Q2 2020 Eldorado Gold Corp Earnings Call
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Thank you for standing by this is the conference operator, welcome to the Eldorado Gold Corp. second quarter 2020 conference call.
As a reminder, all participants are in listen only mode and the conference is being recorded.
After the presentation, there will be an opportunity to ask questions.
To join the question Q you May Press Star then one on your telephone keypad.
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I would now like to turn the conference over to Peter Luggage manager Investor Relations. Please go ahead.
Thank you operator, and thank you, ladies and gentlemen for taking the time to dial into our conference call today.
On the line today, our George Burns, President and CEO, Bill Executive Vice President and CFO.
Joe Day, Executive Vice President and COO, and Jason Show Executive Vice President and Chief Strategy Officer.
Released yesterday details, our 2022nd quarter financial and operating results there should be read in conjunction with our second quarter financial statements and management's discussion and analysis both of which are available on our website. They have also been filed on SEDAR and Edgar.
All dollar figures discussed today are in us dollars unless otherwise stated we will be speaking to the slides that accompany this webcast you can download a copy of these slides from our website.
Before we begin I'd like to remind you that any projections concluded in our discussion today are likely to involve risks which are detailed in our 2019.
And then the cautionary note on slide one I will now turn the call over to George.
Thanks, Peter and good morning, everyone.
Here's the outline for today's call.
Ill give an overview of Q2, along with some comments.
Then I'll pass it to fill to go through the financials.
Joe will follow by reviewing operational performance.
And then we'll open it up for questions.
Im excited to be reporting and outstanding second quarter, both operationally and financially.
We continue to make progress in delivering value for our stakeholders as demonstrated by our strong quarterly production and maintaining guidance. Despite cobot 19 operational challenges.
The operational the operations performed exceptionally and I'm proud of the agility of our teams to adapt to our new normal.
Im, especially pleased to report we delivered a significant increase in cash flow this quarter and improved our financial position.
We've elected to issue a redemption notice of $58.6 million under the equity Clawback provision of our senior secured notes.
Repayment of these nodes will help lower interest expense and average cost of capital.
Another highlight this quarter includes beginning construction of the decline at Lamar.
As a reminder, this will connect the triangle underground mine to the Sigma mill the three kilometer tunnel.
This gives us a number of benefits, including eliminating surface or haulage reduced road traffic and lower carbon footprint.
Enabling lower cost underground exploration for or Mark plug for Unparallel deposits.
And increase safety by providing a secondary means a vigorous.
Or degrees, where we resumed negotiations with the Greek government on an updated investment agreement.
As mentioned last quarter Coven, 19 had diverted both our own and the Greek governments attention.
However, we are back now in discussion.
Perhaps a little background may be helpful. Here.
Other autos existing agreement is nearly 15 years old and there's no longer fit for purpose.
It was negotiated back in 2006 by a previous owner under vastly different economic and technological conditions.
Modernize investment agreement with appropriate Investor productions will offer significant economic and environmental benefits degrees.
Our investment in Greece will not only benefit Eldorado shareholders, but also the Greek state and local communities through.
Providing jobs in construction and operations.
Increasing foreign direct investment in Greece.
Using best available technologies like dry stack tailings.
And other CSR projects.
Reese's prosperity was once built on mining.
Mining could again become a key sustainable industry and source of wealth for Greece, while using best available technologies to protect the environment.
We remain committed to acting in good faith in discussions with the Greek government define a mutually agreeable path forward.
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Also in Greece, we saw movement on drilling permits for mabus Petrus during the quarter, which we see as another positive indicator.
And lastly, we completed the purchase of 5% of Hell US gold shares that were owned by elect or.
Eldorado is now 100% shareholder of hairless gold.
This gives us full ownership of the Cassandra assets and more flexibility for joint venture partnerships.
Greece continues to represent a fantastic growth opportunity for Eldorado that we believe is not currently reflected in our evaluation.
Skouries and Perama Hill, our world class assets that will add significant value for our investors local communities and the Greek state.
I'll stop there or do you Phil.
Thank you George good morning, everyone.
On slide five we provide an overview of Eldorado's financial results for the second quarter 2020.
As George stated earlier, we're very pleased with our financial results for the quarter.
Headline for this quarter is our strong free cash flow generation of 63.4 million in Q2 of 2020.
Versus 4.8 million in Q2, 2019, and 7.2 million in Q1 of 2020.
This increase is due to increase production higher say higher sales and higher gold prices.
El Dorado generated 255.9 million total metal revenue in the quarter.
This includes 232.9 million in gold revenue and represents an increase of 55% over the comparative quarter in 2019.
The increase revenue resulted from higher gold sales volumes of 134960 ounces compared to 113685 ounces in the second quarter 2019.
And 116219 ounces into first quarter 2020.
The increase was also the result of higher average realized gold price of 1700 $26 an ounce in the second quarter of 2020 compared to 13 21 per ounce in a comparative quarter in 2019.
The company reported net earnings to shareholders in the second quarter of 45.6 million or 27 cents per share.
After adjustments primarily to remove the noncash revaluation of a derivative related to our debt.
And the noncash loss on foreign exchange students translation of deferred tax balances.
Adjusted net earnings for the second quarter were 43.8 million or 26 cents earnings per share.
This was a significant improvement over the second quarter of 2009 teens adjusted net loss of 3.5 million or two cents loss per share and over the first quarter of 2000 Twentys adjusted net earnings of 12.5 million or eight cents earnings per share.
Like a lot of our metrics this quarter the increase net earnings and adjusted net earnings reflect higher gold prices and higher gold sales relative to Q2 of 2019.
EBITDA for the quarter was 131.8 million.
And after removing certain noncash items adjusted EBITDA was 135.8 million.
This was a material improvement.
Over EBITDA of 74.5 million and adjusted EBITDA of 66.8 million in the second quarter of 2019.
Depreciation and amortization increased to 58.3 million in the second quarter from 41.2 million in the comparative quarter in 2019, again, reflecting higher production and higher sales volumes in Q2 2020.
Finance costs were 6.5 million in the second quarter 2020, compared to 16.8 million for the comparative quarter. In 2019. The decrease was due to lower interest in financing costs in Q2 of 2020 and a noncash gain on the revaluation of the derivative related to our debt.
Income tax expense for Q2, 2020 amounted to 23.7 million for the quarter compared to 8 million in the comparative period of 2019.
The significant increase was a result, a higher sales volumes in Q2 2020, leading to higher income tax on operations in Turkey, and higher prevention mining duties for our lock operation in Quebec.
We finished the quarter with approximately $440 million in cash cash equivalents in turn deposits.
And approximately 35 million available under the revolving credit facility.
Our liquidity position is very strong and we have been clear that paying down debt is a priority for the company.
As George mentioned, we have elected to parts of the redeem the 9.5% unsecured notes under the equity Clawback provision in the bond indenture. This allows us to use a net cash proceeds from equity raised in the past 120 days to redeem 58.6 million of senior secured notes in late August.
His notes carry a 9.5% coupon. So this redemption will lower interest expense going forward.
Under the terms of the indenture the redemption price.
The redemption price the medium notes is 109.5% of the aggregate principal amount plus accrued and unpaid interest up to the redemption date. These costs will be incurred in Q3 of 2020.
It is also worth noting that we expect Q3 2020 free cash flow to be impacted by the premium and interest paid on the redemption as well as a timing of certain cash tax payments and the timing of capital expenditures.
Moving on to slide six.
We have provided for graphs that I think really capture the turnaround that we're seeing in our financial performance over the past year.
You will recall in April of last year, Lamont commence commercial commercial operations.
In June 2019, we completed the refinancing of the outstanding debt.
Earlier this year, we announced the mine life extension at Kisladag to 15 years.
And we have steadily increased production at olympias over the past few quarters.
All of these factors have contributed to the strong performance were reflected in these graphs.
Adjusted EBITDA as shown in the top left graph has increased quarter over quarter in the past year. This is reflective of our operational improvements and supported by a high gold price.
In Q2, 2020, El Dorado reported 99.6 million in net cash generated from operating activities 63.4 million in free cash flow and 43.8 million and adjusted net earnings.
All three of these metrics reflect significant increases over the previous four quarters and were driven by strong production and a higher realized gold price in Q2 2020.
Thank you everyone I'll conclude on that positive note and we'll now turn it over to Jill.
Thanks, Phil and good morning, everyone.
Here's a quick summary of our quarterly operating results.
We produced 137000.
782 ounces of gold in the quarter at cash operating costs of $550 per ounce sold and all in sustaining costs of $859 per ounce sold.
So a great quarter and in line with our expectations.
Looking forward, we are maintaining our 2020 guidance as a reminder, this is 520 to 550000 ounces of gold at all in sustaining costs of 800.
And 50 to $950 per ounce.
Last quarter, we talked a bit about a reduced workforce due to some workers being considered high risk for cobot 19.
We are now back to normal workforce levels as we found ways for them to work safely.
We continue to monitor our safety protocols and find new and innovative innovative ways to keep people healthy.
And that's good segue to the next slide.
Here I want to highlight at contact tracing and tracking system, we've implemented at newmont and will be implementing and Greece, and Turkey as well.
Contact tracing has become an essential tool to identify and isolate people who may have been exposed to the cone corona virus and mitigating potential impacts quickly for the benefit of our people and our business.
Our solution builds on existing hardware and software systems at sites using I'd cards.
At Lamar each employee in contractor wears a silicone bracelet as you can see in the picture that they used to tap into and out at various entry points in the mail and surface buildings.
The card reader records their employee or contractor number which allows us to identify anyone who may have been exposed to a potential positive case and complete the investigative process within a couple of hours.
The solution as cost effective.
Easy to implement.
Text the privacy.
And was quickly deployed at the Mark.
The system is unique to our knowledge and we will continue to work closely with public health authorities as we look to improve and build on this innovative approach.
Yes.
Good here on slide nine we have some further color on the quarter at each of our assets.
At Kisladag production was 20% higher than Q1 due to increased tons of stack door at higher grade during the quarter.
Solution inventories began to reduce with the drier weather during the latter half of the quarter.
We expect these factors to continue to support higher production levels over the remainder of the year.
Work is continuing on the installation of the HPG, our with delivery scheduled for the first half of 2021, we expect this to be online in the second half of 2021 and and as a reminder for everyone. This will improve heap leach recovery.
At the Mark Gold production met expectations for the quarter, despite a temporary suspension of operations in.
Late March to mid April to comply with Qubec government mandated restrictions to address the cobot 19 pandemic in the process.
The Big news this quarter was the commencement of the decline in the Mark.
As we've mentioned previously we're currently evaluating and underground crushing and conveying system as well as a mill expansion and update outlining the path forward and the Mochis expected in Q4 of this year along with our updated reserves.
As we've always said our long term goal in the markets to increase production at the Sigma mill to its ultimate nameplate capacity of five to 5000 tonnes per day, we will continue to evaluate other deposits in our land package such as Mormeck in pursuit of its scope.
FM true group continues to be a consistent performer the column flotation project remains on schedule for later this year.
And will result in improved concentrate grade and quality.
To lower transportation costs and concentrate treatment charges.
Moving over to Greece.
At Olympias I'm pleased to report another quarter of improved production.
In fact, we saw 2700 ounces increase over Q1, 2020, and our highest ever quarterly gold production.
So as a result of ongoing underground development.
Improvements to the paste backfill system.
And greater collaboration among our employees, resulting in improved productivity.
This quarter marks the third consecutive period of DC decreasing all in sustaining cost settle MPS.
Base metal prices remain low and treatment charges, hi, however, improved efficiencies are leading to lower costs and we will continue to drive operational improvement at olympias.
Just a quick note on Skouries as the as does the asset protection works continue the picture here shows concrete being placed in June.
We had planned to install the mill building and will review that work as we continue to monitor the cope with 19 situation.
With that I'll turn it over to George for closing remarks.
Thanks, Joe.
Before wrapping up I want to welcome Judith Mosley to our board of directors.
Judith will join Us effective September onest.
For skills and metals and mining banking sector are complimentary to those of our existing board members and we look forward to her insights.
This timing is consistent with our ongoing board succession plan.
I also wish to welcome Sam Houston, as our VP capital projects and engineering.
Sam joined US in Q1, 2020, and is responsible for strategic oversight of our capital projects.
Sam has extensive experience in global global Mega projects from across diverse sectors, including mining oil and gas and infrastructure.
In conclusion, I want to emphasize the turnaround that Phil mentioned earlier.
I believe that the groundwork laid throughout 2019 continues to payoff.
Yes. It was back on track Olympias is showing signs of consistent improvement.
Mark is firing on all cylinders.
And if into grew continues with reliable steady performance.
This is reflected in our strong share price appreciation over the past 12 months.
With our solid operating performance several potential catalysts in Greece and come back.
The balance sheet that supports near term growth.
And our energy and drive to execute.
We are well positioned for a period of sustained value creation.
And combined with record gold prices.
Held off Eldorado offers a compelling value proposition.
Thank you everyone.
I will now I'll turn it over the operator for questions.
Thank you we will now begin the question and answer session to join the question Q You May Press Star then one on your telephone keypad, you'll hear a tone acknowledging your request. If you are using a speakerphone. Please pick up your handset before pressing any keys to withdraw your question. Please press Star then too.
We will pause for a moment as colors join the queue.
Our first question comes from Cosmos Chiu of CBC. Please go ahead.
Hi, Thanks, George Phil and Joe first off congratulations on a very strong Q2.
Maybe my first question is on the Mack good to see that Youre ramping out well after the qubec and mandate a shutdown.
Joe as you mentioned, the Oklahoma capacities 5000 tonnes per day potentially.
Could you remind us like you if I look back historically that the mill ever do 5000 tonnes per day with the old timers, and what do they need like what would you need to do to that mill.
Got it up to that name plate capacity, because if I remember correctly. When I was on site. There were some idle leach tanks. You know certainly there was some rod mill that were idle as well would you need to bring those backend and is that what you need to get it up to 5000 tonnes per day potentially.
Well I'll I'll answer and then maybe ask.
George for will help I think I think the first thing we need is.
The resource on which to to build that and that is ongoing through exploration as I mentioned both.
Within the land package.
And this decline figures.
Considerably into that.
Predominantly I think would be a grind.
Addition would be number one and then certainly downstream.
I would be additional retention at those at those rates, but.
George do have a better flavor for the requirements in the middle of 5000, Yes, I mean, the plan did historically do 5000 tonnes a day that was back in the area, where there was an open pit to supplement.
Underground or.
And it had a sag mill in the circuit at that time prior operator sold that Sag mill. So as Joe said, we need additional grinding capacity to push the plant to that level and thats part of the engineering work that's happening this year, we completed in second half.
And then I think Joe hit the nail on the head the big issue is really not the plant its get the grinding in there and then and then retrofit more of the tanks more of the leach tanks. So.
And we've we've guided an estimate of around $50 million to be able to do the the upgrades to the plant to get to that 5000 today level and we're looking at alternatives to scale up incrementally rather than in one.
One one push so that works on going and then.
In terms of where the feed would come from that's that's really the strategic work that continues with Peter and our exploration group.
For triangle itself, we've got a permit now to 26 50 tons per day, and we're already executing a ramp up in development and production from underground and that's going to support ramping the production up from the original.
Maiden Reserve and mine plan of 130000 tons, a day up to 150000 tons a day over the next couple of years.
And beyond that as we continue to convert resources to reserves at depth.
We will continue to assess what the ultimate potential is for triangle itself.
And in parallel with that we're we're continue to explore on or Mark we've got parallel and plug for all offing opportunities for additional fee to the plant.
And then.
If you think about this property package.
Nearly 10 million ounces produced with two underground mines, one of which is.
Try and was a lookalike to those two historic mines.
So when you think about after decades of mining.
New discovery of lookalike deposit occurred so we think that potential still exist on the property we have some.
Very good exploration targets that were working on and and so that offers the opportunity we continue to look around.
Brought our existing property for other opportunities that could be used to.
Amp up production to that potential 5000 today.
And.
Thanks, very thorough answer and then on that.
You talked about studies coming go in Q4.
Ill underground crushing potential conveyor system potential.
Along with resources and mill expansion.
Should we expect how does for a Mac kind of fit and because I think you mentioned that as well and that's that's one of your new targets that you've targeted high grade how does that financial we could we expect a resource coming out with along with that Q4 study and then could you remind me and in terms of historically what was that.
Version rate.
Say resources into reserves.
Tonight I'll start with that first the.
Inferred resource to reserve conversions spend around 80, 85%.
So a pretty good rate, we think that that's sort of conversion rate will continue as we continue to drill deeper.
Okay.
And then in terms of our market. So we're still in sort of trying to define the limits of this new exploration discovery. So its step out drilling primarily.
And I'd say the risk resource modeling our geologists continue to to look at it it's a it's a bit different than most of the mining that's happened in the district gets of these are flatter flying veins and they're fairly high grade relative to the current reserve.
So I can't give you a clear indication and when we will have the first resource yet.
In terms of the way this will unfold hopefully this year, what kind of define the overall size of the deposit and begin to do some some more detailed drilling to support the modeling efforts and then the decline really factors into this once once we get this decline done.
And we'll be able to do drilling from underground to kind of accelerate our understanding of the deposit and.
Eventually hopefully converted to reserves. So we're optimistic about all that and maybe one more key thing is as I mentioned this is a flatter lying ore body, maybe Joe can talk a little bit about the test mining that's underway that.
Potentially could be deployed in this type of deposit.
Thanks George.
I think we mentioned it before we do have a mineral tests going on at the Mark that.
We kind of did the investigative work and.
Movement of the equipment to tumor mock late in 2019, and then in Twentytwenty.
Began to set up of.
So we have.
Installed min rail we have driven.
50 plus meters.
Using the equipment and have kind of set it up nicely for a test it works well in that.
Those flatter lying.
Or veins roughly in that.
20% to 40% or 20 to 40 degree dip angles.
It's a bit like a horizontal or semi horizontal Alan Mac and with attachments that work off the front for drilling.
Scraping.
Or slashing type.
Or recovery.
And so we'll we'll be providing more information as Q3 goes on and we kind of test the economics of it and what kind of.
Resource will need to make an economic.
So far though I can say that from very favorable point of view.
The safety aspects of the men rail or are quite good and.
Oops us from.
Exposing ourselves to any and supported grounded.
I think so we're optimistic and more information to come as the quarter moves along.
Of course, and no just to confirm I guess George on maybe Joe you don't really need a resource on lower AMAG to make a decision on this underground crushing and conveyor system or mill expansion do you.
No I mean, our studies this year are really based on triangle, and obviously anything we add to that will be a supplementary benefit.
Yes.
One last question, if I may turning to kill stood out quickly here.
I think in a previous conference call, we talked about the fact that you know I think stripping at that point in time was a bit slower and if it continues to be slow into the summer months. It could have longer term impact in terms of the 15 year sort of mine plan over the near term you know the 15 year mine plan.
I just want to know you know you did about $7 million and stripping in Q2 is the mining rate and stripping at Kisladag, where you want it to be to prepare you for that 15 year mine plan.
So so presently we are back to very close to budget levels for stripping.
And we'll close that gap.
GAAP completely.
In Q3.
Yes, we because as we've looked at.
The different pit options going forward.
We don't see that.
The short term stripping deficit in Q2 is going to impact us this year or in the five year plan and then for that matter even life of mine, it's slightly different scheduling but.
We see no impacts at this point.
Great. That's a that's great to hear congrats again on a very good Q2 and have a good long weekend everyone.
Okay. Thanks Cosmos.
Our next question comes from Kerry Smith of Haywood Securities. Please go ahead.
Thanks, operator.
George Great quarter, I think that you guys are definitely well in this company in the right direction. So congratulations so just a couple of things one the the mill upgrade study that you're doing in Q4 that will be for the 5000 today right correct.
Yes, it's 5000, what we're looking at other incremental opportunity. So it's it potentially is a staged approach as we continue to.
Expand reserves and and find additional feed for the plant.
Right, Okay Gotcha, and then second question on the Perama Hill.
Steady that you're working on that you talk about releasing Q is that timing Q4 as well.
Yes, it's also tracking for the fourth quarter.
And what are you doing there just updating the old engineering or you're not getting the mine plan or it's just.
Trying to wrap some new economics around that project.
It is a bit of a redesign happening so the pit looks to be a bit bigger the.
We've kind of.
Optimized.
The plant infrastructure, so some I'd say, some modest improvements and basically updating it for.
Current environmental standards being prepared than the.
To to submit the revised EA.
Okay got you and then just maybe the last question if I could what what are your sort is your current sankey on key said.
Are you thinking to maybe update the economics that you did in the feasibility obviously the economics.
That are today versus.
You had back when.
Did that steady.
I mean, the studies pretty fresh so really it is higher metal prices and FX rate changes that that impact valuation and obviously those are numbers, we have in and articulating with prospective.
Acquirers.
Okay. How are you still thinking to try and sell that property.
Plan.
Well the way I'd characterize it is both our remaining in Brazilian assets are viewed to be noncore and if we found the.
A reasonable offer.
That's in line was strengthening our balance sheet and supportive of our focus on growth elsewhere.
Okay got it that's great. Thanks, very much and congratulations again.
Thanks, Eric.
Our next question comes from Tanya Jakusconek of Scotia Bank. Please go ahead.
Hi, Good morning, gentlemen, can you hear me.
You can.
Okay Brian.
Good morning, I asked that three questions.
I guess two I can get to fell and then the last one for you John.
So maybe you can we start my note that we have reconfirmed.
The guidance have production that all in sustaining cost and cash costs can we talk about the capital.
You did mention that capital is going to be higher in Q3 can you me kind of review what the capital spending this year and that's how it goes into Q3 Q4.
Sure John Yes, So I think the capital in Q2 was just slightly.
Lower than what we spent in Q1.
And I think in terms of overall.
Below the rate.
If you if you spread it over the whole year, but I think we're still we're still on schedule for our guidance for the year.
With indicate.
Higher higher higher rate of capital spending in the second half.
It all comes on the timing as well.
It comes there is certain projects that have perhaps been slightly impacted bye bye.
By the.
For example, covance and them off with the with this with the three week shutdown in in March and April.
But we continue to move ahead and I think we're confident that are our guidance on the capital will remain for for this year.
Okay can you remind me your capital guidance for this year on sustaining and development.
Yes.
Sorry, I'm, just I'm, just trying to pull up the number here. So one SEC here so.
Guidance for.
Sustaining capex.
So it was built.
I have the number maybe.
Sure sure extra so.
On its 101 to one fortify on.
Under the development capital and one on one of five to 125 on.
Right.
Gross.
For sustaining excuse me.
Okay. So I got these correctly did you say 105 to 125 far sustaining capital.
Correct.
And then site development capital that you say why now one to 145.
Correct.
Okay, and then just the key items on on that that development capital just remind me.
That makes it a Mac is then there.
I am access in there.
Kisladag.
And.
Those are the two helped parameters.
Okay, well that hasn't changed from the beginning of the yellow check on the passionately. It's just make sure what going with that and maybe what I can then lead on can't sell let's just talk a little bit about ERM.
Capital allocation and maybe I'm charge on for John Pen noticed that you use that does see time, yet ATM to buyback senior secured note how should we think about all of that free cash flow and other sites have cash that that tier dining and cameras that allocation kids you know the pipeline probably all right.
Okay and are there other sources that.
I I am when you stand on a dividend maybe would be another question.
Sure I think overall.
Our capital requirements.
For the year and going forward averaging about it.
I think as Joe mentioned, just in growing 100 million for sustaining and our growth capital requirements limited to pre stripping at.
At Kisladag, which is around 260 million over five years.
The HPG our project at Kisladag, which is about 30 to 36 million, which.
Is manageable and then we have the decline project that Lamar.
That was recently announced.
That's about 2020.
25 million most of that will be funded through flow through financing so that won't impact our liquidity.
As much so I think a lot of our capital moving forward Tonya is quite manageable.
Focus still.
It's still focus on Delevering the balance sheet is.
In terms of what makes sense, we do in terms of the equity Clawbacks on a senior notes that is our highest cost debt and as a 9.5% coupon. So the focus the opportunity would be.
The the provision in the indenture and the proceeds from the ATM allowed us to do that.
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So and I think going forward, we still have uncertainty in terms of future potential impacts of coal bed. So we want to maintain strong liquidity on our balance sheet in light of that so.
And.
If commodity prices continue to be high we will generate significant additional free cash flow and we will.
We will assess our our use of those funds at that time.
Okay.
Specifically on your question on perhaps a dividend.
I think.
I think we're focused on getting our debt.
Dealt with first and we also have opportunities internally to to grow our portfolio. So that all is taken into consideration.
We will continue to look at that as we move forward.
Okay. Thanks.
Hi, but what I decide that the ATM and how you're using that we should kind of think about it and that way in terms of helping you looking at that is that a good way to think of that.
Well I think because the way the.
The way the equity Clawback provision for the industry's work is the window is only 120 days, leading up to the redemption date.
So.
We.
We managed to raise.
Sizable portion of the ATM in Q2, it fit that 120 day window.
So thats how that fit together okay.
Okay. So salt Lake we can just.
Take take additional ATM and increased that amount. It's it is limited to 120 gateway.
And then capped at a 25 million. So we can retire a little over a third of the entire original high yield debt and.
Obviously, we made one big step Q2 that now in that direction.
Okay, and just said that I I understand all of your big capital needs.
George that's.
Kind of hit to you and your conversations that you're having with that the great. Kevin that that's just the that I have that the capital correct. I think we had talked lastly that scoring is like require another 700 million to tweak or thereabouts and I think Perama Hill away then the 200 250 million area.
And then it appears like Mackie and I'll leave Dot com.
The 25 million to the decline, which is being down the 50 million in terms that you know increasing the throughput to 5000 timing.
And then we've got the underground you know I'm crushing and conveyor et cetera should I look at that like in the hundred 150 million total as I said that you know excluding says add about him capital is that a family of looking at that one.
It is I mean.
Today, we look at Laclede, we're committed to the decline it brings the benefits advantages we discussed on this call.
You've got the 50 million to get to 5000 tonnes, a day, but to be realistic, it's probably going to be a staged approach to further expansion that will unfold as we are successful in exploration. So that timing I think is going to be spread out a bit.
The underground crusher and conveyors around another 25 million.
I think we'll have some clear insight by end of this year when's, the right time to make that investment and that might come sooner rather than later and then the last opportunity is around tailings. We're.
We're a company that deploys dry stack tailings pretty universally with exceptional a mock and we've been working on permitting and engineering studies on how to bring that asset in line with the rest of our assets and in a big paste backfill plant is is the.
The likely scenario.
Where we put much of the tailings underground as backfill that'll help us as we get deeper with higher quality backfill and then any excess potentially would be put as is cemented backfill in the old segment pit. So those studies are continuing and that one's not urgent we have.
Plenty of capacity in the existing down which has been buttressed with an enormous amount of waste rock.
But.
That's probably.
An opportunity down the road away a ways and it's it's also in that.
50 million dollar range. So if you add all that up.
It is not going to come as one bullet, it's going to be spread over say the next five years.
But thats strategically what we're thinking at this point NASA that comes about 150.
All right. So we've got scoring is about 700, and then Perama Hill at 200, and then that's one.
Now for five years at about 150.
Would that be fair on the capital capital for these projects.
That's correct, but but again we're focused on.
Bringing in joint venture partner, Yes partners to fund the Skouries and Olympias expansion. So.
Won't need to necessarily come off our balance sheet, and having a strong balance sheet positions us well for those negotiations and making the right strategic decisions for our investors.
And I think that they Atlantic expansion was under 50 million right.
Yes, we're estimating 50 million on that that engineering works ongoing this year as well okay. So maybe that's getting just if I could my final question I was really about do you know where are we now have come back to the table with the great. Kevin that meant it may be just said that a flavor of in Atlanta, we are on on that on these combo.
Patients on what are the focus.
Well again, I'd say, there's good alignment obviously for us getting these high quality assets built and generating enormous free cash flow is strategically important to us.
I'd say for Greece.
Given every.
Every country around the world is dealing with economic impacts from Covidien.
There is no end in sight from from that being eliminated so.
I think the opportunity is right for for both the government on us to hammer out the a mutually beneficial agreement and to get these investments moving so I. Just described we've got good progress going on the permitting back at the table and I think it's a good environment to get it done.
Yeah, it looks like the permitting it yeah, you thought those additional permits drilling how is the investment.
Hi, guys that coming I know we had top.
Originally about Tom you got the updating that that portion and having an arbitration clause in there and how that aspects that you've talked about on conference calls how are we proceeding on that right.
Is it slow right I mean, I don't want to get in.
Yeah, I don't want to get any details obviously, there was a bit of a slowdown during during Q2, we were.
Heavily focused on protecting our people in the health of our business and the Greek state like every jurisdiction was focused on.
Ensuring they could control would spread as best they could so you know.
We didn't get a lot done in Q2, but we all I can tell you is we're back at the table on I think both sides are committed to get this done.
Okay, all right well good luck with that Ken Thanks, a lot everyone.
Thank you.
Our next question comes from Josh Wilson of RBC capital markets. Please go ahead.
Thanks a.
A quick sort of single one for me I was looking back at the notes from the site shore last year and I guess, there was a couple of interim resource update to our expecting further Mac mid year later in the year and and obviously, there's been except with the exploration front with their Mac and then also.
The impact from from.
Drilling just given given now given coated.
In terms of I guess, which components of the resource are going to be included in the next resource update just to clarify that wide could you review, which is that the veins sets are going to be incorporated.
And.
I guess, what the timeline for that are.
Sure. So I mean, we're in the middle of updating resource models and moving that through engineering and design. So we're expecting this to be another good year in and.
Version of inferred resources to reserves.
And that work.
With our annual planning cycle, we get that done.
Late in the years to support our budgeting process. So that work right in the middle of all that work now anticipated to be a solid year and that will offer additional reserves to supports the expansion.
Scenarios that were looking at so and then in terms of where where's are good progress going to be well, it's deeper parts of triangle, So for C and see five.
We've been doing infill drilling to be able to do conversion.
And expect to have a.
A nice bump up this year to support the studies that are underway.
Okay and again.
We're still in trying to define the size of the resource so.
We're not of the state where we have a model that we are confident about to.
And I don't think that will happen this year is likely texture.
Okay and then.
I guess.
The seven some of the deeper flex.
She can is there any chance that we'll see those maybe other inferred category there.
Yes, I mean are our exploration focus is on C. six and see seven so.
We are growing as we speak and we'll see.
We're definitely seeing an increase in inferred resources on that that area.
Okay, great. Thank you.
Thank you Josh.
This concludes the question and answer session I would like to turn the conference back over to Mr. Burns for any closing remarks.
Well a big thanks to our entire team was a solid quarter, we continue to build on our success from last year and.
And we're optimistic that we have a number catalysts in front of us and.
Look forward to updating everybody next call. Thank you.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
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