Q2 2021 Yamana Gold Inc Earnings Call
[music].
This conference is being recorded so it's gonna for homes that don't go as you see.
All participants.
Please standby your meeting ex ready to begin.
Thank you all for joining us this morning before I turn the call over I need to advise that certain statements made during this call today may contain forward looking information and actual results could differ from the conclusions or projections in that forward looking information which include.
<unk>, but are not limited to statements with respect to the estimation of mineral reserves and resources, the timing and amount of estimated future production cost of production capital expenditures future metal prices and the cost and timing of the development of new projects.
For a complete discussion of the risks.
Uncertainties and factors.
Each may lead to actual financial results and performance being different from the estimates contained in our forward looking statements. Please refer to Yamana press release issued yesterday announcing second quarter 2021 results as well as the management's discussion and analysis for the same period.
Period, and other regulatory filings in Canada, and the United States I would like to remind everyone that this conference call is being recorded and will be available for replay today at 12 P. M. Eastern time replay information and the presentation slides accompanying this conference call and webcast are available.
<unk> on them on its website at Yamana Dot Com I will now turn the call over to Mr. Daniel Racine, President and CEO.
Thank you operator, thank you all for joining us and welcome to our second quarter 2021 conference call and webcast.
For something with me today is Jason Leblanc Force.
Keith.
Financial Officer.
<unk> sharp chief operating officer, and Andrey Marsden, senior VP exploration and will be available to answer questions.
I will start as always with safety.
Total recordable injury rate was <unk> 58 for the first 6 months of 2021.
For this.
We introduced our climate action strategy continue.
Continue to advance the strategy during the quarter with work ongoing for their turn mine baselines and gathered data to develop abatements scenarios.
Strategy is 1 pillar of our approach to ESG Melton.
The health and safety and environment.
Our mental management governance and community engagement are all deeply rooted within our organization.
We're proud to have been named 1 of Canada's best 50, Canadian corporate citizens by corporate Knights Yamana ranked 31 overall and was the top ranked Canadian mining company.
The best 50 ranking are based on a series of Criteria's, including 8 environmental metrics 5 social metrics 6 governance metrics and economic factors.
To learn more about our ESG performance I invited invite you to look at our latest material issue report and.
Total reporting initiative reward both are available on our website.
Turning now to our Q2 operational highlights we had a strong production with 217.402 ounces of gold led.
Led by stand out for 4 months at Jacobina can you didn't.
Globally, <unk> opinion, and Minera, Florida.
It will be non Kenny on the mill Arctic I'm pleased to note both reach all time quarterly high.
At Cerro Moro production increased compared to the second quarter of last year.
Both but as we indicated previously we're expecting the mind for Ctrip to see much.
Much stronger results in the second half of this year.
Reduced 163 million ounces of silver during the quarter.
Geo production was 241.341 ounces.
What are the cash costs for $720 per Geo and all in sustaining costs were $1.81 per <unk>.
In line with plan.
Our strong cash flow generation and increased cash balances continue to position us well for return cash to shareholders in the form of a higher a higher dividends.
As reported yesterday, we are increasing our annual dividend to <unk> 12 per share up nearly 15.
8% from the previous dividend.
Fifth 500% increase compared to Q2.2019.
We also announced a normal course issuer bid that allows for the purchase of up to 5% of the company issued and outstanding common shares over the next 12 months.
First half production.
Costs were in line with our plan set out at the beginning of the year.
As with prior years, we expect Q4 to be the strongest quarter.
I would like to remind everyone that we guided production to be 50, 753% split between the first and the second half and this is exactly what we have.
<unk> achieved in the first half.
Taking a closer look at our operations as mentioned Jacobina posted record quarterly production of 47.500.
103 ounces of gold.
As you may have seen in our release yesterday updating progress on the phased expansion of Jacobina average throughput.
For the quarter was 70 to 100 tonnes per day up 5% over the prior quarter with throughput averaging 7500 tonnes per day for the on the entire month of me on.
Talk more about the phase expansion in a moment.
A third opinion Geo production for the quarter was 52607.
Including 39492 ounces of gold and 891 to 155 ounces of silver.
We continue to expect plant production in Q3, and Q4 with the second half production to account for approximately 57% of the operation and <unk>.
<unk> production.
Median while Arctic as a record quarter, producing 92106 ounces of gold exceeding plan due to higher grades and recoveries from or found deeper in the market.
The operations remain on track to complete the <unk> drilling and blasting in.
Answer that by the end of Q3 of 2021.
I would have love EBITDA was a standout performer during the quarter production of 23818 ounces of gold was above plan on higher than the same period in the prior year.
And ore development continuous debt Vince well ahead of.
Plan and exploration on the results continue to demonstrate extension of identify areas of mineralization and new discoveries.
Production net save them on <unk> was $23.25300, <unk> <unk> compared to $15.450, <unk> in the prior year period.
<unk> 2000.
<unk> thousand 488 ounces of gold and silver production was up 736820 ounces in the latest quarter.
Challenging weather conditions and limited travel and impacted shift changed however, the company took the opportunity during this time to fast track certain LTC.
T and other site improvement originally planned for the second half of the year, which will benefit future quarters, the transition to more mill feed coming from the underground ore at higher grade than the open pit ore will continue into the second half of 2021.
Do you have a number.
See for off compelling growth opportunities in our portfolio.
And that we're very excited about 1 of these is the phase expansion in check will be net we've.
We've made significant progress on phase 2 expense expansion to increase throughput to 8500 tonnes per day and raised production to 230000 ounces per.
Number of Jack will be no plan to continuously exceed expectations as mentioned our success underscore the simplified approach that we are now taking to complete phase II.
This include the both total net gain the processing plant and tailings system as well as operational improvement that Derisk the project greatly.
You can reduce capex and eliminate the need to install an additional volume yes.
Our capital costs are expected to be only a fraction of the original estimated amount not exceeding $15 million to $20 million. The key takeaway in yesterdays update is the greater certainty and reduce risks as we now required incremental.
<unk> optimization and the operational improvements to achieve the phase II throughput.
Subject to the successful completion of required permit modification, we expect check will be not to begin to begin producing the new 8500 tonnes per day in the second half of 2023.
We advanced Phase II engineering for Phase III expansion to 10000 tons per day will advance in parallel with the plan modification originated non for phase II now consider adequate for the phase III.
For the <unk> study for the Phase III is scheduled to be completed in 2023 and project commissioning.
Still on track for 2027.
In addition to the phase 2 update we also disclosed strong exploration results at <unk> will be non yesterday.
The results included exceptional drilling from kind of era Central's.
And Morro do vento as well as the discovery of a new zone at Jabil.
<unk>.
With 536000 ounces of mineral resources the results support the phase expansion and demonstrate check will be not as exceptional long term growth potential and the ability to further extend strategic mine life.
Turning now to was imac are all day 1.
<unk> Gold project in Quebec's prolific Abitibi Themis germane region, we're excited to be growing our presence in Quebec, which is also on to our Canadian while RC cooperation.
<unk> is a great project and since acquiring it early this year, we have made it even better.
Carried out several studies.
And to have expanded reserve.
Average annual production, while increasing throughput and plan for that nameplate capacity.
As a result, we've made a decision to advance the project for construction.
We expect to receive all permit and authorization by the third quarter of 2024.
We have identified.
Opportunities to improve ramp up and decrease the processing plant construction per year.
And we will be fully funded from available cash on cash flow.
Once <unk> completed production will ramp up quickly and we will achieve for production of approximately 200000 ounces per year in years, 2 and such.
Sustained at level for the next for use with costs well below the company's debt companies adverts.
Was that Mac as a reserve of $1.91 million ounces, along with indicated resources of 326000 ounces in inferred resources of 258000 ounces.
Excellent additional exploration.
<unk> potential.
We believe was on Mac will be a very long mine life of 15 years or more in.
And assuming the strategic mine life and BV will be in the range of 850 for $900 million at $18.50 gold price.
Thus 100 kilometer down the road from.
From ones that Mac is our Canadian mill Arctic operation.
Where we are advancing the Odyssey younger underground project with our partner. This is another outstanding project that will extend Canadian <unk> mine life through at least 2039.
The second quarter, we've competed overburden excavation and grouting to prepare for on the construction.
Option of the production shaft and entering <unk>.
We've also made progress on the ramp on the underground ramp.
And on these ahead of schedule with approximately $6.760 for <unk> meters completed this year and 587 million near meters completed since the start.
The explorer.
Per map is expected to take about 2 years to company with the first rating platform established in early July.
We have also completed construction of the shaft collar and engineering is progressing on the upstream oils through baseband powerline substation, the workshop and the warehouse construct.
<unk> of debt frame and oyster home is slated to begin.
In the third quarter of 2021, and with that I will turn it over to Jason.
Thank you Daniel and good morning, everyone, turning now to our financial performance.
Adjusted net earnings for the second quarter were 70.
$70.7 million or <unk> <unk> per share.
<unk> cash and cash equivalents at quarter end totaled $702 million, an increase of approximately 8% over December 31 year and this includes about $223 million that has been made available for the Mira project.
Cash balances along with further liquidity and cash flows our.
Our margin sufficient to fully manage the company's business and capital allocation objectives, which includes further returns of capital to shareholders.
We continue to generate robust cash flows with cash flows from operating activities, increasing to $153.5 million in Q2 versus $129.4 million in the same period.
Last year.
Cash flows from operating activities before net change in working capital were $167.8 million and free cash flow before dividends and debt repayments increased 34% year over year to $51.4.2 million.
We expect cash flow to improve in the second half of the year with Q4 expect.
Period, and delivered our strongest performance in line with the production and costs.
For Q3, and Q4 capital spending will be a little higher than the first half of the year as expected.
For sustaining capital will average about $50 million of spend per quarter for.
For expansionary Capex for the average will be about $40 million per quarter with about half of that attributed to Odyssey.
<unk>, 2 and for exploration will spend between $25 million and 35, 25% and $30 million with a 70.30 split between capital and Opex.
We continue to see a strong performance across our portfolio with production and cost tracking to plan.
Our first half results are well aligned to our 2021 guidance released for the started.
Sure, which called for 53% of production to be weighted to the second half of the year.
Our current our cost for all also tracking in line for where they thought they would be at the end of Q2 and prospectively with minimal impact from inflationary pressures for the balance of the year.
As noted we expect stronger production and lower costs in the second half Q.
Part of the year is expected to be our strongest quarter with the highest quarterly production and lowest quarterly cost continuing a trend from previous years and with that I'll turn it back over to Daniel.
Thank you Jason.
Before we begin the Q&A I want to talk a little bit more about was on that.
And our growing presence in Quebec.
Q4 also highlight the points raised by our executive Chairman, Peter Marrone and his most recent losses.
If you haven't read it yes, the block I encourage you to do so it's publish roughly once a month.
Peter share his perspective on a wide range of topics related to gold mining sector.
Is the message.
And the blog can be summed up in 5 words focus on Big Pictures.
Our long term production profile in Quebec, including was on Mac and Odyssey.
As for 450 to 500000 ounces per year between 2028 and 2035, while that's a strong profiling on its own right.
We believe it's just the starting point.
The mineral resources on exploration.
Profile that was <unk> and Odyssey will generate significant production and mine life upside.
That's where we're forecasting a 15 year strategic mind on iPhone was on MA and we and.
And why do we believe obviously will be in production on far flung beyond 2.
1039.
We know that projection like this call for an element of trust on your part and trust and benefits of the adults are in short supply in our industry for Russell. Good reason as a result of event in the last cycle.
Over there have been many changes in our industry and in our company in particular along with many.
Successes.
We believe we never had the benefit of the doubt that our long term track record of converting resources to reserve withheld opinion, and <unk> will be and our success at Canadian <unk> got good reason for your faith and confidence without diminishing the success lift on our other mines are this.
<unk> is a game changer changer, that's our main debt that's been a significant win for us on cash flow, but before Odyssey Canadian loyalty was seen as limited on Nathan it's well establish opened.
Today is a tough tier generous on all open pit and underground mine.
So we urge you to.
To look at the bigger picture was on Mac has the potential to become another generational mine in our portfolio.
That will be in production on for at least 15 years carried carried in our strategic mine life. We look forward to advancing this mine and realizing its full potential and we hope you join us and enjoy the full episodes.
Zone.
Upside.
And debt in term of our Canadian profile and short and few short years, we have established a platform. This is among the biggest in Canada in third on production.
Auction platform that will reach an initial roughly 500000 ounces of gold all comes through concentrated in.
2 mines in the same region of the country and with that I will turn it back over to the operator for questions.
Sure.
Thank you we will now take questions from the telephone lines.
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And the first question is from.
Question is Tony from CIBC World Markets. Please go ahead. Your line is now open.
Good morning, guys. Thanks for taking my call. My question is with regard to the.
The indications.
For indications that you've given for inflation going forward can you give us a little bit more color on some of the offsets that you are seeing.
I think you mentioned that you are seeing some inflationary pressures that you've got.
On some operational.
Sorry operational synergies that can offset that.
On areas, where you might not have the operational synergies and we might see some cost escalation. Thanks.
Thanks, Anita I'll start on and I'll, let Jason too.
Any more detail but.
Talking about inflation, you know a big part of our interest is manpower.
Then we have negotiated 2 contracts this year successfully within our budget. So we have not seen really inflation in debt, there's been some inflation and inflation pressure.
In the first half, but like we mentioned we were able with ours some synergies some.
I'm good operational excellence again 2222 to limit the impact and then we were right in line. So on <unk> and you can give some detail of what we see coming and all we we plan to mitigate these discuss pressure.
Yes, sure Daniel and good morning.
As Daniel mentioned, we are seeing inflation those head on.
<unk> items like everybody else out there they are trickling down to consumption level of grinding media and.
And the like explosives et cetera, and those are all up year over year up a little bit more and more than our plan.
Indicated it is.
Not significant.
With the guidance range that we provided previously of the combination of getting there.
A little bit stronger foreign exchange I'd, probably peg it at $15.20 of.
Of negative impact compared to where we were at the start of the year and obviously, we're working to try to offset that with.
Uh huh.
All of our procurement efforts, we feel pretty good about that and then also operational excellence I think it's been on.
A big part of our success over the last number of years on that program is just that much more mature in advance. So we feel like we're in pretty good position to offset some of these impacts when we do think they are.
We are cyclical in nature they are.
All of these direct inputs for quite a bit from recent cycle lows. So come off from highs earlier. This year. So they do seem to be moderating, but there is definitely an element of uncertainty here in <unk>.
Have to do our best to manage it.
Okay and then.
Second question is just on.
On Jacobina I think you guys mentioned that.
You'd be pulling lower grades for the second half of the year as the mill is now outpacing the mine.
Go forward and that was temporary and it's going on it's going to be your setup into 2022, but how do we.
Okay great.
Jakob benign in 2022 and 2023.
Think previously were kind of targeting towards that 2.3 gram per tonne material to achieve those production targets is that still.
Your your target.
And you talked about me.
The underground mine itself Thats. The growth you can expect but you can understand that our phase 1 was 65 on the tons per day we.
Higher than debt at 68, but you saw a number we're achieving 70 to 175. So the mine is not for these 2 produced at the amount of.
Often but we have stockpiled.
Thank you.
With lower grade. So this is why the greatest would be a bit lower so we're going to process more ton based on lower grade and then in total debt will be a higher production at the end of the day I think we have to take the advantage that we can that supplemental on incremental or.
Into day meals and Thats, what were doing we were making.
A lot of money, even with 2 <unk> grams per ton that <unk> will be non thats, what and then eventually when are we going to catch up.
The production on the underground production on to what the mill is able to do within the greater will come back to debt to 3% to 3% for okay.
Okay. So yes, I guess I was just asking when do you think you'd get back to that 2.3 years.
2 for and then secondly.
And as you mentioned youre, making a lot of money at $2..1. So then what kind of.
Is there any kind of.
I guess processing cost reduction with the higher throughput that I should be thinking about in the model. While you are still purchasing $2.1.
On the why don't you answer that question.
Yes. Thank you.
We were going to 2 per share I mean, we're doing step by step implementation for the purpose on console quite sure with.
What we have in mind by increasing to 8500 tonnes per day without having planned for <unk> kind of that we're going to be a much more efficient so.
Yes sure.
At 8005, hundreds what that new I would say approach I would say I would expect to see some some kind of decrease with processing.
Okay regarding <unk> regarding grade.
That's 1 phase II was planned so around it.
The second half of 2023 and you should see.
Great going back even maybe next year, you Shouldnt see great companies with debt to 3 total point for.
Okay Fair enough. Thank you and then last lastly on Cerro Moro.
As we look at the.
Just taking a look at the production year to date overall.
Is it fair to say that it might undershoot, the original sort of.
Guidance range for that for that specific assets, where other assets that are outperforming with minera, Florida and El opinion on.
On versus your budgets might make up the difference.
Sure the other for.
Yes.
We'll do better, but we're still targeting to achieve our guidance.
So second half I'd say on my model is planned to be a very good assets.
Are we going to see Theres always risk yes.
Yes, we're still aiming to achieve our guidance at settlement.
Alright, so that was on throughput reverting back to normal throughput softer that sort of health and safety shutdown that you guys.
And then secondly on I guess, a really good grades right, yes exactly okay.
Okay. Thank you very much that's it for my questions.
Thank you. The next question is from Fahad Tariq from Credit Suisse. Please go ahead. Your line is now open.
Hi, good morning, Thanks for taking my question.
Just on the dividend I noticed there was some commentary around.
Just maybe a different methodology or a slightly different perspective based on minimal cash that's in EBIT can you just touch on.
Kind of thinking around how the dividend is.
Increased.
If that has changed given.
Theres, obviously, some capital commitments that are coming up over the next few years with lots of Bakken well Arctic you add that up it could be you know almost $1 billion of Capex over the next few years, just maybe just any changes to the way youre thinking about the dividend.
Good morning.
We mentioned in the past that we might look on.
Our formula for dividend, but we've decided to do that we look at our like you mentioned with regard to our future capital our future cash flow generation and Westwood can afford as a dividend and then when we look at what's coming in for Matt uptick it was on Mac.
You saw that Jack will be known as a lot.
Lots of debt now.
We can afford to increase our dividend to <unk> 12 per share and then we're going to continue to look at it.
In the future and then we want debt that like we mentioned many times that dividend to be sustainable. So if we were able to increase it.
10, 5 to 12 per share it is because we believe.
And the next many years can we can afford to be it.
That's the level.
Okay. That's clear so so if gold price to stay above 13, 50, an ounce. It's fair to assume that this dividend would be consistent it will be consistent at $13.50.
Importantly.
Okay, Alright, that's it for me. Thanks, so much thank you.
Thank you. The next question is from Josh Wolfson from RBC capital markets. Please go ahead. Your line is now open thanks.
Thanks for taking my questions for.
On Cerro Moro.
Yeah.
Is there anything you're.
Is there any details you can provide in order for us to sort of connect the dots as to what's required to see improvement in the second half year, historically and last year, obviously, COVID-19 being a bigger impact.
Getting the development rate seems to be a challenge.
Maybe giving you more comfort on the outlook now in terms of.
Expected improvements.
Good morning, Josh. Thank you I'll, let Joanne answer, but I'll say development as the rates are improving.
They are going a lot better now so so maybe you can do on you can give color on why we're very confident that the second half will be quite a good assets animal.
Yeah for sure good morning.
So as Daniel said I mean, we did progress for you will cut back on our debt lockman. So we're not we will turn on a lot of flexibility with mining.
Just to give you. An example, when we start July we were only we don't need to do so they need meters of development to meet all the requirements for the next 6 weeks, so we're getting in better position.
We have hired reconciliation I would say better Beverly confusion between what we mined.
Versus what do we see the mill, we did some progress as well with controlling dilution and what's already on our vein so all of that together.
I think that the operation now reach a point, where we see it I would say Q3 and Q4.
The target that we want it.
So again thats going to be a progressing approach quarter over quarter. It settle model. So.
For sure I think I will not items going to be challenging to meet a budget and guidance on that 1 but the plan is we havent for Nova.
Is showing a good trend if we if we succeed to maintain that high level of development.
For retail and for the heap Leach study.
What was the grade of the material that was used for the column tests.
It's about 1 grams per tonne.
So on.
When you're thinking about.
This 5 million ton target I guess initial resource is that that comparable grade.
Thanks.
And we should think about for for this opportunity.
Yeah on things.
Yes, that's correct okay.
For sure I mean, we're going to see we're going to tell for communities as well I mean, we won't dilute for we don't have to but that can be on a run rate as well, but I would say 1 gram per tonne itself minimal each heap leach.
Great sure.
Yeah.
Okay. Thank you very much okay.
Thank you. The next question is from Mike Parkin from National Bank. Please go ahead. Your line is now open.
Hey, guys. Thanks for taking my questions.
With Odyssey.
Has there been a good plan developed in terms.
Great.
Permanently be involved with the Canadian <unk> mill in terms of what it'll be scaled down to right now you've got the big say feeding into the 3 ball mill lines, if I remember correctly.
I know theres been some preliminary to talk about potentially removing the sag.
Is that kind of run.
Couple.
For the ball mill lines and kind of keep a third 1 is a spare or what's the thoughts there.
Good morning, Mike.
On maybe you can put some color on it but we know exactly what needs to be done to to achieve but again Mike.
6.7 years on wins will be in full production underground.
We'll just.
So things might change.
Our partner announcement, and we said the same thing on the new a new discovery at met uptake.
During the.
The second quarter, so if we find more or more areas to be mined than what might increase into future investment assets.
For now we know exactly what is needed to achieve 20000 tonnes per day, so maybe on on.
EMEA on what needs to be done.
Yes.
I will not go into detail Mike quick question, but.
What's unique to what we need to understand here is we cannot match the ore because the processing time, because we need to keep.
Do you still plan on running all the time took on many of the mining sequence. So as you said we need to.
On.
Right size it puts us expense of about 20000 tons per day and day.
Here is it going to be to do with efficiently. So we are going to park. Some of the some of the grinding units some of many equipment going to.
Part, but that's 1 that be removing case on.
Something up it's coming so we're going to have they're going to have we're going to remain with that flexibility.
So from the current.
Let's say from the current.
Cost for assessing cost by by processing less tons, we believe that.
Puts us on cost.
Sales by about let's.
On let's say top on my head $1.50.
All of our U S per ton more for processing going up 20000 ton per day.
Okay that's perfect.
Another question with the Jackup Bina.
Kind of revisit on the phase 2 simply just kind.
For these got it in terms of where the bottlenecks are.
And.
Unlocking the potential by addressing those rather than going ahead with a bigger capital spend can you just give us a couple of.
Our ideas, where the bigger bottlenecks are within the mill.
How youre working to address those.
Yeah for sure I mean, Chuck will.
What can we go we had a really good surprise on Tmall working like you're doing a really good job I mean to do though the bottlenecking Little project and it just creates a price on it.
It's bringing us to 2 just reconsider what we what we have for phase 2 extension. So I would say on the short term, Mike they're going to work on.
Like what would be the.
The water pumping system and flurry pumping system and we also wanted to do some modifications to our appealing line fully then you've put in some we still have to do some modifications there to release on the system. So in parallel I mean, what what we see there is we have we're using a power draw of about 92%.
Sweet.
Moving on mining is about 95%, 97%. So we're going to take advantage of Santa Barbara running units.
I would say, we also under which aligns the crushing circuit for primary primary circuit then it was about 38% and the second on a rig.
Crusher circuit is ended up above 50.
Percentage, so we see some opportunities there.
By optimizing use usage.
I'd say, maybe a decrease I think on them at 3 of these although up the crushing.
So thats a little help.
I would say the second 1 is that with for the third point is going to be to optimize grinding size.
Spot on all sold screening in flight loading performance.
2 for sure unload on load.
They are running units and be able to push more tonnes through the mill.
Do you expect any loss on recovery or have you already kind of done some studies on that where youre not seeing material.
No.
And.
Yeah. Good question I mean, maybe you saw that in our belief that we run to test in Q2.
We went up.
We've closed on mill up to 8600 tons per day on the day, and we average really high tonnage over a short period of time.
For sure we saw a decrease of recovery and strength.
But that was with 10, 1% I would say.
And on general assessing debt.
So I mean by the way on that on pusher on now we're looking at <unk>, we actually have design of 160 Micron I mean between 160 day not have anything Mike on doesn't make a big difference. We believe that we can put it out.
The further in we don't see at the inflection point.
So that mean by being.
Cutting a little bit by processing I would say coarser material for sure we're going to cut on power requirement as well so as I said this is something that.
On that come up like in Q3, and we are already excited and we still try to understand.
What's going on would be I would say the positive impact on cost going forward and they're ready to find where it's going to be a sweet spot for processing rate.
Okay. That's good.
And then last question.
With respect to the NCI B, how should we kind of think about the execution of that are you going to be.
Strategic.
We're looking to kind of just be irregular participant in the market.
With it and Brian kind of AR.
Fairly steady.
Pace of shares for the next 12 months.
We're going to be strategic and Mike.
And then device small amount of shares.
We are going to decide to do it if we do it it's going to be on a strategy point of view.
Okay.
It for me guys. Thanks, so much Joe Mike.
Thank you.
Again, Please press star 1 on your devices keypad. If you have a question or comment. The next question is from Ralph <unk> from 8 capital.
Please go ahead. Your line is now open.
Good morning, Thank you Daniel for the question.
There is a quite a comprehensive tailing strategy being built around Jakob Peter.
And I'm just wondering.
Is substitution of the surface tailings to the highest degree possible. The go here, where you're taking more sort.
Whenever an ESG perspective, or are you coming away with more of a strategic mine life at the increased processing rate of 10000 tons per day, when you're managing the surface tailings capacity.
Good morning, Ralph good good questions.
A lot of strategy behind the 10000 tonnes per day.
Sort of a check will be nowhere for it we have to think about trading you know we mentioned already that we are going to.
Our goal with our non dwelling backfill system to start are we buying them for that but you're going to switch eventually or ask both also what batesville system to put more on containing underground and even though we're studying.
Dry stack tailing on surface to have to use less and less.
Based on surface and all of that it's included in our strategy.
We would like to use as much as possible and the maximum the ex trajectory will obtaining and thats. What we have been successful at 16.6500 tonnes.
We added 13 years 2000.
16 years of sustaining and mine life, we will increase to 85% and we will have the same because we are going to implement a backfill of the system. So the next step going to a higher tonnage to use the same strategy, what we can do to maintain our obtaining minded.
Still increasing.
For the underground mine life, but putting more maintaining so you're absolutely right.
That's part of our strategy to put as much or more more tailings underground or reduce our footprints on surface with tuning we're doing already quite good.
We see opportunities in the future and Thats going.
To be bought.
1 of the big part of the Phase III expansion.
Okay. Thank you and my second question is coming back to some of these wage inflation pressures you talked about the 2 contracts secured would it be safe to say that those are in that sort of.
Plus 2% to 5% range that we're seeing.
On the industry benchmark and specifically when does the Cerro Moro wage negotiation come due.
With the <unk> opinion, then jacobina this year.
Several mobile I don't remember maybe yamana.
Doug on that ultra cold sorry, yes.
I'll get back to you, but I don't think its this year 2.
2023, guys 23, okay.
So it's for 3 years away.
Okay. Thank you that's great.
Sure Ralph.
Yeah.
Thank you the next question.
From tenure Jack for chronic please go out from Scotiabank. Please go ahead. Your line is now open.
Hi, yes good.
Good morning, everybody.
Just wanted to come back on the share buyback I know you commented on it being strategic I'm, just trying to understand how you view.
Is.
First for share buybacks dividends about 115 million share.
Share buyback should you do all of that that's over 200 million finally depo.
David I'm, just wondering how youre balancing that do you have a target in mind that share buyback would be similar.
Your dividend just trying to understand the strategy.
Go ahead Jason.
Yes, well I think first first Danny it's got to start with the overall capital allocation. So we still have a balance across all of those priorities. That's the first kind of point a point of reference is Daniel.
With a 12.
Yes.
Fixed in our mind, it's sustainable we'd make sure it's sustainable through the cycle and.
And that's going to be the first priority and then once we look at those other capital allocation.
Opportunities then you can look at the D&C.
So straight Debbie first and then.
There will be a component of go into the CIB.
Perfect. Okay. So there isn't a target within the component Thats whatever you.
So there isn't a target based on where we can look at just the dividend in and of itself. We've got to look at all of the capital allocation I think we've got the transparency on on capital now is very well laid out with the 2 projects in Odyssey and Watson Mac now it's spread out manageable.
On every year and we will still continue to chip away at the balance sheet too. So we're going to be balanced across across everything like we have been for the last several years.
We mentioned and we mentioned many times 10 year debt, we have 3 buckets or capital allocation the dividend.
Reducing the debt and then.
Debt is reaching a level no debt.
We are very comfortable it will continue into our financial debt. That's 1.1 does enough cash and we might see.
On a 2 to do within the D&C IV.
It's all included in our strategy we.
We look at all the time to 3 of these 3 buckets and then if.
There's money available at 1 point, we might we might do.
You might do with the share buyback, but.
It will all depend on what happened with so many other factors.
I think gold price debt.
We don't control.
Okay Fair enough. Thank you and maybe just coming back on inflation.
Anita asked us on I, just wanted to come back on you talked about.
Session fees.
Offsetting this inflation on Jason Thank you for the.
Currencies are shifting 20 Bucks was due to <unk>.
Stressing of the currency.
Just for ourselves.
Are you seeing the inflation.
When you look at all of these numbers.
Going forward in that 3% to 5% range that youre looking to offset I'm, just trying to see if that.
Similar with your peers in that sense.
Yes, so maybe just start to clarify the 15 to $20 would be.
Yes.
Both both FX and inflationary pressures baked together I kind of gave you a 1 stop there so thats the 2 of them and they are.
It's coming through on on on.
On a component of items, we highlighted a few in our disclosure but.
We are seeing.
The results of our procurement efforts selling lower cost on other stuff.
So I think thats part of it as well to the extent we are seeing.
Higher costs on debt.
Straightforward sounds like grinding media Ware.
We're actually seeing lower costs on cyanide by example, because of consolidation work that we're doing so it's a bit of.
Peter both but the net is a little bit more on inflation for sure. So we've got a.
Focus on more of those.
Bundling and consolidation opportunities to try to take the edge off and then back to a pure operational excellence. So thats more of a productivity avoidance type type approach there so it will.
We're coming on it from all angles.
Okay. So it seems as though you are probably down on the lower end of that sort.
In terms of what you are seeing inflationary wise, yes for sure the volume of 3% to 5% I think that fits squarely within the labor component that Daniel mentioned very much within our.
Very much within our.
Planning and then you know on a line item basis, we may see higher than 3 years to 5%, but when you when you look at the aggregate.
On a ramp all of our work is going to come out more to that 3% to 5%.
Great. Thank you so much for the insights Joe Daniel.
Thank you there are no further questions registered at this time I will turn the meeting back over to Mr. Racine.
Well. Thank you operator, thank you everyone for joining.
Aggregate, we look forward to updating you on our third quarter call in October for these take care stay safe and enjoy the rest of the summer. Thank you bye bye.
Thank you. The conference has now ended please disconnect your lines at this time and we thank you for your participation.
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