Q3 2021 Royal Gold Inc Earnings Call
Good day and welcome to the Royal Gold fiscal 2021 third quarter Conference call. All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
After todays presentation, there will be an opportunity to ask questions.
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I'd now like to turn the conference or How's the Baker. Please go ahead.
Thank you operator, good morning, and welcome to our discussion of Royal Gold's third quarter 2020 of them results. That's the bench is being webcast live and you will be able to access the replay of this call on the website.
Participating on the call today are bill of heightened bottle, President and CEO, Paul of nurse, CFO and treasurer of markets do exactly the vice President of C. O O of Royal Gold Corporation, Dan Breeze, Vice President of corporate development of RG AG and Randy Schatzman General Counsel are also available for questions.
During today's call, we will make forward looking statements, including statements about our projections expectations for the future.
These statements are subject to risks and uncertainties that could cause actual results to differ materially from these statements.
Yes, the restaurant uncertainties are discussed in yesterday's press release on our filings with the SEC.
We will also refer to certain non-GAAP financial measures, including adjusted net income.
Adjusted net income per share net debt and net cash.
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are available in yesterday's press release, which can be found on our website.
The old will give you an overview of the quarter, followed by Mark with an operating update.
Paul will then provide the financial update on Bill will wrap up the call for some closing comments. We'll then open the lines for a Q&A session.
Now I will turn the call over to Bill.
Good morning, and thank you for joining the call before beginning I would like to remind you that Royal gold continues to operate remotely and we will do our best to offer of coordinated response to any questions.
I'd also like to mention that we held an investor update a couple of weeks ago. They provided detailed information on our assets growth profile finances and strategy.
For those of you who joined our call and we thank you for your time and for those who are unable to participate I. Just wanted to note that all of the materials from that event are available on our website.
Turning to this quarters results I'll begin on slide four.
Had another good quarter of operating and financial performance total revenue of $143 million was driven by solid operating results across the portfolio and our royalty segment continues to be an important contributor to our results as it was in the December quarter.
Earnings for the quarter for $54 million or 82 cents per share of.
Adjusted earnings were <unk> 84 cents per share after adjusting for taxes on fair value changes in our holdings of equity Securities Inc.
Paul will provide more detail on both of those.
Operating cash flow remained strong at just over $92 million.
We paid a regular dividend of 30 cents per share returning a further $20 million to shareholders during the quarter in keeping with our long standing commitment to capital return.
We paid down $50 million on our revolving credit facility during the quarter and ended the quarter with a net cash position of $220 million and over $1.2 billion of liquidity.
On April 1st we chose to repay the outstanding balance on the credit facility in full leaving us with zero debt and access to our for $1 billion credit facility.
We continued to fund our investment in the common Cal project and during the quarter, we paid $32 $6 million to reach the $212 million necessary to acquire the 80 per cent a silver stream.
The early April we made a further $29 million contribution in the form of stream and debt increase.
Increasing our street rates 84 per cent of the payable silver as a result of the incremental stream payment.
We're pleased with the progress of the chemical and Mark will give you more detail in his remarks.
And finally, we agreed the fund important social initiatives with two of our operating Counterparties.
With Golden Star, we entered into a five year agreement to support the sustainable Palm oil agribusiness around the loss of mine.
With the Pueblo Viejo joint venture and the International Relief organization project Cure, we are funding the transportation of donated medical supplies and equipment for use in hospitals around the Pueblo Viejo of mine.
These are good examples of investments that promote sustainability and social initiatives.
We're pleased to be involved in programs to provide long lasting benefits for the communities, where we have invested.
With that I'll turn the call over to Mark for an update on our portfolio and progress of Cold Macau next day.
I'll start by making a few comments on our portfolio, which performed well and delivered solid results again this quarter as Bill mentioned.
The royalty segment contributed about 33% of revenue mainly due to the strong performance from finished Quito.
One area, where we've seen huge deliveries is from silver stream of trouble of behavioral.
The silver circuit is complex and some recent issues with the equipment and the circuit have caused the lower recoveries.
It is working to address these issues and expect to be running normally again within the current quarter.
If you recall our stream agreement has a fixed silver recovery factor of 70% to protect against recovery lift.
And the agreement also includes the deferral mechanism that allows the economic impact of any shortfall, so silver deliveries to the paid up in future periods.
Approximately 362000 ounces of silver had been deferred we expect the shortfall to be made up his plant performance troops.
For my perspective. This is the cash flow timing issue and we do not expect it to have any lasting impact on sales.
On slide five I'll give you an update on the coal Macau project in Botswana currently under development, but coal metallic copper mining of the kcl.
We gave a detailed project review at our Investor update two weeks ago.
So I'll keep my comments today.
Overall construction completion reached about 92% at the end of the quarter.
From 85 per cent at the end of the December quarter.
At the end of March underground development at the three mines in zone five reached over 11000 meters and there was the stockpile of 190000 tonnes of high grade sulfide ore on surface.
And on April 23rd of the milestones reached when the connection to the the settle mill site was energized, allowing both set of interest.
Five cooperate fully on grid power.
With respect of upcoming project milestones ACM is the plant commissioning activities.
Plant startup around the 2021 with the sale of the first concentrated in terms of calendar quarter.
The reduction is expected to ramp up to nameplate capacity in the fourth quarter of 2021 and reach sustained production levels by the end of the fourth quarter.
However, this assumes no increase in COVID-19 challenges.
A C. M has advised that they do not expect to require of any sort of material funding from the Royal gold should the timing of the project milestones remain unchanged.
Turning to slide six on.
Quickly you mentioned some of the other developments announced during the quarter I discussed these in several additional organic growth opportunities during our April 20th of Investor update. So please refer to our website for the in the presentation at the additional details.
First is the preliminary economic assessment on P. E on the watch the Southern extension project Golden Star announced the Pea results in early March which adds about 11 years of production to the existing six year reserves plant.
The P. Eight shows an increase in underground production, which will allow the existing 7400 per ton per day plant to operating at near capacity.
Compared to an average 20 twenty-two input of 5500 tonnes per day on this.
Our plans to complete more infill drilling and expects to finish the feasibility study on the southern extension in early 2023.
The second is Penn is keto or new much full potential program has resulted in significant improvements the mining and milling performance over the last year.
Dennis Ketose gold production increased considerably on the <unk>.
Past two quarters due to the higher grade and mill throughput.
Compared to 2020, new much production guidance for 2021 is higher for all metals.
No. One else has also turned their attention to near mine and regional exploration and expects exploration success could extend the mine life by almost 10 years to 2040.
Turning to slide seven.
The level of VA hope it continues to advance the plant tailings facility expansion project.
Overall engineering. So the process plant is about 65% complete long lead contracts and purchase orders have been placed the construction continues to ramp up.
Social environmental technical studies for the additional tailings and waste rock storage is also continuing to do at the edge.
Post expansion Barrick is expecting gold production to be maintained at approximately 800000 ounces per year on a 100 per cent basis until the mid forty's.
And finally.
We received an updated reserve statement and life of mine plan for Nevada Gold mines that covers on our royalty areas of Cortez.
Year over year reserves did not change despite depletion during 2020 and stands at $3 5 million ounces.
In terms of production guidance attributable to our royalty interest, Nevada gold mines is expecting 2021 production of 350000 to 375000 ounces at average production for 2022 to 2026 on approximately 415000 ounces per unit.
Most of which is expected to come from the crossroads deposit.
We have five for royalties in this area part of the which overlap so the.
The best way to think about these combined royalties is to apply an approximate 8% gross smelter return royalty rate to the production guidance I. Just mentioned of course of this is an approximation and there will be variations, depending on which areas are the mall.
But it is of good approximation that considers our debt to match for relevant deduction for each royalty.
I'll now turn the call of the Paul for a discussion of our financial results.
Thanks, Mark I will now turn your attention to slide eight and give an overview of the financial results for the quarter.
For this discussion I will be comparing the third quarter of fiscal 2021 to the prior year quarter.
We experienced another solid quarter revenue as we recognize the 5% increase of our revenue to $143 million on volume of 79500 gold equivalent ounces for G. E O S.
The increase on our revenue was mostly due to higher average metal prices and strong performance from our pet escape of royalty offset by lower gold sales per man day coil.
With respect the metal prices the average price of gold silver and copper increased 13% 55 per cent and 51% respectively over the prior year quarter.
Contributions from gold continued to dominate and gold remains our focus within the portfolio.
Our revenue from gold for the current quarter was 68 per cent compared to 79% in the prior period the.
The decrease in our gold contributions during the current quarter was largely due to significantly higher increases in the average silver and copper prices.
Our G&A expense decreased nearly $3 million during the quarter due to the additional noncash compensation expense, we recognized during the prior year quarter, which was related to the retirement of two long standing members of senior management.
Our G&A expense was again in line with the typical quarter for Royal Gold and is what we anticipate going forward absent any large or unusual items.
Our DD&A expense was $41 3 million or $520 per G E O down from $594 per <unk> in the prior year quarter.
The decrease in our DD&A expense during the quarter was primarily due to lower gold sales at Mount Milligan, and the coil and Pueblo Viejo as.
As well as lower depletion rates at both public vehicle in Mount Milligan.
The gold and silver depletion rates at Pueblo Viejo decreased due to reserve additions as reported by Barrick, while the gold depletion rate of Mount Milligan decrease due to improved gold recoveries.
Given the reduced depletion rates at some of our principal properties, we are lowering our DD&A guidance for the June quarter to between 525 and $575 per G E O.
And our full fiscal year of DD&A guidance to between 540 and $590 per Geo the annual DD&A guidance range. We previously provided on our last quarterly call was between 590 and $640 per day.
Earnings were $54 million or 82 per share an increase of 39%.
We had two minor adjustments to our earnings this quarter. The first was the four cents per share charge, primarily due to a change in the reliability of certain deferred tax assets held by the Swiss subsidiary.
While the second adjustment was of three cents per share gain or <unk> <unk> per share of net of tax due to the fair value increase on our equity holdings.
After removing these two items, our adjusted EPS was <unk> 84 per share for the quarter.
We had another strong quarter of operating cash flow as our cash from operations for the period was $92 million.
Our operating cash flow was modestly down $7 million and this was primarily due to higher cash taxes paid in the current quarter.
The increase of our cash taxes paid during the current quarter was due to timing.
The timing of estimated tax payments can vary year over year and due to COVID-19. We did see some taxing authorities allow deferrals with our estimated tax payment schedules.
Looking forward to the June quarter, and absent of any potential operational impacts from COVID-19. We expect stream segment sales to be in the range of 60000 to 65000 G E OS and the inventories for the quarter and to be in the range of 31000 to 36000 Geos.
With respect of tax we expect our effective tax rate for both the June quarter, and the full fiscal year 2021 to range between 19 of 23% absent any unusual or discrete items.
I will now turn to slide nine and provide a summary of our financial position.
Our liquidity position continued to strengthen as we ended the quarter with cash of $370 million working capital of $384 million and of net cash position of $220 million.
During the quarter, we repaid $50 million on our revolving credit facility and at the beginning of April we repaid the 150 million outstanding balance and are now debt free.
Although we are mindful that COVID-19 risk remain we believe we have sufficient liquidity our available cash resources and our operating cash flow to cover G&A cost any potential remaining commitments echo Macau and our expected dividend payments for the foreseeable future.
Should we require additional funding beyond our existing resources, we have the full 1 billion available under our revolving credit facility, which is low cost and flexible.
With respect to comb Macau as Bill mentioned in his remarks during the quarter. We made our six advanced payment of $32 $6 million and completed the $212 million commitment required to fund the base silver stream of 80%.
On April seven we provide an additional payment of $28 $6 million, which included $10 6 million in stream financing an $18 million in debt financing.
Our silver stream rate increased to 84% with this additional stream financing contribution.
Our remaining commitment to Casey them includes $49 $4 million in stream and debt financing up to commercial production, which should be by the end of calendar 2021.
Casey I'm has advised us that they do not expect to require any further material funding for Royal gold, yes, the timing of project milestones remains unchanged.
If they do elect to request additional funding we would make any further contributions from our available cash resources.
That concludes my comments on our financial performance for the quarter and I will now turn the call back the bill for closing comments.
Thanks, Paul I'm pleased with another quarter of solid operating and financial results. We continued to benefit from a diverse portfolio. The delivers gold based revenues into a high margin on leveraged business that can self financed its core operations and provide cash returns to shareholders.
We have some good organic growth opportunities within the portfolio, which we hope to see it advance in this healthy metal price environment.
I encourage you to review the materials on our website from the Investor update because we spent a fair bit of time, providing project specifics for a number of these assets.
While we are pleased with the potential for this organic growth we remain active in the pursuit of new business opportunities for that.
For the full $1 billion credit facility. In addition to existing cash balances and ongoing cash generation. We are well placed to act quickly on those opportunities that fit our criteria for investment which include precious metals with the preference for gold and being disciplined with respect to return on.
Operator that concludes our prepared remarks I'll now open the line for questions.
Thank you.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone. If you were using a speakerphone. Please pick up your handset before pressing the keys if at any time of your question has been addressed and you would like to withdraw your question. Please press Star then two.
Our first question will come from Tyler Langton with Jpmorgan. Please go ahead.
Yeah. Good morning, good afternoon, and thanks for taking my question you still could you just talk a little bit about them sort of deal activity kind of what youre seeing in terms of weather activities of sort of increased or the type of assets locations. Just just any color there would be helpful.
Oh sure Tom I mean, what I'd like to do is if we can get Dan Breeze on the law.
To the on mute and give his his input as the head of our on business development efforts.
Sure, Yes, thanks for Hi, Tyler Hope Youre doing well.
I think the message is pretty much in line of what we've been seeing the last few calls in terms of it being a very healthy market.
We're seeing opportunities on the 100 millions of $5 million range, that's been pretty consistent over the last year or so and in terms of where we're seeing the use of proceeds it's really again focused on development assets and I'd say primary gold asset specifically precious metal byproduct as well.
As part of that mix too from base metal assets. So we're pretty encouraged by the market, we're seeing right now.
Yeah.
Great. Thanks, and just answer your question for you.
No that was perfect. Thank you for just kind of final final question on on Pueblo Viejo the are.
The 360000 ounces of silver that the you'll receive it I mean is that something where are we.
Kind of take the next couple of quarters, just kind of just getting the rough sense of timing and when we should expect that.
Yeah, you know that that's hard to say it depends on the the.
The speed with which they are able to address the operational issues.
I think the best I can say right now is just kind of follow it quarter to quarter. If we started to seeing trends will certainly point that out to you, but I wouldnt want to lay out of the timeframe right now.
Because they're still on the middle of the of the dressing the issues.
Okay, Great Alright, that's all I have thanks, so much.
Yeah.
Yeah.
And the next question will come from Cosmos <unk> with CIBC. Please go ahead.
Alright, Thanks, Bill Mark and Paul and team.
With me on my first question is on Cortez, Thanks for giving US a you know the guidance here I guess you have to wait for Barrick to give it to you first.
But I just wanted to confirm my understanding here I guess, you know for calendar 2020 one.
We're saying that are you know you.
The royalty ground, it's about 350 for about 375000 ounces of production if I looked at last year. It was 175000 ounces. So you know if gold prices were to stay the same.
Does that mean that we would expect kind of double the revenue in calendar 2020 one versus 'twenty 'twenty.
Yeah. Thanks, Thanks Cosmos.
Mark is there anything you want to say on the ounce side of things.
Well I guess, the the way the way I would look at it is as I tried to explain is on you know I would just.
The 350 to $3 75 range was what was provided the.
We could disclose and using the 80% gross value.
Well T factor if you will you know, we'll certainly give you.
Very good annual approximation of of.
How do you look at the.
The return to us.
So we know that are you know barrick.
As stated that the of the back half of the year is going to be.
The more weighted to production in the 10, the first half of the year suddenly the it'll be a little bit lumpier won't be equal quarters, but we're out.
Certainly feeling the range.
The range is right in the 8% so all of you.
Loyalty factor is a very exclamation on the annually basis.
Got it.
And not to be pedantic here, but if I were to look at you know your disclosure from last year. I think you had mentioned it on your royalty grounds, we're expecting about 425000 ounces.
From year of calendar year 2021 to calendar 2026 of them now you know the those estimates have been sort of a refined.
Mark do you have the knowledge I guess, you know and to the extent you can share with us what has changed.
Well one of your observations right. It certainly has the production profile has been the.
The shifted out of bed one of the one of the factors that's affecting this year's of.
For sure.
The strength of slows that the head of the geotechnical issue in the pipeline pit, which which occurred back in in the fourth quarter of last year late last year.
So that that's kind of that's been in part impacting this year for sure but yeah. The next the next two years, we certainly saw some some ounces being being down so you're you're correct, which.
We've typically seen this I mean it.
Yeah the.
The Cortez Crossroads deposit is a lower margin material on and I think what we see as a is it a.
Being relegated based on other materials that are available on the process. That's that's my assessment.
Great. Thanks, Howard, maybe Yep, Hey, Bill I'll, just I'll just add when we when we started talking about the longer term.
Ounce figures, just just remember what we're saying on average and there can be some variability around that average.
Of course, thanks, Bill well, maybe switching gears a little bit.
Are you at all on your fiscal Q4 guidance you know thanks again for giving US the guidance here of 60 to about 65000 Geos and.
That's you know of much higher than the 52 point of 5000 Geos just realized in fiscal Q3 could you maybe remind us in terms of the seasonality quarter over quarter to the extent that you can.
Yeah, I'll I'll start and then on my turn it over to Paul.
You can see if he has anything per se, but it's not seasonality. It's it's.
We have two of our large two of our three largest revenue producers they produce of concentrate.
And we get paid based on the timing of those shipments.
And.
So the but when we last got together last quarter and we had the much lower sales forecast really you know a lot of that was the fact, just the timing of the shipments and when we expect the deliveries to come from those shipments.
And you may see that variability in the past we've had the end of clay on Milligan kind of offset each other and in this quarter, we just happen to have them overlapped.
So it really is concentrate timing.
Paul is there anything else you would add to that.
No that was gonna be my response, Bill is it's sort of timing and.
Cosmos, you may recall from our last quarterly call debt.
We did talk about just kind of the the timing of that.
Other than we're experiencing here currently so I think the Bill's response is certainly right now of right down the middle of there.
Great you know and then in terms of guidance. It's good debt, we get the quarterly guidance, but it all was also thinking that as we and now almost for fiscal Q4, you don't Bill have you given of any thought in terms of they don't put on go longer longer term guidance.
Maybe annual guidance, if I look at the peer group you know some of the other companies on your peer group, even put out a five year of guidance.
Is that something that you would consider.
Caused most of it is the conversation we are having internally the.
The one thing I will say is the you know if.
If we have if we have guidance.
We offer guidance, it's different we don't own the properties, we don't know what's going on at the properties all the time so for.
For newmont to give guidance on for us to give guidance, it's two totally different things on.
I'd say our competitors, although they do it they don't control of the properties either.
But but I hear your question.
The question for mothers and it is something we we talk about but you know I've had examples just in the last few months.
Where something has come up and we've learned about it.
Can you kind of go well, that's why we don't give guidance because I don't want to do it and then have something happened on the property that we didn't foresee.
On a scale, we don't have a lot of information rights, we learned about it when you learn about it.
And then we end up potentially having to change that frequently so that that's that's that's my.
My concern.
But again, we're where we're talking about it.
And then and then maybe just following up on Pablo VA over here.
Could you remind us you know understanding that there's recovery issues, where the silver circuit what percentage of your revenue coming from Pablo via Hill is actually coming from silver.
Paul our Mark I'd, Paul I imagine I don't have that number right in front of me do you happen to have it.
I do not build Cosmo of some I'd be happy to.
<unk>.
Look at that and get back to you, but yeah.
Yeah. It certainly is just the overall silver you know for our portfolio on average is roughly 10%. So are you now on our silver deliveries primarily do come from from Pueblo Viejo. So it would make up the the larger piece of that 10 per cent that we normally get.
Got it.
And then one last question here on Pablo Vallejo, you talked about it about 362000 ounces of silver currently sort of inventoried you know when that gets released is it gonna be over several quarters or is it going to be like one shot and we were gonna see of peak of Spike in revenue coming from the.
The release.
Well cosmos it depends how how the operation performs and as the recovery rates increase.
I mean, if they suddenly shot up to two of much higher level that you might see all of the come in at once but it's that that I can't predict.
It could come piecemeal over a number of quarters. It could come very quickly. It just depends on how they do with the recovery rates.
Got it thanks, again, bill and team and those of other questions on the excellent. Thanks Cosmos.
The next question will come from Brian Macarthur with Raymond James. Please go ahead.
Hi, Good morning, first thing I, just want to come on the and say thank you very much for giving us more detail on some of the smaller as the going forward I think it would be helpful. We of quarterly is that we can follow that and I do realize it requires some work, but I do think that's very helpful. So thank you very much my question. Unfortunately goes the P V too so I just.
Trying to understand this a little better of couple of questions. This deferral do you actually book anything of quota receivable and then just pick up the cash later on or is the whole amount just technically.
Delayed and it comes out whenever it comes out.
Paul I'm going to ask you to handle that one.
Yeah No I appreciate it thanks for the question Brian. So just you know in general high level, you know and obviously in accordance with the U S. GAAP rules that we follow here you know there has been no revenue recognized for crude in association with what these deferred silver ounces.
You know as Mark did mention in his remarks.
We do have approximately 362000 ounces of deferred silver to day of.
Which actually about 60000 of that was attributed to our December quarter.
But so when the ounces are delivered well, we'll pay the contractual cash price take those ounces into our inventory and start selling according to our policy. We do expect the shortfall to be made up with the improved performance that the kind of Mark spoke of earlier and we really just view this as the cash flow timing issue and we don't anticipate that these are first of all.
And the quote unquote lost revenue.
But we have booked a nominal number as far as an an asset and it was a payable on our books, it's very small but does it bounce the gross other than it was mainly just because of the cash price that we paid for the ounces that we did receive so that we will ultimately pay when those ounces are contractually delivered to.
At a later date.
And you may not want to get into this but.
Given this is the delay because of a I'm not hitting the 70% does the do you does the price risk get protect the two or does it just all get delayed and it's kind of a volume issue and I guess, where I'm going here is what happens if the price when you get the $362000 as you know for dollar.
Our silver in the market do you do you take that price faster because of the nonperforming I don't know if it's nonperformance, but because it's.
Non contractual debt does that get adjusted tours of just the playing up the volume function.
I would say, it's more of a volume function and when we do receive the ounces honestly, yes, the price could be different than it is today. So.
So again, when we do take those ounces in the inventory our cash price of when they pay well will go up or down.
And then again when we correspondingly sell those ounces the price.
Price you know it could be higher or lower than today, so, but nothing that will have to quote unquote mark to market you know anything for the period or any of anything of that nature.
Great. Thank you very much and I guess my second question is probably due to because of the accounting. So just as we move forward with the comma Cal because now you've got you've increased the stream and that's obviously of contractual part there, but then there's obviously of putting that in is that that just kind of go on us and I assume it's just going to go on the.
You just book it as you know as an investment and just clipped the coupons off of it until it. It's repaid is that the way I should think about it.
Well, yeah, and so just real quick you know again, we did close on that in April for Ani in April here. So you know this is a Q4 transaction for us and so we haven't quite finalized.
Our accounting on that but I do anticipate that we'll record of note receivable on our balance sheet for that amount that we are contributed are there in April and then any corresponding interest are the that we received during a period would be recorded as interest income on our income statement and you know this treatment if you recall Brian.
It would be similar if you recall when we had that alone of similar loan with Golden Star back in 25th right. So I would say, it's going to be you know similar to that treatment are you know we moved to Q4 here.
That's very helpful. Thank you very much.
Thanks, Brian This is Brian.
On the next question will come from Mike Gentleman with Bank of America. Please go ahead.
Oh, Hi, Bill.
Cosmos Aster on my questions, but I still had one from the America call yesterday.
Mark Bristow was commenting that barrack for Nevada Gold mines is looking at pipeline, which he called it the old tier one assets.
And you have royalties on it so on Royal Gold doesn't and just wondering.
Maybe mark has some background there what's the what's what's Mr. Bristow up too it sounds very promising for Royal gold.
Yeah.
Yeah, I'm not sure Mark I'll turn it over to you I'm not sure we have much more color, but but perhaps you do.
Yeah I did.
I read the comments on them.
And we're still producing out of the the from the pipeline deposit the pipeline pit. It's it's co mingled with the crossroads of materials. So he.
He he made reference to.
Looking between the crossroads pit in the pipeline pit in one statement, which I found interesting.
But I'm not really related to our royalty ground. So much at all so many of you referenced between pipeline and the Robertson property.
He had he seemed to have two concepts in his comments, but the one does relate to us that's true.
With respect to the.
Area between the two crossroads and the pipeline deposit.
On the drawing on our or you just have at this point. This is the first of all yeah.
Yeah.
Couldn't give you any more detail than I. Just gave you I think you know his comments yesterday were right about what we know at this point.
Well it sounds like a great mine tour, maybe sometime in the future.
Well thank you.
Hi.
As a reminder, if you would like to ask the question. Please press Star then one day.
The next question will come from Tanya Checkups connect from Scotiabank. Please go ahead.
Hi, Yes, good morning, everyone I'm, just the first off I do want to thank you very much for that.
Additional disclosure it was noted and much appreciate it so thank you for that.
But I wanted to come back to the silver circuit at Pueblo Viejo, I'm, just trying to understand exactly what's happening in that sort of cats and the second thing is what is your understanding of what Barrick is doing to get these recoveries back up.
Mark some of like one for you.
Oh, Okay, Yeah, all of our understanding of of the problem of relates yeah. The.
What they call. The pre heaters are there are three pre heaters are that the did heap of slightly up going into the what they called the law on boil circuit, which of which allows for the Oh come on.
And those of those three pre eaters of.
And on an issue in there.
They've been in the process of rebuilding those three pre heater. So the recovery has been bouncing.
The bouncing around quite a bit.
Over the last PV.
Periods of time several quarters.
Okay.
Is your understanding that they need to replace these three three theaters.
Are they sort of they've actually rebuilt two of them are there are there are a unit that can be there can be maintained and rebuilt two of them had been rebuilt and we understand we don't know the current status of the third one we understood. It was to be rebuilt in the end in April.
But I can't.
I don't have the information on that particular, one yet.
Okay. So once the.
Yeah, I'm just trying to understand for once these three free heaters have been rebuilt.
It's kind of heat this flurry.
Procreant lead to go and get the silver recovery.
Is that your understanding.
It is the that's exactly it's one of the components that that allows for the for the ore to be of.
The treated to make the silver recoverable so they have to heat up the of the solution to a certain for the slurry into a certain the true and that process has been interrupted.
But it's one of the pieces of of the lime boil circuit.
Okay and you said you used in your opening remarks that you thought that that was being resolved this quarter.
That is kind of this current count this current quarter, yes, Thats correct. Okay. So we should see improvement then, let's say fully going forward and sort of calendar Q3.
Okay. Thank you for somebody else that that's that that is our understanding I can't.
All of two two to be seen I guess, we we have not been informed the everything is working properly and they come up to normal the coverage guidance.
We know it's a it's an active.
Process of.
Maintenance.
And we expect it to come back.
Okay.
And maybe just on M&A, if I can ask on them and thanks for the clarity on on you know on looking at anywhere between in up to 500 million and on project sales I'm. Just wondering are there still any opportunities available.
In.
Royalty portfolios anywhere within some of these companies that are you now able to be for sale.
<unk> heard that there were a couple of up to $100 million are those all done.
Dan do you want to start that off.
Yeah, sure Hi, Tanya, it's Dan here and thanks for the question.
So you've seen a number of the portfolios trading the market and so the market is pretty healthy for the sellers and we look at most of those.
We have a hard time with a couple of things one is trying to find a cornerstone asset to really justify the portfolios and number two pricing in some cases. So we're looking at those things that are trading but those of the issues that we've been coming across and of course when on a perfect information on on most of these packages as well.
So that's the other challenge too, but certainly its an active market and we're we're monitoring it very closely of Bill do you want add something to that.
Yeah, I mean, yes, we yes, we look at it.
I think the the portfolios that have not been sold.
From what from my perspective are the they tend to be very heavily focused on.
Net of exploration or development of assets.
So you know I just.
As Dan said, finding something cornerstone debt you. Congrats on two it's really really liked that asset and I want it in my portfolio, that's getting harder and harder to do.
Okay. So would it be a fair statement, then that the portfolio of the easy one with the cornerstone assets of gone kind of like the 100 million ones have gone and sort of the portfolio of royalties laughed are going to be like hundred significantly under that value.
I can't say that because of I don't know every company's portfolio.
But I would say based on the trend of what we're seeing that that's probably as of a valid statement.
Okay.
Okay, and it's just and it's just something that I heard you know that there's all of these portfolios and I guess one guidance you know are we pretty much done the back right.
Well I I can't for with I can't rule, it out and as Dan said the sellers the sellers market. So there could be a mining companies out there right now putting together a portfolio that they want to sell because they like the value of that they can get.
Okay, great. Thank you so much.
Thank you.
This will conclude today's question and answer session I would now like to turn the conference back over back over to Bill hasn't that'll for any closing remarks.
Oh, great. Thank you everyone for taking the time to join US today, we certainly appreciate your interest and.
And we look forward to updating you on our progress during our next quarterly call.
Take care.
The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.
Yeah.
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