Q3 2020 Ero Copper Corp Earnings Call
[music].
Thank you for standing by this is the conference operator, welcome to the air copper third quarter, Twentytwenty financial and operating results conference call.
As a reminder, all participants are listen only mode and the conference is being recorded.
After the presentation, there will be an opportunity to ask questions.
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I would now like to turn the conference over to norm.
Executive Chairman of Air Copper. Please go ahead Sir.
Thank you operator thank.
Thank you and good morning, everyone. The news release announcing arrows third quarter results is available on our website I don't see doll.
<unk> financial statements and then DNA for the three and nine months ended September Thirtyth 2020.
As usual, we will be making forward looking statements on this call that involve risks and uncertainties concerning the businesses operations or financial performance of the company.
We would refer you to our most recent is also available on SEDAR.
For a discussion of the risk factors of our business and that potentially impact on future performance.
Unless otherwise noted on this call all amounts are in U.S. dollar sales.
Joining me on the call today.
David strong arrows co founder Chief Executive Vice President.
Wayne dryer.
As Chief Financial Officer.
For the <unk>, Vice President corporate development.
As our results have demonstrated this was another excellent quarter for the company building on a strong foundation from the first half of 2020.
Our operations have continued to achieve new quarterly records for operational and financial performance culture.
Contributing to the most consistent quarter on quarter improvements in key corporate level financial metrics.
More importantly, third quarter results are yet another reflection of the shack commitment throughout the company.
An organization to keep our employees contractors that families.
Local communities safe during this period of COVID-19.
Highlighting these aspects on September Thirtyth, we celebrated one year.
Without a lost time injury MSC M.S.C.A. operations. Despite many challenges associated with mitigating the impacts of COVID-19.
Wow, you case counts moderated in Brazil during the third quarter from the peaks of July and August we.
We remain vigilant and continue to implement extraordinary mitigation efforts at sites to ensure continuity of operations.
Year to date, we have contributed approximately $1.5 million to local community relief, an onsite COVID-19 mitigation efforts as a result, they did by the hard work and commitment of our in country colleagues. We continue to experience no disruption to our operations supply chains <unk> sales channels to date.
From a financial and liquidity perspective, we saw a noteworthy improvement in our working capital position as well as a reduction in net debt relative to the second quarter.
Ended the period with a significant improvement in our cash position despite paying down several short term lines of credit during the period.
We continue to remain in excellent shape as a company well positioned we love as it had to navigate any uncertainties associated with the current macro environment.
We achieved another quarter of record cash costs during the third quarter benefiting from the ongoing currency tailwinds.
While the Brazilian real remained weak relative to the U.S. dollar during the quarter.
A significant decrease in volatility of the underlying currency is lessened the noncash impacts on our earnings and working capital during the period.
We closely monitor that have continued to settle some of afford dated FX option contracts as well as opportunistically roll a portion to the future in line with our overall strategy for managing currency volatility, which is designed to protect the business in the event of a rapidly striking Brazilian reallocates the U.S. dollar.
More specifically, we continue just the emphasis and the weak Brazilian real if we continue to see a specific consistently weak Brazilian real our underlying business will benefit and we will continue to settle a portion of our existing contracts on the other hand the.
The export driven Brazilian economy is likely to benefit on a relative basis at the first signs of sustainable global recovery as we come out of the COVID-19 period.
We are focused on ensuring our business and profitability are protected getting so rapid strengthening of the currency.
With that I will now pass the call over to David to provide a brief review and update of our operations and then Wayne will provide a review of the company's financial performance.
We will all be available for questions immediately following the call.
Thank you know.
Following up on what no mentioned, our Brazilian colleagues throughout this entire year frankly have demonstrated their resolving keeping operations safely.
Managing and mitigating the impacts of current my team.
We achieved that this quarter of reaching one year without having a loss time injury M.C. I say.
Testing milestone for the company and we are incredibly proud of the efforts throughout the organization that went into improving upon our safety performance and setting new high bars operational excellence.
Implementing improvement initiatives once made all the more challenging would be on sales cope with my team.
And again credit to all our frontline workers Supervisors senior lead leadership, many of whom are listening on this call for making this possible.
Focusing on operational highlights and outlook for him to say operation grew its all done first.
Operations continued to perform well throughout the third quarter, we produced 10961 tons of copper in concentrate.
In line with second quarter performance and our year to date results continued to track on guidance.
During the period, we milled 553148 tons of ore grading, 2.18% copper and achieved metallurgical recoveries of 90.8%.
Decreases in tonnes mined and processed during the third quarter were more than offset by a 10% increase in grade and an increase in recoveries relative to the second quarter.
Strong quarterly performance was driven in part by contributions from the mass my with 222, excuse me 227963 tons grading, 3.76% copper mine.
[laughter] same quarter on quarter improvement in grade mine.
Mark 375296, comparable where mine grading 1.36% copper.
In line with the first and second quarter of 2012.
As Neil mentioned, we achieved a new quarterly record with respect to see one cash costs of 63 cents per pound produced reflecting continued operational performance currency tailwind.
Improved byproduct gold and silver prices.
Year to date in 2020, C., one cash costs have averaged 66 cents.
Pound of copper produced.
We are maintaining our 2020 production guidance for core itself on the operations of between 41040 3000 tons of copper.
Teaming up previously revised see one cash cost guidance of 70 to 85 cents per pound copper produced.
Given the strong operating cost performance year to date, we expect full you'll see one cash cost to be at the low end or slightly below this range.
Similarly, we are maintaining our previously revised non exploration capital expenditure guidance range of $56 million to $68 million.
We have increased our full year exploration spend by approximately $5 million to between 25.
All it to reflect continuity and expansion.
Excuse me our ongoing go programs and the crews some downward through the fourth quarter.
As we now look to prepare broke about operations for extensions in mine life, we expect full year tough dual to fall at the high end of our guidance range.
Most of the growth projects, we set up to deliver this year and even now being completed or remain on track for completion prior to year end.
Among others. This includes the installation and commissioning of our high end and the grinding built big mill, which was commissioned in mid September.
Well based on preliminary data and feed and control system integration work remains got ongoing.
We achieved 92% recovery during the month of September.
A monthly record for us this year and certainly a strong leading indicator as it relates to improving recoveries.
And stabilizing overall no performance.
In late September we completed the test work about ore sorting trial campaign.
Excuse me successfully demonstrated excellent upgrade rate shows a minimal couple loss can be achieved a commercialized remedies.
As a result, we fully expect this technology to be an integral component of our efforts to further optimize our production portfolio across the various operations were critical about.
We currently view the males District, that's the most logical place to integrate ore sorting operations due to the results obtained in pets were combined with expected savings trunk pension costs.
Our 2020 resource reserve and life of mine plan update try and see a say operations continues to remain on track who completion prior to year end.
One of the primary near mine exploration objectives in support of this effort was to undertake an aggressive drill campaign focusing on the high grade.
Extensions on the bottom line.
This program started in earnest around this time last year during our analyst visit and we continued to be extremely pleased with the exploration results and progress.
Engineering and mine planning over the past 12 months.
These efforts have effectively taking this project from concept to nearly completed engineering studies Mds Huh.
Well the cut off date for this years report has caused drilling of the zone remains ongoing.
Moving from surface using directional group technology.
When balancing all sectors, we see this project, it's having considerable potential not only usually.
Extend the life of the plus or minus but.
But certainly carries the potential to expand production volumes.
Engineering work on these folks as well advanced than we expect to provide further details on these plans in the fourth quarter.
Throughout the course of Valley. We currently have 26 drill rigs operating including those allocated to the deep link extension, though.
Our exploration focus during the fourth quarter can be summarized in three areas.
Continues to demonstrate dump lunch high grade continuity within the deepening extensions, though using directional drill technology from surface and underground.
Two.
Aggressively target a recently discovered mineralized zone between the medicines are worried about the positive.
Results today within the song, which extends approximately 700 meters on strike length suggests that multiple step high grade lenses, maybe Chris.
And three extending the breadth in part two of our regional exploration camp.
Campaigns throughout the crude so badly on select parts your target.
Which we continue to remain very excited about.
[noise], consisting with L. scheduled quarterly updates results from our ongoing exploration programs will be further detailed in the upcoming exploration update which we typically released four to six weeks following up commensurately.
With respect to ongoing exploration activities and improvement projects.
Relative to conduct multi element analysis in house is now complete and daily sample volumes have reached steady state.
In accordance with our schedule and best practice, we've implemented the standard Carla.
Quality assurance quality control program used to using third party lumbar trees as required to ensure a calibration of the equipment.
And to ensure consistent and reliable say results can be obtained.
We expect this addition to our liberty to significantly reduce cost and turnaround time time Platinum group metal. That's a result in the future.
But the Nx gold mine production during the quarter totaled 9436 ounces of gold.
5736 ounces of silver.
I wouldn't know feed of approximately 41749 tonnes grading 7.64 grams per ton gold.
After encourage metallurgical recoveries of 92 cents.
Well go production mill throughput and recoveries continued to improve quarter on quarter, an area of the sentence O'neill Dane we expected. The mine this year <unk> sub optimal ground conditions that were required and enhancement of our inherited ground support capabilities in order to pick the mine.
Since encountering this own opinions act quickly to implement characterization work injury excuse me and engineering studies for the installation that implementation of a small modular peaceful pump on site.
Well the modest investment of approximately $2 million, we view this as a significant first step in securing long term production stability and extending the life of mine Pernix gold.
We fully expect the implementation of peaceful will allow us to not only recover the area. We had been tend to combine this year.
Later in the mine life, but allow us to improve overall resource conversion than mine recovery in the future.
We expect to incorporate these plans until 2020 resource reserve life of mine plan Annex gold, which also remains on track for completion prior to year end.
Well longer term, we expect a net benefit as a result of operational changes and re sequencing in 2020, we have lowered our full year guidance for next go to between 36 and 7000 ounces of gold.
Increased our non exploration capital spend by approximately $2 million between nine and $11 million.
We are maintaining our previously revised view on cash cost guidance range of between 425 and $525 per ounce.
Unexpectedly in the law for this range.
Your despite lower production guidance.
Who your exploration expenditures.
<unk> increased by approximately $2 million to between three and $5 million as we continue to grow exploration footprint and then.
Next gold through the fourth quarter.
With that I will now pass it over to Wayne, who will provide an overview of the financial performance.
Thank you David and good morning, everyone.
Echoing what has been said previously by Nolan David.
At quarter of Twentytwenty was simply an outstanding one for the company.
Quarter on quarter sales volumes were up 9% and 17% for copper in concentrate and gold respectively.
Attributing to a record $94.3 million in quarterly revenue, a 33% improvement over the prior period.
As mentioned, we achieved another great quarter with respect to see one cash costs across our operations.
Impressive quarterly revenue paid with these low operating costs contributed to another record quarter of cash flow from operations and adjusted EBITDA totaling 44.4, and 62 and a half million dollars respectively. During the period.
Quarter on quarter improvements in the company's consolidated financial metrics continues to be underpinned by the strong operating performance.
Real exchange rates and increases in underlying commodity prices.
During the first nine months of 2020, adjusted EBITDA totaled $138.4 million exceeding our full year 2019 number of $134.1 million.
This performance continues to speak to the growing strength and profitability of the business.
As norm mentioned, we did continue to benefit from the sustained weakness of the Brazilian real against the U.S. dollar.
While the reduction in underlying foreign exchange volatility did lessen the impact of non cash adjustments on our third quarter results.
During the period, we recorded approximately $6 million in actual losses related to the settlement of maturing foreign exchange contracts.
The non cash adjustments included a further 1.1 million and unrealized foreign exchange derivative contract losses based on the fair market value of these contracts expire September thirtyth versus June thirtyth.
And a further 2 million related dollars related to the translation of our U.S. dollar denominated debt in Brazil, as a result of our functional currency being the real.
Oh headline net income for the quarter was $31.1 million or 34 cents per share and after adjusting for the non cash components of the foreign exchange loss.
The net income was $36.7 million or 40 cents per share fully diluted which much better reflects the performance of the underlying operations.
The strength of our balance sheet continues to improve quarter on quarter. The company's total cash position at quarter end was $54.3 million compared to $51.6 million at the end of the second quarter.
Increased sales volumes and rising commodity prices also contributed to a significant 16.3 million dollar improvement in our working capital position as compared to the prior period.
Increases in accounts receivables at quarter end were primarily driven by increased sales volumes timing the timing of the sales and a modest positive provisional pricing adjustment at the end of the quota.
The company's net debt improved by 12.5 million quarter on quarter, primarily as a result of the repayment of certain short term lines of credit at withdrawn during the first quarter of the year as a precautionary measure.
Repayment of these lines reduced the current portion of loans in borrowing by approximately eight and a half million relative to the prior period.
In summary, our business continues to run extremely well and generate significant free cash flow, particularly at prevailing metal prices and foreign exchange rates.
On that note I'll hand, the call back over to know for some concluding remarks.
Okay. Thank you Wayne.
Our performance year to date can be summarized as follows one.
Proactive and ongoing efforts to mitigate the impact of COVID-19 or operations.
<unk> prioritizing the safety and well being of our colleagues contractors in local communities.
To continue advancement of key growth projects and objectives.
Including on the exploration and mine planning fronts in.
In spite of challenging conditions.
Three exceptional operating and financial performance across our core business.
Boasted by ongoing currency Tailwinds.
To reiterate what David mentioned earlier.
We are looking forward to the completion of our 2020 results reserve and lot of life of mine plan updates of both M.C.S.A. on index gold.
Which we expect to incorporate Willie Cobra at many of the objectives, we set for ourselves this year.
All of which have progressed largely on schedule.
Thanks, very much for joining the call we will turn it back to the operator to open the line for questions. Thank you.
Thank you we will now.
The question and answer session.
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Yes Colin.
Our first question is from <unk> <unk> with BMO capital markets. Please go ahead.
Thanks, very much congrats on a great quarter, guys I guess I just wanted to circle back with a with a comment made by both mobile and win in the in the preliminary remarks your balance sheets in great shape.
And as a result, I'm still kind of.
No I understand why you're holding.
Cash strong from your credit facility I know initially a lot of companies did that she.
[laughter] preserve liquidity.
During the first or early days of the Covance pandemic, but most most other companies are repaid that can you give us some thoughts as to how long you might hold that for and.
And so what that liquidity needs are that you are holding that far thanks.
Yeah, sure look where can.
Sales of bunch, you know we live in uncertain times as we know from what's going on south of the border since the election.
So you know we're paying things back progressively could we do it all today, yeah sure we could but we just set up well why don't we just wait and see what happens and Oh well go from there I think thats just generally this just all mindset, we like to be conservative both.
You know in terms of size you have commented on in terms of our.
Projections or expectations for the year, but also in terms of how we manage our liquidity.
Great.
Huh.
No I think I think got a notice it very well Jackie I think you know we we all we watch that very closely our cost of borrowing is extremely low given our leverage ratios. So the holding cost all of that as you know is immaterial in the scheme of things and so you know when you sort of match.
Set up against the uncertainty has now put a generic wasn't that long ago. When the world was a very was a very uncertain place. So you know I think we'd like to see <unk>, you see a little bit more stability in the way in the world in the markets and and absolutely. Yeah. We will we will continue to sort of <unk> work to bring down the lines of credit.
When we feel appropriate.
So just just I guess hopefully not to be the labor the point, but there's no immediate liquidity need that you're anticipating this is just a just a conservative approach just given what's going on.
Correct that's correct.
And I guess just.
All right.
I think Uh huh.
[laughter] different question then.
I eat you put them.
Really good looking now resolved.
This is Jerry mine and potentially the lenses that might might move across towards somebody else. I think can we expect to hear more about that or can can we expect to see that wrapped into the life of mine update that might be coming out later this month.
Our next question Jackie.
It's too soon.
You know we have now moved I believe we now have six rigs.
Onsite between Oh, I'm, asking sort of every month.
And we're now going to systematically drill that zone out Ah.
Like we did it was as we mentioned on the call are.
Deepening project last year, when we were ultimately quick five rigs done them deepening project and have now drilled zoom out then you tend to see here to try and do the same thing to be in a position hopefully this time next year.
To conclude.
Resources from the news on into a life of mine plan cyclical.
Okay. That's that's helpful and I'm just just really quick one last question for me.
You normally put out.
Yeah, our exploration update me about a month after earnings come out but that feels.
Feels like that's kind of around the same time that you're thinking about for the life of mine updates I just don't I just want to understand are you planning to put out both at age over the next month or so.
Yeah, Matt this is going to be very very busy and so [laughter]. We have both a the update to the 43, one to one for the crew So valley.
The update to the 43, one or one point onex gold along with our normal exploration a quarterly exploration update that will occur I think towards the latter part of <unk>.
This month going into December.
Got it Yeah I was just I was just not sure. If you have a new still do the exploration update you can give any other update that's coming out but that's helpful. I know pass the baton onto somebody else. Thanks very much.
Our next question is from Rafael this it was that we'd see Ibcs. Please go ahead.
Hi, good morning, Congrats on the strong quarter guys.
I had a quick question on the meadows. So despite the strong see on cash cost for the quarter in local currency you reported an increase in mining costs.
Just wondering what to expect going forward in terms of like that number in Brazil and high.
With regard to that right now it's that number bounces around on a quarter by quarter basis due to the allocation.
Development costs between operating development capital development.
So where do you see a slight increase in costs in the quarter or that is more likely more reflective with respect allocation Uh huh.
Well the development than anything else.
Operations, there on a month by month basis in terms of our normal operating we have not seen any real deviation.
In costs at that mine a month to month with respect to the direct operating mining costs.
Okay and just.
Then changing gears a little bit so I saw the proper can cause also increased a little bit on Brazilian high therms or any comments on that as well.
No again, it's a <unk>, it's the things will jump around from a quarter to quarter basis, I think you need to in terms of how you look at our cost you have to look at on an overall basis on a on a could come basis over the year because both.
You also see similar situation that large as well, where we have this allocation between capital and operating development.
So where it wouldn't view and that is not a its.
It's not a fixed variable between the two in the month by month quarter by quarter basis, sometimes we do more a couple development, sometimes we're doing more operating development on a particular quarter.
It just jumping around like that but as I said so.
From an operating cost perspective are we haven't seen anything go at good there's obviously, a little bit reflecting ER from some material of metal prices the U.S. dollars.
Particularly on on the maintenance side of things, where we have seen those costs increase you rehash times because the direct.
Correlation over or with regard to the pass through in terms of the pricing work, but.
In general we haven't seen anything that has shown that that does change.
The reaction operating costs.
Okay, Yeah, I mean, I understand that I would have expected the allocation to the <unk> impact the mining cost not necessarily the processing cost, but what okay. And then just on a different subject. So you came out with the ore sorting plan a result, and I believe your plan going forward is to focus.
Hopefully on on that and they do and then the impact that the transportation costs, but do you have any like do you have any comments were open to that because I believe that this was your initial goal with this project correct.
When we talk about the the mail if we talk about with the mass district.
And when we look at Ah Ah. So when you look at remains don't necessarily I.
I would take that to the mass mine.
But rather look at it in terms of the.
Oh sorting working with regards to the various open pit.
Reece open Pittable resources that we have in the the mass district, that's really where we're looking at right now that are using or sorting technology.
Okay. So then he can probably use that to upgrade like an eight or nine like that no.
Exactly exactly exactly that's really where our focus is right now.
Okay fantastic well. Thank you. Thank you again.
Thanks.
Our next question is from Stefan that you are now with Cormark Securities. Please go ahead.
Yeah, great. Thanks, guys and congrats congrats on the quarter I'm just it's just curious obviously with the exploration you know getting the the third of full Q4 budget into the into the mix as well and a shift to regional exploration. This quarter. Just wondering a is that a theme I know you haven't heard you set your formal guidance your budget for next year, yet, but it's not going to be a theme that carries into next year as well or will we see a sort of a.
Revert back to near mine exploration for the first part of next year as well I'd anticipation of the subsequent mine plan update or just can you give a bit of color that are you gonna stay focused on that regional stuff going forward for now.
<unk>, Yeah, we reach regional it's always an important part of the project and everything that we do in terms of the.
The development of new resources in the district, and as we pointed out I.
I believe in this news release, we still are focused on these four or five areas.
In the district right now we're still very encouraged by what we are doing that in terms of the work and so we see no reason to really get out of those areas in terms of the regional exploration program until we have truly understood what's going on there obviously.
Obviously as I highlighted here there is a big focus now on drilling between Syria, <unk> and <unk> and <unk>.
And you know allocating six drill rigs to that program there as well and then we will continue how many rigs we're going to be using with regards to the deeply project.
In terms of ongoing drilling there is still being worked through in terms of the budget.
But we will still also continue to drill and continue to expand and drill up to the deepening project as well. So those are the three sort of main focuses.
In terms of exploration, but regional is a very important part of all of that.
Okay, Okay, great and then I'm not sure if I missed it but I just noticed the at and T.S. safer the corridor or the theme of the mine production was strong but the the mill throughput kind of lagged <unk> like the mine and mine output was there any particular reasons or is it because you were tying in the HIG mill and things like that or can you, maybe just provide a bit more color on that yeah.
Yes, it's it's just again.
You know I think everybody expects on the front when you look at us in the quarter by quarter basis, everything is going to be exactly the same things lagging not lagging. It's it's got nothing really to do with that and it's just we just have some fluctuations in terms of things. We've had one of our mills down in terms of doing some repairs on that so at the end.
For the quarter I think we built up a bit more material sitting in the <unk> the yard.
So that so you know nothing that's untoward and from a month or quarter by quarter basis in terms of how we're operating.
Whether we have material sitting in the yard to or running through.
Running through the plant.
It fluctuates.
Fair enough fair enough. That's good that's very helpful. Thanks, very much guys.
Our next question is from Orest Wowkodaw with Scotia Bank. Please go ahead.
Hi, Good morning, guys I realize it's probably a little bit premature, but I wanted to.
If we get a bit of an understanding of how you're thinking about the new mine plan that'll be coming out about a month and I don't need specifics, but more of just from a philosophical perspective, whether youre thinking that.
The approach would be to be more of a lower throughput higher grade type of mine plan or does the addition of the ore shorting technology kind of make the larger throughput.
Lower grade type of mine plan more economical.
Say than last year, and I'm, just kind of wondering where where the thinking is right now.
It's a good question ours, and certainly you know what our.
The philosophical <unk> full so excuse me the philosophy of this management team as we've put out in the marketplace as we return on capital focused first and foremost so.
So the highest return on capital that we can do and as part of that and that's we've highlighted to the marketplace is a targeting operating costs.
Oh below a dollar a pound.
And so as we move forward here.
We are not necessarily interested in looking at grade.
But how do we maintain.
Hi profitability.
As I said, we're targeting low operating cost as possible.
Below a dollar a pound ideally with.
Maintaining our high return on invested capital that's the philosophy that has gone into how are we doing this mine plan.
This year.
If a project is able to maintain a high return on invested capital while at the same time looking at the long term with regards to maintain a life of mine average operating costs.
Or below a dollar a pound.
We will look to include that.
You know production plant.
Oh, we're not NAV focused.
So we're not just going to throw anything.
Through the.
The mine plan, but if we are able to maintain that talk those targets as I've outlined then we will be looking at adding that materially.
Okay. No. That's helpful. Thank you and then just as a follow up.
I mean do you have a sense of it in terms of the polar deeps been very exciting from a drilling perspective can you give us a sense of what the earliest could be in terms of that material actually making it into the mine plan like is it going to take a couple of years in terms of development yes.
Yes, Yes, I think why we did this work as early as we've done to give us the flexibility.
In order to optimize.
The development.
Of the deep project in the best way possible that gives us a highest return possible.
And part of that is all transportation and the team have spent.
Long long time going out to look at that and look at what gives the highest returns.
We're lucky that we have that flexibility now to be able to implement the deepening project.
On the timetable that allows us to generate the highest returns.
So I can't give you a specific date, but what I will I will say is we have we have worked to develop.
The deepening project because it fits with our philosophy of highest return possible and we're pretty excited about.
What the outcomes are looking like right now.
Okay.
That's awesome. Thank you and then just finally in your last exploration update.
I guess it would sort it became clear that you were a bit behind schedule or where you hope to be on some of the regional exploration because of kinda Colgate constraints.
Yeah do you feel like that's now behind you in terms of are you actually able to start drilling those targets an hour or should we expect more a longer kind of delay on the regional exploration program I.
I think I think the the thing to take away when we talk about the impact of coated.
Is there an ability for us to travel not only from Russ to travel from North America.
And Mike and Pablo to be able to be on the ground with the guys and looking at what is going on terms that regional program, but there's also been constraints with regards to some of our team in Brazil.
So my team older and as you know, we have restricted or people, who all the system age two rather work at home and we have a couple of see the Jones, who are in that position and so have not being that the operation.
Then some of our other geos, who work directly for year over year.
No when Brazil was in lockdown wouldn't unable to travel.
We were able to do one trip or during the quarter or to go to site and it was fantastic in terms of getting the guys. There and out years now in country are able to get the site. It's not so much that we haven't been able to group we have been evaluating projects. The issue more is about what we are seeing.
And then moving rigs to be able to more optimally drill some of the the target that we are uncovering and that's been the issue more than anything else.
As these ore bodies on big quote real bodies, we just drew.
Drew here and then you step out hundred Cookie meal drew again, you got to get it takes a lot of work.
Neat intellectual capital on site.
So we are drilling target.
We're pretty excited about some of the stuff that we see.
But where do we see the delay is understanding what we're looking at with material coming up the ground and could be how do they move rigs to ultimately.
Drilling group called.
We came a little bit more efficient in.
In doing that I would say.
Due to the lack of intellectual team being there to be able to review.
That makes sense.
It does.
Thank you David.
Once again, if you have a question. Please press Star then one on your telephone.
Our next question is from Dalton Barretto with Kinda Corp. Please go ahead.
Thank you. Good morning, guys. Just one question for me.
Now that you've got the lab onsite, Canada for multi element.
Have you had any okay.
Yes.
[laughter] outdoor [laughter] yeah.
We have a person needs every day.
Uh huh.
Certainly we have some it pissed needs, but the there's nothing to really talk about it's far too early to be able to.
Talk about anything there's a lot more work that needs to be done in a number of different areas. So there's no point, even speculating about anything.
Like anything else you see something you get excited about it you.
You do some more work sometimes the the new work.
Turning to be perfectly into it off well I guess, we have to move on sometimes you keep stretching and keep doing we really in that kinda phase right now I can't tell you whether things.
Things will break one way or the other but you're not having that capability now on site.
Certainly is going to allow us to accelerate.
Some of the work that.
We've been doing.
Had significant delays in turnaround time, because we're having to send a samples out.
Two labs outside of Brazil.
So that's the best friend insider threat to add Dave is that around the labs is ramping up its not.
It'll be really at full speed in January onwards, it's kinda yep phase.
<unk>.
Thanks, no. Okay. Thanks, guys.
This concludes the question and that's it.
I would like to turn the conference back over to management for any closing remarks.
Okay, well I'll just pick it up.
No pointed out we.
We're really excited and happy with regards to getting a major milestone for our team and it's a real credit sales team in Brazil, and our colleagues in Brazil with regards to having it over a year now or safety with regards to the no accident its.
It's a real real benchmark, a real milestone, particularly for underground mining operations like Oh, I'm, where we really it's about <unk>.
Our team members and colleagues in Brazil.
Outside of that as Mancos pointed out we're always available for Kohl's and look forward to chatting to you all in the coming weeks.
And as we come closer to updating the market place and come to the 43 one of the ones.
Thank you operator, and everybody have a good day. 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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