that that originated being planned for Q4, that's part of the updated flat.
In addition, a schedule mill shutdown maintenance shutdown is expected to require more than the typical for the agreement to compete with them at the social dispensing protocol.
You extend that maintenance can be perform more efficiently it will benefit production.
Despite the impact and challenges caused by called at night, who have in 19 that they make we had that very strong first quarter.
Our total recordable injury frequency rate was point 39 at quarter end and after one year of measurement on our social license to operate indexed result showed strong through us and acceptance across all our operation.
During the quarter, we continue to monetize our non producing asset will improve our financial flexibility and provide optionality.
We entered into a definitive purchase agreement to sell a portfolio of royalty interest and the contingent payment to be receive up on deflation of commercial production at the deep carbon at Georgia logo by Lori.
Total consideration of 65 million.
Following the completion.
The market merger between deal gold and equinox subsequent to quarter and we closed the sale of 12 million when it equinix $420 million Canadian dollar.
Each unit include one common share and one half of a common share purchase wore it I'll make one that's.
All the warrants are exercised total gross proceeds.
I would be 201 million dollar Canadian.
As you me I've seen we haven't announced an agreement earlier this week.
Option up to 40% interest in our C., we ought to go project.
Very highly respected Argentina portfolio management and capital markets company based in Argentina.
We're excited about disagreement and the potential to advance the project.
During the quarter, we have decreased net by a further 20 million due to positive cash flow from operation.
Watering net debt.
869.1 million.
Taking into account the receipt falling from aforementioned equity next year in itself or net debt balance at quarter end would've been approximately 786 million on a pro forma basis.
This time last year art that that was 1.7 77 billion.
And with our significant improvement nature, and then Schultz exhibit D D.
We have increase our dividend for third time in the past year competitively increasing it by 213%.
Net increase during the quarter or 45 million four or five cents per share.
Adjusted net earnings was 47.2 million also five cents for sure.
Cash flow continue to be very Rob was robust.
<unk> cash flow before net change in net working capital.
And at 64.6 million.
Normalized cash flows from operating activities before net change in working capital of 168.1 million.
Free cash flow before dividend debt repayment 38.9 million.
We produced 192.
I wasn't 238 ounces of gold during the quarter.
Notwithstanding the temporary suspension that can you give or take several mobile.
Jack will be no that was opinion and media Buffalo you, though.
All add exceptional quarters exceeding their production target.
Silver production was 2.73 million ounces following a strong performance from it.
Law Geo production of 221.
Thousand seven on the 46 ounces was in line with that.
Cash costs of six.
694 bridge, you and all in sustaining costs of 1032 for GE you were better than planned despite the Geo racial being higher.
84 point 23 than original guidance up 86 point then.
<unk>.
Cost were positively impacted by foreign exchange movements as a result of Canadian dollar, there's a young Riyadh Argentinian peso and Chilean pesos, all the weakening against the U.S. dollar.
Jack will be not achieve its objective for the phase one expansion of 6500 tonnes per day.
Hi, good quarter ahead of schedule.
And it did so without the benefit from the installation of Florida Atlanta Houston.
Scheduled for completion in mid 2020.
Phase, one and short as going better than plan and we are currently evaluating what are those unfortunately to further optimize needs with good above 65 or that sounds pretty that's part of this phase.
With respect to face to the referred to beat the study, which evaluates lendingtree is into it with 275 8500 tonnes per day is now complete.
Preliminary results indicate that total capital costs up 57 million with 35 million, they're ready to the processing plant.
18 million for underground mining and 8 million for infrastructure.
The phase two expansion would increase check will be knows animal production to 230000 ounces and reduce operating cost with the positive impact on cash flow.
More comprehensive and detailed information relating to face to the visibility study will follow in a separate announcement.
Early next month.
At 43, one all wanting to report will also be published than me.
I should also noted that additional production phase two is nothing through than in our guidance.
As mentioned our Q want result were very strong despite the temporary suspension that settle in Canadian Malartic.
If they weren't that in fact it in total we would have finished you want on track to be ahead of our order to know guidance.
At the beginning of the year.
We are encouraged by that 32000.
20 performance of all in line.
We have decided to provide you with our artisan internal budget numbers for the quarter. So you can see oh each operation tracked.
Oh production as you can see oneq and they didn't Laura <unk> and civil model, we're below budget logic will be though.
And then media definitely though all exceeded our budget.
Production enough do I didn't in 22000 deal on says what's exactly in line with budget.
On cost, we actually tracked better than our Q1 budget.
On Cerro Moro.
When you sell them all saw costs higher than our budget and again this was due to the government the restriction during the quarter.
I will now I'll turn it over to Jayson to discuss the financial.
Thank you Daniel and good morning, everyone.
Turning now to our financial performance revenue in that first quarter was $356.5 million compared to $407.1 million in the same period of 2019.
The decrease reflects the company's <unk> current portfolio five mind this quarter compared to their first quarter of 2019, which included contributions from six mines, including Chicago.
However, this was partly offset by higher gold and silver prices as well as increases in sales or sales volumes from jacket, Nina El pen yarn and Minera, Florida.
Despite the year over year decreasing revenue gross margin, even DDNA increased slightly to $202.2 million.
[noise] DNA expenses decreased by $5.7 million were 27% compared to the same period in 2019 due to corporate overhead reductions as we scale their cost structure to our current portfolio of assets following the sale like spot.
Net earnings were $45 million or five cents per share.
The net effect of adjusting items was neutral in the quarter. So we also had adjusted earnings of five cents per share as well.
Quarterly cash flow performance reflected.
Impacted both strong production and gold prices as well as the positive impact of foreign exchange movements on cost structure.
Cash flows from operating activities during the quarter were $129.4 million caseloads from operating activities.
Change and working capital were $164.6 million.
Free cash flow before dividends and debt repayment during the quarter.
$38.9 million and we've reduced net debt during the quarter by a further $20 million to just under $870 million.
The recent proceeds of equinox sale pro forma net debt was $786 million at March 31st.
If we go back one year the end of Q1 2019, our net debt was sitting at a $1.77 billion. So we've been able to reduce net debt by about $1 billion in 12 months.
The American majority of that follows the proceeds from the Chicago sale, but more recently that had been from the free cash flow generation of the company.
Given the uncertainty and the code Codependent Mac, we drew down 200 million or $750 million revolving credit facility I think across every measure in March but we do not expect to utilize any of these funds.
[noise] before I get into our revised outlook. It is important to note the impact of how the gold equivalent ratio had moved since earlier this year.
Gold has performed exceptionally well year to date relative to silver, which has significantly increased the geo ratio, they're getting a market compared to the ratio assume in initial 2020 guidance.
With our revised 2020 guidance, we have updated the assumed ratio to better reflect that movement.
In our original guidance, we assumed a ratio of 86.1, we're now assuming a ratio of 98.85 for the full year.
The result is that silver production accounts for less.
That's ounces in gold equivalent terms following that change.
The impact to our 2020 production guidance from our new ratio assumption is approximately 17000 GE opened this change in the Geo ratio only from my mind could produce over the remainder of the reconciliation of the change in our guidance, it's kinda covidien packs at Cerro Moro animal Arctic and the guidance increase that Jacobean.
Turning to additional items in our guidance, we are continuing to access the impact of coking 19 on costs.
Relation to guidance assumptions previously provided in February so.
So for now we wanted to provide a directional update on costs into say our costs are expected to be higher but we will provide a further update more detailed update at a later date.
Right now we are providing some indication that the impacts we are experiencing and anticipating ahead of that further update.
As a result of the aforementioned yield race you assumed we estimate an increase of approximately $20 burgio under a sick.
Larger geo ratio results in total cost being divided over that Ti allowances and increase and increasing the overall cost per unit reported.
The second impacted the positive tailwinds from foreign weaker foreign exchange rate than those assumed in our original guidance, which represent about $35 per geo at current got tax rates.
Finally in association with Koby 19 costs are also expected to be impacted primarily by the lower yield levels and unit cost impacts from the re guided production.
But also demobilization ramp up and workforce safety measures put in place.
Well cost will be most significantly impacted during Q2, we expect consolidated eatec for the full year, maybe in the range of 5% higher than previously guided.
We also expect capital can be scaled to the new guidance level as we will have natural deferrals and capital spend in association with delays related to Kobe 19, both from a sustaining an expansionary capital perspective.
Expected reduction in capital spend pretty air is between 15 and $20 million.
And lastly, total DNA is being re guided to $470 million for 2020 in association with reduction in quantity sold.
Overall, when thinking about our 2020 outlook, despite the impact to production and cost from coated the company's margins and cash flow generation will benefit from the positive response to gold prices during this unprecedented uncertainty.
So cash flows remain healthy this year, despite the cobot impacts.
That's a good looking into next year beyond our cash flow platform has improved meaningfully due to the higher gold price and the weaker operating currencies and reductions in other <unk> cost inputs were seeing over the longer term.
I will hand, the call back over to Daniel.
Thank you Jason why are these are unprecedented unprecedented time for every month, we believe our business maybe in a better position that it has ever been.
Well, the cash flow and financial flexibility continue to rise against the backdrop of a horrible gold price environment.
Our balance sheet and liquidity is strong and getting stronger than that that continues to decline.
And our growing financial strain.
The been by a strong asset portfolio that is performing exceptionally well.
Lets them into our people well, despite the uncertainty and challenge suppose pose like Kogan 19.
Risen to occasion and done a remarkable job job.
And with that we'll be happy to take your question operator.
Thank you.
If you want.
Speakerphone please.
Prior to making your selection.
Two questions. Please press star one on your telephone keypad.
It's at any time, you wish to cancel your question. Please press the pound.
Please press star one at this time, if you have a question.
Paul.
That's register thank you for your patience.
First question.
Ralph.
Capital. Please go ahead.
Good morning, everyone. Thanks for taking my questions then you'll have to one Jack Kubena. Please.
Firstly the presentation talks about.
Moving to feasibility study stage.
2021, and I don't need to get too far, but can you tell us a little bit about what studies, you're looking at and maybe what gives you. Most excited is.
Exploration side and things like reserve grade I'm, most of the Optionality going forward or is there processing optimization as well.
But like we said you're gonna see you next to thank you for the question are all what you're going to see next week, we're going to everybody's a lot more detail on the the pretend to be these studies are the profess to be de study just completed.
Were we going to wait before releasing any and eat being really special about it we want to to stabilize the operation at the end of June as you know phase one will be completed by then we want to know what's the base case.
That's a chicken will be no.
You know stabilized the operation then after that.
With that you know you know are studying company. The feasibility study so right now that the perceived to be these studies show, which is a no brainer to go ahead.
This what we want to continue with running you mentioned that good points. You know we had many success in exploration that Jack will be though right now all the buildings stuff.
But we're slowly restarting we have.
You all know we had very good grade going deeper at a joke will be no. There's only makes them. So we want to make sure that we capture all the potential to put in D. This study so more to winning transferring more inferred into reserve will help right no. It would this study we don't really update.
Our 16 years of mine life, we want that to happen before we go ahead with that project anywhere there was no capital spend this year.
So that's a good thing and then nothing has to be spent before mid next year. So that gave us plenty of time to compete.
The study before that.
Okay.
And when it comes to the piece backfill plant. It sounds like this is a separate studies going on outside of any Prefeasibility study or feasibility study can you just maybe touch on.
The process and the timing on when we could see an update on that and and by my estimate just if you get approved for 2000 tonnes per day that would take the to yourself above 20 years is that the right way to think about it at the 500 ton pretty scenario.
Yeah, the you're right the.
Backfield plan is a separate study, it's not big capital, but we wanted to keep it separate from the the extension it will be roughly a 2000 tons for the backfield plan and you're absolutely right that will extend the mine life of the.
The tailing facilities.
Longer so we had already over 16 years of mine life.
Putting 2000 tonnes per day back into the other dawn will extend the someone like so basically the.
The yeah.
The backfill will help to extend the mine life of the the team.
That's it for me thanks, very much thank you world.
Thank you.
Our next question.
With RBC. Please go ahead.
Thank you I just want to ask a question on the dividend policy going forward.
Recognized for its been a significant increase over the last year, but just thinking you know going forward, we see it level of net debt where it is a and also were old places where they are how do you see the dividend policy changes going forward and and what is it sort of based on [noise].
Hi, Good morning, just good question, so, yes, or no losses, when we first increased the dividend. We said it left we have talked gets to where we wanted to bring the dividend.
Last year was about 50 million dollar per year old, though it's gonna be.
60 million dollar per year total.
We said we want to be between 60 50 in the 100. So that's the first step to be to go towards the Andres as we generate more free cash flow this year.
<unk> interest going down that's what we're saying we want to give it back to our shareholders. That's been station in the past few years and then.
Nothing else change, we announced that we wanted to be between 50 and 600 million through you were getting towards the target.
Okay. So when your stress testing I guess downside.
Risks for the company and you know what sort of price assumptions are you using within within that sort of base case, where they depend can still fully be covered [noise].
Well, it's only a 10 million increase but Jason can you give you the detail.
Yeah, I guess the way to look at it yeah, we're definitely not a basing decisions on current spot prices in America today, you know we've.
We budget at a much lower gold prices sensitized to the downside I think the further complement to that is the dividend reserve fund that well build up or over overtime I think the.
The recent a disposition of equinox shares is a is another step towards or just back backstopping not got approach with the dividend as well.
Okay, great. Thank you very much.
Yeah.
The question from it.
With credit Suisse. Please go ahead.
Hi, Good morning, Thanks for taking my question just just one for me in the release you mentioned, you're still targeting leverage below one times not that EBITDA and part of that will be monetization of non producing assets, maybe tell us that <unk> recon fit into that.
Hi, good morning.
No we gonna reached a one we'd all like where we go on the with what we have done so far and into free cash flow generated from.
The company the mines, the operation will reach that targets one.
We said before the end of 2021 would think we're going to reach than that but little one.
By the end of this year. So we bring I go Rico or somebody from where we go well.
And I bring that a leverage ratio lower than one.
Well, we don't need that we don't need like what we got to reach the one.
Okay. That's clear thank you.
Thank you.
Please press star one.
My question.
<unk>.
Please go ahead.
Good morning, everyone. So first thanks for all the detail in this presentation it really helps with.
The guidance going forward Secondly, Josh asked my question to dividends, so I'm going to address that.
Are there any plans to I'm like to potentially refinance your debt given the favorable trends that are out there at this point.
Good morning, any that's isn't.
Yeah, good morning, and either no I think what we've said is that in the short term, it's gonna be a net net that story, we don't have any any debt of significant due until a 2022. So I think I think we'd be doing between now and that would be no building not a cash balances building that cash reserve fine.
And seeing that that will net debt levels or reduce them and ultimately reducing gross debt as we as we get up there as well. So no. We don't want we don't see this is a refinance story, we want to see to close that <unk> reduced.
Okay and then my second question I guess, tying in what I think are sort of the big picture seems that people are going to be looking at which is basically gold prices stay where they are a there's generally a lot of free cash flow coming to lay of the senior producers and the intermediates and you know, but what do you think or your capital allocation priorities sort of addressed dividends that.
And then in terms of the projects after Jacobean could you remind us what the highest priority projects are for you.
Yeah. There's a you know we left can you give or take but it's not what's real four years from now.
We might start to ramp later this year, but it's small capital.
We might increase or we might will probably increase threading at a high school D.S.. We have success you know, we will use our resources and reserves or resources there in February but.
The close was in November so we drilled November or December January February and March and very good result.
The resources that's continued to increase there were doing an internal p. So that's one priority with Jack will be though.
For us.
Because the other one.
We are advancing the feasibility study.
It's been delayed a bit because of course with 19, so with all the feed study will be completed more early next year, So first quarter or second quarter for Oh, six first half of next year.
It's also a priority as you all know.
We I like the project the project.
56% owner of it will will develop it probably no, but we would like to be involved into this off and so on capital allocation basically there's no big capital, except if we go ahead with Jack will be no and that's you saw that amount is 57 million nothing before me next year so easy.
End of next years, and then 2021 after that the the next one will be better seeking in three four years from now.
So this is why three cashed free cash flow is going up and then with gold prices going up all that free cash flow will reduce the debt than that and the debt and then the then give more to shareholders with the dividend.
Hi, Thanks for that and I'll leave it that thank you.
Thank you Anita.
Thank you.
Our next question from.
Check disconnect with Scotiabank. Please go ahead.
Hi, good morning, everybody, maybe circling back [laughter], but Jason.
You know you talked about they all in sustaining cost moving out.
Hi, sample or there about.
Can you just talk a little better not yet hedging philosophy and have you done any happening.
Yeah, I know a feeling that somehow [laughter].
Sure. Yeah. Thanks are thinking that the we we have done some Canadian dollar hedging I guess, we announced that when we put out our Korean them.
Prelim production results, a little little while ago through I think we put on about 90 $90 million the hedges at a a color.
From 138 to 140 fives that just pretax that.
That comedian dollar or cash flow exposure you know Canadian dollar is our.
Largest exposure we didn't have any hedges onto we felt that was a good idea. We do you have existing hedges or.
Place for both the Brazilian Ral in the emerging in the Chilean pesos stretching that three this year as well. So I think it's always been an important part of our.
Philosophy to try to try to lock in those cash flows.
And your <unk> contributed to that and by doing that I think with rising gold price, we're seeing the margins improve as well.
[laughter] since announcing that Tom 90 million I'm on the Canadian dollar nothing else done.
No.
No no and I guess, you did asking about a fuel as well you. All we we haven't we haven't got anything there you know I would say we are obviously seeing a benefit from from fuel.
The larger larger open pit operation in Milan tick a little bit at Cerro Moro because of the.
Good yeah easily generated power down down there you know probably $5 million to $10 million, though total total savings that we that would be embedded in.
The comments on on the caution.
Okay. So so maybe got having philosophy.
How do you look at right now.
Well definitely nothing on the on on the top line I think no no interest to had Joe the precious metals Gerber comfortable and our cost structure will continue to manage our costs. This year is more challenging you know you saw we had a good start to Q1, you know co. Good.
Kicks in the story from Cold It is really more story.
The unit effect not you know.
There's <unk> dollar cost as well, but it's mainly the units that have gone down and the costs a in total dollars haven't gone down as much. So I think that's the way to think about <unk>, there will be some incremental costs.
He has to deal with the operations every deal that you know gitmo dream olds ramp ups I'm you know just been thing and you know a employee safety but.
This is gonna be a 2020 story as we get her to 2021, you know there maybe some marginal impacts back that we would see our cost structure and crude from from from next year. So margins look good and less need even think about hedging the top line.
We will continue to hedge.
Operating currencies when we we see the opportunity to lock in the cash was I think we've been very consistent not.
Last number here, so I would say that is still the philosophy.
Maybe just thoughts on Bonnie continuing on the top line I appreciate you know the impact.
The lock down on the operations I mean paying out the operation for backhaul capacity, but can you talk about whether I am I seeing any <unk>.
You know costs that are going to be in place going for like from a he called me 19, <unk> I mean I may be the social that's something comes with additional cost me he may be law firm called activity.
Your comment on what in the cost structure RBC longer term homologous if any.
Yeah. Good morning tenure, thanks for the question. The no we saw in Q1, we reported in <unk>.
The impact of Kogan was 3.5 million dollar in Q1, So we lost.
Eight nine deals that might uptick and about the same at.
But several mobile, but Q2 will be the most impacted as you you all know we started the both operation.
Late in the this month.
We'll take two to four weeks to be fully ramp up it's going it's going fairly well them is at full capacity. It's just the mine to bringing back to full operation will take some time civil Mo.
And this is bringing to people to the sites you know, 35% to 40% of Oriental use our on site.
The crews so it's challenging to bring people from other provinces. So this cost associated with that they're all embedded in.
The guidance, we have said that for this year on called it. So the yes, there are costs I.
I don't remember Jayson, maybe you can help me what's the amount we split I think it's 10 to 15 million impact.
Now, we don't we don't see that impact coming that being there for next year, social we will realize when we do our budget for 2021 in 2022 right now our guidance does not change for both years as we we have mentioned, we see no as some of the Q4.
Production that would be pushed to Q1 next year and then two four is always our best quarters, it's still going to be very good quarter, but some of the the good grade is gonna be pushed to 2000.
21, so that will help or or cost that we so yes. We have included in our actual forecasts costs.
Generate.
Cool that met uptick is a big example, this 2000 people working there. So you can bet imagine.
Respecting the two meters distancing is is a challenge each day.
Thousand people go to side they have to go to trailers before they even get to site.
At temperature Jack questionnaires.
Even the more for the people that everything goes to the sites. We're lucky all our lives without exception, there's no cases so.
Right off the thought door, Amos, where 99% our employees coming from there's no cases say magic will be though 80000 people living Intel no cases, so that helps to to maintain our sites free and or local communities, but there's a cost to do that we're lucky by nature, you know mining Hugo.
On the ground jumbo operators are the oldest scoop upgraders alone, saying with the goal but.
There's only one person drug shovels thrill so.
We reduced cost there.
We don't increase cost there is mostly to transport that people will bring our employees to the job and then accessing decide where we see some inefficiency, but we think with time and we're seeing that I don't think right now people are getting more used to being check in and of course this is going faster.
Yeah, I guess, maybe I wasn't clear I I understand you know what's happening to with all the ramp it wasn't more do you believe that longer term so beyond Q2.
Yes, do we have call that I'm going to happen well within the cost structure, because the social thing and or lower productivity that were going back to park happened 21, and beyond let's say.
No [laughter]. Thank you yeah.
God Jason.
Yeah, I know I was just gonna get I mentioned that you know this is.
I think we've got a better line of sight on the shorter term impacts I think we're still going to continue to define that as time goes Oh design and Kurt for further out we do think these costs are a temporary to the extent there's any.
You know marginal impact I think one of the.
You know things that we're you know we're observing as we work differently is is a finding opportunities for cost savings that perhaps weren't a recognized previously because different perspective, working like like we do so I don't know the we became to find it precisely but I think.
You know Directionally I think we can say to the extent very marginal costs I think we've seen opportunities to take those costs out of the system or too you know to at least a you know your met them out, but we don't we don't have the answer for that but that's going to be the approach.
Okay, well I'm wondering.
One. Good example is threatening we're not throbbing at all right now on all our offices are those people are working from home we closed this quarter without adding any one in.
Our office when all four since Oh.
Early early March show that shows that this saving maybe we won't we don't need the full space. We had here we don't need to travel that's much of we found out that we can do a lot with the internet, saying about the each our site.
Most everyone, that's working and admin a job.
Finest job, they're all working from a from old so that helps dispensing too when you don't have the employees from the office is working and you have on either the mine people, there's some saving to that so they decent said yeah. This extra costs, but we we haven't done.
Uh huh.
With that in our or NRE saving yet, but we see some saving coming from upwards you need these with this <unk>.
Yeah. Thank you.
Thank you.
No further questions registered at this time I will turn the meeting back over to Mr. machine.
Well. Thank you operator, thank you everyone for joining us we hope you are able to join us for EG and 11. This morning, Eastern time, and we look forward to updating you on our second quarter resolve in July lease they care that's the same.
Thank you.
Thank you.
The conference.
Disconnect your lines at this time and we thank you for your participation.
[noise].
The conference has now ended.
Your next your lines at this time, thank you for your participation.
This conference is no longer being recorded no. He's putting all this it goes home. This conference is no longer being recorded no. There's just not as it goes home that's healthy.
[music].
Uh huh.
Note that this conference call has ended please disconnect your lines at this time. Thank you.
Okay.
<unk>.
Okay.
[noise] 50, though.
This conference call. Please.
Please disconnect your lines at this time thank you.
Okay.
Yeah.
She was pending.
[music] [noise].
Yes, I don't process before.
Note that this conference call has ended.
Disconnect your lines at this time thank you.
Okay.
<unk>.
She was trending.
[music].
Office people.
At this conference call has ended please disconnect your lines at this time. Thank you.
Okay.
Okay.
[noise] 50, though.
This conference call hasn't it.
Disconnect your lines at this time thank you.
Okay.
<unk>.
She was pending.
[music] [noise].
Yes, I don't process before.
At this conference call has ended please disconnect your lines at this time. Thank you.
Okay. That's good for that.
She was funny.
[music].
Uh huh.
Please note that this conference call has ended please disconnect your lines at this time. Thank you.
Okay.
Okay.
She was winning.
[noise].