Q4 2021 Coeur Mining Inc Earnings Call
[music].
Good day and welcome to the core mining fourth quarter 2021 financial results Conference call. All participants will be in a listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero after.
After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad and to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Mr. Jeff Wilhoit. Please go ahead Sir.
Thank you and good morning, welcome to Coeur Mining's fourth quarter and full year 2021 earnings conference call.
Our results were released after yesterday's market close.
Copy of the press release and slides are available on our website.
I would like to remind everyone that our press release slides and some of our comments today include forward looking statements from which actual results may differ.
Please review the cautionary statements included in our press release and presentation as well as the risk factors described in <unk> 2021 and 10-K.
I'll now turn it over to the team thanks, Jeff and good morning, everyone two.
<unk> 2021 was an important year for core characterized by elevated levels of investment in our highly successful multi year exploration program and in our robust project pipeline.
These investments last year, along with several transactions intended to strengthen and streamline our portfolio are key elements of our strategy to position core as America's Premier growing precious metals company.
We're now quickly approaching a phase of expected high return growth featuring sustained levels of expected free cash flow from our larger longer life lower cost production base generated by our collection of North American assets.
Looking back at last year, I'm, especially proud that our team accomplished everything they did while delivering another year of consistent operational excellence, despite a challenging macroeconomic environment.
I'll start off on slide three in today's presentation with a few key highlights.
With a strong finishing kick in the fourth quarter core once again achieved consolidated annual production and unit costs within guidance at each of our primary gold operations, which contributed to our highest annual revenue in nearly a decade.
I'll ask Mick to go into the specific operational drivers of our performance in a moment, but I'll touch on a few key highlights.
On the rail delivered particularly strong results with $25 million of cash flow in the fourth quarter on a 14% increase in mill throughput.
Strong throughput and grades drove solid free cash flow at Kensington.
Wharf delivered on plan following a near record third quarter.
And Rochester rebounded nicely from a third quarter marked by crushing and hauling work related to the Poa 11 expansion.
Ore tons placed increased 12% despite a greater than 100 year rain event in October that impacted about 10 days of production.
We've asked a lot from Rochester, as we work our way through the Poa 11 expansion project.
The team has certainly dealt with its share of day to day operational and industry wide challenges all while embracing changes to the operation as the mine transitions into the linchpin of the company's future production in cash flow that we expect it to be.
The full scale test work, taking place has been invaluable in Derisking development and informing our operational approach to the expanded project.
Yeah.
The finish line had poa 11 is beginning to come into focus.
The team conducted a comprehensive rebase lining during the quarter that included reviewing in progress and newly awarded construction contracts.
I'm pleased to report that we consolidated the two outstanding S. M. P. I contracts related to the construction of the Merrill Crowe processing facility and the crushing circuit into one single contract.
We've awarded it to T. I C. A subsidiary of Kiewit Corporation, which you may recall did some great work for us at silvertip over the past year.
Having a proven and reliable construction partner in place reduces our development risk and increases clarity on project completion.
In addition, this rebase lining led to the value accretive decision to incorporate prescreened as part of the new crushing circuit.
This work has led to a refinement of the estimated capital for the project.
The updated capital estimate is now approximately $520 million, which reflects the 10% to 15% increase we flagged for you last quarter driven by industry wide inflationary pressures.
In addition, pre screens on the new crusher and associated reassessment of contingency estimates are expected to add $70 million to $80 million to the total cost of the project.
The stage six Leach pad is now essentially complete next up is the Merrill Crowe facility, followed by the crushing circuit, which will now include the pre screens.
The full project is expected to be completed mid next year.
Moving to exploration on slide seven we invested a record $71 million during the year, which led to new discoveries mine life extensions and resource growth.
After depletion Palmeraie O saw its silver reserves increase roughly 5% to 62 million ounces, while wharf added about two years of high quality mine life. After depletion from about a 5 million dollar investment in exploration.
On a gold equivalent basis, all classes of mineralization increased approximately two 5%. Thanks in part to impressive resource gains at silvertip.
We plan to invest approximately $40 million in exploration in 2022 with about half allocated to infill drilling with the goal of converting a portion of this expanded inventory of resource ounces.
Over the last five years core has invested approximately $240 million in exploration, which is a key element of our strategy and differentiates us relative to the sector.
In our estimation not many companies can point to that level of commitment to exploration or to the level of success in growing reserves and resources like we've experienced.
In addition to replacing production over the past five years totaling 1.8 million ounces of gold and 56 million ounces of silver.
We've added another 500000 ounces of gold and 85 million ounces of silver to our reserves.
And across the resource categories, three and a half million ounces of gold and 145 million ounces of silver had been added over the past five years.
Increases of 132% and 63% respectively.
Silvertip has experienced its own significant growth since we acquired it in 2017.
In just the past year Silvertips high grade resources increased 50% for silver, 35% for zinc and 43% for led.
These company wide increases had been generated at low discovery cost and represent a tremendous return on investment as we monetize these ounces in coming years.
Relative to our production last year of approximately 350000 ounces of gold and 10 million ounces of silver.
These reserve and resource additions extend the runways out ahead of our operations and provide a lot of flexibility and optionality for future growth.
A quick note on Silvertip studies are underway to determine the next steps toward a potential restart and right sizing of one of the highest grade silver zinc lead deposits in the world.
With continued exploration success and strong metals prices, coupled with a potentially larger scale operation.
We hope to identify a robust business case to support a restart following completion of the Rochester expansion.
We expect to have the results of this work later this year.
Before passing the call over to Mick I'm proud to highlight Core's recent ESG achievements, beginning on slide 17, including further progress on our diversity equity and inclusion initiatives.
An updated assessment of what ESG issues are most material to core.
In a recent upgrade to an a rating by MSCI.
I'm also happy to report that cores lost time injury frequency rate reached an all time low in 2020 one.
And our total reportable injury frequency rate remains among one of the lowest in the industry.
The important accomplishments, we achieved as a team last year would mean very little without the knowledge that we accomplished our objective safely and to the mutual benefit of all core stakeholders.
Horst track record of succeeding responsibly isn't a matter of luck, our culture and mission demanded.
I'll now pass the call over to Mick.
Thanks Mitch.
On slide five I will cover the operations starting off with Palm real.
The team tends to finish the year strong and last year was no exception.
Delivering a 14% increase in mill throughput quarter over quarter and high agreed.
Full year gold production was at the high end of the guidance range and silver production was in line with expectations.
At the same time unit costs for both gold and silver came in closer to the low end of our guidance ranges and benefited from Mexican peso hedges throughout the year.
Another solid operating year resulted in nearly $66 million of free cash flow a great result.
Looking ahead, we anticipate a similar year for pulmonary who with higher grade, partially offset by lower throughput.
As a reminder, our first quarter cash flows will again be impacted by the annual Mexican EBITDA tax payment.
Switching over to Rochester.
When we spoke on last quarter's call Northern Nevada was experiencing historic rain event that impacted about <unk> of our production.
With the Rins out of the third quarter of Cushing <unk> 11 behind them the <unk>.
<unk> finished the year on a strong note.
Great finish helped us to achieve the low end of our production guidance for silver while gold production was near the midpoint of expectations.
Whole truck availability issues and continued higher prices for consumables led to unit costs coming in higher than expected.
Going forward, we are continuing to focus on performance enhancements driving sustained improvements in our results.
We plan to install pre screens on the existing pushout.
Mitigating the impact of phenol material and improving recoveries.
During installation around mid year, we expect our ability to crush material will be affected for up to 30 days.
We continue to use war chest as existing ex pit crusher and stage four leach pad is a full scale testbed to derisk. The peewee 11 project and apply that knowledge to our post expansion of operating plants.
Turning to Kensington and keeping with the theme of strong finishes.
Production reached its highest level in the fourth quarter was the main hit on all cylinders to tuning a solid year.
The team achieved full year production and cost guidance. Despite continued cost pressures from me about and consumables to deliver healthy free cash flows of over $43 million.
We expect another strong performance it can be 2022 with consistent contributions from the dwelling being even its grades are expected to decline slightly.
Lastly at wharf the team continued to deliver consistent operational excellence achieving guidance on both production and costs.
This led to strong free cash flow of $50 million for the year and ongoing Testament to the fantastic investment at Wolf has been for coal.
Looking ahead, meaning within a lower green portion of the pit will lead to a lower expected with gold production guidance of between 70, and 80000 ounces compared to over 91000 ounces produced in 2021.
Before handing the call over to Tom I want to circle back to work just for some additional details that have come out of European a technical report summary, and why we are excited to get the project overlaying next year.
First it's important to point out that the new schedule and cost estimate is based on updated proven and probable reserves that reflect optimized cutoff grades.
This assumption accounts for anticipated operating cost inflation as well as our recent experience in processing software was on the stage for each pad.
On both fronts, we will bring the bay, a tried and tested approaches to business improvement and innovative technological advances to maximize rochester's full potential.
We also expect to unlock further value through our successful exploration efforts to target future resource expansion.
The larger scale of the operation is expected to more than double throughput leading to anticipated average annual production of 8 million ounces of silver and roughly 76000 ounces of gold from 2024 through 2034.
This production profile in Nevada, the best mining jurisdictions in the World is right on strategy for cool.
We will be able to begin stacking ore on the brand new stage six Leach pad later this year and we will continue to make big strides on the Merrill Crowe process plant and crushing circuit.
We look forward to keeping you updated every step of the way.
Lastly, I'm gratified to report that the Rochester Peewee 11 team has just surpassed 500000 hours without a lost time incident.
This is a very impressive milestone for this project and the team deserve special recognition for keeping safety at the core of all we have accomplished.
With that I'll pass the call over to Tom Thanks.
Thanks, Nick.
Turning to slide four I'll quickly run through our consolidated financial results stayed.
Stable metal prices and consistent performance at our mine sites led to a historic topline result of nearly $833 million operating cash flow totaled $110 million, a decrease compared to 2020, largely due to rochester's negative operating cash flow and the inflationary environment that we like all.
Miners have been facing for labor fuel and other consumables.
Despite these cost pressures, we were pleased to achieve cost guidance at each of our primary gold operations for the year.
Looking ahead as highlighted on slide 15, we issued our 2022 guidance.
These guidance ranges show, a fairly flat year production wise compared to 2021 slide six provides an illustrative quarterly production profile, which highlights a slightly back half weighted year in terms of production.
On costs, while we do expect to see a continuation of the inflationary pressures we experienced during the second half of 2021, we expect a significant improvement in Rochester as operating cash flow in 2022.
You will notice that we have reduced our planned investments in exploration and at silvertip year over year as we pursue our number one priority to complete the Rochester expansion.
I'll remind everyone that our first quarter also includes some lumpy annual expenditures, which will impact our Q1 operating cash flow.
Turning to slide 12 for a look at the balance sheet. We ended the year with approximately $257 million of liquidity, including $57 million of cash and $200 million of availability under our revolving credit facility. We also held $132 million of equity investments.
Comprised primarily of our investment in Victoria gold on our balance sheet.
We ended the year with a net debt to EBITDA ratio of two times.
The increase in Poa 11 capital for the <unk> contracts and the pre screens will put pressure on our desired leverage levels. However, our funding plan remains intact with several layers of financial flexibility from six key sources.
Our operating cash flow from our four operating mines.
Capital leases for Poa 11, which were entered into in early 2021, our gold hedging program the revolving credit facility capacity, which can be expanded by up to $100 million, our equity investment portfolio, including our investment in Victoria Gold and our $100 million ATM program.
We remain confident in our ability to fund our growth initiatives I will now pass the call back to Mitch Thanks, Tom before moving to the Q&A I want to quickly highlight slide 14 that outlines our near term priorities for the year ahead.
In a nutshell 2022, really boils down to achieving production and cost guidance safely and responsibly and remaining zealous stewards of our capital as we continue to execute on our major growth projects.
With that let's go ahead and open it up 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 telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys.
And to withdraw your question. Please press Star then two and at this time, we'll pause momentarily to assemble our roster.
Okay.
And the first question will come from Dalton Barreto with Canaccord. Please go ahead.
Thanks, Good morning, guys I wanted to start by asking about what Tom just wrapped up whether that's on the.
A 11, capex as well as to funding options.
First of all I just want to know you're just under halfway through the spend how comfortable are you in the updated number at this point and do you see any rest of that could go up higher.
Yeah. Good question, I guess Dalton coming out of that Rebase lining work that just wrapped up.
Sure.
Our confidence can't be any higher now than it than it is.
Not to say that.
The World is a is an unpredictable place right now and it's at.
It's not the easiest of times to have a a major capital expansion project, but I think we have layered in a lot more.
Our buffer.
To reflect some of the uncertainties that are out there whether it's the labor whether it's the material I think we're up to a P 85 kind of level of confidence on this on this capital estimate and so going into the end of last year.
<unk> was shaky given all the the macro and NAND projects specific questions and cross wins I think now coming into 2022 confidence has been bolstered significantly make do you have anything or Tom do you want to chip in.
So it's a <unk> five project schedule and cost estimate now are very solid.
And that schedule is agreed with walk primary contract out T. IC. So we're pretty happy about where we stand now in the go forward path.
Okay, and then Tom Tom highlighting your different funding avenues on my numbers at the current commodity price.
Levels.
Looks like Youre going to go through your current revolver and made some pretty significant incremental funding. So I guess three parts to that question number one how far are you willing to push your balance sheet number two how do you think about the accordion versus the ATM versus your stake in Victoria, particularly given where your share prices right now and then.
Part III why haven't you put in any Polish or 'twenty right.
Okay.
Okay. All three good questions. The last one there Dalton was collars for 2023.
Yes, correct, yes, okay. Thanks, Scott how far you want to stretch our balance sheet look we.
We had.
Going into the end of the year middle part of last year.
I had sort of set that that target of having a two times net debt to EBITDA as we've gone into this more inflationary environment here in the second last year in the second half and realizing that that's likely the new reality here in 2022 and 2023.
We recognize that the debt leverage ratio is going to be exceeded.
How far that that sort of.
Spills into your second question, which which relates to the to the accordion and the revolver as youre alluding to there the current revolver under which we have a $200 million or so of availability there.
And options and have an opportunity to expand that by $100 million.
So we'll definitely be taking a look at that of course with the revolver comes certain covenant ratios, which will govern essentially how how much leverage and how far we will push the balance sheet and that'll be a discussion that will want to have with with the lender group.
And as far as the a T M.
It's one of those levers that we have that we put in place a couple of years ago.
It's a good thing to have I think.
In the in the quiver.
To help kind of round out the suite of options as we navigate our way through here in particular that the first half of this year peak spend on Poa 11 is really this quarter and next quarter before it starts to to step down so.
These different <unk>.
<unk> and funding alternatives that Tom outlined are really.
Most targeted towards the first half of this year.
As far as the colors.
Tom and I were meeting on that even this morning.
Because we we.
Obviously like everybody has seen the gold price.
Show some some strength here and its something that we want to try and take advantage of here, whether it's booth.
Boosting our downside protection here in 2022, and an open to the 2023 at least first half.
As well because all of this funding plan that we've thought a lot about we are reliant on prices remaining near these current levels and so anything we can do to kind of reduce that that element of the of the equation is something that that makes a lot of sense.
For us to to think about adding to what we what we already have in place Tom do you want to cover any of those three but yeah look at it as a as Mitch mentioned that that too.
Two times.
We'll obviously be stretched.
The number that we all we think about it is at least maintaining our $100 million of liquidity.
But again the.
Back to your first question our confidence level in that remaining capital at Poa 11. It is very high right. When you look at the amount of work that's done all the equipment's been ordered.
We really worked hard on that S&P I contract to see what we continue to refine it.
Fortunately weren't able to get that much of a reduction but what we do have is a really high quality partner and so I feel very comfortable that with the work that the team has done that where that that that capital is in place and those alternatives that we've outlined are there and people see see the prize.
The lenders hopefully our all of our investors see the prize post the Poa 11 expansion.
Pretty robust cash flows and you look at.
What we've done in terms of extending all all of the mine lives.
We're feeling pretty pretty comfortable.
Perfect. Thanks, guys I'll jump back in queue.
Okay. Thanks, Don.
Again, if you have a question. Please press Star then one our next question will come from Karl Blunden with Goldman Sachs. Please go ahead.
Hi, good morning, Thanks, very much for the time.
I just wanted to discuss a little bit more some of the funding options that came up but when you think about an ATM relative to other options, maybe noncore asset sales will stake sales.
How does the current share price play into that.
Probably don't want to be selling at a time when you're you feel the stock is undervalued for example.
Any any framework around that would be pretty interesting.
Yeah, you're right.
That's always sort of at the bottom of the list in terms of cost of cost of capital.
But it also is.
You need to wait.
We feel like and I feel like we have to pull the lens back a little bit and look at what are the returns that you're generating off of that cost of capital and even even with the higher.
Higher capital higher Opex dialing back to silver recovery in the in the.
That updated SK <unk> hundred for for Rochester, It's still up.
Good project right.
High teens, which rate of return.
Tom alluded to the.
The sustainable $90 million a year of free cash flow. So you know the cost of capital to to.
To deliver that kind of quality project and others, including exploration investment that we've that we've been making.
Puts those caught relative cost of capital into some some context, but.
It it ends up I think Carl being a bit of a holistic approach right.
Between the revolver and the ATM and the other levers that Tom talked about trying to think about it in a.
And in an overall way that can ensure that we that we achieve the main the main goal which is to.
<unk> deliver a successful expansion out there at Rochester, I don't know if that helps give you some context, but Tom anything you want to add to that.
Does that help Carl yeah.
I think that that helps.
Direct is that you have.
Safeguard the balance sheet and the Pakistan on projects that you've been developing with regard to <unk>.
Silvertip I noticed the comment that it would be.
After Rochester I'm not sure if that's it.
A very recent change, but it sounds like the sequencing there is quite precise at this point in time. When you think about that do you want the balance sheet and leverage to be in a certain place before you go after that or.
Is that not as large of a consideration given some discussion around.
That you have different funding options and you wouldn't have to necessarily do it with your balance sheet.
To grow that out so interested in how that fits now with the updated Rochester Capex, Yeah, I'll start and then Tom Jeff anyway, and it is something we alluded to I think in the third quarter about the sequencing and being mindful of it all.
Making sure that Rochester is priority number one that we deliver that Meanwhile.
To do this work at silvertip.
We will have more to say on that later later this year I think some of the suggestions you pointed out Carl it's almost like all of the above.
We want to get on the backside of the Poa 11 and use that cash flow.
To delever for sure and that's with or without silvertip.
That's a high priority that will that will happen.
But I think also yeah. There are other options for silvertip.
As far as how we would think about funding and.
An expansion of that facility.
That that could be.
Not necessarily the same approaches were taking to how were funding.
Poa 11, Tom do you want to know exactly right Ed Everything's on the table in terms of alternatives about how to how to fund that project and.
It's just a pity.
Capital costs have gone, where they've gone at Rochester, and silvertip, because obviously we are <unk>.
Very excited about what we've seen it on.
Silvertip the exploration results that the growth in the resource are pretty pretty exciting is as we talked about earlier that.
Earlier calls the metallurgical.
Recovery all those testing the quality of the concentrates are continued to have us pretty excited but one.
One step at a time, we've gotta get Poa 11 done first.
Helpful. If I could just.
A question for Philip on one piece of.
Of the questions I think I'd mentioned noncore asset.
Got it.
Maybe just general Stakes.
That you own for example, the Victoria Gold stake how shall we think about that going forward at this point.
Well it's a.
The hard one to really define right in terms of how to think about it.
We made that investment.
Because we we think that Eagle operation.
As a high quality.
Paul High quality asset there was a unique opportunity to acquire that 18% stake from from Orion.
Kind of on strategy for us how that plays out.
From here as you know I can't really speculate but it does.
Figure into our our future one way or another right.
And in which which cath and win.
Still still TBD, but.
As we as we always think about our funding.
Alternatives, you know that $130 million or so.
Of equity there is something that.
Factored into.
Into the into the calculus, so that's kind of a non answer but.
It's a it's a part of the overall.
Equation I guess.
Thanks for all the time.
Okay. Thanks, Karl I really appreciate it thanks.
The next question will come from Mark Reichman with Noble capital markets. Please go ahead.
Good morning, and thanks for taking my question. So on the on Rochester. So the crushing circuit gets completed in the third quarter of 2023. So you know there's a lot of talk about mid 2023, I'm just kind of kind of opinion down on on what what to assume for commercial production would you just kind of expect that it would be full year.
2024, or when do you expect kind of meaningful production from from the expansion.
Yeah, I'll start and then Mick.
Thanks for the question Mark.
Construction completion of the crusher.
By the end of the second quarter.
Mechanical mechanical and then we and then we go into <unk>.
Commissioning.
Throughout the second half of the.
2023 with first full year.
In 2024.
In terms of commercial reaching commercial production levels, we would expect to reach commercial production levels before the end of 'twenty three to have a full year of production in 'twenty four with us.
But we'll.
We'll have to build that into the commission plans.
The detail of that later this year.
And then the second question. Thanks for that so next year kind of.
Lower exploration expenditures.
I guess really just to do you have a replacement lined up for Hans who I thought was was retiring and then also are there any opportunities to extend the mine life at Kensington or will they just become kind of less important as Rochester gets expanded and then eventually you bring on.
Larger silvertip.
Yeah I'll take.
The <unk> question first we just can't get them to leave he's hanging out here again in the conference room.
Just kidding.
There will be theres been a process underway to identify a replacement for Hans.
Made good progress.
On that front and Hans will.
Is kind enough to be flexible with his his plans in his schedule to help with an orderly transition here in the first part of.
Of 2022.
In terms of Kensington.
Good question, it's obviously, our shortest mine life.
It's been that way now for a few well it's been that way for quite a few years as an underground mine and it's been a good asset last few years, it's generated really good cash flows for us it should do another good year for us this year.
Been investing in exploration.
At Kensington, mostly on the resource expansion side versus infill to kind of.
Grow the the inventory or pipeline as Mick would say of resource ounces and.
And we've been actually quite successful at that and you look over the last three years resources have grown by nearly 30%.
We've replaced about two thirds of what we've produced over the last three years. So we have seen a little bit of reserve.
Depletion there this is an important year here in 2022.
As we focus, especially in the first half of the year on more infill drilling to try and convert some of that larger inventory of resources that we've added over the last few years into reserves and as we continue to to do the work on testing some other structures that we've identified from the.
Drilling over the last the last few years to see what the the longer term future might be there at Kensington. So.
The key is really to <unk>.
Turning our focus more toward infill this year.
And see if we can maintain.
Three ish year mine life out ahead of US, which is an underground mine.
Pensive underground capital development, you know you don't want to get too far out ahead.
Of ourselves on a on a pnp basis, but that's just some thoughts Marc on how we're thinking about Kensington I don't know Hans or make did I.
Leaving anything out of it.
Great. That's very helpful. Thanks, so much okay, yeah. Thanks Mark.
The next question is a follow up from Dalton Barreto with Canaccord. Please go ahead.
Oh, Thanks, again, guys I've actually got a couple more.
Number one these this screen the 80 million Bucks on screens can you help me understand.
And what the incremental benefit us.
Yeah, I'll start and then Mickey overview.
That 70 to 80 is it is a combination of screens and some additional contingency that we're adding to the overall project.
Capital estimate I think of that 70 to 80 I think the screens are about 50 of it.
So there's that that that element of.
Of that extra range tied to screens for the Limerick Crusher, Mick do you want to talk about.
The incremental benefit and even a little bit about what we're doing is to the existing pressure with screens. This year absolutely. So if we look at Limerick and the benefits that we've built into the technical report we've been fairly conservative we put a couple of percent of improved recoveries in there from screens and.
And then it allows us to effectively bypass the tertiary crushers and increase the throughput. So if you look at where we were for the original business case for Peewee 11. It was at about 28, and a half million tons a year when I walk towards 32 million tons a year.
Some of the two key benefits from putting screens in as well as of course, allowing us to drive the top side.
Topside sizes Don on.
On the crusher.
So that we can maximize towards recovery. So there may be some upside in recoveries, but were not going to build within yet until we've tested the ex pit.
Bill will be experts screen.
This year middle of the year and then we'll get a few months of optimization ahead of building a deliberate screens. So we'll have really good test work to optimize early and quickly when we start commissioning and deliberate.
Got it Okay and then my second question is around timing, which I think a previous caller just alluded to.
How confident are you in timing given all these supply chain issues that we keep hearing about.
Well as the.
As the fit not to be too cute about it.
As the finish line gets closer.
And the more money gets spent.
We're getting more and more confident there is less things.
That are that are not yet ordered or.
Unknown or uncertain are long lead times that have big question, Mark next to them that Nick do you want to.
And we had a delivery schedule and a lot of that was in the early part of 'twenty, two and a lot of that equipment on long lead is already arriving at site and actually being placed because when I was in a good spot with it.
Concrete and foundation, so we can take that equipment, even said it straight.
Straightaway, so but.
Part of the project is going really well.
That's good to hear and then just maybe one last one I noticed Terry Smith took a new job this morning.
Any impacts of the project there at all.
Yeah.
Hum.
Well, let's see we made a change there middle of last year.
And so no we have a project team under Mick.
That is running with.
Poa 11 in Silvertip, and then all the other capital projects at the existing operations so that was.
I haven't seen that I hadn't heard Terry.
Landed somewhere which is great but that was a change that took place I think last September September .
I didn't realize it was that long ago. Okay. Perfect. Thanks, again, guys, yeah, sure adult and take care.
The next question will come from Brian Macarthur with Raymond James. Please go ahead.
Hi, Good morning, sorry, just back to funding our first thing do you still expect a the lap Osha transaction to close early this year, so you'll get that 15 million N.
Yes.
Just waiting for that Copa C approval in Mexico.
Which should be here in the hopefully in the first quarter.
Perfect and then secondly, just with silvertip timing I think everybody's kind of talked about this but obviously there is different the most important thing is to get Rochester finished and there's different ways too.
To that but it probably involved as you said balance sheet is going to be.
Higher going forward and then.
You talked about.
Obviously, hopefully at some stage here youre going to be having cash flows coming out of Rochester in a big way.
How do you think about the timing of our silvertip restart versus because your balance sheet and we push farther.
Further up that maybe you want.
Capital is going to be needed for silvertip, we talk about alternative financing are we talking about potentially would you go as hard putting a stream of silver stream on silvertip and make it a.
Mostly in zinc lead mine because there's a lot of that in there an arbitrage that are or would be turnaround and hedged the zinc in Atlanta, I'm, just trying to figure out.
Even if we get once we get by and I get it. The most important thing is Rochester, how you're thinking about funding out.
24, let's say, a 25 and you want to get silvertip and by 'twenty six.
Yeah, a few variables there.
It's kind of a fun question that you're asking.
But let's get the.
The plan, let's identify a plan and a path.
That maximizes the value of that.
<unk>.
But as we're as we're hopefully getting toward that goal here in the second half of this year.
<unk> as you pull the lens back like like you or Brian .
Get past Rochester expansion.
The ideal scenario I think we've alluded to in the past has been this idea of starting at silvertip on a smaller scale and then scaling it up to a larger throughput.
In large part self funded from its own cash flow that might help us come up with a path that's not only sooner.
Sooner, but less capital intense.
And so on.
I'm just sort of.
Hypothesizing here about what what would.
What we'd like to see ideally, but if there is a scaled up operation that could help kind of.
Could self fund itself in large part that could be a key part of how we think about.
Funding and expansion and restart on top of that then would come from some other things a couple of them that you mentioned that are that are on the on the table for sure whether theres a prepay.
Of some sort.
JV partners I mean, if this if this gets to be a scale that we think it potentially could be.
The size of the prize here could be big enough to make sense to share it with a partner whether that's another operating company or a more of a financial nonoperating entity. So those are all sort of on the on the radar screen of the alternatives that we consider.
Once we have and assuming we are we have a viable business plan here.
Identified later in the year.
Does that.
Give you some yes.
That's helpful. As you said, there's a lot of variables that so I was just curious what you were sort of visiting at the moment. So so that's very helpful. Thank you very much Mitch.
Thanks, Brian .
This.
<unk> our question and answer session I would like to turn the conference back over to Mitchell Krebs for any closing remarks. Please go ahead Sir.
Okay, well, thank you and we appreciate everybody's time this morning, and we'll look forward to speaking with you all again in the spring to talk about our first quarter results. So thanks for the good questions and your time and have a great day.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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