Q2 2022 Centerra Gold Inc Earnings Call
Yeah.
Greetings and welcome to visa Terra Gold's second quarter 2022 results conference call.
To start with a presentation all lines will be in a listen only mode. Afterwards, we will conduct a question and answer session at that time. If you have a question. Please press the one followed by the four on your telephone.
At any time during the conference you need to reach an operator. Please press star Zero I should remind you from east coast being recorded Wednesday August 10 2022.
I would now like to turn the conference over to Karen Treasurer, and director of Investor Relations. Please go ahead.
Thank you Carlos what could this is a terrible second quarter 2022 results conference call. Please note that presentation slides are available on <unk> Gold's website to accompany each speaker's remarks todays call is open to all members of the investment kidney and media in listen only mode. Following the formal remarks, the operator will give instructions for each.
Asking for asking a question and then we will open the phone lines to questions.
Please note that all figures are in U S dollars unless otherwise noted.
Joining me on the call today are Scott Perry, President and Chief Executive Officer, and Darren Millman, Chief Financial Officer.
I would like to caution everyone that certain statements made today, maybe forward looking statements and as such are subject to known and unknown risks, which may cause our actual results to differ from those expressed or implied.
Also certain of the measures we will discuss today are non-GAAP measures. Please refer to the description of non-GAAP measures in our news release and MD&A issued this morning for more detailed discussion for a more detailed discussion of the material assumptions risks and uncertainties. Please refer to our news release and MD&A, along with the unaudited financial statements and notes and.
All of our other filings, which can be found on SEDAR, Edgar and the company's website at <unk> Dot Com and now I'll turn the call over to Scott.
Thanks Tobey.
Good day to everyone as Tony mentioned I'm, just referencing the accompanying webcast presentation deck and I'm just starting off on slide number four.
So first of all I'd like to start by highlighting our announcement on July 29, we have officially closed the global arrangement agreement could result in the government of the cookies Republic.
This is a clean separation.
Loud us to significantly reduce that share count by approximately 77 million shares or 26%.
This closing the company is positioned to move forward with a renewed focus on our core operations the Mount Milligan mine the oxide mine.
Cool Goldfields development project in addition to exploration and drilling investment program at our Greenfield and brownfield exploration projects in.
In the second quarter. The company continues to demonstrate that safety remains one of <unk> top priority.
Notable milestones during the quarter.
Achieving three years without a lost time injury and subsequent to quarter end opposite minus <unk> <unk>.
Cost 1 million hours without a loss time injury.
Moving out of the.
Gold room operations at the opposite minds ADR plant remains suspended due to mercury that was detected.
Retrofit and the Goldman is expected to be complete in late 2022 operation operations Recommencing as soon as regulatory approvals are obtained the.
The company has completed engineering work and has ordered equipment to retrofit the idea plant to safe operations within the Goldman the.
Capital cost of this Mercury abatement retrofit is expected to be approximately U S $5 million.
You will note in today's release that at the outset mine, we have initiated suspension of stacking and leaching activities as of August 10, and this is due to the company's inability to obtain approval from the regulators to use more activated carbon than what is currently allowed in the mine environmental impact assessment.
This change in operating practices means that the company has had to revise as consolidated 2022 outlook to reflect the suspension of stacking and leaching activities offset the continued suspension of gold roadmap over gold room operations and the ADR plant as well as the impact of it an assumed decline in copper.
And the impact that has on that Mount Milligan operation.
We'll speak to each of these in more detail later on in this webcast.
In terms of our development projects the advancement of the Goldcorp development project continued in the second quarter, we have initiated a resource expansion and infill infill drilling program that targets. Some 65000 meters of diamond drilling in reverse circulation drilling.
Plan here is to issue an updated resource estimate for the project in 2023 with a feasibility study shortly thereafter.
In regards to the senior leadership, we are now in the final stages of recruiting a new chief operating officer, and we plan to provide the market with an announcement on that shortly.
From a liquidity perspective, reflecting the strength of our balance sheet. The board again approved a consecutive quarterly dividend of Canadian dollars seven per share.
Lastly in respect to our molybdenum business unit evaluations to surfacing value.
Value.
Alright evaluations assessing value opportunities remain an ongoing work in progress item.
Just moving to slide five just in terms of our environmental social governance highlights.
There's a lot of exciting environmental social governance update on this slide and I won't go through them, all but I do want to note that on August 4th Center published its 2021 ESG report. This report demonstrates the great strides that we are taking to continue to strengthen our environmental social governance performance and I feel it is reflected in several achievements noted for.
That report.
Lastly, I just want to highlight the successful completion of our year to responsible gold mining principles assurance work.
The organization is on track to achieve conformance with the responsible gold mining principles before the end of 2022.
Moving to slide six.
Touching on Mount Milligan operating highlights now I think it is important to note that our 2022 gold and copper production outlook from the mine has not changed we are still on track to meet our gold production guidance of 190 to 210000 ounces for the year and to meet our copper production guidance of 70 to 80 million pounds for the year.
During the second quarter Mount Milligan continues to deliver strong results producing some 42728 ounces of gold and some $17 4 million pounds of copper.
In terms of the corresponding all in sustaining cost on a byproduct basis at Mount Milligan. The results came in at $245 per ounce for the quarter, but was $641 per ounce for the first half of this year.
The Companys second quarter all in sustaining cost result was impacted by the meaningful decline in copper prices again, remembering that copper is recognized as a byproduct credit.
Second quarter copper credits were effectively reduced by some $560 per ounce in relation to a negative mark to market adjustment on our provisionally priced copper contracts that were open as at the end of the quarter Darrin, Our Chief Financial Officer will speak to this.
Speak to this in more depth in the financial highlights section of this presentation.
The Mount Milligan mine posted a solid cash flow result in the second quarter.
Generated in terms of cash provided by mine operations, we generated some 81 million dose and in terms of free cash flow the mine generated $58 million for the quarter.
Mount Milligan <unk> staged flotation reactors were commissioned in early may during.
During the second quarter, and we're expecting to see improved future gold and copper recoveries at the mine as a result by way of example, the month of June actually had the highest monthly copper recovery that we've seen in the mines history.
Lastly mountain millions last of mine planning work continues to progress with a focus on optimizing some meaningful life of mine extension opportunities relative to go forward equipment fleet capacity requirement, our tailing storage facility requirements as well as some other identified opportunities and tradeoffs.
Just moving to slide seven.
And offset as already mentioned as of March 2022.
<unk> operations remain suspended and the company has initiated suspension of stacking and leaching operation as of August 10, as a result of a lack of access to activated carbon mining and crushing are currently ongoing in the company is evaluating whether these activities should continue while we pursue an amendment to our <unk>.
Fundamental impact assessment permit to align permitted limits with current operational plans.
As at June 30th, Oxford had stored Golden carbon inventory totaling some 58469 ounces the weighted average cost of this inventory on a per recoverable ounce basis was approximately $444 per ounce.
The.
Mercury abatement retrofit is expected to be complete by the end of this calendar year and we do assume that current inventory at Golden carbon will be processed in 2023, assuming the ADR plant resumed full operations with regulatory approvals in place.
Meanwhile, we do consider continue to consider other alternatives to monetize the golden carbon.
<unk> is currently in the process of preparing a new environmental impact assessment applications, which will clarify the heap leach stacking capacity of the mine and the excellent amount of activated carbon required for usage in our operations, we expect to be submitting this new EIA application by the end of this month and we will be pursuing it.
Its approval as quickly as possible.
Just moving on to slide eight just in terms of <unk>.
<unk> and our revised outlook.
As I mentioned earlier the company has revised its outlook for 2022 as a result of initiating the suspension of stacking and leaching activities at the oxide mine. In addition to the continued suspension of Gogo program operations. This is also in addition to the changes that we've made to that assumes spot copper price moving forward.
With regards to copper prices, we have considerably reduced the second half forecast assumption from $4 per pound to $3 25 per pound.
Note that should copper prices stay at the current spot levels for the remainder of the year the company's all in sustaining costs as well as its cash flow outlook, we'd see a positive impact versus this revised guidance.
You will see we have offset production at 55000 ounces for the year and this really represents the actual Q1 production results. This is revised down from our original guidance of 210 to 240000 ounces for 2022.
In terms of the Companys consolidated all in sustaining cost on a byproduct basis guidance has increased to 1000 to $1050 per ounce, which is an increase from previous guidance of 600 to $650 per ounce and this primarily reflects the lower go to the lower gold output contributions from offset as well as the reduced copper.
Price assumptions at Mount Milligan.
As already mentioned guidance for gold and copper production of the Mount Milligan mine remained unchanged from the previous guidance.
Likewise consolidated capital expenditures costs relating to the molybdenum business unit and corporate administration costs also remained unchanged from previous guidance.
Exploration guidance has been updated to 50 to 65 million dose and this reflects the addition of $15 million to $20 million in spending and investments to the Goldfield development development project. Following the addition of this project to our portfolio in Q1 of this year.
Just moving on to slide nine.
Here on slide nine this reflects the revised 2022 gold production guidance graphically on a quarter by quarter basis.
The guidance is updated to include only year to date gold production at the oxide mine of 55000 ounces. In addition to Mount Milligan full year gold production outlook as noticed as noted previously mountain elegant gold production guidance remains unchanged from the original outlook of 190 to 210000 ounces.
Company assumes completion of the Mercury abatement retrofit at the offset mine in late 2022, and this will then allow the restart of the Goldberg in 2023 subject to the relevant regulatory approvals being in hand.
Just lastly on slide 10.
Just in terms of copper production as previously noted the company's copper production guidance is unchanged from the original outlook of 70 to 80 million pounds and the full year.
With that I'm going to pass the presentation over to Darren Millman, Darren Millman, our Chief Financial Officer, and Darren will walk through some of the key financial highlights Thanks, Scott and good morning all.
For those following on the slide deck, albeit initially speaking to slide 12.
<unk> recorded 167 million in net revenue during the quarter consisting of the Mount Milligan mine lubricant business unit No revenue was recorded at the oxide mine.
At the Mount Milligan mine gross gold copper sales from <unk> $71 million.
Prior to the provisioning adjustment, our concentrate sales and a negative $32 million, which were made in the quarter I will speak to this in more detail exit later in the presentation.
In the quarter Mount Milligan, So 41590, <unk> of an ounce of gold and $18 9 million pounds of copper.
Due to the suspension of the Ida plant as noted earlier by Scott. The oxide mine has no recorded sales oil production in the quarter. However, stored coated carbon inventory balance recognized at 58460 non recoverable ounces at June 30.
The cost associated with the Oxford Stuart Gordon carbon inventory is approximately $444 per ounce, which is being capitalized as a current asset with no cost flowing through the earnings statement in the quarter.
The total <unk> clinical cost as at June 32000, $22 million to $26 million.
The recorded costs will flow through the earnings statement on the process upon the processing RDA client ADR plant or otherwise monetize.
Facility.
At the molybdenum business unit 30 to $3 2 million pounds of molybdenum was solid generating revenue of $68 6 million.
During the quarter Milligan mine operations average gold price realized was $1335 per ounce.
$2 19 per pound of copper decent.
This incorporates the existing stream arrangements over the mine.
It should be noted that 25% decrease in realized price from when comparing Q2 2022 to that of Q2 2021.
Cash used in operating activities was $3 5 million for the quarter.
As noted in the MD&A Milligan mine generated 81 million in positive operating cash flow. This favorable variance compared to prior year was a result of the one style shipment recognized in Q1 2022 of approximately $42 million the cash being received in Q2.
This was offset by a reduction in gold and copper.
Crosses realized within the quarter with 19% and 25% respectively decreasing in comparison to Q2 2022.
Q1 2021.
Given those sales occurring at the oxide mine in the quarter with operations continuing $50 1 million was used from treasury.
This also included income tax payments of approximately $22 million to Oxford tax authorities and 222 text sheets relating to the 2021 tax year together with the annual royalty payment of $8 million relating again to the 2021 year.
Free cash flow deficit from continuing operations for the quarter was $31 million, primarily driven by the $55 4 million from the Oxford <unk> currently current operational status together with a $6 1 billion deficit at the molybdenum business unit.
As inventory levels remain relatively high with working capital working capital reductions expected in the second half of the year.
The net loss from continuing operations was $2 6 million in the quarter with $36 2 million and adjusted net loss recorded.
Do you have anything in the quarter attributable to operations were at minimal too.
$2 seven being contributed from the Mount Milligan mine as a result of the mark to market adjustments from our historical recorded provisional copper and gold constant striked sales together with the reduced gold levels, So and lower copper prices realized this included the mark to market adjustments.
Earnings also attributable to $1 5 million loss from the oxide mine, primarily from exploration costs and a $3 4 million loss from the molybdenum business unit.
For the quarter there were three adjusting items they were reclamation provisions recovery at sites of care.
<unk> is a $41 4 million, primarily a result of change in underlying discount rates used cultural related legal and other costs of $3 2 million and income at monarch tax adjustments of $4 3 million.
Now move to slide 313.
Given the significant movement in previous issued all in sustaining cost products can pay to Q2 actual results, we refer to as high level slide <unk>.
The removal of the opposite mine plant production and sales in Q2 has resulted in a higher all in sustaining costs by $337 per ounce given the planned 2022 low cost profile of the mine.
Secondly, the planned overlays timing at Milligan mine, which remains unchanged have higher expected costs in the first half of the year compared to that of the second half of the year, specifically, 90% of gold production planning the second half of the year. This results in a higher cost profile than the first.
Half of the year as noted in the slides of the $229 Barings.
The company's fuel and Canadian dollar hedging programs.
Set to date any inflationary pressures together with initial high inflation affected in as part of the 2021 budgeting process and included in the original guidance.
The company trades.
Excuse me the third point is the copper company treat copper revenue as a byproduct, while the Mount Milligan mine in effects and negative cost when calculated all in sustaining cost.
Given this recent and dramatic movement in copper prices together with onset of provisional sales contracts has resulted in an increase in all in sustaining cost of 460 <unk> in Q2 compared to original guidance now.
Now moving to slide 14.
At a high level. The company has 700 unsettled copper contracts at the end of each quarter.
The rising copper prices in 2020, and 2021 have you seen a company benefiting from the provisional pricing whilst its recent sharp decrease in copper prices have seen a reduction in revenue and cash receipts.
As noted on the slide the copper price it variability experience for accounting purposes was a high of $4 75 per pad at the end of Q1 2022 to a low of $3 71 per copper pound at the end of Q2 2022.
The Mark to Mark copper price adjustments made at the end of the quarter contributed to a $560 $60 500, a C store.
<unk> of negative impact of OLED sustaining cost of the Mount Milligan mine in Q2.
The.
<unk> copper hedging program to date is focused on the company's production entitlement quotation period, while Q peak periods with zero cost collar as being the preferred financial instrument.
To date, the Cabos crossing thing within the ranges with 9 million realized gain or loss.
As we move into the second half of 2022 as these copper prices at these copper prices the hedges are of value.
It should be noted the company currently has $52 8 million hedged copper pounds with the majority in the second half of 2022 and 2023 with average floor prices in 2022 at $3 65.
In 2023 at a $4 and in 2024 it also $4.
Now finally on slide 15.
But largely covered off on much bullets on previous slides. So it just highlight the company has exited Q2 with a cash balance of $723 million one.
At $1 1 billion in liquidity.
This liquidity does not factor in Golden carbon with a current market value of approximately $100 million.
As the company will continue to pursue these initiatives in Q3.
Given our strong financial position the board declared a quarterly dividend of <unk> <unk> per share.
With that operator that concludes our formal remarks, we would like naphtha tend to turn it over to Q&A for those on the call. Thank you.
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One moment please for the first question.
Our first question comes from the line of fire Tariq with Credit Suisse. Please go ahead.
Hi, Good morning, Thanks for taking my question a point of clarification on Oct suite.
The gold room retrofit is completed by the end of the year.
And.
Youre able to recycle the carbon activated carbon again does it permitting still become a constraint in 2023 or is it no longer required.
So this is kind of real time is able to say, we met with the ministry of environment.
Effectively yesterday on August nine.
In terms of the solution here moving forward they.
They have recommended that we follow that new environmental impact assessment, and Thats whats going to align.
Our operations without sort of required permitting.
Moving forward, so assuming the Ida Adi facility retrofit is all complete and we have the regulatory approvals in hand.
That will allow us to continue regenerating carbon in 2023 oil recycling the carbon and so that would put us in good order vis vis what we expect to be permitted under our new AIA moving forward.
Okay, and just as a follow up is the expectation now that in Q3 and Q4, there will be no additional inventory of Golden carbon is that the right way to think about it.
Yes, that's correct.
Okay, great. Thank you.
Our next question comes from the line of Trevor Turnbull with Scotiabank. Please go ahead.
Yes. Thank you.
Wondered if we could talk a little bit about the suspension of the 2023 guidance.
I was just wondering what drove that and I assume some of it has to do with maybe the permitting and the new EIA in general, but I was also wondering if it was related to looking for those enlarged grazing permits that we're going to allow access to higher grade because as I understood. It some of the higher.
Grades from those areas, where part of the original 2023 plan.
Yes Trevor.
Put forward simply it's a combination of all those items, you mentioned and really what it comes down to is right here right now we don't have visibility.
With Hyde with a high degree of confidence in terms of when those are.
Our regulatory approvals will be enhanced so say for example, the ADL facility I think we're highly confident that that will be that retrofit will be complete by the end of this year.
We are making we have to make an assumption with regards to when the regulatory approvals to be using that facility will be enhance life.
Likewise in terms of the new AIA that we'll be submitting by the end of this month, we have to make assumptions in terms of when that will be approved and right. Now. We just don't have a high degree of confidence that would allow us to provide an outlook for 2023.
Sure I understand.
And then just as kind of a.
A follow up question on what's going on in Turkey.
I know that when you first had the issue and started.
Building up an inventory of gold on carbon there was talk of having maybe a third party process that carbon for you. It seemed like a pretty straightforward plan at the time and obviously given the buildup in inventory that doesn't seem to have been as simple as we thought I. Just wondered can you say anything about why that that didn't turn out to be.
Viable plan.
Look Trevor we continue to consider those alternatives in terms of looking to monetize the golden carbon.
Essentially off site, but.
In terms of our discussions with the regulators and the agencies.
I think what they've instructed us as their preferred approach is for us to for us to remediate our facilities and to complete the retrofit about Adi facility.
In terms of our operating license, we're not permitted to transport oil to export.
Loading golden carbon upside that would require an amendment and the discussions to date I think the preferred approach for the operation from the Regulator's point of view is for us to remediate facilities. So that we can continue to produce story.
Onsite. So we will continue to engage in those discussions.
But right here right now.
What you're seeing in our guidance, we're assuming that we're going to have to complete the retrofit.
That'll be the Avenue of the main for producing gold Dore moving forward.
Okay, Yeah, I guess, I guess some of that permitting and turns out to be a bit more richard and narrow than we realized.
Just one final question, if I could on Mount Milligan and that's just about the new mine plan I saw that you had mentioned you wanted to assess the impact of capital and the tailings requirements and I was wondering if the capital would be related to stripping costs expanding the tailing.
<unk> or equipment.
And if if there is any permitting hurdles with respect of tailings that we need to think about it as well.
Yeah.
It's.
The the last month.
Quite advanced and I think what we're seeing here is a meaningful opportunity to increase the sort of the conceptual reserved delineated asset life.
Thats favorable if you will.
Obviously, that's resulting in a larger pit.
Which in the contact your question.
Our mining volume it will be more.
Capitalized stripping if you will in terms of sustaining capital.
Likewise, the life of mine processing volume is going to be considerably higher than what we had in the previous life of mine plan and so to your point that that will require.
Larger tailing storage facility.
Yes, if we look at.
The required height of that telling storage facility vis vis what we currently permitted to we would require.
An amendment to to build a larger tailings storage facility.
Generally speaking I would want to put forward.
That's kind of a routine part of the course in terms of how we run our business, but answering your question directly yes, we would have to.
Engaged with the regulators et cetera to get a permit amendment for a larger tailings storage facility.
And sorry, just one follow up to that.
When looking at an amendment for tailings is that all in the hands of the province or do you have to also engage with first nations on that one as well.
Yes, I'd have to engage with first nations and other stakeholders, but it's a provincial permit.
Okay I appreciate that thanks for all the answers Scott.
Yeah.
Next question is from the line of Anita Soni with CIBC. Please go ahead.
Good morning, and thanks for taking my question.
Got.
First question is how much with respect to oxy put some disclosure in there that you had stacked more than what's permitted in 2019 to 2021 can I ask for the volumes that you stocked more than once and what the permitted the mouthwash.
Sorry, Anita I don't I don't have that in front of me.
That was discussions that took place yesterday so.
To be quite honest, we're still trying to clarify.
Clarify.
The regulators tradition on this we're trying to make sure that we've understood and interpreted it correctly, but I don't have those numbers in front of me.
I guess, what I was trying to drive that with the suspension of operations with that mitigate perhaps and theyre mindful youre not talking now for six months that we will not make up for it.
Im not sure Nader I cant speak on behalf of the regulator.
Okay, Alright to the second question there was other additional disclosure that I just read in the MD&A about elevated mercury levels in light of the employees is that.
Something that.
One that you know.
Is it something to be concerned about I think.
Like how what's the elevation level.
With respect to sort of what are the what.
Hello, both mercury level of holiday <unk> and someone if there is any and what would that have implications to that.
Amended EIA.
In terms of the employees and the contractors to help them well being of our employees is obviously paramount back.
Back when we first identified.
Mercury.
High levels of Mercury in the Adi facilities, we had all of our employees and contractors that were working in that facility, we had them submit samples.
Just to ascertain whether or not that had elevated levels and then any employees that we did identify as potentially having elevated levels.
Actually have them sent today.
Our specialized hospital.
Further.
The evaluation.
I am pleased to report that.
Since all of this all of the employees and contractors fine health side.
Okay.
So all good on that front, albeit it was pretty concerning at the times given the Paramount focus on that.
From wellbeing of our employees.
In terms of does that have an impact on the AIA.
I don't believe so I think what we're focusing on here again.
The retrofit of the idea of facility.
As a change in our business model. If you will in terms of the processing operations and again the regulators instructed us that the best thing for us to do is submit our new AIA to make sure that AI is aligned without sort of go forward operating protocols.
Okay. That's it from my questions I'll pass it back if I have any more I'll get back in the queue.
Our next question comes from the line of Lawson Winder with Bank of America Securities. Please go ahead.
Hi, good morning, and thank you for that yet.
I wanted to ask about Mt Milligan.
And.
The economics around that would it be fair to say that.
In the current inflationary environment and given the tailings capacity limitations that there are some.
Questionable economics on doing a life of mine extension.
No look again as I said.
The report itself. It's in its final stages, there was a number of opportunities the number of trade offs that we're considering.
But on a preliminary basis, what we're seeing in terms of the unitary cost profile.
The productivity profile.
I think it's quite similar to what you would have been ex what you would've seen in the last month.
Profile.
Think when you look at Mount Milligan for performance.
Over the first half of this year or even 2021, and I think <unk> seen a significant improvement in terms of productivity as unitary cost et cetera, even our recovery efficiencies.
Don't see any reason why that would be dissimilar to what would be the new life of mine plan.
We released it.
Okay, and then along those lines what are you guys thinking in terms of.
Number of years for the extension.
I can't disclose that as yet.
No problem, maybe could you.
Disclose what you guys will be using for a gold price assumption and hurdle rate for that study.
I'm just looking in terms of the reserve itself on the gold price I think we run into assessing 15.
And when we do relate to the life of mine it typically provide a cash flow section.
Typically we provide a sensitivity.
It would be a whole series of gold prices at that cash flow will be run out of.
So we sensitize it can.
You can pick the gold price that you want to assume moving forward.
And I think historically you guys have you sort of like a 15% after tax IRR for projects would that be a fair hurdle rate. So that's one.
Sure.
Well this is kind of different when you asked that question I think thats more so in the context of what does that hurdle rate when it comes to making a construction decision on any sort of organic projects. We may have in the organization or maybe put differently. If we're looking at inorganic opportunities.
Typically when we'd be looking at that order of magnitude sort of hurdle rate.
I think in terms of our existing asset.
Again, I think the last one report I think it will be providing ultimately an NPV from memory, it's like 5%, 8% and 10%. So we leave it with the reader or the use of the report.
To self select.
That divide discount rate.
Okay, and then just one more if I could on Oxiclean I haven't been through the entire entirety of your release.
Were you guys flagging any.
Right down in the value of oxy at or is that still to be determined.
Yes no.
The high margin and temporary nature.
There is no accounting or impairment adjustment in 30 June or expected in the future.
Yes.
Oh, Okay excellent. Thank you for your answers.
The next question comes from the line of Dalton Barreto with Canaccord. Please go ahead.
Thanks, Good morning, Scott and team.
I'll start with Oak Street as well.
It sounds like.
Higher metal regulators have been involved since may and that <unk> been looking at a much broader scope than just the ADR plant and I'm just wondering.
What triggered a broader review of focusing it and is it realistic to assume that it will get approved by year end maybe in early 2023.
Yes, it does.
I can't speculate or talk on behalf of the regulators.
Fair enough to answer that question, but you know obviously you are aware of the challenges that we have had in our ABL facility and the retrofit that we're doing and as we mentioned earlier that does require regulatory approval before we can actually commission.
Mercury abatement system moving forward.
In terms of the EIA I mean, we've been in a lot of discussions with the Ministry.
They have put forward that the solution here is to submit.
Your new EAA that will then align your operating sort of activities in profile.
With that EAA and what's permitted so that is well underway.
As we mentioned in that disclosure, we expect to be submitting it.
At the end of this month.
And.
It has been good engagement with the Ministry, So I'm hopeful that it will be an expedited process moving forward, but I can't really.
Can't really provide any more clarity than that or any more visibility. That's just something we'll have to ascertain as we move forward here over the course.
This is Jim.
Okay. Thanks for that and then just kind of as an extension to that question. If the EIA approval does get delay.
Delayed a little bit.
Youre operating permits expiring in January when you eventually improve will that trigger an automatic approval of the operating permit or will you have to then go through another process.
Separately, we would be.
The extension of the operating license and that extension application is already in the system, we've already followed that.
Okay, Great and then just switching gears I think on the last call you had mentioned that you were.
You were going to wrap up some internal studies on the <unk> business unit around this time and I'm just wondering kind of what came of those how you're thinking about that business going forward.
Yeah look I think as I mentioned earlier that we think that there's some conceptual value surfacing opportunities within that business unit, it's something that we continue to study and evaluate but I'd really characterize it as a work in progress those studies or are not completed.
Yes.
So it's really just a work in progress evaluation, so nothing I can really speak to.
In terms of any.
Any impact at all.
Any change in our outlook or our business model moving forward, it's really just a work in progress evaluation.
Okay and then just one last one from me if I may just given where your balance sheet is and the fact that you've got a clean break with the Kyrgyz right now.
Should we anticipate that some sort of a meaningful buyback or special dividend could be back on the table.
Given what's happened with your portfolio is M&A a bigger focus now.
I think.
In terms of the.
The strength of the balance sheet liquidity profile, obviously, that's something that we we do discuss with our board of directors and will continue to have those discussions, but I'm not really in a position to provide any guidance.
In terms of go forward capital return initiatives really the only thing I can speak to right now is our quarterly dividend distribution.
But over and above that we will be having future discussions with the board when it comes to any sort of incremental capital return initiatives and whether or not that's warranted.
Great. Thank you for that cash take care.
We have no further questions from the phone line I will turn it over back to you Mr. Karen.
Okay.
I'd like to thank everyone for joining us on our call today.
Thank you everyone Goodbye will be available throughout the day if needed. So please feel free to reach out to myself and I can answer any additional questions. Thank you bye bye.
That concludes today's call. We thank you for your participation and ask you to please disconnect your lines.
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Yes.
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