Q1 2023 Franco-Nevada Corporation Earnings Call

Speaker 2: Good morning and welcome to Franco Nevada Corporation's first quarter 2023 results conference call and webcast. This call is being recorded on May 3rd, 2023. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a Q&A session where you may ask a question through the phone line or webcast.

Speaker 2: If you are joining by webcast, you may submit a written question for the Q&A session at any time during this call by typing a question in the Q&A section of the webcast platform.

Speaker 2: If you require immediate assistance during this call, please contact the

Speaker 2: Please press star zero at any time for the operator. I would now like to turn the conference over to your host, Candida Hayden, senior analyst in investor relations. Please go ahead.

Speaker 3: Thank you, Joanna. Good morning, everyone. Thank you for joining us today to discuss Frank and Nevada's first quarter 2023 results.

Speaker 3: Accompanying this call is a presentation which is available on our website at franco-nevada.com where you will also find our full financial results.

Speaker 3: The presentation is also available to view on the webcast.

Speaker 3: During our call this morning, Paul Brink, President and CEO of Franker Nevada, will provide introductory remarks, followed by Sandy Parana, Chief Financial Officer, who will provide a brief review of our results.

Speaker 3: This will be followed by a Q&A period.

Speaker 3: Our full executive team is available to answer any questions. Participants may submit questions by telephone or via the webcast.

Speaker 3: We would like to remind participants that some of today's commentary may contain forward-looking information and we refer you to our detailed cautionary note on slide three of this presentation. I will now turn over the call to Paul Brink, President and CEO of Frank and Evada.

Speaker 4: Thank you, Candida, and good morning. I'll start with a note on our ongoing direct to succession.

Speaker 4: At our AGM yesterday, we were sad to mark the retirement of two of our directors, Louis Zhenyak and Elliot Pugh. Louis was one of the original directors of Franklin Nevada and his expertise and guidance has been the foundation of many of our investment decisions. Elliot joined our board in 2019.

Speaker 4: and was key to directing our oil and gas investments.

Speaker 4: Thank you, Louis and Elliot, for the enormous contribution that you've made to our success.

Speaker 4: Turning now to the first quarter results.

Speaker 4: A diversified portfolio continues to generate strong cash flow and high margins.

Speaker 4: Although the quarter was impacted by production disruptions at Cobra, Panama, and Antipakai, as well as lower energy prices.

Speaker 4: Stronger precious metal deliveries are anticipated in Q2 with the social disruptions at Antepakai having subsided. Following live from Perspective of a

Speaker 4: and First Quantum and the Government of Panama having agreed on terms for a refresh concession contract.

Speaker 4: The results for the quarter, while lower, bring home to me the robustness of our business.

Speaker 4: Despite the production impacts, the business still generated an 83% adjusted EBITDA margin and 55% adjusted net income margin.

Speaker 4: We have no fixed costs related to our royalty and stream assets, so a temporary production halt is largely a deferral of revenue.

Speaker 4: We like to say great ore bodies get even better over time, and I think that will apply to both Cobra Panama and Antipakai.

Speaker 4: During the quarter we published our 2023 ESG report.

Speaker 4: Highlights include an outline of our ESG due diligence focus, increased community contributions, new board diversity goals.

Speaker 4: disclosure of scope 3 financed emissions, and details of our new climate action policy.

Speaker 4: We also published our annual asset handbook. A few numbers in the handbook stood out to me.

Speaker 4: We now have interest in 419 assets, of which 113 are cash flow producing.

Speaker 4: Those assets generated $1.3 billion of revenue in 2022. That's 8.7 times the revenue of our first full year in 2008.

Speaker 4: At year end 22, we had 18.8 million M&I resource royalty ounces.

Speaker 4: Those are our answers that are cost free to Franco.

Speaker 4: at current production rates. Our M&I Resource Mine Life stands at 34 years.

Speaker 4: Those numbers don't include our energy assets, our exploration assets, or obviously the upside potential of the producing assets. In total, our assets cover 66,000 square kilometers on some of the world's best mineral trends. Moving forward to the balance of 2023, the expansion of Cobra Panama will be a big driver.

Speaker 4: I was impressed that despite the disruptions, first quantum completed construction for the CP100 expansion project ahead of schedule.

Speaker 4: They're now wrapping up throughput to achieve 100 million tons per annum by year-end.

Speaker 4: There are three new mine stocks we're looking forward to this year.

Speaker 4: Maggino in Ontario, Seguela in Cote d'Ivoire and Salarz note in Chile.

Speaker 4: And during the quarter we commenced funding the tucatas in your stream deposit.

Speaker 4: the G-Mining Ventures team are targeting first production in the back half of 2024, driving our next leg of growth.

Speaker 4: Lastly, our business development team is seeing good opportunities for financing new gold mines and I'm confident they will further add to our five-year growth outlook. With that, I'll hand it over to Sandy. Thank you Paul. Good morning everyone. As mentioned by Paul, our diverse portfolio continue to generate strong cash flows.

Speaker 5: and high margins during first quarter 2023. However, a gold equivalent ounce deliveries and financial results were impacted by temporary production curtailments at two core assets, Cobre, Panama and Antipakai. In addition, with the retreat in energy prices, specifically natural gas, this did result in a reduction in energy revenues and associated GOs.

Speaker 5: in first quarter 2023 compared to prior year.

Speaker 5: On slide 5, we highlight the gold equivalent ounces sold for the last 5 quarters. Overall geos sold for the first quarter were 145,331, down from first quarter 2022 and fourth quarter 2022. Of this total, precious metal geos were 111,238, down 14% from prior year.

Speaker 5: For the quarter, the largest contributors to the lower precious metal geos were Antipakai, Antimina, Guadalupe and Goldstrike. At Antipakai, geos delivered and sold were lower in Q1 2023 compared to prior year due to sociopolitical tensions in Peru that impacted operating activities and constrained logistics to... Laws to Know

Speaker 5: At Guadalupe, the operator mined less ounces from streamlands, resulting in lower geos delivered and sold.

Speaker 5: At Gold Strike, the MPI was lower due to lower production from roaster maintenance and higher capital costs with the conversion of the autoclave to a conventional carbon and leach process.

Speaker 5: Partially offsetting the lower geos from the assets mentioned were stronger geos from Bald Mountain and Marigold.

Speaker 5: by the temporary curtailment of operations in the quarter, partly offset by the receipt of GOs from shipments related to Q4 2022.

Speaker 5: We do expect strong deliveries from Colbray Panama in the second quarter. For diversified assets, we recorded lower GOs and revenue for both iron ore and energy assets as both iron ore and energy prices were lower in first quarter 2023 compared to first quarter 2022.

Speaker 5: Q1 2023 saw continued volatility in commodity prices. Other than the gold price, average commodity prices were lower year over year as seen on slide 6. Pladium and energy prices were down significantly.

Speaker 5: This volatility did impact our financial results for the quarter.

Speaker 5: The lower energy prices resulted in a sharp reduction in energy revenue for the quarter, with energy revenue being $49 million compared to $75.6 million prior year.

Speaker 5: Also, with the increase in the price of gold year over year and lower non-gold commodity prices it did impact the conversion of non-gold commodities to geos.

Speaker 5: Slide 7 highlights our total revenue and adjusted EBA DOT amounts for the five quarters beginning Q1 2022.

Speaker 5: As you can see from the bar charts revenue and adjusted EBITDA were consistently above $300 million per quarter but did have a pullback this quarter for the reasons explained earlier. However, margins remain consistent and adjusted EBITDA margin being 83% in the quarter. Revenue for the quarter was $276.3 million.

Speaker 5: while adjusted EBITDA was 229.4 million. As you turn to slide 8, you will see the key financial results for the company. As mentioned, GOs and revenue were lower in the quarter compared to prior year.

Speaker 5: On the cost side, we had a decrease in cost of sales, which was 38.2 million compared to 43.6 million in Q1 2022. The largest component of this is the per ounce fixed cost we pay for stream ounces. We sold 82,181 stream ounces in first quarter.

Speaker 5: compared to 96,740 a year ago. Depletion decreased to 61 million versus 74.6 million a year ago. Depletion is based on actual mining geos sold and barrels of oil equivalent received on the energy side of the business. As we received less geos from Antipakai, Antimena and Valais, which are higher per ounce depletion assets.

Speaker 5: this resulted in lower overall depletion expense. For first quarter 2023 adjusted net income was 152.2 million or 79 cents per share.

Speaker 5: Slide 9 highlights the continued diversification of the portfolio. As shown, 77% of our Q12023 revenue was generated by precious metals.

Speaker 5: The geographic revenue profile has revenue being sourced 89% from the Americas, with Canada and the US being the largest.

Speaker 5: With respect to asset diversification, Colbreak Panama was again our largest revenue generator at 20% of total revenue.

Speaker 5: The last chart highlights our operator diversity. Our largest exposure is to revenue being generated by any one operator is 20%, which is First Quantum who operates Cobra Apanema.

Speaker 5: operator diversity. Our largest exposure is to revenue being generated by any one operator is 20% which is First Quantum who operates Cobra Apanema.

Speaker 5: Slide 10 illustrates the strength of our business to generate high margins.

Speaker 5: On the slide you can see that cost of sales has remained fairly consistent over the period shown.

Speaker 5: The amount of cost of sales will depend on the mix of royalty versus stream geos, including mining and energy.

Speaker 5: During first quarter 2023, the cash cost per geo, which is essentially cost of sales divided by gold equivalent ounces sold, was $263 per geo.

Speaker 5: Corporate administration costs, including stock-based compensation, was less than 4% of revenue for the quarter. The total can fluctuate quarter over quarter, but has tended to average approximately $8 million each quarter historically.

Speaker 5: In a rising commodity price environment, we expect to benefit fully as we do not expect our cost structure to change significantly.

Speaker 5: Slide 11 summarizes the financial resources available to the company when including our credit facility of $1 billion. Total available capital at March 31, 2023 is $2.2 billion. The company continues to be debt free.

Speaker 5: And before I turn it over to the operator, on slide 12 we provide an update on our audit status with CRA. As you are aware, there were three disputes ongoing with CRA. Foreign accrual property income, domestic and transfer pricing. I am pleased to say that on April 28 we reached a settlement with the CRA.

Speaker 5: Canadian for the FAPI, including interest and penalties.

Speaker 5: With respect to the transfer pricing reassessment, the company continues to believe that these reassessments are not supported by Canadian tax law and intends to defend its tax filing position. We will continue to provide updates as needed.

Speaker 2: And now I'll pass it over to the operator as we're happy to answer any questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question on the phone, please press star followed by the one on your touch tone phone. You will hear a three tone prompt acknowledging your request.

Speaker 2: If you are using a speakerphone, please lift the handset before pressing any keys. Again, if you'd like to ask a question over the web, you may do so by typing your question in the Q&A section of the webcast platform. One moment, please say your first question.

Speaker 2: The first question comes from Cosmos 2 at CIBC. Please go ahead.

Speaker 6: Great. Thanks Paul, Sandeep, and thanks for taking my questions.

Speaker 6: Maybe my first question is on taxes and it's certainly good to see a CRA resolution here and also the domestic reassessment.

Speaker 6: I guess my question is, is there any kind of read through from the CRA resolution on April 28th?

Speaker 6: into the transfer pricing for a subsidiary file, at least any kind of read through in terms of timing.

Speaker 5: Thanks for the question, Cosmos. There's no read-through. They're all separate. So, FAPI and domestic have been settled. We're going through the process on the transfer pricing with likely discovery later this year, early next year, but no read-through.

Speaker 6: Got it. Um, county office, I guess I believe, you know, all the three different issues all came out at about the same time. So um, but I guess my question, other question is, and if I can follow up, you know, this transfer pricing, um, kind of foreign subsidiary file, has that always been more sort of complex or contentious.

Speaker 5: or would you not say that? I wouldn't say it's complex, it's just a different set of facts and circumstances, different legislation that CRA is looking at and making an interpretation of. So as I said, we believe we've got a very good fact pattern and we will defend our position, but they're all independent. Of course.

Speaker 6: Without sounding too much like a tax nerd here, maybe another question on taxes. As you mentioned in your press release, a global minimum tax, you made a statement on global minimum taxes, Bill 2. Looks like it is going ahead. As you mentioned, there's no legislation yet. You need to review the legislation when it becomes available and take a look at the potential impact of Franklin Nevada.

Speaker 6: But maybe I'll ask this question anyways. If I look at the taxes paid in Q1, $23.9 million, your net income before taxes, $184. So that works out to about 13%. Global minimum tax is 15%. Is that how I should approach it in terms of?

Speaker 5: And there we pay a low tax rate, less than 2%, or at least that's what we record. So the incremental 13% would be related to those assets and then you would adjust for that.

Speaker 6: Got it. And I guess you, I don't know if you've thought about this yet, but I guess it is somewhat complex, but when the time comes and you when you're presenting us with the impact, potential impactor, I guess have you thought about how you presented? Are you going to go, I guess, to the details of the Barbados subsidiary? Have you given any thought in terms of how you will...

Speaker 6: present that impact to the market, to us and also investors.

Speaker 5: So obviously we'll have to wait to see what the legislation entails. Once we've seen that, whatever disclosure is required by us going forward to explain that in our financial statements and MD&A and other filings will do so. But at a high level we have run some internal numbers.

Speaker 5: if it is enacted the way that the legislation internationally has been proposed, it is about a 3-4% impact on NAV.

Speaker 6: And then maybe switching gears a little bit, you sold 111,000 ounces precious metals geos in Q1, you've maintained your guidance, 490 to 530.

Speaker 6: Clearly, that means that Q2 is better, H2 is better. I think Paul, you kind of mentioned that as well in terms of different factors going to it. Could you maybe help us in terms of giving us more color in terms of how that increase is going to happen? Is it going to see increases quarter over quarter steadily?

Speaker 5: or we should see a big lift in Q2 now that Colvray and Antipakai, some of the issues are behind us. Yes, I think you'll see a stronger Q2. Obviously, at Colvray Panama, they were not making any shipments, so that stockpile had to be shipped, and so we'll see the benefit of that in second quarter, and we sort of have guided to that.

Speaker 5: at the year end call where we said that we did expect a second quarter stronger from Cobra compared to first quarter and quarters later on in the year. And then Antivacai with the production curtailment there again there'll be some catch up deliveries in Q2. But you know overall the rest of the portfolio is performing in line with our expectations.

Speaker 5: So I think you'll see a stronger Q2 and a more even Q3, Q4.

Speaker 6: Perfect. And then maybe one last question as you mentioned, there's some new streams, new royalties coming in, new contributions coming in, Magino, Seguella, Solores Norte. I guess my question is, we shouldn't see any kind of lag, right, in terms of production versus

Speaker 5: revenue to Franco-Nevada because I believe these are all dory so I just want to make sure that you know as they produce it hits the Revenue or hits as revenue to Frank and about it fairly quickly Yes, so they're all royalties so we will accrue the revenue whether we've received it in kind or in cash

Speaker 7: Hey, good morning. Can you hear me okay?

Speaker 7: Thanks to Louis and Elliot for their services in the past.

Speaker 7: Question wise, Chile has really been pushing their lithium industry lately. Obviously, there is no direct impact on you, but I've heard some folks be fearful on the impact on the mining industry in general. You know, with cash-strapped governments around the world looking for an easy buck.

Speaker 8: Hi, Coach. Thanks for that. It's Paul.

Speaker 4: The, I think what you point to, and probably the most prominent thing there is yes, that there has been a, you know, both a shift to the left in recent years in Central and South America. Also with COVID, so many governments around the world are cash strapped and so we've seen a lot of jurisdictions have moved to see how they can fund the COVID-19 pandemic.

Speaker 4: paying taxes in country and so we're fortunate we haven't been a target for governments in those countries.

Speaker 4: So, for the most part, I've been able to avoid that. You know, where are we in that process?

Speaker 4: So for the most part, I've been able to avoid that. You know, where are we in that process?

Speaker 4: I actually think that the pendulum is wrong fairly far and I say that over the last year it's actually moved back a bit towards the middle.

Speaker 4: The initial proposal, much higher taxes in Chile were voted down along with the rest constitutional changes. And so now the discussion seems to be a much more pragmatic discussion. And um—

There will be a raise in mining taxes through that royalty, but it seems that it will be something that's much more manageable. Similarly in Peru, the government was pushing hard for mining reforms and now has backed off a bit on that. You're absolutely right, so much the focus now.

to date so it has yet are not impacted.

Okay, fair enough. Your answer was very politically correct and I appreciate that. But it's fair to say that M&A might be shifting a little bit in the future.

We're trying to be a low-risk way for investors to invest in the gold market. One of the ways we do that is through diversification. And so we're, unfortunately with mining assets, they are where they are, but our approach is don't put too many eggs in any one basket. But we know, we will be exposed to some of these issues. We think we can rise.

are still accumulating. First of all, what's the rate at which that accumulates? And also, it says, I mean, you're vigorously defending your position, not to unstandard in a lawsuit, are there settlement talks at all or will this become like an all or nothing outcome?

So we're still in the process of going through discovery and working through what's required under when you do file a dispute with CRA. We'd be happy to settle at some point but we're not at that process yet. In terms of interest, the interest gets accrued at 8%.

So we're still in the process of going through discovery and working through what's required under when you do file a dispute with CRA. We'd be happy to settle at some point but we're not at that process yet. In terms of interest, the interest gets accrued at 8%. Perfect. That's all I needed. Thank you.

Thank you. Next question comes from Greg Barnes at TD Securities. Please go ahead. Yes, thank you. Sandy, I just want to get an idea of what Guadalupe looks like for the rest of the year. It's a lot lower than us in the first quarter and I'm wondering how it's trending. Q2, Q3, Q4.

So obviously we get guidance from them on a full year basis of what the deliveries will be for Guadalupe. Q1 was short, but at this time we're still estimating that they'll reach their plan. And that's the best information we have.

And you don't have a sense of where the production is coming from relative to your stream lands? No, so it fluctuates quarter to quarter because our stream doesn't cover the entire land package. But we sort of have a general percentage for the year.

So at this time, we think they'll make it up, but we'll have a better idea as the year progresses. And we'll provide an update on our guidance in the second quarter.

Okay, fair enough. Thanks, Edith. Thank you. Next question comes from Martin Pradie at Veritas. Please go ahead.

Thanks for taking my question. I have just two questions. In terms of the CRA, did you settle at a certain cost and if yes, what was the cost? Or was this like you won and you didn't pay anything? So with respect to the settlement, CRA basically vacated their reassessments. The only cost to us was the legal.

It was much higher than before. I guess that is related to all your cash that you have today. Are you doing something different than in the past?

Now, as you can see, our cash balance has been growing. We do invest that through short-term state secure term deposits and other avenues for investing, which is the reason for the increase in finance income. So we should see that going forward.

in the next couple of quarters. As long as interest rates stay where they are, you should. Otherwise, if our cash balance decreases, but yes, if everything stays the same, you should see that going forward.

Okay, that's it. Thank you very much. Next question comes from John Tomazos at John Tomazos Research. Please go ahead.

Thank you. Trying to understand this 15% global minimum tax, presumably your incremental tax payments because of the Barbados subsidiary would be paid to Ottawa.

And I guess the monies would stay in Ottawa.

and fund the Canadian federal budget.

That might make someone in Peru or wherever who's not enjoying those tax revenues.

frustrated if the mining and exploitation is in one country and the tax revenue is in another.

Is there any way that you could voluntarily pay taxes in the country of origin to kind of remedy that inequity?

So for the first part you are correct with the way it'll be implemented you know with paying the lower single digit in the foreign jurisdiction the incremental GMT payments will go to Ottawa and remain in Canada as to the various local jurisdictions where our streams are. Our streams are all offshore they're not in those specific countries.

So voluntarily, it's not something that we would do. We're not directly linked in those jurisdictions. But as I said, we haven't seen any of the legislation, and we'll evaluate everything as time goes on.

So John , for the countries, you know, if you take Panama, Peru, or Chile, what they see is we're a metal purchaser. So it's just like they're selling the gold that they produce to some other party that is painful, that gold.

So it's just a mental sail from the perspective of the countries where the mines are. Thank you.

In your press release you give reference to higher production from three existing mines and three new mines in the next expansion in Panama Some of us might be familiar with the

with some of the companies but not every one of the projects. Which of those developments might be more than a 1% impact on revenues? Or could you give us an idea as to which are the larger of the mung leaves?

Of those I mentioned John , obviously the stream interests, the larger interests for new mines, it is toca de zinho, the tree mining a building.

where we have a larger interest. In terms of ongoing growth in the business, it is a number of royalties. As you know, most of our royalties are 1-2% interest.

But we've, over the next five years, the main mine expansion is a detour, going up to a million ounces, hopefully, from Ignico. You've got Kinrost expanding Tazius, again that's a 2% royalty for us. And then the expansion of Stow Water. Stow Water is bigger, our royalty there is one of our biggest, it's a 5% royalty. So that does.

obviously have a larger impact. For the new mines that are coming in, those are 1-2% interest.

in total if you can over the next five years.

I think we've got nine new gold mines potentially if copper world goes ahead, one copper mine in there. But most of those interests are 1 or 2 percent royalty interests. Thank you very much.

Thank you. Next question comes from Ralph Profiti at 8 Capital. Please go ahead. Thanks, operator. Just one question from me. Sandeep, I apologize for coming back to the tax issue, but on the outstanding reassessment potential taxes and penalties, does the CRA ask you to...

place those monies in remittance or secure those against lines of credit. I'm just wondering what those potential impacts are in that available credit calculation of 2.2 billion.

Yes, they do. For the reassessments we've received, you have to put 50%. You can either make deposits directly with CRA or you can draw down on the credit facility and put a line of credit in place. We've done, sorry, letters of credit, we have done that for the reassessments we've received so far.

Okay, gotcha. Thanks very much. Understood. Thanks for that. That's it for me. Next question comes from Tanya Yakusanik at Scotiabank. Please go ahead.

Good morning everyone. Thank you so much for taking my questions. I just wanted to come back to the global minimum tax. I know we're waiting for legislature to come through to have more clarity, but from a modeling perspective, would it be the safest or most conservative to assume it's implemented in 2024?

Hi Tanya, you know I think that's a safe bet, I think that's the direction the government has put forward that it will be implemented so on a conservative basis January 1st 2024 is a possible date that it could be implemented.

That's helpful, thank you. And just again coming back on the modeling side, I know in the Q4 call we had talked about the iron ore business being 45, 55, first half and second half. But I still kind of think, because I was a bit low on the iron ore side.

Should I kind of still think about it in that 45 to 55? Has that changed? That has not changed.

And then the Oil Division, are we going to see improvements quarter over quarter or is this, you know, just was just a weaker quarter because of the pricing?

I think going forward I think you would expect to see volumes fairly stable for the remainder of the year. Revenues will obviously be impacted by where prices go. They are currently sitting below the range at which we provided our guidance.

which I believe was $80 for oil and $3 for gas, so we're a little bit under that right now. But in terms of performance, I would expect you'd see reasonably stable performance throughout the year.

That's helpful. Thank you, Jason. And just on the overall portfolio, Sam, as I come back, you know, from a volume perspective, as I look at the portfolio, we have that, you know, uptake in Q2 and you said Q3 and Q4 are going to be relatively the same. Is Q2 going to be, you know, materially different than Q3?

because when I look at our model, it's not materially different. You know, I think Q2 will be definitely a better quarter, just for the catch-up deliveries related to Colbreak Panama and Antipakai. I think Q3 and Q4 will be......

know, strong quarters as well, but at the end of the day, it depends on how operations are performing and deliveries particularly with related to the streams which are our largest revenue source. So you know, as I said, we'll update our guidance in second quarter as we have a better idea of how the year is going to progress.

I kind of read through that Q2 is going to be better than Q1, but Q3 and Q4 are going to be better than Q2. I would say Q3 and Q4 at this stage will be not as good as Q2 because Q2 has catch-up deliveries coming. Okay. Okay. No, that's helpful. Thank you. And my last question, I always have to come back to the...

mine builds for companies that are building new projects. I'm just circling back if that's still the same or has something changed? Hi, Danielle, it's Ian here. I think you're still accurate in your assessment there. That's largely what we're looking at.

I'll let someone else ask questions. I appreciate you taking the time for my questions.

Thanks, Sunya.

Thank you. As a reminder, if you have any questions, please press star 1. Next question comes from Brian McArthur at Raymond James. Please go ahead. Good morning. Sorry, most of my questions have been answered, but just back to the tax for a minute. You talk about getting back.

9.9 million. A couple of questions. First of all, have you got that? Because I know some other companies, it's been a long time getting money back from the CRA. And secondly, is that in other assets on your balance sheet in that 41? So net net, you will convert that back into your cash position.

Hi Brian , Sandeep. Yes, we have not received it. We just finalized the settlement last Friday. So it is a process we have to go through. Yes, I am aware that getting cash back from CRA takes a bit of time. So we will follow the process. Hopefully it will come back sooner for us.

but at this point we have not received it. And on the second piece, yes, it's sitting in our other assets on the balance sheet.

Great, thanks very much. Thank you. There are no further questions on the line. You may proceed.

Thank you, Joanna. There are no questions from the webcast. This concludes our first quarter 2023 results conference call and webcast.

We expect to release our second quarter 2023 results after market closes on August 8th with a conference call held the following morning. Thank you for your interest in Frank Enterprise. Goodbye.