Q2 2021 Alexco Resource Corp Earnings Call
Thank you for standing by this is the conference operator.
Welcome to the electrical <unk> Resource Corp, second quarter 2021 conference call.
As a reminder, all participants are in a listen only mode and the conference is being recorded.
After the presentation there'll be an opportunity to ask questions to join the question queue. You May Press Star then one on your telephone keypad should you need assistance during the conference call you May SEDAR operated by pressing star in there.
I would now like to turn the corporates over to Bertrand you Bella Investor Relations Communications Heath.
Please go ahead thank.
Thank you very much and good morning, ladies and gentlemen, today's Tuesday August 12, 2021, My name is Josh and Ebola and I. Welcome you all to Delek. So he's always 2021 second quarter results Conference call. This call is being webcast live and can be accessed through the events and webcast section.
That site at electrical resorts Dotcom and audio archive of the call will be available later today.
This slide also contains our most recent news releases and our financial statements for the quarter ended June 30th Twenty-twenty. Upon all amounts mentioned today are in Canadian dollars, unless otherwise indicated today, our chairman and CEO. Please no man will discuss our most recent three.
And he will be joined by our President Bad Troll, and our CFO Mike call during the question and answer period.
Please be reminded that some statements made today may constitute forward looking information within the meaning of applicable securities law.
Really fast performance discussed today does not indicate future results and our business involve several risks that could cause results to differ from projections and Mr. Sun encouraged to review the disclosures pertaining to risk, which can be found in our most recent regulatory filings available on our website.
And I'm sorry.
I'd call I've been now leave you with our chairman and CEO. Please know man.
Thank you Raj name and thank you to everybody who's attending this morning, certainly a good to talk to you.
I'm a little bit of a change up this quarter my presentation, there's gonna be relatively brief.
And I'm not going to reiterate our financial results do you have them available from Oh filings yesterday, so I'd, rather I I'm going to give you a few high level remarks from site operations.
And then expand in response to any questions that are that you might have I think that that should be a pretty productive way to to execute this discussion.
Our ramp up of operations at Keno Hill continued during the second quarter and we've been making good progress I would say that you know our workforce is settling in.
Covid restrictions, although still rigorous are not viewed as as threatening that the workforce level, which is important and so operations are hitting more about a routine type of a profile.
We see on the revenue side, you know we continue to mine ore from Albion L. Bell Keno mined in the in the last quarter, we mined 6460 odd tonnes.
The head grade was just over 700 grams per ton in the second quarter and the year to date had great is that is there a little bit north of 770 grams per tonne silver.
Whereas you know pretty strong base metal credits. So this mine continues to overachieve.
It's block model estimates and Hum, but we are at the present time moving into the lifestyle that we would.
It wouldn't seem to mine there and then we'll be looking to transition and redeploy our.
Resources, we have in that and that mind about Kino mine too.
I, the flame and moth will walk through our two grabbing him.
The one thing that I would say about the Belgian our experience is that we have done a significant amount of long hauling and for those that are familiar with our technical reports, you'll know that buys at bermingham and flame and moth we have a long hauling component.
On the on balance it's a subsidiary component contrary to that you know about Kino, we've been doing a fair amount of long hauling it out would have to say that our experience has been very very good.
We you know whenever I ever achieved grades we haven't taken a lot of dilution.
We're using you know much more.
I guess sophisticated or advanced long holding methods, we used in the past and the results have been excellent. So just to make that point.
That that the Bel canto experience has been really pretty pretty pleasant.
In terms of but in terms of our operating practices as well as well as output, but time to move on.
So we remain on track to reach the Bermingham and flame and moth a war in the second half of 'twenty 'twenty, one I would.
Say that at flame and moth which of course, you know is situated right very close to the mill, where we are at the first production level at.
The 835 level and we're about to cross cut to the or it's about 120 meters to the euro and that's kind of open up about 65000 tons.
Material. It has a grade of 600 to 700 grams in that type of range at the top of the flame and moth a whole body.
And we would anticipate a you know being into that ore body.
The last half of the year at Bermingham are in contrast, we are in a drive called the 11th 50 is the first production drive that's a result of the new reserves and resources that we calculate it earlier this year.
And and and there is where we're within meters off the first all blocks are at about Kino. The major portion of the valkyrie or deposit that will occupy the production component than 'twenty.
22, it's about 140 meters in front of us down to ramp.
Yeah, and that will open up that when we get there about 60000 tons of close to 1700 grams per ton silver, so where within 140 meters of bad meantime, where we're gonna be mining at the 1100 level and extracting extracting ore going into the third and fourth quarter.
Underground development rates as we mentioned are in that published material is slower than forecasted and we would you know we would quite to crew and experienced related issues.
Issues, there, but they certainly are improving and we are pretty happy with where we're heading here.
At Bermingham. The initial oil production is anticipated as I mentioned in the third quarter and at flame and moth initial oil production is anticipated fourth quarter of 'twenty 'twenty one.
Don't forget that we updated our mineral reserves are in may of this year. They were increased by about 20% to one point or one 5 million tonnes. So we added about 270000 tons.
Number for those used to bigger mines, but don't.
Don't forget that if 400 tons a day, that's almost two years of production there.
So the new a new resource at a you know it is a it is an average grade of <unk>.
804 grams per tonne silver three 8% Zheng two 6% lab, there's a little bit of gold.
Yeah or as some people report.
And and we would say.
<unk> thousand grams per ton silver equivalent based on the normal calculations.
So theres no reserve as a.
Standard a mine plan and we would we would anticipate producing more than 35 million ounces of silver over the next eight years.
At the mill, we processed nearly 11000 tonnes of ore in Q2, its a 18.19000 tons year to date with a year to date, a head grade of 817 grams per tonne silver about 11% land and 4% zinc so very high base metals.
In the second quarter that mill averaged 100, and 176 tons per operating day for the days was operating in Q2, and I think that the mill is simply operating in response to the orders being Oh, that's being extracted and deleverage from.
Bell Keno, but the Q2 experience was at 65% increase in throughput over the last quarter and all of the or the great majority of the construction work refitting works in terms of site claims a new fine ore feed or construction revenue building. The second ball mill re grind bells et cetera.
Have all been completed and are in and stand ready for scale up in Q3 and Q4.
The experience in the mail has been has been excellent to actually recoveries.
Uh huh are on or ahead of our expectations and has averaged 93%.
But recovery of silver in Q2 with 94% of the silver report into the led concentrate so you know pay abilities are a high and and that's it and that's good to see you here today.
Recoveries are around 91% with 87% of the so reporting to the led concentrate so you can see the similar trends.
You know our emerging at the mill with increasing efficiency and especially Playability as we go along here.
So Additionally in Q2 as I mentioned before we are we released they are updated technical report the mineral reserve increased as I mentioned.
And we end up here with a with a full point of run rate of four 4 million ounces of silver per year over an initial eight year mine life.
Turning briefly to exploration well.
We will have a lot more to say about exploration in a couple of weeks here.
And then the Bermingham northeast deep exploration program is continuing we have four drill rigs are.
<unk> continued to operate they're using directional drilling technology.
That is a 20000 meter underground program.
Excuse me.
And we're about 60% of the way into that particular program, but we haven't done a thousand meters have been drilled to date.
Ultimately, where you should have more than 50 intercepts you know through the target zone.
In this northeast Deeps area under the Bermingham deposit and target those ads are that that zone are you know what.
As we have talked before is 400 to 500 meters long well will be drilled off of 10 cancers, which are which are being drilled with large diameter large diameter core off of which we drove daughter halls have a directional holes to get a vertical hole spacing of about 20 meters.
So we're doing that very deliberately to make sure or two to enhance I guess the opportunity for us too.
You know when we stopped calculating the the the resource for this deeper.
Mineralization that we're able to go straight to an indicated indicated category.
We're working towards a releasing initial drill results in late August.
Say that are we where we would have to we'd have to have them available for.
For the second quarter for this well.
This week actually but we had some some duplicate some standard issues quality quality issues.
We had to retest the lab was delayed as a couple of weeks nothing to nothing.
Nothing to get excited about there pretty routine this is very high grade material and.
To the extent that it is intercepted so it does give the lab some problems from time to time.
Our objective in 'twenty 'twenty, one is to incorporate this drilling into a new site wide mineral resource estimate.
And of course that'll be focused mostly at bermingham, but it will gather in somebody that drilling that we did in 2020.
So it's still our target to complete this resource analysis by the fourth quarter of this year.
And just to see where we stand.
At this Betsy at Bermingham.
So finally, just to conclude I wanted to again express my sincere thanks to our workforce, who have continued to deliver results amidst the ever evolving covid environment.
Together.
We've made steady and significant progress on delivering Keno Hill back to full production, but make no mistake. We still have hard work ahead of us maintaining and increasing our forecasted underground development advanced rates as key as his continued successful recruitment of underground miners and beta.
That's technicians.
We also need to be navigating the normal short term supply chain issues as is most of the other people in the business.
And for US, it's all about execution and that comes down to underground advance rates continuing success in recruiting underground operators miners mechanics, especially and being proactive on the supply chain challenges.
With that I think I I've seen enough yet to give you a high level overview, Sir I'd like the operator to open the call for questions. Thank you.
We will now begin the question and answer session join the question queue. You May Press Star then one on your telephone keypad.
You'll hear a covid acknowledging your request.
If you're using a speakerphone please pick up your handset before pressing any keys twist.
With jewelry a question. Please press Star then two.
We'll pause for a moment as callers trying to cure.
The first question comes from Jake <unk> from Alliance Global Partners. Please go ahead.
Hey, guys. Thanks for taking my questions.
So ajay.
Looking at the ramp up kind of heading into the second half of the Europe I'm trying to get a sense of the pace, we should be modeling for Q3 and Q4.
Is there any color that you guys are able to give on how we should kind of be thinking about that curve up to 400 tons a day in the second half.
Well I mean, let me take a shot at that.
No Jake it's a it's a you know it's an evolving issue obviously as we as we ramp up here.
We are fully confident that we will have an opportunity to be able to push that mel up into the higher numbers in the fourth quarter.
Of 'twenty 'twenty, one and certainly.
You know by the second by the first quarter of but 2022.
You're going to be.
Be modeling you know sustained a 400 ton per day or four plus million ounce per year, it's sort of a run rate. That's I mean, but you know hypothetically I guess, if I was sort of you know.
I'm working on a model, that's what I'd be thinking.
Okay, Yeah, and I understand it's a moving target, but that was that was what I was hoping for so thanks for that and then just on recoveries I mean honestly, we saw a significant increase quarter over quarter with with both silver and zinc you know do you expect these to trend higher in the second half as throughput ramps up in your transition.
To mining bermingham and flame and moth material.
Yeah, Brad said the expert here, so I will say anecdotally before Brett I'm, So sorry that that Mel you know Jake is operating as good or better than we've ever seen it operate but I'll turn it over to Brad because you're correct.
The actor of the war, that's going to be coming from flame and moth in Bermingham is slightly different it Brad.
Yeah. Thanks for that question Jake.
I mean, certainly our recoveries in Q2 improved over Q1.
Again about 93% on the silver side, but I think even more.
More important just in the last month or two June July we were at just over 94% on silver. So I wouldn't say that it will continue to increase I think we've kind of you know.
We've reached the point of of <unk>.
Excellent.
Response, but again, we are transitioning from bell Keno tube, Bermingham, which is a different war.
And that will will require the re grind mills for the concentrate so.
Yes, so I think in all the recoveries that you're seeing right now in that 90, 394% or.
That would be.
Our expectation going forward.
Got it Okay. That's helpful. That's all on my end thanks again.
Thanks Jay.
The next question comes from Joseph Reagor Roth Capital Partners. Please go ahead.
Good morning, guys. Thanks for taking my questions.
Kind of just following on a little bit of what Jake was asking on the operating right.
Ramp up Yeah, you guys gave your your operating rate in Q2 is 176 tons per day, but that's per operating day. So.
You know I guess.
Looking at Q3 and Q4.
Should we be assuming a certain percentage of days that the mill will be down as we're looking at those numbers you gave it or were those numbers based on.
You know an expectation of the metal being you know fully available the rest of the year.
Well once again I'll, let Brad take that but I mean, that's the high level are you know issue is that that mill is operating Joe in response to the or that's being extracted from bell Keno and it's worked pretty.
Pretty much as we expected I mean, it's it it's yes. There's runs have you know a couple of weeks you know we are you know.
Working on you know optimization Debottlenecking type work. So it's worked out pretty well and are in the for the for the last half of the year, though you're going to see or being delivered from you know about Kino initially and then and then bermingham. So there's got to be you know a supply of all that is going to <unk>.
Able us to operate that mill at a higher throughput.
Albeit it may not be a sustained higher throughput, but I don't know Brad do you want to elaborate on that.
Oh, Yeah, I mean, I think the mill General Joe has been operating on a two week on two week off schedule.
And that's.
Mostly dictated by like cruise and crew rotations, we want to make sure that all four of our operating crews have you don't have operating time when when when when orders available, but certainly you know that 176 ton per day, I mean that there's not any.
The indication of <unk>.
Mechanical throughput capacity I mean, we could that we could operate let's say for a week at even higher throughput, but I mean, so we're trying to find the right balance of.
Sustained operations you know for it for a couple of weeks at a time.
But again being cognizant of the feed source coming from Bell chemo. So we'll likely continue this two week on two week off rotation at the mill into Q4, but as we get closer to the end of the year.
That's when we'd be looking to increase the run time.
At the mill.
Okay fair enough.
And then on the capital spending front.
You know the first half of the year you guys spent a right around $25 million based on the cash flow.
Statements are what should we expect you know as far as capital spending in the second half of the year.
Well I mean, it's it's it's you know it does.
There's two pieces to the capital the way that we look at it Joe.
The first is the P. P N a N.
And you know to a large extent that is you know.
Already invested so it's all about you know working capital and and that is you know that is based on the fixed costs the underlying fixed costs at the operation that theyre going to continue at about the same level that we have that.
At present time offset of course by you know revenues that are that are returning from the AR from the ore that's being built that so the underlying cost side. You know I don't anticipate are going to change significantly, but its the revenue or the revenue side of the equation is gonna be.
The important piece, Brad do you want to elaborate on that.
Yeah, No I think that's a.
Yeah.
Their comment.
The vast majority of our PP&E limit the mill and you know all of these site wide infrastructure projects. They are essentially complete.
We are now and kind of a normal I guess operating burn rate. If you will that's pretty consistent month in and month out and and it's now the focus is increasing the revenue to start to narrow that.
GAAP.
Yeah.
Okay fair enough I'll turn it over thanks guys.
Thanks, Jonathan.
The next question comes from Nicholas <unk> from Cormack Securities. Please go ahead.
Hi, guys. Most of my questions have been answered so sorry to be repetitive, but just to be clear. It sounds like the mill is performing quite well. So that's really holding the ramp up back as the underground development rates and the main issue there is recruitment and retention of labor I guess the ground conditions you've encountered.
Have you know underground has so far been more or less as expected. It is that all fair to say.
Yep, that's pretty reasonable.
Okay great.
Yeah.
It's a fair statement.
Okay. Thanks.
Okay.
The next question comes from Mike Hughes from <unk>.
Please go ahead.
Hi, good morning, Thanks for the extra detail on.
Underground development at flame and moth and Bermingham.
It kind of sounds like that you're going to be able to seamlessly transition right in the bermingham and flame <unk> moth.
Or do you anticipate that there might be a break there are where the mill might be idle for more than a couple of weeks.
Hey, you know we are not not the way that we're that we see it Mike we've got plenty of war.
To continue to come from Bermingham.
From a Belgian Oh, sorry, Bermingham is very close to being in New York, So you're going to see a continuous supply.
Of ore to the mill.
It is true, though that the multiple working headings that are in the plan.
<unk> will be you know yeah, but bermingham.
You know at a deeper level that I mentioned and also at flame and moth.
The blockable, whether we're cross cutting to the present time.
Those blocks of war.
Can be expected to be onstream in the first quarter of 'twenty 'twenty two.
You know how soon we get to them in the <unk>.
If we get to them sooner in the fourth quarter that's great.
But all our plans show a steady supply of ore to the mill pretty much in line with what we've been seeing.
Until we until we get those bigger blocks of war underway and more earrings available at Bermingham and and playing them off so I'm not exactly sure if that answers. Your question was suddenly not looking.
Any.
Stand or or or.
Or step back.
At the at the mill, we we anticipate a continuous supply an increasing supply of ore to that mill.
But that does answer it really does sound like you're really managing your people in the days of Covid pretty well.
One more follow up about the zinc recoveries are they really were all it was quite a jump from the first quarter and much better than the prior operation.
Back in earlier in the last decade is that pretty much from re grinding.
The concentrate and do you think that youre going to be able to maintain those ink recoveries going forward.
Yeah Yeah.
Let me take a shot at that yeah. Thanks, Mike.
It's not because of re grind its <unk>.
Essentially to two changes I mean, one is ph control I mean.
Lead zinc flotation circuit ph control is absolutely critical so you know I think we have that dialed in.
Pretty well right now and we've also made some adjustments to the field.
Adjustments on some of our reagents on the zinc side so plus.
Plus 75 close to 80% recovery on zinc with you.
You know in excess of 50% Congress so that that is as good as we've seen the.
At Keno Hill, and Yeah, we would expect I think that to continue going forward.
Certainly at Bermingham, and especially when we when the redrawing mills are operating at Bermingham.
Okay. Thank you and one more thing that following up on that when answering the question earlier passing it off from Clint to you I wasn't sure about the answer with the new type of ore bodies flame and moth in bermingham or a little bit different in bell Keno do you foresee pretty much.
Continuation recoveries, you know again seamlessly into those ore bodies are you expecting a few challenges you'll need to do our work.
It worked through an optimized.
Yeah, there may be certainly some learning curves I mean again the reason that we are installing concentrate re grind mills.
Is all due to the the Bermingham deposit, which again bermingham and flame and moth as you know have lower base metals and bell Keno and so those re grind mills are necessary to increase the concentrate grades.
To meet to meet spec.
Specs on the concentrates so.
Yeah I mean.
It wouldn't be it wouldn't be unusual to have some learning curve as you get into some of these new laws, but.
Re grind mills are ready to go in and.
And you know again.
30 days or less away from starting to mill that bermingham or.
Well the thank you.
The the directional drilling seems to be a real cool not just from the number of downhole.
It hits you might have but also understanding true whets their buy coming in at different angles, but just from the numbers of meters drilled its kind of hard to get to estimate how many opportunities you have had to pierce the targeted panel and I am guessing its somewhere with 11500 meters, you'll probably around two.
Five to 30 hits on target there is that close.
Yeah. Your arithmetic is pretty good Mike last I looked it was 33.
So oh yeah.
Just to elaborate on that a little bit.
They yeah. It is that the directional drilling exercise has been important technically.
It is.
Not as easy as just shooting holes in the ground.
From the surface.
It's slow getting around the bans if you like or the dog legs, but we are totally focused on the end result, here, which is a controlled intersection at measured distances.
Down dip and along strike and from that perspective, it's certainly meeting that's the expectation.
I would say that it is more expensive than we had anticipated but that does not mean that we would.
You know end up running anything over budget.
Rather we are gonna collapse, our entire effort this year into that Bermingham deep zone.
And expand.
We're drilling 20000 meters in there and what was originally planned to be at 25000 meter program with 5000 meters in reserve for other work in the district that now has been collapsed into the Bermingham deep program and we have increased the number of intercepts or.
I guess potential intercepts ore intercepts of the targets aren't simply because of the information that we're seeing as we go through this process.
The increase we're increasing the drilling it.
It's a little slower it's a little more expensive, but at the end of the day. It will end up with a product exactly as we expected in terms of in terms of geometry of Oh penetrations of the other target zone.
So with collapsing in the you know the non bermingham deep targets what would be the gross.
The number of.
The meters are targets for the solely the Bermingham deep alone now.
I think we're I think we're at like 56 or 58, something in that range. It's about another three quarters of a million bucks reporting into that that happened.
But how many how many so 58.
Yes.
Yeah.
Yeah, something in that range yet.
Oh, Okay, so as originally and the.
Yes.
I kind of broke up there for a second.
No I just said, we originally talking like if you remember you know several quarters ago 45, 50 hold something in that range. We've increased that to you know the 50.558 type range.
Okay. Thank you and the recent increase in our reserves that's actually in the mine plan now that's not gonna be Refigured later in Europe at the end of this drill program is that correct exactly yeah exactly it's a little complicated I know yeah. So.
We did that primarily because this first production level at Bermingham live in 'twenty was not in the reserves and the original mine plan, but with the increase in the silver price it.
There's clearly margin in there. So it's it's currently in the mine plan. So that was the that was the reason we redid that technical report so.
You can expect another technical report or a recalculation of the resources and reserves in the fourth quarter of this year and if that yeah, and that'll that'll primarily be driven by the steep drilling at bermingham.
But you can be reasonably sure that if the results from that are drilling.
<unk> are encouraging.
There's there's high possibility that we'd look at it even further report in Q1.2022.
As we see whether or not you know the mineralization that's deeper mineralization can withstand the economics of a of a normal underground mining plan.
Well I look forward you are the first quarter of next year I, just one last more of a comment than anything, but Brad mentioned, a burn going forward again I was staring at your cash flow statement for the second quarter and you actually had a positive operating cash flow, which is interesting for a project that is.
Still in the throes of commissioning.
Commissioning and optimization and so congratulations on that that's kind of a rare sight.
I can't say that that's going to be the same next quarter, but with with no huge adjustments in there other than a reduction of inventories are congratulations on a good quarter and I look forward to the exploration results. Thank you.
Thanks, Mike.
The next question comes from Ken Lin from Lin asset management. Please go ahead.
Hi, Thank you for taking my questions actually most of my question has been answered I just want to touch on a couple of points I've been hearing that next year's zinc smelting charge. It's already been said in the company reporting much better term next year versus this year.
Do you see similar trends and can you quantify that thank you.
Yeah, Chad I, just Brad I'm not sure I have an answer to that to the the zinc Tcs eased at this point are you familiar with what's happening.
Well, we're currently under a under an off take agreement.
The churn as you know and those terms are are set through the end of the year and then the new.
There would be.
I guess adjustments on an annual basis based on benchmark kind of guidelines. So I guess, that's all I can say right now in terms of.
Uh huh.
Our smelter treatment charges. They are set but they do have an annual kind of adjustment built into the contract.
Okay. Okay, great. Thank you.
So right now.
Haven't declared commercial production, yet right or you are capitalized.
Expenses in.
In their accounting and what's the right kind of cash if you know I don't want to just touch a little bit on the Mikes last question, what kind of cash burn, we though the exploration and then Covid you know.
Asia doing on what kind of cash burn you have in the past quarter and what do you see.
Our project on projections by the end of the year when you start ramping up the production, where the cash and I will be.
Close to the end of the year. Thank you.
Yeah, I'm going to let Mike take the first part of that in terms of the accounting treatment of the of the expenditures at Keno Hill and I can elaborate on that second portion.
Yeah. Thanks, Clint Yeah. So we early adopted on our.
Expensing all of our operating costs at the mine. So the mouth. The easy capitalized are more of the longer term capital expenditures that you see hitting the balance sheet otherwise all of our operating expenditures are going through the P&L right now, which is what you see for Bell Keno.
Okay, great. Thank you.
Okay and then the other on the other side of it Chan you know in terms of the burn. It you know it's pretty you know.
It's pretty straightforward arithmetic, obviously, it's driven by revenue.
And primarily because your underlying cost as you know a large lots of them rather than declining costs are fixed.
You know the burn you can calculate I think from current financials do you know that that.
You know our fixed costs.
And underlying costs that site Ah Ah.
Running.
That you know $2 million to $3 million more than the revenue that we've been producing over the last.
You know the last quarter or so but be aware that those that the throughput and and concentrate side the revenue side of the equation.
Changes to scale up as we go into the B as we go into the end of the year. So.
I'm not sure if that answers your question, but.
But you know that's what we're that's what we're anticipating.
Okay, great. Thanks, Yeah great.
So you did the financing accurate with much higher almost double the current stock price and you have a can have a very strong balance sheet.
Okay, and then you know, Nevada volatility up in Idaho.
That's a good move and I'm. Just curious are you or are you going to finish up the volcano right and you redeploy to bermingham flame and moth.
Right.
Great migration do you see and what do you see you know the if recovery do you expect a similar recovery from them the only if not better.
Yeah, I mean, as I said, we talked about the recoveries previously Brad was talking about that.
Well, let me just see that you know that the output from volcano has averaged I think you know at the mine head around 770 grams.
They're at the first the initial or at Bermingham, and flame and moth has a slightly lower head grade than that but as you get into these deeper levels the head grades will escalate.
Quite quite rapidly so.
We Havent, you know actually and just sort of thinking through your question here.
770, you know year to date silver.
Grades.
Are likely to decline slightly in the initial feed from.
From that combined you know bermingham and flame and moth operations, and then they'll climb very rapidly into the when these other production levels come on stream.
Okay, great. Thank you.
Thank you for the question and to answering my question.
And looking forward to your new report with them more production and more profit.
Okay. Thanks, Jim.
The next question comes from Martin Omalley private Investor. Please go ahead.
Clint.
A couple of times, you've indicated that you thought that the bermingham exploration would be transformational in terms of how people viewed Keno Hill do you still feel that way.
Absolutely no question.
I don't know any other way to answer it.
Yeah well.
We've been lucky enough to just stumble into.
A turtle, what we you know what a geologist would call sort of an ore deposit profile.
Dumbledore into a deposit, which you know, which which is unique at Keno Hill, we see the top of it.
And we certainly haven't seen the bottom of it and we're drilling holes down there 500.600 meters.
And then right next door to the biggest deposit in the district historically, so yeah. It's a it's a very important discovery for a lot of reasons.
And and I still feel.
Quite optimistic on the Blue Sky Guy don't forget that.
But I feel really quiet.
My My interest is highly peaked by you know what might be the outcome of that work yet.
Thank you you answered my question.
Okay.
This concludes the question answer session.
Like to turn the conference back over to Clint Nauman for any closing remarks.
Thank you operator, and I look forward to keeping you updated on our progress as we get closer to a four.
400 tonne per day target here and I want to thank the shareholders for their continued support and confidence in our team and with that.
I I I I wish you a safe.
And and and and confident travels as we move into the future here. Thank you.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
[music].
Okay.
[music].
Yeah.
[music].
Yeah.
[music].