Lundin Mining Corporation Q1 2023 Earnings Call
Good morning, ladies and gentlemen, and welcome to the Lundin mining first quarter tiny tiny three results call and webcast at this time all lines.
In a listen only mode.
Following the presentation, we will conduct a question and answer session.
If at any time during this call you require immediate assistance. Please press star zero for operator.
This call is being recorded on Thursday may 4th 2000 Chinese food.
I would now like to turn the conference over to CEO , Peter Bakken down. Please go ahead Sir.
Thank you operator, and thank you everyone for joining us today.
I would draw your attention to the cautionary statements on slide two you'll be making several forward looking statements during the prepared remarks and likely during the Q&A.
On the call to assist with the presentation and answer your questions are tighter Paulson, our senior Vice President and Chief Financial Officer, and won't address morale, our senior Vice President and Chief operating Officer.
Before we discuss our results I would like to compliment our team on an exceptional start to the year with health and safety.
Our efforts across the company with visible felt leadership and the implementation of F. R. M. Federal risk management has brought a discipline that is already impacting our teams.
Moving to our corner.
We delivered solid operating results across the portfolio producing nearly 103000 tonnes of copper equivalent metal.
<unk> production also increased 10% quarter over quarter with the zinc expansion project in Denver, Colorado continuous ramp up and achieving record quarterly production. In addition to the increment performing well.
With a strong operating performance, we generated attributable net earnings for our shareholders.
145 million and adjusted EBITDA of over $335 million.
Operating cash flow adjusting for the working capital draw with 235 billion and free cash flow from our operations is over $70 million, our balance sheet remains very strong with $1 7 billion of liquidity.
As tighter will speak to we are realizing the benefits from the foreign exchange hedging program entered into late last year and in April we initiated a diesel hedging program to protect the operating cost structure at candle area.
Our focus continues to be on growth. However, we will also continue to be very disciplined in how we allocate our capital.
With Yesterdays financial results our board of Directors has maintained our peer leading a regular dividend at Canadian <unk> per quarter or <unk> 36 on an annualized basis.
On the growth front, we're very excited about our recent acquisition of <unk>.
Chile last month with a number of my colleagues and much of the integration work has begun both our candle area in Australia teams are looking forward to working together to create even further value.
Also it was evident after spending time with numerous government and regulatory officials as this transaction has been very well received in country.
<unk> complements our existing operations and we believe will enable us to unlock synergies in the future as we integrate our teams and resources in particular casserole and proximity to candle area will allow us to leverage our knowledge experience relationships supply chains and potentially existing infrastructure in the region.
The transaction is immediately accretive on key cash flow and other financial metrics and we will continue to remain low financial leverage policy acquisition.
We also continue to advance our large scale Jose Maria copper Gold project.
Detailed engineering currently stands at 40%.
As I'm sure. Most on this call are aware much has occurred in the <unk> district since our acquisition of Jose Maria including our most recent purchase of Castro Neves.
We will continue to progress our Jose Maria project in a prudent manner and take into consideration many of our learnings over the last year with respect to the region.
We announced the first mineral resource estimate for the cyber deposit in February .
The maiden estimate is nearly 180 million tonnes of indicated resource containing one 3 billion pounds of copper and $1 1 million ounces of gold.
We expect the estimate to increase with ongoing exploration efforts.
Candle area study work evaluating expansion of the underground mines to add roughly 20000 tons of copper per year production profile has been completed with potential changes to mining royalties and taxation actually moderating from earlier proposals. We're looking forward to updating the study within any new information and making an <unk>.
<unk> decision upon receipt of our 2040 EIA.
I'm, sorry, blending mining delivered a strong first quarter and is well positioned to deliver on our strategy of operating upgrading and growing our base metals portfolio that provides leading returns to our shareholders.
I will now turn the call over to Juan on drafts to provide a summary of our production results.
Thank you Peter.
As Peter mentioned before we produced approximately 103000 tonnes of copper equivalent metal in the first quarter.
Copper production of 61500 tonnes increased 9% over the fourth quarter of last year.
<unk> had a strong first quarter processing over seven 2 million tons of ore to auto copper production decline quarter over quarter as expected with lower head grades and recovery rates as the operation manage the first quarter radio season, well as Pedro mentioned before corporate.
Copper production at an average corvo Eagle and <unk> all increased over the fourth quarter of last year.
Copper production is tracking well to annual guidance of 236000 tons 260000 tons.
<unk> copper production increased 10% quarter over quarter to over 48500 tonnes.
Ramp up of the zinc expansion project at an average corvo progressed in line with trends delivering its fifth quarter of sequential production improvement with production, increasing 13% over the fourth quarter of last year.
<unk> production throughput increased 10% over the last quarter processing 510000 tonnes of ore and recovery improvements to 70% to 90%.
<unk> has had a good start to the year, producing nearly 20800 tons of zinc.
Zinc production is tracking well to annual guidance of 180000 to 195000 tons as production is expected to increase over the course of the year with initiatives to enable <unk> to consistently achieve nameplate capacity and recovery improvements.
Vehicle production.
3700 tons was lower quarter over quarter as expected with planned grade profile equal both copper and nickel production at Eagle were impacted in the first quarter by unplanned downtime at one of the ball mill, which has been rectified and rehabilitation work on the main brand.
That limited ore production from equally as well as winter weather conditions in the upper peninsula to a lesser extent.
Even with the slower than planned start of the year at Eagle nickel production is tracking to our annual guidance of 13 to 16000 tonnes.
Gold production was 36000 ounces for the first quarter with Candelaria, having a strong start of the year and to either having operated through the rainy season as planned.
Gold production continues to track well to our annual guidance of 140000 to $150000. All in all an operationally strong start of the year.
I'll now turn the call over to Tyler to provide a summary of our financial results.
Okay. Thank you Andreas and good morning, everybody.
Moving to slide six as Peter mentioned, we generated meaningful adjusted EBITDA.
<unk> cash flow and free cash flow from operations in the first quarter.
Starting with the topline we generated over $750 million in revenue.
Our sales remain leveraged to copper with domestic generating 70% of the quarter's revenue.
Zinc and gold contributed 13 and 8% respectively.
While nickel contributed 6%.
Other revenues include sales of led <unk>, cobalt pjm's iron and other byproduct metals.
With the price of copper in several of the other metals, we produce increasing during the quarter revenue was positively impacted by $40 million of prior period price adjustments.
A summary of our realized copper and nickel prices for the quarter are presented in the chart on this slide.
Ultimately, we realized prices of $4 49 per pound of copper.
$1 39 per pounds of zinc.
$7 36 per pound of nickel in 2074.
Per ounce of gold for the first quarter, including the adjustments.
At the end of the first quarter approximately 89000 tonnes of copper were provisionally priced at $4 <unk> per pound and remained open for final pricing adjustments.
Did over 41000 tons of zinc $1 33 per pound.
And over 2000 tonnes of nickel at $10 75 per pound.
On slide seven.
<unk> cost totaled nearly $450 million into the first quarter, an improvement of 7% compared to the fourth quarter of last year.
The decrease is largely a result of improving <unk>.
Rice of consumables, primarily that's kind of the area and it was corvo and.
And particularly diesel and electricity compared to those of 2022.
The chart on this slide presents the relative impact of the key drivers of the total operating and capital costs by operations for the quarter.
How the various production cost improved 9% compared to the fourth quarter of last year benefiting from the lower electricity contract that commenced at the beginning of this year.
Which more than half the per kilowatt hour cost quarter over quarter.
The new PPA with our existing provider also ensures a minimum of 80% of renewables in the energy mix prioritizing.
Solar.
The new <unk> labor agreements with the two remaining unions reached in the first quarter impacting come to serious production costs and cash flow.
On a cash cost basis, the impact was eight cents per pound of copper in the first quarter.
<unk> cash cost guidance of $1 80 to $1 95 per pound of copper in 2023 remains unchanged.
Chipotle production cost decreased roughly 20% compared to the fourth quarter of last year.
While electricity unrealized diesel prices did improve modestly moisture of the quarter over quarter change.
So how's the operation this mileage during the rainy season with a greater proportion of the new feed being from previously stockpiled floors.
<unk> cash cost guidance.
$2 55 to $2 75 per pound of copper and 2023 remains unchanged.
They are as cover production costs increased 9% compared to the fourth quarter of last year.
Primarily due to the higher zinc production volumes production cost benefited from easing of inflationary pressure on consumable prices in particular electricity, where the real loss rate in the first quarter was less than half of Daft experienced for much of last year.
Cash cost guidance is $2 10 to $2 <unk> per pound of copper in 2023.
With improvements expected a sink in net production volumes increased with continued drop offset towards nameplate.
Equals production costs improved 10% quarter over quarter.
So cash costs were impacted by lower nickel sales volumes.
Cash cost guidance is for $1 50 to $1 65 per pound of nickel in 'twenty three and is currently trending higher with the expected year on year increase primarily a reflection of the planned lower production volumes.
Synchronize production costs were consistent with those of the fourth quarter of last year cash cost guidance is for 60 to 65 cents per pound of zinc and 23 net of the lead and copper byproduct credits.
Capital expenditures are tracking well to our guidance for sustaining capex of nearly $160 million in the quarter.
Compared to our full year guidance of $700 million.
Expansionary capital expenditure on the host Maria project during the quarter.
Approximately $19 million in support of advancing the project, including the continuation of detailed engineering procurement of long lead equipment.
And pre construction activities, such as road upgrades and geotechnical work.
Lastly on this slide we continue to realize the benefits of our foreign exchange hedging program intended to provide better visibility on our USD requirements of future operating cost and Capex.
In the first quarter, we realized a gain of $14 million.
Additional unrealized gains bring to fair value of the onset of constructs to $85 million.
The quarter end.
As Peter mentioned in early April we initiated a diesel hedging program to protect the operating cost structure kind of malaria.
We operate our largest open pit mine.
We have initiated diesel swaps, representing approximately 75% at 50% of the attributable purchases.
<unk> forecast for the remainder of 2000, <unk> and all of <unk> 24, respectively.
Our key financial metrics are presented here on slide eight.
First quarter revenue has had was over $750 million.
The slight decline quarter over quarter with $35 million list of positive pricing adjustments in the current quarter.
We generated adjusted EBITDA of over $235 million.
And adjusted earnings were over $125 million.
Adjusted operating cash flow was $235 million in free cash flow from operation over $70 million.
Details of the adjustments are broken down in our in DNA disclosure.
We remain in a strong financial position, we finished a portrait and a very modest net debt position of $35 million.
And today have a net debt position of approximately $93 million.
Okay.
We have significant liquidity of approximately $1 $7 billion and I think it's fair to say that the strength of our balance sheet and our funding capacity are two of the <unk> stuff that enabled us to acquire customer loans.
Upon closing of the acquisition, our leverage will remain conservative given our overall net debt ratio.
And the additional contribution of EBITDA from Crossroads.
We will remain well onsite with our debt covenants after closing of the customer on this transaction and our liquidity headroom will also remain at a robust level.
Based on our latest disclosed net debt position of $93 million and coupled with the FERC withdrawing of $800 million.
Upon closing of the customer on the transaction.
Would leave our net debt position of approximately $890 million before accounting for the likely a net cash position that will exist with intercourse enrollments.
<unk> transaction mechanism.
The transaction structure is centered on the lockbox principles the swaps book State being 31 December last year.
Zero debt and cash equivalents asset update.
This means that by the time. This transaction closes later this year the confident that we are acquiring a 51% stake and is likely to have accumulated a net cash position at the point of the transaction closing.
Slide 9% greater detail as to the sources and uses of cash in the first quarter.
Before changes in working capital the direction, though.
Timing of which is heavily swayed by provisional pricing.
Our operations generated $235 million into first quarter net.
Net of $40 million of cash taxes paid.
Cash and cash equivalents at quarter end were approximately $185 million.
And the effect to deal with the ownership is at the beginning of this year.
We continue to make good progress advancing are world class Jose Maria copper Gold project and continue discussions with potential partnership groups.
We will continue to advance the project and the deliberate and disciplined manner.
Kendall they are the life of mine has been extended 2046 with the mineral reserve estimate announced in February .
[noise] base case plan of the corresponding technical court does not yet include the candle area underground expansion project, which has the potential to add roughly 20000 tons of copper production per year, nor does it include the potential restart of the al Capp arose in mind.
And lastly on this slide in February we announced the maiden indicated resource estimate for this I would discovery and view it at the first of many iterations of increasing mineral estimates to come.
I also wanted to take this opportunity to highlight the significant exploration potential with within the emerging Vicuna district onto our existing land package.
At the top of the figure on slide 11, with casserole and as we will be acquiring a large package of over 58000 hector's in Chile of highly perspective, and Underexplored land was several near mind cards ready for drilling.
The cats erroneous claims about the land package of injects minerals large lots of lettuce tropical deposit. In addition to some of <unk> is more recent positive exploration results.
The light green and pink shading on the map indicates or Jose Maria land packaging claims.
Also illustrated as planned Jose Maria infrastructure, including the protests plant tailings facility and abetted Arrow camp.
We believe Jose Maria is well positioned to be the center of future development and expansion for this emerging World Class District.
Some of the top exploration targets on the Jose Maria property are outlined on the map and killed looting Potro cliffs Tortoni is lost pilots and Jose Maria at steps.
We will begin drawing on many of these targets this year.
In conclusion on slide 12, we have a very desirable portfolio of wildlife quality minds and or advancing meaningful growth project in a disciplined manner.
We delivered solid performance in the first quarter bleeding too strong operating cash flows and a strong financial position from which to grow we remain well positioned to both operationally and financially to continue deliver consistent results for the balance of the year and beyond.
And with that operator, I would like to open the lines for questions.
Thank you.
He's in general mainly will now begin the question.
Should you have a question. Please press followed by the number one I need to touch feeling fine. If you would like me to file your request. Please <unk> followed by the number two.
One moment please <unk>.
Your first question comes from the line of <unk> some like in Stanley. Please go ahead.
The 17th Thanks for the presentation.
A few questions from my side and starting with.
Yeah.
To me that's a message Hudson change debate you haven't returned it explicitly the timeline for a cup except 18, the second how old is yours.
You know referred to an updated <unk>.
Submission by 222 interesting before and you show the slides on the the Queen of District Optionality.
What's your latest thinking here with the best way for some.
<unk> that'll be associated the fine lines and maybe she can share the latest views around the optimal configuration and potential topics that that would be great and I was hoping that thank.
Thank you.
Thank you thanks for the the question.
You know we continue to progress the technical work is mentioned in the presentation, but arguably that's a good observation probably had a bit of a slower rate and the reason, it's a bit of a slower rate is really the findings that we've had over the course of the last year and then also take into consideration the.
It costs erroneous acquisition. So we were trying to do a series of tradeoffs studies, which take time and whether or not we can benefit some with some of the infrastructure that we now have in place. We just thought that would be a prudent approach given the materiality of somebody that infrastructure.
Also you know there hasn't been a lot of exploration success in the region and we just wanted to make sure that some of the decisions. We've made with respect to positioning of the mail et cetera are still 100% the best decisions given the the development in the region. So.
Nothing nothing major that just making sure we're making all the right decisions on that front, we're still pushing to make those decisions towards the end of this year and parallel would've been very very busy on a lot of the partnership discussions so that hasn't slowed down I've been on the road for the better part of the last few weeks and.
In a few different jurisdictions and we are looking to maintain that kind of structure. If you will of of a partnership.
The other area, maybe I I would add is.
There has been information kind of coming out of Argentina with a few potential changes on how they deal with blue chips swaps currency controls et cetera. Many of these things would have been pretty material positive impact on on the project. So.
No. We're we're trying to get that information and take it into consideration, but it's also difficult because it's an election year now we're starting off with the provincial election, then moving to federal so getting that information kind of finalize is arguably a bit slow at this time like.
Oh understood thanks very much.
That's really clear and I guess.
Your last point would you expect any major updates on the fiscal front before the election, so or is it more fun twins 24 story <unk>, Yeah, I'd I'd be surprised if it comes out you know prior to the election. So it could be a late 20 twenty-three arguably.
And there's not early early 2024.
Perfect. Thank you I was joined the queue again, thank you.
Okay. Your next question comes from the line of Ralph the city from eight capital Pizza.
Good morning team, but thanks for taking my questions Peter the M. D N a at Jose Maria talked about procurement of some long lead equipment. Just wondering you know what specifically those items are where have you needed to get into the queue. You know even though this you know you're now going at a slower rate is it sad.
Cause of the shovels trucks, a little bit more specific on that would be helpful.
Yeah, it's more we don't need to get into a queue. We were in the queue quite a long period of time ago. So it's mainly on the mailing and crushing side most of those items quite frankly has been complete and arguably.
I would say at the end of the next quarter, there probably wouldn't really be any outstanding items in the long lean long lead items, if you will and in the queue. So it's just the ones that were already quite a period of time that go with it or.
Being completed as we speak and those are the two areas in particular focus.
Okay, Great Yup.
You also talked a little bit about the Jose Maria regional exploration on those three targets and just wondering when we can get a little bit more of a of a concise strategy on the regional exploration cause erroneous right does that sort of fall behind a Jose Maria in terms of its you know in terms of its priority or or you're waiting just more.
Until you get sort of integration of the asset to look at exploration, Yeah, I would say our exploration teams are are already talking.
I was just down and chili for a pretty extended period of time and having meetings, both with cats erroneous and candle area of the teams that really hit it off which is great. So I think this is going to be a pretty quick.
Integration, if you will and then we focus kind of phase two on the local synergies and then expanded synergies we've got a fairly extensive process. In place then we have somebody that actually it is leaving that that process from the expiration perspective, we've already come with a proposal for a budget at <unk>.
[noise] erroneous.
Keeping in mind that there's about 58000 hectares. It casts erroneous. So it's a huge footprint arguably double the size of candle area.
But we haven't maybe eight or nine specific targets and one of the ones. That's of particular interest if you recall some of the most recent drills also came out from lost a lot of we're about 50 meters from the cast erroneous border. So I think we have a pretty good understanding of the geology that area and that was is going to be a focus.
You know we are getting into the winter stretch right now so we'll see what we can get done but I mean, there's no question that both cats around he San Jose Maria are gonna be a huge huge focus for us this year and next year and we spend a fair bit of time actually yesterday, and our board meetings outlining a plan to to our board.
That's good to hear thanks to that update yep.
Thank you Eli.
Next cutscene kind of spend a line as Daniel <unk>. Please go ahead.
Hi, there yeah.
Yeah, Thanks for questions Uhm.
The first.
Question on the operational side it was a <unk> performance in in Q1, if I look at the <unk>.
Of the metrics you live very well positioned versus the guidance this year, particularly if I look at.
The ramp up <unk> <unk> <unk> I mean, you previously indicated to serve the sequential improvement and zinc production through the year, but.
So Q1, one right would <unk> be achieving a little or Bob died and so I guess is this some upside with school conservatism built in particularly the Nebbish cool the guidance of this year I could probably say something similar around the soda run rates in terms of <unk> Kendall area. So yeah. If you could just.
Sent them all color that.
Good morning, Dan. This is 100. Thanks for the question I think we we put together a very strong and a robust budget for the year.
Q1 is tracking according to the budget. So at this time, we don't see a need to change any of the guidance as in either never score rule or kind of Logan.
[laughter], okay. Thanks Uhm.
Second question at the time the presentation, when you announced Castlevania S acquisition, you may some commentary around I think it was a 45 day timeline the full publishing technical ripple or updated guidance on the asset can we get an update that and should we expect that.
<unk> the deal closes.
I think that is Peter about computer here, sorry, no I think when we made the announcement if you'd made a forward looking statements that then triggers a timeline for which you have to get the technical report out.
So our thought is you know I think it's best to put the technical report out if we can't exactly at at closing. So therefore, it we're going to continue to maintain avoiding the forward looking statements and right now from a closing perspective, we are tracking extremely well to probably in the very early part of Q3.
Yes.
Okay, Thanks, and what one more if I could just on the bigger picture around <unk> et cetera.
You mentioned in the past.
Looking up multiple <unk> streaming sort of off take type.
Silent partner in the other selling yeah, a large a steak to want us the the big mining companies can you give us any color and you'll recent discussions as to which <unk> is looking like the more likely option.
Yeah, I haven't been on the road a fair bit over the last few weeks and meeting with many of these different counterparties I would say that.
The proposal that we said from the very beginning which would be like many of the other south American Big Big projects, where perhaps you have a major in there and then maybe even a smaller trading house.
So just stay on that that's <unk> <unk>.
Modem, one counts parts of it with a major as an operator was that what we should be thinking well I would start off with probably one larger partner as you said it doesn't definitively made with the operator would be and then it just I gave you the opportunity to bring in someone smaller but that would be a second stage approach.
[noise] excellent. Thanks, Thanks, Okay hope that answers your question sorry.
Thank you.
Your next question comes from the line is Bryce Adams Some C. I D. C. Please go ahead.
Yeah. Thanks beta good morning on the back of the customers announcement I was gonna ask on round potential upcoming changes to taxes and royalties in Chile can we get your updated thoughts on changes to the royalty Bill and when you think that would likely to see a final outcome.
Thank you very much.
Sure well as I said I was just down and.
Truly it I've I've found at home and.
It was quite positive in in this area, we had a great meeting with administer fence Mary M. A cell and myself and one Andreas spent a fair bit of time him with him as well as administer minds and I would argue that their tone is being though every time, we meet with them, it's more and more moderated and in fact, when we were there there was a proposal put forward for.
Cap at 48 47 per cent, sorry, and you know that was with rejected so that the trend continues to to go into positive Ah sorry, it as a positive trend. So we're quite happy with that one grass I dunno, if you want.
Yeah. That's that's the thing cause we were both in the same meeting. So I think you know from where they first started talking way back right on some pretty high numbers every time, we have a meeting and keeps getting better and better.
When when was the 47 48 per cent cap rejected uhm.
I recall, a 50 per cent proposal, but that was coming back to earlier in April .
Yeah.
Three weeks ago, approximately it was a modification presented by the government to the the bill.
Oh perfect. Thanks for the updates appreciate it alright.
Thank you Yeah. Our next question comes from the line of Greg buying some T. D. <unk>. Please go home yeah.
Yeah. Thank you could I just wanted to go back to your your answer to <unk> question about the long lead items and I crept understanding that all of the <unk>.
<unk> crushing equipment all the major components have been ordered or are in the application.
Yes.
Okay I guess, that's good news.
[laughter] secondarily, northern fabrication, they're basically a complete.
The complete okay.
Yeah.
Secondarily on Jose Maria and the discussions with the government around the stipulated greens that you're having sit down face to face concentrated discussions with them at this point and if not when do you think you actually get to that point, where you're sitting down with them and yes hammering out an agreement.
We've had those discussions face to face both of the prevention and federal level and in some cases. We've had you know actual agreement I would say just last week. There was further discussion, but it was not face to face.
And I have just my own personal view with with the elections coming up I suspect some of those face to face discussions in the near term make it a bit more challenging just to be able to hold.
So is there a structured process around this is there.
Yes that schedule about meetings and discussions and looking documents that you're putting together to to pull together a final agreement I just want to understand what the processes and yeah.
Yeah, I'll concentrated and help focus the discussions.
Oh, there's a working document, but as far as having it on a timeline.
It's not quite bad form of lives and I think again, it's just because I mean, the reality is you know you know you could have a new governor.
Order right so.
That's why we're just taking a bit more of a cautionary approach on the timing and some of that is actually spilling into the broader Jose Maria timeline, if you will.
Okay did you need to get those things out of the way.
Which things out of the way sorry, just breathing like elections.
Right obviously.
Okay. Okay. Good enough. Thank you no problem.
Mhm. Yeah next question comes from the line that's fine <unk>. Some coin my please go ahead.
Yeah. Thanks, very much guys just maybe just a follow up question as well just on the exploration and outside of casserole and he's on that slide show on site 11, do you think will actually see some drilling then at the patroclus in Porto knees and lots of times. This year, just you know given the success in Texas had right there as well.
I think that is a very much a priority for US you know we've already started discussions on whether you can get a couple of rigs over there you have to just keep in mind that it is shifting into winter season, so that gets a bit challenging, but I would say from the Jose Maria side is a very very much a priority and.
And we have a view on which ones we should start with first and we already have some locations in mind and there's a budget would that would be allocated for it okay.
Okay, Great and you guys you guys have like permits or whatever required to go in and actually put a rig up on all those right now or is that still in the works as well.
Some areas, where we have permits some that are still awaiting.
Okay. Okay, great. Thanks, very much guys.
[noise]. Okay. Your next question comes from the line of glad you last name some paradigm capital please come out.
Yeah. Thanks for taking my question I just have one.
One easy one for you here, so with respect to synergies accessorize would that conclude a possible expansion of the at the T. W. <unk>.
No we haven't taken that into consideration at this stage I mean, perhaps something down the road, but.
It hasn't been factored in most of as soon as you were talking about right now will begin on the chili inside and are focused with candle area and also you know heading all the way down towards caldera with our pipeline.
Poor desalination plant things of that nature. So the low hanging fruit will be gana procurement and just sharing of knowledge and certain skill sets that are best achieved catriona use or a candle area.
Okay. Thank you very much.
But.
Okay. Yeah. Our next question comes from the line is Jackie excuse me Lesche from BMO capital might get please go ahead.
Thanks, very much actually that question that gorgeous asked US was basically what I was gonna ask but can you can you talked maybe about what we're gonna see in the technical report that comes out are those synergies with with candle area going to be included in that Tech report or would that be so future upside.
No that was it wouldn't be included in the Tech report the Tech report would be a standalone document our teams well advanced in that document I wouldn't anticipate there would be any you know a large surprises in it from previous years of operation.
We already do separate to that have a formal strategy that we can you know perhaps Jackie go through off the call on how we plan to approach the different phases of potential synergies.
Okay that sounds great. Thanks, Peter and if I can maybe ask and I know you've started answered this already but if I can just ask again, because I just wanted to be totally clear on the elections that are coming up in Argentina can you just talk a little bit about what new slower what disclosures you might be releasing prior to that.
Elections, or should we be expecting to wait on essentially any kind of new slope from Jose Maria until after those elections are finished you can you can you spell that out for me well I I guess I would say if we had material news and it's pre any election results, we would put that news out we won't okay.
Back, but there are certain aspects of call. It a bilateral agreements or negotiations of that nature, they're they're gonna be extremely hard to proceed you know as we get into the finale here on election. So I just anything of that nature is probably gradually kept going to come out on the backside.
Does that include the feasibility study okay. Please spell you say.
It's not they're not they're not linked so I.
Okay. Okay. Thank you very much.
Hi, Kim.
Hey, My Dad did you have a question. Please <unk> followed by the number one I need to <unk>.
We have a follow up question coming from the line of <unk> Morgan Stanley . Please go ahead.
Great. Thank you yeah, just a couple pull ups from outside the first the pizza to your point on the Ah Minding royalty Bill and Chili visa 47 per cent of that was rejected.
<unk> Ducks right.
For he's the actual tax rate higher than 45 per cent for that proposal just just trying to figure out whether we are comparing apples to apples yeah. It is the the all encompassing right.
Okay. So that's clear.
And then the other question I had these around the a couple of rows how's the remediation work progressing beyond what's the time, even for a regular through decision about the possible restart yeah. So I think myself and one on dress up both answer that one when we were down and chili about 10 days ago I would just.
Wanted to mention that our meetings with the minister fast as et cetera are there a couple of times administer mines or an argument and other government officials.
It was really really strong I think the the transaction with cats erroneous.
It's put us in good standing with the government, especially given some of the headlines of other companies that had been a bit pushing back on the government. So we're getting extremely good support that being said, it's still does require permits to move the remediation process forward. We are out for bid right now with about five different companies are going to be part of that.
Remediation process. So once we get those permits once we can determine the.
Most appropriate a bid that will begin in it should move in pretty quick order, but it'll pass it on to one address that.
Think I have much to add to what you said, Peter but yes, we're working on different ER ER faces there'll be a remediation and of course, the potential reopening comfortable showing the second half of the year and S. Peters said.
Right now all the studies so most of the studies have been completed it with just a waiting for the the final permits from the different government agencies to proceed with the the actual walks and I would just add unfortunately.
Permanent perspective, those are extremely hard for us to determine how long that takes yes.
<unk>. Thank you both for the answer. Thank you. Thanks for your question.
Thank you Yeah and next question comes from the line of Patrick Jones, Some J P. Morgan. Please go ahead.
Hi, Thanks for taking my question regarding a follow up on Jose Maria obviously, given the timeline is looking like it's taking a little while longer than you know a formal approval is looking like it would be some time posts. He wants you to next year.
You know I, just wanted to kind of inquire as to what kind of Catholics spend you could have an ongoing basis prior to an F. I D decision, obviously the guidance and see if that $400 million is sort of 100 million per quarter, a good rough estimate for what you'd spend pre F. I D into to next year and also is there sort of a limit.
And that you would spend on a total aggregate basis prior to F. I D. Yeah.
Yeah, I think there I think first of all that the spend this quarter has come in a little bit below anticipated. Their original number I think that trend will probably be similar for the back half of this year.
And I don't think until we actually have a definitive go ahead decision. There you know moving out into 2024, I think the number will be fairly moderate it down until we make that actual decision.
Because a lot of the bigger items, where these some of these long lead items and those and those will be complete this quarter.
Great. Thank you no problem.
Thank you. Your next question comes from the line of <unk>, Nevada from <unk>. Please go ahead.
[laughter]. Thank you good morning, Peter and team just one question for me [laughter].
With the center of gravity kind of coalescing now around copper and gold in the get up on the Chilean Argentinian border [laughter], how should we think about your European businesses now Monday still a courtier given that you know, they're geographically removed and get a big component there.
No I think they're still assets that we are very happy that are within our portfolio in particular for starters. If you look at nervous Corvo you know they've just had a great first quarter on health and safety, which we're very proud of him on we've also seen the production ramp up obviously, it's been a challenging project, but we're now starting to get into that gradual rap.
[noise] mode. So I think there's gonna be a huge demand for zinc in Europe , and you know it zinc grew I had been an amazing asset within a portfolio for a long period of time so.
Happy to have both the assets in our portfolio or something changes you know one day down in the future. We'll we'll we'll we'll look at it differently, but right now there are core part of our team.
[laughter], Thanks, Peter that's helping me.
<unk>.
Thank you.
There are no further questions at this time I'd now like to turn to call back of I can Mr back in Dallas for any clothing relax now thank you operator and and thank you everyone for joining in today I think blended my name is at a very very good first quarter. In particular is mentioned at the start on health and safety, but also seeing the operational stability within the company and we're going to be pretty good.
Like going forward to ensure those two areas continue and look for a job updating everyone on our queue to a conference call. So thank you for joining.
Thank you thanks, ladies and gentlemen does conclude your conference call for today well. Thank you for participating and ask that you. Please disconnect your lines have a lovely day.
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