Q3 2022 Fortuna Silver Mines Inc Earnings Call
Good day, ladies and gentlemen, and welcome to the Fortuna Silver Q3, 2022 financial and operational results call.
At this time, all participants have been placed on a listen only mode and we will open the floor for your questions and comments after the presentation.
It is now my pleasure to turn the floor over to your host Carlos Baca director of Investor Relations.
Sir the floor is yours.
Thank you Tom.
Ladies and gentlemen, I would like to welcome you to Fortuna silver mines and to our financial and operations results call for the third quarter of 2022.
Leading the call today on behalf of Fortuna will be what kind of medical and also have prescient and chief Executive Officer.
Oh, and also Chief financial Officer.
There's kind of a lot of co chief operating officer of Latin America, and David Whittle, <unk>, Chief operating officer at West Africa.
Today's earnings call presentation is available on our feature presentation box on our homepage at Fortuna Silver Dot Com as a reminder, statements made during this call are subject to the readers advisory included in yesterday's news release and in the earnings call presentation, our national figures contained in the presentation.
In today's call are presented in U S dollars unless otherwise stated.
Before I turn over the call to Jorge I would like to indicate that this earnings call contains forward looking information.
That is based on the company's current expectations estimates and beliefs. This forward looking information is subject to a number of risks uncertainties and other factors actual results could differ materially from a conclusion forecast or projection in the forward looking information.
Certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in the overlook any information additional information about the material factors that could cause actual results to differ materially from the conclusion forecast or projection in the forward looking information and the material factors.
Or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward looking information is contained in the company's annual information form and MD&A, which are publicly available on SEDAR. The company assumes no obligation to update such forward looking information in the future except as required.
By law.
I would like now.
Now to turn the call over to Hawkeye and also our cofounder of part two of that.
Thank you Carlos.
Our business continued to perform well in the third quarter we.
We had a small adjusted gain in net income of one cents per share slightly short of analyst consensus.
Beat consensus estimates for cash flow for sure with 22 cents versus 18 cents of the annuities.
We provide in our results news release, a measure of free cash flow from operations after capital investments at the mines.
CIS and interest paid and corporate overhead.
This figure is a strong $34 million for the period and these metal price and inflationary environment. Our business continues generating very healthy cash flows.
The financial performance is underpinned by steady and meaningful quarterly production of approximately 100000 ounces.
Got it.
Gold equivalent ounces for the quarter, 68% of sales were attributable to go 20% to silver.
What percent are byproduct zinc and lead out of it.
We're mining.
Costs at all our mines are tracking within the range, we guided at the beginning of the year inflation pressures on key consumables like B cell cyanide steel explosives immense have pushed site costs to the upper range of guidance, but at this time.
Late in the year, we believe risks for major deviations from our annual cost predictions are largely diminished.
Our safety culture and safety performance continued to show sustained improvement with multiple key initiatives ongoing in both Latam in West Africa regions.
We reported the second consecutive quarter free of lost time injuries to our people and our total recordable injury rate of $2 6 million.
For per million hours worked for the quarter.
Our project team at singular continues to deliver exceptional performance.
So at the end of October and the construction is 83% complete remaining on time and on budget.
<unk> grew to $119 million. So the 173 total capex and have already committed approximately 95% of the total capex.
<unk> <unk>, our Chief operating officer for West Africa will share with you more details on the status of the project and what is coming over the next few months in a moment.
I want to read through your attention a few additional important topics for the quarter.
And.
Subsequent events and one is on funding November 7th the Mexican food Court ruled in our favor on the disputed attempt by our semi and artificial to reduce thermal for 12 year environmental permit extension.
San Jose mine down to two years.
With this ruling or 12 year environmental permit extension stance originally granted in December of last year.
Needless to say, we're extremely pleased with this outcome, which is consistent with our position that we have always been in material compliance with applicable laws on standard procedures on these matters.
The second matter to Richter attention is.
The expansion.
Stage, one of her great facility, which is set to close in December .
Although we are faster peak capital demands and remain well funded to take singular construction to completion in mid sustaining capital need set our minds. These added financial flexibility is welcome for a business of our size today.
And also at a time when we want to be able to continue capturing organic growth opportunities in our portfolio at an accelerated pace.
On September 12, we.
Published an exploration news release sharing the continued success we have.
We are having with our drilling program subsidy gayla.
The newly discovered sunbird deposit, we successfully extended gold mineralization significantly beyond the limits of amazing 350000 inferred resource at a grade of three two grams gold.
Working to produce an updated estimate with all these new data before year end.
Additionally, our scout drilling within the property continues to yield significant gold intersects with multiple prospects like <unk> seven and winning.
Please refer to the September 12 exploration news release for the details on the program.
We're all excited about the opportunities for organic growth. That's a gala continues to present to us.
With that I'll ask Luis now too.
Sure the highlights of the financial results.
Thank you.
So as Jorge mentioned sales were $166 $6 million in the quarter. This is 2% over Q3 2021.
Indeed, all recorded $10 $2 million of higher sales, partially offset by slightly lower sales at our three other operating mines.
In terms of aggregate volume and metal price impact, we had higher volume contribution to sales of $10 million, mostly coming from Linda.
Partially offset by lower metal prices and treatment and refining charges of $6 million.
In particular, the isolated effect of lower silver and gold prices on our Dore and provisional concentrate sales was $13 million.
Our average provision our realized prices in the quarter were $1718 per ounce of gold.
Compared to 1779.
Dollars per ounce in Q3, 2021, that's 3% lower than $19 $16 per ounce of silver.
Compared to $24 24 in the prior year, that's 21% lower.
Our operating income of $5 $7 million was $16 million lower than Q3 2021.
Excluding non recurrent items, namely the $13 million charge in Q3 2021 for the settlement of a disputed royalty claim with our Mexican Geological survey.
A $3 million charge in Q3 2022 for the write off of that let me know project in Serbia.
The drop in operating income was approximately $26 million.
The name of the main drivers for these were higher total cash costs of $17 million and $9 million of higher depletion.
These higher cash costs year over year, or approximately $9 million to $10 million above what was already built into the midpoint of our cost guidance for the year.
The higher depletion is mostly aligned with higher activity at Lindbergh.
We recorded a net loss in the quarter of $4 $1 million or <unk> 10 per share other items in the quarter contributed to the loss were $3 $4 million write offs mentioned before.
A $1 6 million unrealized loss on derivative contracts and $2 $4 million of foreign exchange losses, mostly related to balances held in local currency in our West African operations in the context of the strong appreciation of the U S dollar.
We reported adjusted net income of $2 3 million compared to $22 5 million in Q3 2021.
Our reported free cash flow from ongoing operations was $34 million for the quarter, including $11 6 million of positive changes in working capital.
For the first nine months of 2022, the same figure it was $64 $8 million, including $18 million of negative changes in working capital.
On the balance sheet, we closed the quarter with $125 $9 million of liquidity comprised of $99 million of cash and $35 million undrawn under our $200 million revolving credit facility.
Total net debt, including the outstanding convertible debenture is $120 million.
For a net debt to EBITDA ratio of 0.4.
And that's again the construction, we funded $26 million in the quarter. We continued to remain adequately funded for the remaining portion of the construction.
But you are correct.
Thank you David.
Highlight the West Africa region results. Please.
Thanks Jose.
Operations in West Africa continued their solid performance throughout Q3 tracking well with respect to our shadows and budgets.
Despite the one guy worldwide inflationary and supply chain pressures on the operations and get them up all the construction progress at cigar I love being impacted.
<unk> third quarter gold production of 27130 ounces was in line with plan.
Production for the first nine months of the year totaling 79919 ounces.
<unk> Guy to achieve mid point to that you won't guidance.
Safety performance at both sites has been strong with Sig, while continuing to be an LTI free project to date.
We are proud to highlight that Mike I reached in Q3, the milestone Mark of a two year LTI free operation.
Important tonight inside their operations or am I kind of have been unaffected by the political upheaval that it could even picking up that side of the end of the third quarter.
Moving to <unk> construction progress continues to be steady in line with plan and on time and on budget. We finished <unk> pool projected for mid 2023.
As of the <unk>.
<unk> was 36.
<unk>, 93% complete with approximately $166 million committed.
Of this how long the $73 million initial capital budget.
The project continues to be Derisked niche transitioning from the bulk earthquakes phase into the structural mechanical piping works at the prices flat.
With the majority of consumption come assignments, having progressed through them reduce the whole process.
The mining contractor monitoring you continued mobilization on site establishment activities on recruitment of key positions.
Long lead fleet shipments are underway with a rival on site expected during the fourth quarter.
Ron pad construction and initial grade control drilling is planned to commence this quarter.
The water storage stem is complete with approximately 565000 cubic meter stored sufficient to commissioning and operating requirements.
CIL tightens fabrication water tanks assembly, along with hydrostatic testing has been completed.
Structural steel has been erected and the same.
And the installation of mechanical equipment has commenced within the price as planned.
The project critical past processing plant EPC is on track at 83% complete.
The HB grid connection Skype is nearing completion with Energizer nation of the HV substation.
In December .
Parallel to the excellent progress on the ground operational readiness, Skype shred advancing well with the operations team and systems come state continuing to be established.
Key members of the operational team being hired.
Progress on the next level of management staffing advancing according to the plan.
Back to you okay.
Thank you David.
Latin America results highlights.
Okay.
Yes, Thank you Jorge.
So our metal production at our mines in Latin America is on track to achieve annual guidance range, San Jose Yamana and clean data.
<unk> delivered another strong production quarter, reflecting an increase of six 9% in consolidated gold production compared to the same period of 2021.
Stronger silver and base metal production is explained by higher production and higher head grades for the period.
Some highlights for the quarter.
In Argentina lean data delivered another consistent gold production performance.
We saw a 14, 5% production increase compared to the third quarter of 2021.
Mainly explained by an increase in the performance of the three stage crushing and stacking system.
The operation continues capturing higher productivity gains, partially offsetting inflationary pressures and key consumables.
Demonstrating consistent production performance.
Gold production for the first nine months of 2022 totaled 89000 ounces.
Moving on to Mexico, San Jose delivered its highest silver production quarter in 'twenty to 'twenty two.
Totaling 155 million ounces. This is at seven 6% higher production when compared to the equivalent period in 2021.
Gold production of 9100 ounces, plus 2% higher for the same periods.
Increased in silver and gold production was primarily due to higher mill throughput.
And slightly higher grades in line with the mining sequence and mineral reserve estimates place.
Placing the operation.
<unk> strong position to achieve the upper range of annual guidance.
Silver and gold production for the first nine months of 2022 totaled four 3 million ounces and 25600 ounces respectively.
As we move.
To Peru.
Our mines continue to mine continue to deliver strong and steady production.
We say 292000 ounces of silver produced in the third quarter of 2022.
Measured against the comparable quarter of 2021 silver was six 1% higher.
To a combination of increased mill throughput higher grades and better recoveries silver production for the first nine months of 2022 total 831000 ounces on track to achieve the upper range of final guidance.
Zinc and lead production for the third quarter was $11 9 million pounds, and $9 1 million pounds, respectively.
Overall production was a result of variances in head grades higher mill throughput and better recoveries.
The first nine months of 2022 zinc production totaled $33 6 million pounds and lead production totaled $25 9 million pounds.
Both in line to achieve the upper range of guidance back to you Jorge.
Thank you.
Carlos.
We would now like to turn the call over to any questions that you may have.
Thank you ladies and gentlemen, the floor is now open for questions.
If you would like to enter the queue to ask a question at this time you May press star one on your telephone keypad to enter the queue. We do ask if listening on speakerphone today that you pick up your handset while asking your question to provide optimal sound quality once again, ladies and gentlemen, that'll be star one on your telephone keypad.
At this time to enter the queue to ask a question. Please hold a moment, while we poll for questions.
And the first question today is coming from Trevor Turnbull from Scotiabank your.
Your line is live please go ahead.
Great. Thank you.
I think Jorge the last time, we spoke you talked about delivery of the Sag mill components to the site as one of the major critical path items and I just wondered now that the mill is essentially arrived.
Do you consider critical path now for construction.
Yeah.
Oh.
Deferred to David who is here and there.
Did you want to expand on the critical path items that we see them moving forward. Please.
Yes.
Yes, Thanks Jose.
As far as the construction of the project is really transitioning now from the <unk>.
Bolker earthquakes and concrete civil space into the kidney SMP sites.
So I really am.
Any further exposure really forms part of that works for you.
As you alluded to the segmental components.
Has been somewhat the race team that clause components.
Either in transit or actually already be Chinese like the <unk> Zhu pool transportation up to site for might be John .
In this next week.
So we're pretty confident at this stage that's all.
Risks have been minimized.
And we don't see any major.
Risks going forward.
That's great.
Uh huh.
To complement in order to give them a bit more visibility.
The major milestones coming.
Some of them were mentioned already we have the interconnection of the national power grid coming in December .
That's a milestone we're looking forward to.
And also the start of mine excavations.
Early next year right, we are starting to see our arrival in country of.
The components of the mine fleet.
And really we're gearing for excavations to start early next year David.
Okay.
Yes, very much side the mining trucks.
Currently in the final stages of being there to the Oems and you should be getting transported to site within the next couple of weeks.
So the batches of mining equipment to the mining contractor, which is all new equipment.
She'll be getting delivered over the rest of Q4.
The grid.
Grid connection as you alluded to is actually scheduled for the first half of December .
Ultimate connection to the actual plant thereafter.
About January next year.
The <unk>.
<unk> and recruitment of the mining operations team has gone really well so we have all the key scene.
Ralph in terms of general manager of mining by images.
Processing managers, chief geologist maintenance people.
<unk> already identified and recruited.
Are we now.
Yes.
Pulling out the.
Secondary levels of the sort of the professional running.
Uh huh.
The management ranks within the organizational structure.
Yes, it sounds like things have continued to go well and hopefully they will continue to the very end.
I also had a question.
Just sticking with Africa for a minute.
<unk>.
I think the latest Tech report indicated that the mining rates are going to be fairly consistent next year compared to what you did this year.
On the order of half a million tons, but in 2024, it looks like the rate comes down significantly and I. Just wondered if you could remind me why that is and if there's anything over the next year or so you could potentially do to address and change that.
Yes.
In terms of 2023 in 'twenty to 'twenty four.
Right should stay around the same area as we all know.
In the first quarter of 2023, we actually complete the mining the bankruptcy sales.
Satellite mine.
And at that point in time, we commenced.
Processing some of the lower grade stockpiles at that point in time.
That will continue we still have a substantial amount of stock.
Lower grade material on the on the run pad.
He's unable leanness to.
Maintain full production throughput in the mill.
The moment, we are doing some development out to an additional <unk>.
<unk> deposit.
The bankruptcy sales model.
The development is progressing in the second half of this.
Ian.
And will bear.
You already reached <unk> in the second half balls.
2023, and 20 in early 2020 pool, providing some additional mill feed.
We're also in the last stages of calls.
During the feasibility on I E.
The smaller surface deposit.
So the immediate northern area Europe C.
The mine as well to provide us with some additional mill feed as well.
But he expected that the development that the ore tons from those two areas.
We'll probably be coming reduce somewhat towards the end of 2020 full run woods.
And then we will be into a position, where we really army being able to mail what is being produced from the underground mine.
That stage.
So sorry, so so the stockpiles and what and the satellites potentially keep everything running about current rates at least through kind of mid 'twenty four is what youre, saying.
Probably more towards the end of 2020, yes.
Okay, Great that's very helpful.
And then I just had one final question.
And maybe this is more for Jorge and Luis but just given the fairly material drawdown.
On the revolver as you are waiting to enter production with sequela.
I was wondering would you consider any level of hedging.
Into this.
The short answer is no.
Yeah, No we feel we are adequately funded.
Okay.
No we have absolutely no need to to enter hedges issues metals.
At this stage no.
We are past or.
Peak year in our history in terms of capital our total capital demands amounted to roughly 244 $45 million this year.
We've been able to meet those funding requirements comfortably.
Cash on hand, the existing facility, which we are expanding and we just kind of that worried more on that.
And.
And.
And the cash generation from the assets right.
So no no no we're not thinking of hedging.
Yeah. It doesn't seem like the best time to be hedging, but we have seen a few people talking about it more and more and I just wanted to ask but that's all I had thank you Jorge.
<unk>.
Thank you and as a reminder, ladies and gentlemen, if you'd like to enter the queue to ask a question you May press star one on your telephone keypad to enter the queue. Once again, ladies and gentlemen, that'll be star one if you'd like to enter the queue to ask a question.
And our next question is coming from Jasper week. Please announce your affiliation and then you May go ahead Jasper.
Okay.
Thank you operator.
I'm just provide some volatile.
Congrats on the fantastic progress made on say well I'll cover most of your peers on the several of them have about delays in their development projects.
Given the.
The first gold pour is towards towards the end of the second quarter next year.
How long is the ramp up time, that's the nameplate capacity how much gold production.
Could be expected in the second half of next year.
Yeah.
Let me give a pump here and see if David can come.
Complement.
But right now we are budgeting 2020.
Three.
And.
As you have.
You can probably appreciate.
We are or mine planning teams are going through the optimization based on the addition of resources.
And opportunities throughout 2022 at <unk>.
We're right now going through their revision and optimization of mine schedules.
Plans at <unk>.
He left for 2023, so we will be providing guidance.
On that.
Yeah.
Early next year, when we guide for <unk>.
Production across the business.
But I kind of advance that is not going to look similar to what we have in our feasibility study today we.
Have opportunities.
Versus what was produced.
In may of 2021 over a year ago in the feasibility study.
So we the team is working and Iterating on their mine scheduling.
And we will be providing guidance for 2020.
Three early next year.
Now with respect to two two.
To a ramp up to nameplate capacity.
Well it is always our expectation that that can be a smooth transition.
The.
An expectation that that can be achieved in the matter I mean, there should be no shortage of core we're going to stockpile.
And we should be in a position to feed the mill.
Capacity demands it.
It's certainly going to be no less than several weeks.
But I don't know David if you can provide a bit more color on the timing of.
Required for <unk>.
Nominal capacity, it's always a process.
How we would look to declare commercial operations in a way once we achieve 85% plus 85% of nominal capacity and design recoveries right. That's traditionally what xenon.
It would be an expectation right now that we can achieve that in a matter of weeks.
Anything else, David you would want to add.
No no I really I think that it back or is it obvious.
One related to any of the mining contractor is already well and truly in the price of <unk>.
And we would expect it to be.
Producing.
Are you seeing or to them ROM pads by.
February .
The coming use our tool guy.
Two there we certainly expect to have.
Leading us.
On the patent at that point in time will can machine now and going into operations.
Other aspects such as the amount of water that we put in the same the Tam series six quite sufficient commissioning and operational purposes as well.
So we would be our influence.
And the quick ramp up.
Two two.
Steady state operations through the mail.
Thank you on the call.
Over to the guidance.
Question on the sequela.
What is the long term throughput plan of course, the gorilla in other words, how much tonnage started towards them on an annual basis because in the feasibility study.
It might not be up to date, that's why I'm asking just mentioned that you could get the throughput up to one 7 million tonnes per annum.
Even more than the nameplate capacity of 3750 tonnes per day.
Don in your Excavator fleet.
I wish.
All of them.
Also if you could add some more color on that.
Yeah.
Our plan there too.
We have embedded in the design.
Yeah.
And the opportunity to expand milling capacity right.
I think how this is going.
You are going to see it.
Play out as we start production, we will push to maximize nameplate capacity.
And you know push the adenoma.
The nominal capacity.
See if we can effectively.
Improve on that.
And likely second half of 2023 is going to be a year of commissioning ramp up.
Stabilizing steady state operations testing the nominal capacity.
And.
In that second half of the year, we're going out of the site.
Yeah.
No.
And to what rate than the plant needs to be expanded.
What again, referring to what's in the feasibility study a lot.
What has changed now by next year, we will have.
100 in the mine plan.
Today, we have 350000 ounces of gold in inferred resources at the highest grade.
At higher grade than the average grade of reserves.
The grade of sand versus three two grams gold.
Above the reserve grade of.
The deposits on average so all of those things are moving parts right now.
Uh huh.
I think the second half of the year 2023.
It's going to be key for us to finally define how big this is going to be.
First of all of your opinion that we have important opportunities ahead of us to expand beyond what's currently in the feasibility study.
Clearly we will have.
More resources available.
And that should drive the decisions to expand the question he said what rate right.
We're in no position today to give an opinion on rate.
Beyond what's in the feasibility study, but what I can say decisively is that we have clear opportunities to spend expand beyond that.
Thank you I look forward to see the impact on the songbird households, They go out on one one last quick question.
Speaking of Brazil or.
Plethora of exploration projects previously communicated the plan is to put out the maiden inferred resource towards the end of the year or next year. So that's still the plan or has something changed.
Yes, we are in the final stages of having a resource available for disclosure.
The team is well advanced our team has been really dealing with that is the same team that's been supporting the circular optimization.
And the sunbird resource estimation, and we have given priority to the work on singular.
That's why <unk> has been somewhat delayed.
It is our plan to have that out shortly right.
Thank you.
That was everything from it.
Thank you and your next question is coming from Don Demarco from National Bank Financial Your line is live. Please go ahead.
Okay. Thank you operator.
Good afternoon Jorge.
So at San Jose There was recently a favorable decision by the court regarding this the 12 year extension of the EIA.
Beyond this what are the next steps if any.
Hi, Doug.
John .
Well there are no next steps.
The.
The ruling is not a pea level, but some are not.
So.
No.
The operation has been working since.
Throughout all of this drama.
Business as usual, we always been under the protection of Court orders Court injunctions courts day of executions.
We get this final.
Risk solutions.
Basically says that are there.
Of your Permian granted by someone that's that so.
For US there is no next step really here, it's quite simple.
Okay, So you're not waiting for another court decision there is no.
Reaction from some or not or are.
So effectively this de risks the.
The EIA for 12 years for San Jose is that right.
Yes, that's what we understand that we have no notices from some or not of any kind in front of us.
Nor indications.
There was something like that coming.
We all do.
The issues that we were dealing with with some are not.
That court right regarding that extension of the department so.
Yeah.
We have.
I have no pending issues there with respect to the environmental permit right.
Great. So okay well. Thank you for that just another a couple of questions looking at Linde Darryl.
Year to date and IFC is above the top end of the guidance, we know that inflation has been a factor here.
Can you just remind us what are the drivers for this uptick in costs.
And.
Heading into next year is this the new normal for inland narrow in terms of.
What we're seeing in cost maybe in Q3 or thereabouts.
Yes.
Yeah.
And Darryl has been hit the hardest by inflation, but not only that we're still dealing with legacy issues from the construction or we're still remediated.
The legacy issues from the construction, perhaps this or you want to provide a bit more color.
On the status of that work.
<unk>.
What is it that we're seeing into next year right.
Sure Jorge Yes, so as you mentioned, we had some legacy issues.
<unk> been properly addressed throughout the year.
Especially.
<unk> to the.
The crushing system.
And also some.
The opportunities for Debottlenecking some of the process.
Granuloma three as well.
So.
Phase one of the Leach pad.
<unk> has been finalized.
These year.
And as we move us as we're looking to the into next year, we will be looking at the expansion of the of the Leach VAT on what we call phase two.
And but.
Lower.
Requirement for.
You referred to as legacy issues in next year, so so pretty much everything.
It will be taken care of.
In 2022.
Or in 2023.
This is just to complement on that.
The question with respect to a new normal a large component of that higher cost and aggressively narrow comes from the sensitivity of.
The cost structure of that mine to certain consumables.
Particularly.
Diesel and cyanide right.
So what happens next of course is highly dependent as well on how we see those.
Inflation those key inputs are evolving over the next few months in one year.
Okay.
Okay. Thank you for that and just as a final question. This is a strategic slash corporate development question and maybe it's a little premature given that you're focused on our mind starting up in about six to nine months, but.
We also see and it was mentioned earlier in the call about your medical the high cost mine life and technical importance on any event your medical was to wind down or otherwise would you look to add another asset and if so you've got a number of jurisdictions, you're operating which ones would you favor, which do you have any preference at this point and so what are your thoughts regarding.
Adding another asset in jurisdictional conferences. Thank you.
With respect to jurisdiction you know we.
Sure.
We're not looking to add more.
Yeah.
Dispersion towards geographical presence already right.
And I think what we have done with the expansion into West Africa East anchor the company in two regions.
But we should be able to see or business growth for years to come so we're not.
Looking to add a new jurisdiction, so everything that we do.
It has to be covered with the infrastructure and teams we have in place at the Reno level. So we look at opportunities in the countries, where we operate our near neighbors no.
Yeah.
And.
With respect to two to growth.
Outside the farm.
Our view is that we have so much growth organic growth in the pipeline.
That's our focus needs to be to harvest that.
You know.
We were just talking on.
With the previous caller.
On the expansion of circular right.
We have the view that together has the looks of a much bigger mine.
And we need to work to matter.
Materialize that right.
So that's going to be a big area of focus in Cote d'ivoire, which is a great jurisdiction to work.
We have Oh, my mind, which is our smallest producer today and it's a steady free cash flow generator. Another biggest business, but it's a mind that if you look at reserves and resources, it's akin to 10 years in the internal.
If you the way the regulators don't like if you buy reserves or resources, you can see a 10 year operation.
With mineralization wide open on the northeast extension of the Animas vein so.
We are contemplating potentially the expansion of that mine. That's a study that will take place throughout 2023.
We are working on the absorption of some demanding standards on <unk> P M and whatnot that will consume capital.
You know I think there is a lot of.
Organic growth.
Housekeeping for our business, so far size that we need to face them.
I think there is a lot of value to be harvested within the portfolio.
And that will be our priority that is not to say that we're just blind or will blend ourselves to do.
Opportunities in the countries, where we operate our near neighbors.
We are always curious we have we're always.
We I am myself.
I come from the ranks of exploration, so I do favor active exploration.
So we will be always keen to get involved in.
<unk> exploration play if it comes about.
The messages.
We're largely focus on organic growth for the next.
Time to come right.
Okay. Thank you Jorge.
It's all for me and so good luck with the.
Final construction and ramp up the suite level.
Thank you Doug.
Thank you and there are no further questions in queue. At this time at this time I would like to turn the floor back to Carlos Parker for closing remarks.
Okay.
Thank you Tom if there are no further questions I would like to thank everyone for listening to today's earnings call have a great day.
Right.
Thank you ladies and gentlemen, this does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day. Thank you for your participation.