Q4 2021 Turquoise Hill Resources Ltd Earnings Call
Good morning, ladies and gentlemen, and welcome to the Turquoise Hill fourth quarter financial results Conference call.
At this time all lines are in listen only mode and following the presentation, we will conduct a question and answer session.
If at any time during this call you require immediate assistance. Please press star zero for the operator.
This call is being recorded on Thursday March <unk> 2022.
I'll now like to turn the conference call over to Mr. Roy Mcdowall. Please go ahead.
Thank you Kelsey and good morning, I'm Roy Mcdowall head of Investor Relations Communications welcome to our fourth quarter and year end 2021 financial results Conference call.
Wednesday, we released our fourth quarter and year end 2021 results press release MD&A financial statements. These items are available on our website and SEDAR with me today on the call are steeve thibeault, our interim CEO , Luke Colton, our CFO and Joann Bradley our CFO .
This call and presentation includes certain looking for forward looking statements and information.
Youre afraid sort of forward looking statements section of the annual information form dated March eight 2021 supplemented by our MD&A for 12 months ended December 31 2021.
And now I would like to turn the call over to our Chief Executive Officer, Steve Hey, Bob.
Thank you Roy and thank you all for joining us this morning.
Before I turn the call over to Joe one for an operational and project update and look for a review of our finances.
Roger brief comments on Ot's record performance in 2021 and review some of the key highlights from the year, which was a pivotal one for the company.
Starting with our top priority safety.
Last year the site achieved a full year all injury frequency rate of zero.
One four for 200000 hours worked.
Best ever in OTT.
We also reported record revenue of $1 $97 billion to $1 billion, an increase of 82% versus 2020 and record income of $681 million.
Year over year increase of 38%.
Turning to slide seven.
Financially it was a year of significant accomplishments for taco shells and its shareholders.
With the critical steps towards bringing the OLED I agreed upon the ground into production.
The key achievement in 2021 was the culmination of two years of negotiation with the government and local yet that police test and renew our partnership and allowed US to proceed with lasting of panels zero. This past January 25.
<unk> and Rio Tinto reach a binding agreement on our funding plan for you to avoid with provides a clear path to meeting <unk> SV the funding requirements.
We work with all of you to go to enter into electricity supply agreement with the government and won't go for long term source of power from the Mongolian grid.
In spite of the challenges presented by Covid, we remained on track with key infrastructure needed to take the on the ground for sustainable production in the first half of 2023, which is only 12 to 16 months from now.
Now turning to slide eight.
Despite the impact of the pandemic on Ot.
Staffing level and productivity, our 2020 , one copper and gold production within our revised full year <unk> guidance range.
Copper production for 2021 of.
163000 tons was within the guidance of 150 to 180, while gold production of 600.
468000 ounces came at the end of guidance.
All things considered.
It was a solid year resulted in PRT posting record revenue and income numbers.
We currently expect gold and copper production to be lower in 2022 versus 2021 due to the stripping of the next cutback and processing lower grade stockpile material.
Once the underground has ramp up is expected to operate in the first quartile of the copper cash cost curve and is expected to produce around 500000 tons of copper per year on average from 2028 2036 from the open pit and underground operations.
Looking now at slide nine.
As I mentioned earlier all injury frequency rate recorded in 2021 was the best in the site history and continue a trend and a proved safety rates.
<unk> seen at <unk> since 2013.
This is very gratifying and a tribute to the site team.
Safety is always a work in progress and we are not taking anything for granted but we will maintain the discipline necessary to protect our people and communities.
Considering the COVID-19 related challenges <unk> faced over the last the past two years. This is a real tribute to the commitment of Ot management and team to running a safe operation.
At the bottom of slide eight you will see that only the mill continues to operate above nameplate nameplate capacity for the sixth consecutive year.
This consistent outperformance speak highly of our culture of excellence at <unk>.
With that I will now and the cohort two which will undoubtedly our chief operating officer.
Yes.
Thank you very much.
If we now turn to slide 10.
In Q4, 2021 materials handling system, one construction was completed.
And now I'd like commissioning commenced.
Commissioning activities were completed in Q1 2022.
The materials handling facility, including primary crusher.
Ready to support the ramp up of panel <unk>.
Construction of the first on footprint truck sale during the quarter.
And this has subsequently been commissioned during Q1 2022.
The truck shape critical infrastructure required to support production from panels.
And construction of the subsequent shapes is ongoing.
Shop for thinking activities rates during the quarter.
And readiness Wix Vishal sorry continue.
As anticipated later in Q1 2022.
In terms of mine development.
Through the <unk>.
John .
Was achieved in Q4.
So now post the combined.
On the connected to the underground mine.
Turbo draws excavation and the panel zero initiation hearing continue with Brooklyn construction work also underway.
Panel, one and panel date.
<unk> refined that study with continued.
<unk> preliminary outcomes with Hamilton expected life of the fleet.
All right Ms cautionary were achieved on the 24th of January 2022.
First on the coupler side on the 26th of January .
In terms of exploration turquoise hill through its wholly owned subsidiary <unk>.
Mongolia Harriger exploration.
Hello.
Alright, and exploration program in Mongolia on losses that are not part of all you totally.
Check with you Im sorry exploration licenses bag, and IDT <unk> Cohen and cutoff.
I don't want a guidance province.
The 2021 planned exploration program was successfully completed on all three losses.
Results have identified further signs of interest that will form part of the exploration program for 2022.
If we turn to slide 11.
We can see the key key near term milestones for penalty rate as well as the critical activities to enable the ramp up of production to 95000 tonnes per day.
Important milestones for 2022.
Including include the first draw Bell foreign and panel zero, which is anticipated in Q3.
With sustainable production of the panel zero expected in first half of 2023.
COVID-19 impacts have resulted in expected commissioning dates for shafts three and four in the second half.
Of 2023.
Keith the impact of the shocked lies in lake restrictions impacting underground development progress as well as changes to morning, Skype. We now expect the first draw bell in penalty to be filed in 2026.
And the first draw Bell in panel one to be filed in 2027.
With the commencement of beyond the cost and full budget uplift now pre.
<unk>.
LLC Board.
A re forecast of cost and schedule for the remaining projects, including materials handling system T and concentrated modification is underway and is expected to be completed during Q2 2022.
I'll now hand, the call back over to Luke Colton.
Financial Officer.
Many thanks for this is Joanne and good morning to everyone.
If you could please turn to the next slide I'll provide a summary of our key financial metrics for 2021.
Revenues of.
197 billion in 2021 were a record for the company there were $82, 8% higher than 2020 due to a combination of higher volumes and higher prices.
Copper and gold volumes increased by 9% and 157% respectively.
Despite the challenges from COVID-19.
This was driven by the scheduled move to higher grade areas of phase four b.
The company also benefited from average prices that were 53, 4% higher for copper and two 4% higher for gold.
Revenue of $504 million in Q4 of 2021 increased 24, 4% from the $405 million in Q4 2020.
And that's due to a 35, 8% higher average copper prices and $54 five.
Sent higher gold sales volumes.
Okay.
Net cash generated from operating activities was $576 million in 2021.
It was $41 million during 2020.
This was primarily due to <unk> 9 billion higher revenue.
And lower interest paid as a result of a lower average LIBOR rate.
This was partially offset by an $18 million lower interest received his bank deposits in money market funds were drawn down to fund investment in the underground.
And $327 million higher taxes paid.
Which included the $356 million in payments made to the government of Mongolia.
And related to the 2013 to 2015 and 2016 to 2018 tax assessments.
These payments are so are.
Are the subject of the international tax arbitration proceedings that were suspended on February 11 2022.
Net cash generated from operating activities was $149 million in Q4, 'twenty, one versus $70 million in Q4 2020.
Reflecting a $91 million increase in gross margin from the higher sales revenue offset by $11 million higher operating expenses.
Those were associated mainly with the implementation of COVID-19 controls.
Income attributable to owners of Turquoise Hill increased from $2 <unk> per share in 2020 to $2 61 per share in 2021 the.
The increase mainly reflects again, the $9 9 billion higher revenue offset by <unk> 6 billion additional tax charges in 2021 versus 2020.
2021 reflects the $278 million deferred tax expense.
From utilization of prior year prior year tax losses against current year taxable income and from a reduction in loss carryforwards anticipated to be utilized in further in future periods.
Those are mainly driven by the previously announced underground delays.
2020 reflected recognition of a $347 million.
Deferred tax asset recognition, which was driven primarily by improved near term commodity price estimates.
Income attributable to owners of Turquoise Hill decreased slightly from 79 per share in Q4 2020 to 78 per share in Q4, 'twenty 'twenty. One this reflected the impact of a $99 million higher revenue from higher copper prices and gold sales volumes offset by higher tax charges.
As well as higher total operating cash cost.
$20 million deferred tax expense in Q4 2021.
Reflected the utilization of prior year tax losses.
In Q4, 2020, additional deferred taxes additional deferred tax assets of $86 million or recognized as a result of improved near term commodity price estimates.
2021 cone cash costs and all in sustaining cost benefited from the impact of the higher gold credit.
All in sustaining costs were also impacted by a $24 million increase in open pit sustaining capex.
Stripping was 2020 with $22 million higher in 2020 due to waste mined ahead of the transition of mining to page five.
Capital expenditure of $997 million in 2021 comprised $913 million related to the underground, including $232 million in underground sustaining capital expenditure as well as open pit capital expenditure of $84 million.
2021 open pit capital expenditure included deferred stripping of $27 million and tailing storage facility spend at $26 million.
Q4, 2021 capital expenditure was $300 million versus $263 million in Q4 2020.
And thats comprised of $259 million in underground capital expenditure and $40 million of open pit sustaining capital expenditure.
Our cash and cash equivalents decreased from $1 1 billion at the end of $2022 7 billion at the end of 2021.
The additional investment required to fund the underground project exceeded free cash flow generated from Ot open pit operations.
The base case incremental funding requirements.
Increased from $2 3 billion at the end of 2020 to $3 4 billion at the end of 2021.
That $3 4 billion, a decrease of $200 million from the $3 6 billion reported at the end of Q3 2021.
If you can move to the next slide please youll see again that turquoise Hill had liquidity of $1 7 billion at the end of Q4 2021.
Decreasing slightly from Q3, 2020 one's ending balance of <unk> 8 billion.
As noted previously the funding gap with decreased to $3 4 billion from $3 6 billion at the end of Q3 2021.
The decrease was mainly the result of updates to short term.
Mine plan slightly improved commodity price assumptions.
Sure Kelly <unk> base case incremental funding requirement incorporates.
Metal price assumptions from copper and gold over the incremental funding period, which we have now included in our MD&A.
The definitive estimates, which estimated development capital costs of $6 75 billion.
19 restrictions through the end of Q4, 2021, which resulted in accumulative increase of $175 million to the estimate of underground development capital included in the definitive estimate.
The current forecast is sustainable production for panels zero, which is still expected in each one of 2023.
Current forecast of delays to shaft shaft, three and four <unk>.
The impact of an open pit mine designs in response to previously reported geotechnical events re sequencing of the open pit ore phase is due to the delay commencement of the undercut as well as the impacts of COVID-19 on open pits.
That waste movement.
And $1 $8 billion of scheduled principal repayments, which the company is attempting to re profile.
The details of these and other items are discussed more fully in our MD&A, which is available on the Companys website SEDAR and Edgar.
On January 24, 2020 to turquoise Hill entered into a binding amended and restated heads of agreement with Rio Tinto, which replaces the previous heads of agreement.
Key aspects of the amended HOA are included on the on the slide the full agreement is available on the company's website SEDAR and Edgar.
The amended HOA signals of an improved relationship with Rio Tinto and an updated joint view on how to fund the underground project.
The key highlights are as follows.
Pursue rescheduling, our principal repayments of existing debt with a target completion date of December 2022 later.
Seek to raise additional supplemental senior debt of up to 500 million, which would be available for drawdown one sustainable production is achieved.
And incremental colon facility provided by Rio Tinto about $750 million.
Would also be available to be drawn down upon once sustainable production is achieved.
Rio Tinto will if needed provide a short term secured advance directly to turquoise hill of up to 300 million, which would be available during the debt funding restriction period identified in resolution one O three.
And the company agreeing to conduct an equity offering and a form of its choosing of at least $650 million by no later than the end of August 2022.
With the amended HOA HOA and place the company is together with its partners restarted the engagement process with the project finance lenders regarding sequencing out the principal repayment and other elements of the amended HOA.
Under the current base case assumption of additional equity in excess of BNS initial $650 million would not be required if the re profiling SSD and Poland are fully successful.
<unk> HOA provide bat if necessary turquoise hill could be required to raise up to a total of 100.
$1 5 billion less the amount raised in the initial equity offering just discussed.
Further equity offering again in the form of its tubing.
Should they occur in these significant further delays the underground project, our nonfulfillment of any of the conditions precedent identify that in the amended HOA wed also adversely affect the ability of the company and Ot LLC to obtain additional funding our re profile existing debt as content contemplated by <unk>.
The timeframe send out set out in the amended HOA.
Additionally, the company continues to monitor commodity markets the ongoing impacts of COVID-19, and how the <unk> progresses in the underground mine ramps up its production.
Our liquidity outlook and estimated incremental funding requirement will continue to be impacted either positively or negatively by various factors. In addition to the aforementioned many of what you are outside the company's control.
And with that I will hand, the call back over to Steve to wrap things up.
Thank you Eric.
Our app up.
We faced multiple challenges throughout 2021, and 2022 with the renewed partnership with the government and local here.
We negotiated a new funding agreement Rio Tinto and <unk>.
Electricity supply agreement for you to avoid.
And we have begun the last thing. It was also the first one on the phone line.
Okay.
Ultra day to thank the entire team at <unk> and at.
Q4 debt commitment demonstrated in helping us bring the underground into production for the benefit of all.
Nick holders.
We will continue to update the market.
The underground progresses, and we look forward to ramping up what will become one of the largest copper producer in the planet on the planet sorry.
Thank you very much and with that the operator, we're open for questions.
Thank you ladies and gentlemen, we will now begin the question answer session should you have a question. Please press the star followed by the one on your Touchtone phone.
You will then hear three pronged acknowledging your request and your questions will be pulled in the order that the RBC.
Should you wish to decline from the polling process. Please press star followed by the Q and.
And if you are using a speaker phone please Mr handset before pressing any Keith.
One moment. Please for your first question.
Sure.
Your first question comes from Ralph <unk> from eight capital. Please go ahead.
Alright.
Thanks for taking my questions good morning, Steve and team.
Good morning.
Two questions if I may Steve one one perhaps for Joanne and one for Luke.
Maybe I can start with Joanne Joanne I see in the MD&A that.
There's been a reduction in the number of draw bells to achieve sustainable cave propagation moving to 'twenty one.
And I'm just wondering is there any offsets to that with respect to perhaps.
Higher costs, when we think about perhaps secondary breakage or see in.
Our realignment of the scheduling I'm just wondering what some of those offsets are.
Alright, Thank you ma'am.
Any questions.
At times in <unk> really is a reflection of a change a minor modification in the sequence on the footprint that was really has it.
<unk> technical.
And trying to minimize that.
And essentially what were trying today.
To get to.
<unk> production is to reach a certain area.
And that area is the point at which.
Our calculations and internationally.
Rough math tells US archival sought help guys and say well that has seen it.
A change in the number of draw bells, we still retain assigned area. We're just doing it in a slightly different way because beyond the kind of starting in a different orientation.
Please.
Fundamental change to the point at which we think that the case will start starting in Salt Lake.
Opening up the different geometry.
In terms of China, we don't expect to see any cost implications of that.
Yes.
Schedule advantage in doing that but that was not the primary driver is.
Or any any contribution to driving that decision the decision was driven by geotechnical.
<unk> technical.
Key technical concerns and trying to minimize site.
Hopefully that answers your question Ralph.
It does thanks very much.
Luke.
I appreciate the disclosure on the metal price assumptions used in the base case. So thank you for that.
Look when I think about $6 75 billion in Capex and the remaining $1 two five.
Could you categorize those in buckets roughly speaking how much of that remaining capex as perhaps labor how much of that is.
Equipment and how much is consumables just rough numbers would be all the more helpful.
Thanks for the question and I might I might get Joanne to help me a little bit on this one as well.
If you think about that remaining.
That remaining capital to complete the underground project tend to get to the $6 7 billion.
So the $175 million and Covid impact.
<unk>.
Tended to look at it from the perspective of the sort of major packages of work.
That are underway and that needs to be completed in a few if you think about it from that perspective, obviously you have.
Shop shop, three in shock for which are underway.
Also have material handling systems.
<unk> handling system too.
What would be a large portion of that that remaining capital and I think is very similar in many many respects.
<unk>, what we've already done with SMA type one so I think there's probably a greater degree of certainty there.
And then obviously the upgrade of the concentrator, which is another major major piece of work.
That would form part of that remaining that remaining capital estimates.
Obviously, a lot of large portion of that is going to be.
Labor related.
And there are definitely going to be packages of.
Equipment et cetera that needs to be purchased associated with those major pieces of work and I know the underground team they are in the process.
At the moment.
Looking at all of that carefully as part of the sort of report accounting work.
Is underway and that we.
We hope to be able to to provide further detail on in the coming months.
Jo Anne do you have any more detail there or any any additional specificity that you might be able to help with.
I think you covered it very well.
The rate forecast is on the y.
Uh huh.
The previous estimate can time assumptions on all the main elements and you covered the Skype the primary Skype benign.
Yes.
Okay, well, that's very helpful. Tim Thanks very much.
Thank you very much Rob.
Thank you.
Your next question comes from Rs.
From Scotiabank. Please go ahead.
Good morning.
Hi, good morning.
Just following up on Ralph's questions I realize you haven't completed the work at this point, but can you give us an indication of what youre seeing with respect to the.
<unk>.
With respect to what Youre seeing on the Capex front as Youre looking at re costing of project in terms of impacts of inflation and schedule delays to date.
Ralph.
Sorry.
I mean.
Only thing I can give you guidance because July and August .
The information is being capture Athene.
Determine that development and we will have that in Q2, okay, but what we do.
The enrollment is that some of the some of these companies.
Came out with a larger one that related to.
To the extent of two came out pretty close to the previous estimate that we had.
Kevin I think all the future public future one.
It came.
In line with that.
Well gross margin slide.
There is a large portion of labor.
In our estimate and to come and Thats, one I mean, we've been favorable because where the exchange rate that's favorable.
The impact on that from an inflation perspective because of the FX.
We obviously won't hold yet so.
I would say overall the work needs to be done Rs.
There is some there is some element of that we got that.
Theyre going to be other elements that will vary.
But what we have seen right now.
It's not significant but we work in.
Im very cautious here, okay, what needs to be completed before we can have certainty.
Okay fair enough.
So do you expect that update to come with the Q2 financial results or could it come earlier than that.
Q2 results I would hold up.
Now looking to do it.
Fixing that information to come in Q2, and the Q2 period so.
No.
I'll ask as well.
And expecting.
It will be in Q2, so it will not come with Q2, it will come at best what the Q1 results.
Okay. Okay.
All right.
Yes. Thank you.
Just a question for Luc in terms of getting some a little bit more granularity.
Thanks for the updated schedule in terms of the maturities of the project finance facility.
That are in the note.
But when I look at that schedule.
It looks like you've got 400 million maturing this year, and then $1 4 billion maturing in 'twenty three 'twenty four can you give us the split between $23 24 is that is that pretty even between the years and then similar question for the $1 2 billion that's maturing in 25%.
Six please.
Yeah.
Thanks for the question.
Listen it.
Youre right at $400 million in 2022, and most of that is actually back ended to the December 2022 payment, which is why we're trying to get the re profiling done before December .
And then at one 4 billion over.
Kind of four payments in 2023 and 2024.
So.
The repayment profile is such that we make we would make principal repayments in June June and December .
Each year so taking.
That one four and dividing it by four.
Broadly speaking give you.
The sort of.
Principal repayment that need to be made each June or December .
There are there are slight variations due to caps meet mechanisms et cetera.
No that actually comes into play.
After 2024 actually but.
Broadly speaking that that that's how you should think about it.
<unk>.
That's the level of granularity, we've kind of guided the market on so far.
Okay. So is it fair to do the same thing for that $1 2 billion, but to do in 2526, roughly just sort of.
If you split it in half between the years.
Yeah, I mean, I think on a rough basis, that's probably right again, there will be some variance due to cascade mechanism and things like that but broadly speaking that.
That's a pretty good position thank.
Thank you.
Okay.
Thank you all right.
Thank you.
Next question comes from Craig Hutchison from TD Securities. Please go ahead.
Sure.
Good morning, guys.
Good morning.
With respect to your guidance for this year in particular, the underground Capex guidance of one two to $1 4 billion does that include sustaining capex or sustaining capex on top of that.
Luke do you want to answer that.
Yes so.
The one two to 1.4 it doesn't include any.
Capital expenditure for open pit.
But the one two to one four does include.
Both underground development, Capex and underground sustaining capex.
Okay.
Yes.
And then the overall kind of cost to complete the underground at six point, some five an additional $105 million.
Is that an all in capital number does that also include sustaining capex or is that is there some kind of amount on top of that number.
Okay.
No. The 675, plus the 175 is just underground development Capex.
There's always been underground sustaining capex on top of that and if for example, if you look at it at our Aif or if you look at our technical report you can see.
The underground is going to have.
Sustaining capital requirement for many many years into the future. So the 675 plus the 175 is exclusive of underground sustaining capital.
Okay.
Any kind of clarity in terms of what that number could be between now and I mean <unk>.
Production.
The obviously the 2022 guidance that we've provided includes the amount in 2022 per underground sustaining capex and.
The technical report that we've issued would give you an idea of what.
The the underground sustaining capital requirements are going to be.
Broadly speaking going forward kind of over the life of mine I think and I believe there is some additional information on it in the Aif as well.
Okay.
And maybe a similar question in terms of the production guidance does the production guidance include any underground development or is that separate.
So that guidance is that there is I guess the guidance only for the open pit.
So why would you want to cover that.
Yes sure. Thanks, Thanks, David Thanks, Craig.
Yes. It does include the underground material that will be said.
Fed to the mill.
Production guidance is inclusive.
Integrated production schedule.
And again the technical report does have.
So Joel Bennett.
Help save provide.
Information around the kind of ran possibly would say in the proportion we would say.
Thanks seed remembering that there has been a six month July .
Commencement.
Since the technical report.
It was completed but it remains materially correct. If that's helpful.
Okay. So you can kind of provide a breakdown between maybe a rough percentage basis, what will come from the underground won't come from the open pit.
It's very early days.
So we've just started beyond the Carson.
Seth Bell is in Q3.
Scott on the ground ramp up until.
Half one next key with reaching the milestone of sustainable production. So it takes a while to build that.
Daryl points to ramp up the capacity of the underground mine now it reminds at modest levels.
For some some periods to come yes.
So there's a pretty wide variance I guess between the guidance ranges I think is around 40% between copper and gold is that because of the concerns on the sort of ramp up.
Of the underground this year or is it more just kind of contingency around COVID-19 or concerns over grades.
Maybe you can provide some kind of clarity there.
Sure sorry.
Uh huh.
Really the production guidance predominantly with existing iPhone peak performance and.
As you know that way.
The ITT.
That takes several years.
At that time to get into high grade areas and that means that that.
We see variability in the delivery of the grade to the mill and that means that as you indeed.
Hi, intensive completing the high grade and moving into more medium grade areas, while you're.
Trying to advance to the next section you didn't say that.
Change in grade in the guidance reflects.
The differences in nice areas.
It's really driven by the ITT and the stage of mining, whereas in the I think peace intend to Bang the claim.
Anything of size Colby and strictly.
Chicken thighs tie in exactly area.
Okay, maybe one last question from me just with respect.
Back to the.
<unk> forecast.
It's cost and schedule, it's kind of come out in Q2, I mean is there a risk that.
The funding.
Forecast of $3 4 billion goes up.
On that forecast or some of those costs more pushed out to 2023.
Okay great.
Greg I would say that the fun.
<unk> if you will.
Talking about your question.
And that relates to is the new estimate could have an impact on the funding gap three four yes.
Three four if you remember remember Craig this for is covering the full period of 2022 to 2024.
So and the answer is yes, okay. So an increase.
I think Kris.
Andy.
All of the ground development Capex that Capex would have an impact okay.
And.
Because that would be that would be capex that would be spent within the period of 2022 2024. However, as we mentioned, we're always optimizing theres a lot of elements related to that and one will have the inflammation. That's why we will give you an update on the will give you an update on the funding.
Okay, but also will need to update as we did in the last quarter would need to update our pricing assumptions, which also will have an impact on the funded yet. So we'll give you a full update with the information we have at that time.
Okay. Thanks, guys Okay.
Thank you.
Thank you.
Ladies and gentlemen, as a reminder, should you have a question. Please press the star followed by the one.
Your next question comes from.
Jackie <unk> from BMO capital markets. Please go ahead.
Thanks, very much excuse me most of my questions have already been answered, but I just wanted to ask a question to Luc if I can.
Your interest payment this quarter was quite a bit less than what I had modeled so I was wondering Luke if you could walk us through.
How how your interest expense is incurred and how it's calculated and if we can expect similar.
Relatively low levels.
Of interest expense going forward or what might what might change that thank you.
Sure I can try and give you a bit more flavor there.
The what you're probably seeing is the interest expense that get reflected.
The the main interest payments are actually made in June and December of every year.
And they are on the Pf debts.
So they would incorporate obviously the interest rates that we.
Secured with the various lenders under that debt.
And if you go to the debt note in the financial statements.
There's actually some further breakout of.
The interest rates under the different tranches.
It would also include the.
The fee that were charged by Rio Tinto to provide their completion support undertaking.
So those things those are the things that those are the things that are included in that charge. So it.
Mainly just the interest that we pay.
Our that we incur on that debt and then the actual the actual payments to the lenders again they happen they happen I believe in June and December every year.
Okay. That's helpful. Thank you.
Thanks, Jamie.
Thank you.
And ladies and gentlemen, this does conclude your conference call for today, we thank you very much for participating and ask you. Please.
Disconnect your lines have a coupon.
Okay.
Yeah.