Q1 2022 Capstone Mining Corp Earnings Call
Good morning, My name is Sylvia and I will be your conference operator today at this time I would like to welcome everyone to Capstone copper Q1, 2022 results conference call note that all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this.
It's time simply press Star then the number one on your telephone keypad and if you would like to withdraw from the queue. Please press Star then two thank you.
Mr. Gerald Gerald and you May now begin the conference Sir.
Thank you good morning, I'd like to welcome everyone to Capstone coffers.
<unk> results Conference call. Please note that the news release and regulatory filings announcing capstone Koppers 2022 first quarter financial and operational results are available on our website and on SEDAR.
Were logged into the webcast, we will advance the slides of today's presentation, which is also available in the investors section of our website.
I'm joined today by our CEO , John Mckenzie, our President and C. O O Castle Maher, our Chief Financial Officer, Robin Randhawa, and our senior Vice President risk ESG in General Counsel Wendy King.
Following a brief remarks, there will be an opportunity for questions. Please note that comments made on the call today will contain forward looking information within the meaning of the applicable securities laws.
This information by its nature is subject to risks and uncertainties and actual results may differ materially from the views expressed today.
For further information on the risks and uncertainties pertaining to our business. Please see capstone is most recent filings which are available on our website and on SEDAR and finally.
Just note that all amounts we will discuss today are in U S dollars unless otherwise specified now I will turn the call over to John Mckenzie.
Thank you Joe and good morning, everyone.
I'm pleased to report our inaugural first quarter Capstone cover and I'd like to take this opportunity to thank our entire organization and all stakeholders as we progress our integration efforts I mean, what has been an incredibly busy period since announcing the transaction in November last year.
On slide five.
Before we kick off the call with respect to our Q1 operating and financial results I wanted to take a step back and briefly revisit division of Capstone Capa as we continue to both a leading copper producer in the Americas.
Our portfolio of four operating mines.
I'm fields Monterey the extension and are fully permitted Santa Domingo projects creates the foundation of a truly peer leading growth profile over the coming years.
With the ambitions and building a world class district in Chile, while simultaneously improving the asset quality of our portfolio with higher grade lower cost sulfides coming online.
Moving on to slide six.
In Q1, we produced 22 and a half thousand tonnes of copper at a <unk> cash cost of $2 31 per pound.
Quarterly results include a nine day stub period for our Chilean operations monitors blankets and lots of bad debt as a result, the microscopic transaction closing towards the end of the quarter on March 23rd.
Inflation has been a topic of theme this quarter.
Early amongst our peers and for the World will generally.
Operating costs were impacted by inflationary pressures both of the last six months and further exacerbated more recently as the war in UK and the associated sanctions on Russia have led to higher energy and input costs, which will speak to further on the following slide.
On slide seven we are showing the year on year change in our Q1 cash costs.
The strength, we are seeing the largest impacts on our business from an operating cost standpoint.
Prior to the impact of our months of Splunk as the most of any bonds I'll see you on cash costs with $2 17, that's happened in the quarter impacted by inflationary pressures primarily in severity with respect to power diesel grinding media and other input costs as well as higher TCR sees.
With global benchmark tests for cover have increased by around eight 5% year on year.
On the top right hand side of the page we show the impact of our Chilean operations for the nine day stub period in the quarter with costs were heavily impacted by record high sulphuric acid prices.
And I'll cover this in more detail when discussing our guidance for the remaining nine months of 2022.
With the completion of the ramp up of the massive Blanca sulfide plant Debottlenecking in Q3 of this year and the commencement of production from MVP late next year, we expect our costs to decrease substantially.
As I mentioned earlier.
Our vision is to build a world class district, and Congresses months advance and sensor Domingo.
Now I'll pass over to Rob for a financial results.
Thank you John we are now on slide eight.
Despite the inflationary pressures John referenced we had a solid quarter underpinned by higher sales and gross margins driven by our realized copper price of $4 78 per pound, resulting in adjusted EBITDA of $123 million in the quarter versus street consensus of approximately $95 million.
Operating cash flow before working capital in the quarter was impacted by some one time items, including transaction costs related to closing the manto transaction of $19 9 million as well as the annual Mexican tax payment was higher by 23 million, which related to actually income from 2021.
Turning to slide nine.
And when the Mentos transaction closed during the quarter, we highlight our strengthened consolidated balance sheet with available liquidity of 638 million, which included in our cash and short term investments of over $400 million.
With Undrawn revolving credit facility of $225 million subsequent to the quarter, we had been working on this before the quarter. We further enhanced our financial flexibility, we actually increased our available liquidity by amending our revolving credit facility from 225 million to $500 million plus $100 million accordion.
At very attractive terms.
This financing was about right sizing our borrowing capacity for a company of our size Ie capstone copper and the amended Rcs is now expected to be in place before July this year.
Well they have enhanced our CF our total available liquidity does increase from the 688 I noted as of March 31 to now $913 million or over $1 billion with the accordion.
Capstone copper with four operating mines, all generating meaningful operating cash flow underpins, our ability to finance our growth plans.
Our financial strength, coupled with our EBITDA generation shown on the left and the right hand side here, even at meaningful lower copper prices, which are shown on the right hand side of the page illustrates our ability to fund our next phase of growth now.
And as John mentioned.
Build a world class district between mental Verde in Santo Domingo.
From a capital allocation perspective, we have actually phased and a disciplined approach with respect to our major capital projects in construction in the major project that we do have in construction is that the Verde.
So sulfides of which 40% is already spent on 825, plus 80% of the mental Verde capital cost your fixed relating to the lump sum turnkey Cinco and the fact that we order mining equipment from Komatsu pre inflationary environment.
With that now I'll hand, it over to cash flow.
Thanks, Robyn we're on slide 10.
Valleys produced 14400, Chinese copper at <unk> cash costs of $2 six.
Per payable pound.
Mill throughput was strong at an average of 58400 tons per day, while grades and recoveries of.
<unk> 32.
82% are expected to improve as we progress through the year.
Copper production is weighted towards the second half of the year as we've taken some planned annual maintenance downtime in Q2.
The waterfall chart on the slide shows the areas, where we saw 37 cents per pound higher operating costs in Q1 compared to our January guidance about 12 cents per pound or a third of the higher cost is due to inflationary input costs as John mentioned earlier like flu view explosives.
Grinding media <unk>.
Reagents.
Some contractors.
The balance is mostly due to Q1 being a lower production quarter plus the impact of capitalized stripping.
I'll comment more on hidden valley cost a bit later in this presentation when we cover our nine month guidance.
But on the top right of the slide is a recent drone shot FERC demo dump leach testing pad for our <unk> <unk> study. This is in addition to column Leach testing, we're performing using the jetty catalytic reach technology.
The opportunity here is that excess sx EW capacity into valley is available to process increased dump leaching activity.
Work continues on our pirate agglomeration project will conduct column tests to determine the amount of acid credits that could be potentially generated by diverting a tailing stream containing up to 50% by mixing it with our dump leach feed.
The results of this will be included in the PV for PFS. This study is expected to be released in each one of 2023 and recall we are aiming to extend the <unk> mine life by 10 to 15 years into the 2015.
Before I leave this slide and.
And not mentioned is the work that we have done so far this year at copper cities, just 10 kilometers from Pinto Valley, We believe fiber cities the geological marriage potential value.
Call, we announced in January that we have entered into an 18 month access agreements with BHP to conduct drill and metallurgical test work.
To date, we have completed the required drilling and have sufficient samples to commence metallurgical test work age to 2022.
So I believe that the $7 million program is going quite well.
Moving to slide 11.
<unk> had a good first quarter with production of 5900 tonnes of copper in Q1 cash cost.
$1 12 per payable pound on the cost side Cozman came in on the lower end of the guidance. We provided in January throughput of just over 3700 tonnes per day was slightly impacted by planned downtime to install the mill and to increase grinding capacity to over 4500 tonnes per day. This <unk>.
So our current mine plan of 3780 tons per day. So the additional mill capacity will provide future mine expansion optionality and overall operational flexibility.
The top right of the slide shows a recent photo of the <unk>.
Dry stack tailings and paste backfill.
Alrighty, which continues on track for completion at the end of this year with commissioning in each one and 2023.
Total project investment is estimated at $45 million of which $23 $2 million has been invested to date.
Cosmens exploration teams were very active during Q1 testing.
Also in the Manhattan achieved main being west target.
Drill testing has commenced from the underground West Cross cut area. This is significant because our drilling accuracy and efficiency has improved as a result.
As we are targeting a zone that appears to extend that matter not shipping.
We expect to provide results of our cosma drilling within our broader corporate exploration update.
Before Pete Act next month.
Now on slide 12 commissioning of the Mantas Blancos Debottlenecking project was completed in Q1 and subsequent to quarter end in April we reached a throughput of 18000 tons per day. So we're well on our way to achieving design throughput of 20000 tonnes per day.
And typically to all ramp ups.
Need to see steady state throughput first before process optimization can take place, where we expect to make gains and recoveries.
They are currently in the low Seventeens, we expect to see the targeted 80% level that was in the technical report in Q3.
Important to note that matches black doses processing fee grades.
In the 8% to 9% range and when we achieve design production. This will drive down C. One cash costs at the mine.
The higher cost oxides are now considered secondary production, which we can dial up or down depending on input cost factors, namely sulfuric acid prices.
We will talk about this more in detail in a few minutes from now.
Phase III PFS work to expand Memphis blankets to over 27000 tonnes per day throughput will be completed in Q2, and this will be incorporated into our feasibility study.
We will release in Q4 of 2022.
Recall the expansion aims to tie in unused old mill capacity with the new mill operation currently in ramp up we expect this to result in an attractive IRR and overall low capital intensity.
Moving to slide 13.
Manto Verde will become our crown Jewel World class asset that is expected to double our company's EBITDA.
During its first year and production in 2024.
You can see by the photo below major construction is well underway bulk earthworks are complete for primary crushing and grinding area platforms and major TSS construction activities have commenced we've received 13, new commenced Sui 30 haulage trucks and they are currently in operation and finally, the construction camp is complete.
<unk> and operational.
Over 40% of the projected Capex has been stands at the end of Q1 in terms of inflationary pressures. We are seeing a small increase in capex, owing to $25 million and higher pre stripping costs related to higher diesel prices and we added in an extra $15 million contingency.
The projected Capex is now $825 million or $38 million higher.
Recall, we have a lump sum turnkey contract with the <unk> of which $525 million or 67% of the original capital cost have been fixed plus $140 million in mining equipment is fix which equates to a total of $665 million on the $825 million or 80% of the project mix.
Now on to slide 14, one of our top deliverables for this year is for a man. So Verde sensors Domingo district integration plan to be announced just ahead of an analysts and investor tours scheduled for the week of November 14th the plan will outline how we believe the large copper cobalt gold and iron resources that mental burden.
And sensitive income should be developed so as to maximize the value of the district to the benefit of our shareholders and stakeholders.
We expect to communicate and optimized flow sheet as part of this plan as well as detailing the synergies that will be maximized by integrating these properties.
We are targeting 200000 tons per year of copper production with first quartile operating costs driven by efficient operations high copper grades and strong iron and gold byproduct credits top that we have an enormous potential to be one of the largest battery grade cobalt producers in the world and.
And lowest cost with strategic byproduct sulphuric acid used to treat district, copper oxides and fill excess sx EW capacity.
We would produce one 4 million tons of sulfuric acid per year and currently we consumed 900000 tons between mental Verde in Memphis, Blancos, which would be significant cost savings for additional oxide production.
The plan, we will map out how are you.
Mental Verde, Santa Domingo will link together with flow sheets, which we will then work on to deliver feasibility study as follows an H one of 23, an update at Santa Domingo feasibility study that captures district infrastructure synergies.
And H, two or 23, <unk> phase two expansion feasibility study that captures district synergies.
Also in <unk> to 'twenty three.
A mental Verde, Santa Domingo cobalt feasibility study, which captures production from both Santa Domingo and mental Verde with byproducts sulfuric acid production.
And <unk> 23, a further updated Santa Domingo feasibility to capture the copper oxides opportunity, where excess sx EW capacity, yet mental burden can be utilized.
This approach will enable us to provide informed timelines for each project that can be phased appropriately to reduce our execution risk.
Timelines for studies outlined above will ultimately influence decisions around green lighting growth beyond our near term MVP project under construction.
We recognize we're in a fortunate position given our low altitude location near major mining centers. This scale of resources, the existing production base and with key permits in hand.
This is rare clearly this growth pathway will keep us incredibly busy over the next 18 months. So I'm pleased the capstone copper continues to attract top industry, leading professionals joined our team in April Peter analogs and joined US as VP technical services and he will oversee plant optimizations across the portfolio.
Quarterback our technical reports or studies, including the Meso Verde, Santa Domingo integration plan.
He is a professional engineer with 25 years of operational and senior management experience at numerous copper mines across the globe.
I've had the honor and working closely with them for many years and look forward to this next chapter as our team executes on our exciting growth strategy.
Now on slide 15, one of the largest synergies we have in creating momentum early sense of Domingo district is in cobalt the iron oxide copper gold deposits in the attic Hanna region typically have high concentrations of cobalt associated with pyrite and we have the opportunity to be one of the world's largest and lowest cost vertically integrated battery grade.
Cobalt businesses.
As mentioned, a strategic byproducts will be sulfuric acid and we anticipate more than we currently require allowing us to pursue copper oxide growth opportunities around our operations, where we have excess sx EW capacity.
We are currently evaluating two different processes.
Hosting an ashford asset pressure oxidation or parks <unk> potential to be a lower capital alternatives, which is why we are pursuing this process in parallel with roasting a flow sheet will be selected in a cobalt resource update will be completed for mental verdicts and the Domingo in H two of 2022 then.
And each two of 2023, we will have the cobalt plant engineering and reserve estimate followed by cobalt mental Verde Domingo feasibility study completed.
Now over to Wendy King for the sustainability review, Thank you Kash.
Now on slide 16.
We are pleased to announce our upcoming sustainability report that will be published in June . This is our sixth sustainability report prepared in accordance with the <unk> standards and the FASB mining and metals standard. We are also beginning to align our disclosures with the task force on climate related financial disclosures.
Tailings management with a key focus in 2021 Pinto Valley established and convened its independent tailings review board a requirement as a global industry standards for tailings management.
Construction is underway for the new paste backfill and dry stacked tailings storage facility at <unk>, which will result in a smaller land footprint and lower water demands.
Our global workforce grew by 30% in 2021, mainly driven by growth projects women's representation in our employee base held steady at 11% we.
We created a diversity and inclusion committee, which will work across sites developed an action plan in 2022, our board diversity target, it's 30% women by 2023.
We also made efficiency gains relative to production and water use energy and greenhouse gas emissions.
Overall water intensity or the amount of water used per ton decreased by 11% over 2020, Despite a global production increase.
Trends in admissions closely followed energy is which increased from added fuel demand for capital construction projects. However, the increase is still well below our production increase.
We are committed to taking action on climate change by reducing our greenhouse gas emissions in 2022, we will establish a companywide target in SaaS decarbonization pathways for all our sites.
This process began in Q1 with a review of greenhouse gas inventory to establish a baseline in line with industry best practices.
We are also developing our ESG strategy with focus on the areas that will be critical for capstone in this new growth phase, which our tailings and water climate change land management responsible value chain workforce development and community impacts are.
Our strategy will include actions and targets for these focus areas.
Our strategy, we aim to link our performance to the ambitions of the UN sustainable development goals.
Now I'll hand, the call back to John .
Thanks, Randy we are now on slide 17.
I'm pleased to provide capstone corpus and overall guidance keep in mind. This is for the nine month period from April through December 31st.
For the balance of 2022, we expect to produce between 91000 and 100000 tonnes at <unk> costs between $2 to $2 50 per pound for our sulfide business.
Additionally, we expect to produce between 45000 to 50000 tons of copper.
From cathodes at $3 55 to $3 75 per pound.
During the quarter.
Critically looked at our business in the context of the current inflationary environments.
The World has certainly changed since providing guidance in January of this year with the war in the Ukraine and sanctions on Russia, adding to inflationary pressures, which you're experiencing on input costs, such as fuel sulfuric acid explosives grinding media and freight charges.
The capex costs are roughly 70 cents per pound higher than what is published in our technical report because we are assuming spot sulfuric acid prices of $280 per ton for the balance of this year, which represents all time highs.
This compares to $180 per ton, we assumed in the technical report for 2022.
Perfect Storm has led to weigh the sulfuric acid price and felt the market is today.
Incredibly strong fertilizer demand is coinciding with pandemic related logistical challenges in Asia and higher ocean freight costs that have hampered the supply side of the equation.
We believe sulfur and sulfuric acid prices at these levels are unsustainable and will ease in the second half of 2022.
Prudently with prospects around 65% of our sulfuric asset purchases in Chile for the balance of the year.
Also when copper prices were higher in April we made the decision to protect a $4 floor and lock in margins for over half of our cathode production for the balance of the year.
This works out to 27000 tonnes of copper cathode with a $4 floor and the ceiling price of $4 86 per pound.
Now on to slide 18.
We added this chart illustrates how we proactively improving the asset quality of our portfolio by transforming our business to lower cost sulfides as we ramp up muscles bonkers concentrate the Debottlenecking project and complete the construction and ramp up of the months have added sulfide projects in 2024.
Delivering insensitive bigger projects will further increase our sulfide business improving margins through reduced costs.
Low cost sulfides are expected to contribute over 90% of our future total copper production.
The developments of the World class months have added sensor Domingo integrated district.
As expected to drive companywide consolidated cone costs to approximately $1 50 per pound.
Slide 19.
This slide shows our capital and exploration guidance for the nine month period from April .
Through December 31st.
And principally our sustaining capital includes one time items totaling $24 million related to tailings and water management initiatives, especially.
Especially important as we are actively looking for ways to maximize mill throughput.
At Montrose Blancos for financial reporting reasons, we required reclassified some operating cost to production phase deferred stripping, which is expected to be just over $50 million for the balance of 2022.
As previously mentioned total initial capex from activated development projects has increased 58 billion to.
$825 million with expansion capital this year focused on the primary crusher pipelines stockpile caps and tailings.
At Cozman capital spending is on track with respect to our paste backfill in dry stack tailings plants and insensitive Ingo capital is primarily focused on rerouting Highway C 17, and spending on the cobalt feasibility study.
Our exploration efforts for the balance of this year are primarily focused on brownfield opportunities at Cosan and in Chile with a focus on delineating the oxide resource Santa Domingo as well as Greenfield exploration at Corpus cities.
Looking forward, we expect increased brownfield exploration efforts in Chile, particularly at months of Ed sensitive Linda.
On slide 22.
Paul and exciting pathway to transport capstone copper instead premiere mid tier company on route to a 100% production growth and lower costs.
We also have an opportunity to create a world class cobalt business that will put Chile on the map for yet another critical green metal as the world accelerates this decarbonization efforts.
We are applying disciplined and phased approach to growth and we have the balance sheet, our strong cash flow base from current operations and the leadership to execute on this plan.
Finally on slide 21.
Capstone copper is expected to produce 185000 tons of copper production of 12 months in 2022, which has been illustrated on the slide in the first stage is good.
The second stage of growth as we commission. The MVP is expected to generate copper production of 260000 tons by 2024, which represents 40% growth.
Beyond this we expect to deliver another 45% growth to 380000 tonnes per annum with subsidy Domingo.
With further expansion opportunities throughout our portfolio.
You can see that we have a tremendously exciting growth trajectory and this doesn't factor in the robust pipeline of other growth initiatives between breakfast, including PV for the phase two expansion projects at modest blockers in months of Ed and the cobalt production.
Ill be even more importance is in fact these projects all served to lower our unit costs, allowing for strong cash flow generation throughout the cycle.
I'd like to take this moment to thank our team at capstone copper with a huge commitments to our integration process, which I'm very pleased to say is going extremely well.
With that we're now ready to take questions.
Thank you Sir.
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And your first question will be from <unk> talk about at the Scotia Bank. Please go ahead.
Hi, good morning, and congratulations again on the transaction.
I've got a couple of questions about your guidance and I appreciate they had pretty detailed guidance for 2022, when we start to think ahead to next year.
Mike.
Correct in thinking that your copper production consolidated will be fairly similar in 'twenty three versus the 185000 tonnes in 'twenty two with really the step up beginning in 'twenty four.
Okay.
Or second answer that a little bit.
I mean as you know Mentals Blancos is the main asset that's ramping up this year. So when you look ahead to 2023 that will be the pickup in production that youll see when you look through the four assets.
But should we expect pretty minimal contribution from that in 'twenty three specifically.
Yes, I mean, we don't give 2023 guidance, but if you go to the Tech report Youll see it as I wouldn't say it's minimal.
<unk>.
You'll see the numbers there in terms of how many.
Tons here it is.
I think yes.
The other thing Thats important about it is it represents quite a significant shift at months discomfort from oxides to sulfides. So that does have quite an important impact on our unit costs at months as bonkers.
Alright, Okay, and then sort of similar vein in terms of Capex.
I was a little surprised how high the planned Capex was for this year.
Am I correct that.
Dr. What's left for the project.
That we could be looking corporately of Capex sort of similar for next year somewhere maybe in the 500 to 600 range and finish the matter Verde project plus all the other sort.
Smaller sustaining and everything else going on or is that kind of a good ballpark number.
Okay.
Yes, so I'll pass across to run them to give you a more detailed answer but.
The main portion of the Capex spend on the motivated project as this year.
I think there's a.
Some of the savings of $140 million for next year, I think was exactly adding portion for 2023.
And I think the one item, which obviously does.
Influenced the size events that Capex spend is obviously the sort of pre stripping in deferred stripping.
Various operations.
So when you look at it.
The number is 825, we've spent 338, we've said to date there is 265 and our guidance for this year. So that leaves us another 220 for next year roughly on that severity.
Alright, plus all the other assets.
Yes, I mean, the sustaining capital under other assets one thing when you look at our capital guidance.
Guidance of 620 and includes a $125 capitalized stripping for the Tech reports never had the accounting for capitalized stripping that was probably just kind of in the Opex line. So that's that's kind of new to standardize our accounting when you look at our guidance if you back out the $6 20.
The 125 on stripping that's really a 500 number when you look at it from a capital perspective without stripping.
Yes, no fair enough, but we're not really seeing the offset though in terms of reduction in your opex right. So it does seem let's say incremental to the net numbers.
And I get that that's largely inflationary, but it felt like we can add.
The 120 to Capex and then take it out of Opex.
Yeah, I agree I think the asset and inflations hitting into that.
Okay. Okay. Thanks, I'll pass it along.
Thank you next question will be from Ralph proceedings at eight capital. Please go ahead.
Okay.
Good morning, Thanks for taking my questions.
If I may I have two on the amount of ethane.
And just looking at the you know.
The construction progress at 14%.
And you talked about sort of monitoring.
COVID-19 risks and logistic risks, but it does seem that inflation risks are pretty much in check just because of the single into EPC lump sum contracts. So just wondering.
Of those three things.
Which should we be most concerned about.
In terms of stressing on either the Capex number.
Our scheduling.
Is it COVID-19 or is it more of a logistics chain, but that sort of brings into incremental risks.
Yeah. Thanks, Joe.
Take that and then just ask Kessel, if he's got any further comments.
As I, we've obviously.
<unk> been through sort of two ideas of covered already and I think the procedures that have been put in place, but at the operation of the project and the.
The country as a whole.
Has proven pretty resilient to sort of what kind of it is China and us to date.
And I think we did have the advantage of negotiating the contract with the cinco taking into accounts.
So we've actually assumed the sort of full blown pandemic for the full period of the construction. So all of that is built into the procedures that as things like additional transports of additional accommodation there is.
So the issues of productivity that we have assumed in the project. So I think COVID-19 is well taken care of.
Think we spoke quite a bit on inflation and how we've always he basis and somewhat impacted just by diesel price increase in the pre stripping and that we've now built into our estimates.
<unk>.
We've been fortunate that basically we locked in the.
Prices for all of the mining equipment and the plants equivalents I think before we saw this.
Sort of inflationary period and to an extent, we also locked in our orders before we hit the big.
So the schedule Inc. Challenges before the they certainly were seeing in the market today timelines for lead times for orders growing significantly.
So I think we are reasonably comfortable that I think.
As you know today, so that's our logistical challenges around the world with shipping et cetera, particularly I think around around China. So these are things we need to keep a very close Ireland.
Just sort of as we as we sort.
It showed the final equipment delivery to the project.
And then the cashes anything you want to.
I would just echo I've been to Chile, several times since joining capstone and it's incredible how that country's managing COVID-19 I mean.
Very good.
Robust protocols and procedures businesses as usual and they've.
Adapted to it where COVID-19 interrupts us exactly where John is saying is what might be happening in various areas, where parts and components are being manufactured so we're bird dogging that we don't have any.
Notice to date that there is any major issues, but that is our biggest concern. If that was your question. What is your biggest concern if some of these areas maybe.
What's going through the Shanghai Harbor versus a different harbor and those types of things. So we're keenly aware of those things monitoring them, but to date, we don't have any confirmation of any major impacts of the project, but thats, where it would lie.
We were to try and guess where something might happen.
Okay, Yeah that helps a lot I appreciate it casual let me stay with you.
Because theres been a more robust build out of the team. There are there any scope changes that have happened that mental burden that have been implemented or are potentially being looked at just a sort of a fresh set of eyes is sort.
Sort of come in and looked at that project as you are sort of near that 50% completion rate or.
At the risk of repricing some of these contracts you've sort of held back on that.
Look.
I'm completely familiar with the <unk>.
DTC deliver a St. Joe that's there and as it happens that flow sheet is the exact same as the constancia flow sheet. So I've had lots of opportunity to work with that engineering group and I understand that flow sheet it'll serve extremely well it's already been proven.
So I don't think theres any modifications that.
Myself or any of the new additions to the team would come in on that project, where we see the value and Thats, what we really focused on an outline as what the future value for the integrated district is and that's where we see maybe there is some other plans we can bring in but that's in time minutes in steps. So it's not changing.
Anything that was previously planned for thought of the integration of these two companies.
Gotcha outstanding well done thanks, very much all.
Thank you once again, ladies and gentlemen, if you would like to ask a question. Please slowly press star followed by one on your Touchtone phone.
And your next question will be from Craig Craig Hutchinson.
TD Securities.
Hey, good morning, guys.
Just a question on the ramp up of Monteverdi previously.
Previously a new tenant.
Tenant was I think they had this thing in ramp up mode at the end of 2023.
Now it looks like the ramp up is beginning in 2024.
Is that a change or are you guys just being more conservative in terms of what you're showing now.
Again also see of course has got anything further to add.
I don't believe we've made.
<unk> made any changes on that.
We are still talking about sort of commissioning and commencement of ramp up in late 2023.
And obviously sort of hitting full stride in 2004.
Yes, that's it.
Often at the back end of these large concentrated there is scope given to ramp up we're just saying that we will be here.
Fleet in full production in 'twenty four so there is that normal period in 'twenty three.
Sufficient to get to full production. Its just we don't see sustainable production till 'twenty, four and that Hasnt changed from the original time at all maybe the wording is different but it hasnt changed.
Okay. So we could see some incremental production basically at the end of 'twenty three.
Absolutely, yes, our full intention is to have ramp up production through there.
Perfect and then maybe just a follow up question to what ours was touched on earlier in terms of the capitalized stripping.
And the numbers you're quoting this year for months as Blancos, a monthly burn rate.
Can we expect similar numbers as well next year on that kind of level of capitalized stripping.
Yes.
For more details on kind of the strip ratio, but it's kind of about <unk> 10, and <unk> phase but.
When you look at it you can expect kind of in that range next year as well.
Yeah.
Okay.
I may just a last question for me I know on past you guys have looked at partnership options for incentives mango I wonder if there's anything kind of actively engaged there or whether really the intent is to wait to you guys.
There's some update information whether it's on the feasibility study or the district integration plan.
Yeah. So there's no great data definitely the latter we have no engagements at the moment on partner studies.
Awesome partner discussions I think our entire focus is on is.
He is on the study work that.
We've described.
And I think once we have.
<unk> got a much clearer idea of the integration plan the value of the opportunities I think at that stage, we will consider whether a partner would be desirable or not.
Alright, perfect guys. Thank you.
Thank you.
At this time Mr. Mckenzie, we have no further questions. Please proceed.
Thank you very much. Thank you. Thank you everybody for joining us today, and we look forward to meeting investors at the Canaccord and the bank of America mining conferences next week and at <unk> next month and.
And in the meantime, please reach out to <unk>. If you have any further questions. Thank you very much and have a great day.
Thank you Sir.
Ladies and gentlemen, this does indeed conclude your conference call for today. Once again. Thank you for attending at this time, we do ask that you. Please disconnect your lines have a good weekend.
Sure.
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