Nexa Resources S.A. Q1 2023 Earnings Call
Good morning, and welcome to the natural Resources' first quarter 2023 conference call.
All participants will be in listen only mode should you need assistance. Please signal conference specialist by Christmas Star key followed by zero.
This event is being recorded and is also being broadcast via webcast and maybe accessed through Nexus investor relation website, where the presentation is also available.
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I would now like to turn the call from Mr. Rodrigo Osama.
Masada, what's normal.
Investor Relations for opening remarks. Please go ahead.
Pardon me Rodrigo.
Your line maybe on mute.
Thank you.
Pardon me Rodrigo your line maybe on mute.
Please hold for one moment.
But we can't speak other thank you.
[music].
Okay.
Fine.
I would now like to turn the conference where somebody could come out of the former head of Investor Relations for opening remarks. Please go ahead.
Good morning, everyone and welcome to extra resources first quarter 2023 earnings conference call.
Thanks for joining us today.
This is my first conference call with the financial community DSO was appointed head of Investor Relations and Treasurer.
I want to thank next was leadership team for their trust and affords us a purchase and.
And say that I'm very excited about this new rule.
I would also like to thank Roberto Gorilla for her contributions to Nexus investors relations area over the past few years.
During the call we will be discussing the company's performance.
The earnings release that we issued yesterday.
We encourage you to follow along this brief presentation through the webcast.
Before we begin I would like to draw your attention to the slide number two as we will be making forward looking statements about our business and we just ask that you refer to the disclaimer and the conditions surrounding those statements.
It is now my pleasure to introduce our speakers joining us today is our CEO in hospitals viable.
Our CFO Jose Carlos go buy it and our senior Vice President of mining Leonardo quick So now I will turn the call over to Ignacio for his comments in Austin. Please go ahead.
Thank you Rodrigo and thanks to everyone for joining us this morning.
Please let's move now to slide number three where we will begin our presentation.
Let me begin by saying that despite the still challenging environment with significant volatility in commodity prices persistent inflationary pressures and some unexpected events in Cerro Lindo, we generated solid results in the first quarter of 2023.
In mid March we experienced unusual heavy rains in Peru, which affected our Cerro Lindo mine.
Nevertheless, we were able to resume the operation at normal level of capacity at the end of March ensuring all protocols and the safety of our employees.
Our net revenue for the quarter reached $667 million, 8% down year over year, mainly explained by lower metal prices, but partially improved by mining production and metal sales over that period.
Our adjusted EBITDA was 133 million, 39% lower year over year impacted by lower Ele me prices on byproduct contribution.
When compared to the fourth quarter of 2022 our adjusted EBITDA increased by 11%.
In our new mine that you point out the ramp up continues to progress. Our current focus is on plan. This stabilization increasing throughput rate unimproved concentrates grades and qualities.
We are aiming to reach nameplate capacity in the second half of this year.
In terms of exploration activities in our minds, we look with optimism to the initial results we had in the first quarter of 2023.
Especially in any point on Basanti, revealing results with high grade thick intersections.
I would also like to emphasize our balance sheet.
Which remains solid despite the investment cycle, we have gone through in the past years and the temporary pressure on working capital effect in our cash flow in the first quarter.
Finally, I want to highlight that we are advancing in their studies related to the integration project of the steroid Pasco complex.
This is a project with a strong potential to transform the underground at our culture and El Porvenir operations into our flagship combined mine.
Not only through production increase but by extending the life of that to us.
Finally, we maintain an optimistic view for the year and we remain confident about the long term fundamentals of our industry and our business.
Now moving to slide number four.
In slide number four regarding the operating performance of the mining segment.
You can see that zinc production in the first quarter increased to 75000 tons up 13% year over year, mainly explained by an increase in treated ore volume on higher ship sink average rates compared to the fourth quarter of 'twenty 'twenty do seem production was relative.
Leaflets.
About the cash cost, even though we are keeping under control our cash cost per ton of run of mine ore.
Our cash cost per pound in the first quarter of 'twenty three increased to 43 cents compared to the 19 cents per pound in the first quarter of 'twenty, two and 20 cents per pound in the fourth quarter of last year.
In both cases, the increase was mainly explained by lower byproduct contribution due to lower let me prizes and the effects of the Cerro Lindo operate shown suspension.
Now moving to slide number five.
In the slide number five regarding the operating performance of the smelting segment.
<unk> sales totaled 144000 tons in the first quarter down 14% from the fourth quarter of 'twenty due mainly due to a lower comparable quarterly production on sales seasonality.
Compared to the same period of last year, we were up 7%.
Although the cash cost per pound in the first quarter of this year, a smelting cash cost decreased to one point 25 cents per pound compared to the one point 26 per pound in the first quarter of 'twenty two.
This slight decrease was mainly driven by lower raw material costs due to lower LNG prices.
When we compare the first quarter of 'twenty three to the fourth quarter of 'twenty two.
Cash cost increased by 4% due to lower byproduct contribution on lower lemme metal price.
Now moving to slide number six.
Ramp up activities had the idea of why not mine continued to progress and we are currently focused on a steadily increasing the plant throughput rate asset reliability and the stability of concentrate grades and widely.
During March we had a plant stopped stoppage at the plant to adjust some bottlenecks such as pumping on Bipin system unimproved that drain edge compute H, which presented limitations after the rainy season.
These measures are contributing to the overall performance of the asset and consequently, the stabilization of production aiming to reach nameplate capacity in the second half of this year.
During the quarter treated ore volume was 277000 tons.
Zinc production reached 2.5 thousand tons switch.
Sustaining capex during the quarter was $15 million, mainly related to mining development and infrastructure.
Yeah.
In our exploration activities in 2022 we added $8 3 million tons of mineral reserves, extending the life of I do point out by three years.
In the first quarter of this year. These activities were focused on the northwest extension of the Babassu area with very positive results.
Now moving to slide number seven.
In the first quarter of 2023, we executed over 12000 meters of exploratory drilling in all of our minds on projects over 12000 meters of infill drilling and nowhere 2000 meters from earlier stage exploration projects drilled in bedroom.
At Cerro Lindo, the Puka Saia mineralized body continued to be extended to the south east.
Sandy.
Around freely exploratory drilling in that Extremo Norte area continuous mineralization with continuing Dia deaths, which provides a good indication of the potential around the main infrastructure.
But that he bought out.
Meritor is really has been focused on the northwest extent Juno Bob Boswell.
We're new drilling continues to confirmed high grade mineralization and exploration and infill drilling at the <unk> ore body. He has been successful for resource classification upgrades.
Regarding the Bosco complex exploration activities continue to focus on the extensions of known bodies like borrowing needs food.
On integration at Elbowing, you highlighted by high grade new intersections.
Now moving to slide number eight.
As I mentioned earlier, we are moving forward with the integration of studies of the attack larger annual perennial underground mines to create a robust strategic organic option for next.
The scope of the project included a sequence of investments with an emphasis on upgrading the poor veneer shaft debello being the integration of both the at our culture and therefore, we needed underground infrastructure.
And increasing the capacity of the poor renewed plant and at our courtyard damien's them.
We are very confident in the potential of this project and we expect to complete the studies in the second half of this year with submission for board approval at the end of this year.
Now I would like to turn over the call to Jose Carlos <unk>, Our CFO , who will present, our financial results Jose Please quiet.
Thank you Vanessa good morning to everyone I will continue on slide nine.
As you can see beginning with the chart on your upper left total consolidated net revenues for the first quarter decreased by 8% year over year.
Yourself adjusted EBITDA consolidated adjusted EBITDA in the first quarter of 2023 was 133 million compared to 217 million in the first quarter of 2022, and two $120 million in the last quarter of last year. We now move to slide 10, where I will explain our results in further deep.
Yeah.
In the mining segment net revenues for the first quarter of 2023 totaled $268 million down 17% versus the same period of last year.
This is explained mainly by the decrease in metal prices lower sales volumes of copper concentrate and the higher T. Six paid by our minds. These negative effects were partially offset by higher zinc lead and seed where sales volumes.
Regarding adjusted EBITDA on Europe , you're right first quarter adjusted EBITDA for the mining segment was $42 million a reduction of 70% year over year, mainly driven by lower prices and higher T. CS and the negative impact related to Eddie born as higher unit costs during the ramp up phase.
Back to the fourth quarter of 2022, adjusted EBITDA decreased by 47%. This was mainly driven by lower sales volumes in Cerro Lindo, which as you already know what's affected by severe weather during early March lower by <unk> contribution and higher operational costs and Eddie partner, partially offset by an increase in Eddy partners.
<unk> sales volumes switch.
Switching over to the smelting segment net revenues in the first quarter of 2023 totaled $543 million.
A decrease of 3% versus the first quarter of 2022.
<unk> up 9% from the first quarter of 2022. This is explained mainly by higher sales volumes, a positive impact of $26 million related to changes in market prices, which resulted in positive quotation period adjustments, which were partially offset by a decrease in bipolar contribution that was mainly explained.
By lower sulfuric acid prices and higher energy prices in <unk> compared to the fourth quarter of 2022 adjusted EBITDA for the smelting segment increased by $43 million, mainly as a result of a positive price effect of 37 million related to changes in market prices that resulted in positive quotation period adjustments.
The positive effect of variation in mark to market of inventories and higher Ele me metal prices, partially offset by lower bipolar contribution and lower sales volumes.
Now moving to slide number 11 on.
On the top left of the slide we can see that in the first quarter, we invested $56 million in capex of which 100% west region related to sustaining investments, including $15 million in 90 pointed out we expect disbursements for investments to accelerate in the upcoming quarters and based on our projections for the year. We believe we will comply with a 20%.
One three cup at guidance of $310 million.
With regards to mineral exploration and project evaluation, we invested a total of $21 million in the first quarter of which almost 12 million were related to mineral exploration and mine development.
I would like to emphasize that as part of our long term strategy, we are focusing our efforts on replacing and increasing mineral reserves and resources supporting our organic growth.
In this regard it is important to mention that we're maintaining our guidance on the investment category expecting to finish 2023 at about 110 million.
Let's move onto slide number 12.
For the first quarter of 2023, and starting from a $133 billion of adjusted EBITDA. We can see that cash flow provided by operations before working capital changes was 106 need.
We then paid $57 million related to interest and taxes of $56 million in total capex for our current operations. We also paid dividends of $25 million to our shareholders. Additionally, there was a $6 million combined positive effect of loans and investments and FX impact.
Finally, there was a working capital variation of a $105 million, mainly due to the combined impacts of the idea behind now ramp up and the decrease in trade ankle for me payables driven by higher payment volumes in the period, we expect this to be reversed positively throughout the year I'm.
As a result of these effects free cash flow in the first quarter of 2023 was negative in $132 million.
We are confident that throughout 2023 with a completion of debt do you plan to ramp up and our ongoing efforts to be more proactive and efficient we will positively contribute to the company's free cash flow generation in 2023.
Now moving to slide number 13.
Let me slide you can see that our liquidity remains robust and we continue to report a sound balance sheet with an extended debt profile by the end of the first quarter of 2023, our current available liquidity was approximately $675 million, including our undrawn revolving credit facility of 300.
The others. It is important to mention that as of March 31st the average maturity of our total debt was 4.4 years with a 5.5% average cost of debt.
Finally, our leverage measured by net debt to adjusted EBITDA was 1.9 times compared with 1.5 times at the end of the fourth quarter and two 1.4 times a year ago.
Going to my last slide before I turn it over to Ignacio.
In this slide we show that in the first quarter of 2023, let me think price average $3124 per ton down.
Down 17% compared to the same period, a year ago, we will leave sync demand remains positive in the meat and long term driven by investments in infrastructure and construction and renewable energy and in the automobile sector now boosted by sales of electric vehicles on the supply side, a lack of feasible projects who fulfilled.
Demand requirements will continue to put positive pressure on prices.
Regarding copper, yeah, Lemme price was down 11% compared to the first quarter of 2022 and up 12% compared to the fourth quarter of 2022.
Copper prices like those of other metals have benefited from a weaker U S dollars and optimism of a Chinese economic recovery.
Therefore, the man the metal will play a key role in the energy transition on the supply side volume from Greenfield or brownfield projects will materialize in 2024, and 2025 contribute pink to a mild temporary surplus in the market with long term additional supply facing important challenges overall, the outlook for zinc and copper.
In the mid to long term remains positive and supported by solid market from debit.
Ill now turn it over to weakness.
I would like to close this presentation by reinforcing our priorities for 'twenty to 'twenty three on our short term is try D.
We are progressing with our ramp up of Huddy Boy now current.
Currently we are performing at the higher running rate capacity on boats sink on copper concentrate grades and quality are improving in line with our projections look.
Looking ahead, the Pasco complex integration project has the potential to be a robust organic strategic option for next.
Yeah.
We will keep executing our exploration program in our Korean operations on key projects. We continue to have very encouraging results in the first quarter of this year.
I would like to point out that we are moving forward with our ESG study.
And we intend to release, our annual sustainability report in May.
We will remain focused on optimizing costs, all biggs on Capex and once again, we remain confident on the long term dynamics of our industry.
Thank you all for attending this presentation with that we will be happy to take your questions.
We will now begin the question and answer session.
To ask a question you May Press Star then one of your Touchtone phone.
If you're using a speakerphone please pick up your handset before pressing the keys.
Two as Charlie a question. Please press Star then two.
He also missed some questions via chat at the walk on the webcast platform.
Our first question will come from Lawson Winder.
With Bank of America Merrill Lynch.
Oh go ahead.
Yeah. Thank you operator, and good morning, everyone. Just two questions for me one I wanted to just get a little bit more detail on the expected ramp at Ari Poniard, and then a little bit more detail on the issues that you experienced at the plant. So if so if I understand correctly, it's really just the plant the mining is fine and then.
Yeah actually I'll leave it at that and then I'll follow up with my second question. After you address that thank you.
Okay. Thank you.
No we're not going as planned.
Yeah.
Yeah.
An unplanned.
In March because of the rainy season, it was very heavy and we as we said in the presentation. We were working on the piping system.
Pumping system and also on that regency.
<unk> grew and this is not an nicole.
Throughput.
Around 70% to 75% and quality of concentrate is very high and ready to go through our drip by the Atwood Manta. So the second half the second one.
You wouldn't see a major regroup.
To the first quarter.
As always in the plan.
As I always say.
We are aiming to reach nameplate capacity in the second half hopefully sooner than.
So the the guidance on Blackstone you Andy we are behind in this part of the year because I mean, you know, it's a ramp up.
We believe that in the second half, we're going to catch up and we will achieve guidance. The OLED part that is important is that.
We wanted to make sure that on a monthly basis, where we stopped losing gaslog.
The ramp up is always.
The savings that you are below the Capex R&D opex of the month.
So part of the problem that we face will be a cash flow of all the 19 business why because already by now we invested $40 million in any one item that varies quite a bit in the second one is going to be much less and.
And hopefully the second but he is going to be positive.
All the benefits.
In 2024.
Okay. Thank you for that and then thank you for that.
Second question I wanted to ask was just on the exploration results you put out earlier in the week.
Earlier in the week.
Daryl Lindo.
Oh would be eight.
We're at very very.
So my questions would be what is the distance of that strike from the existing inferred resource what is the distance.
That from the existing underground infrastructure so yeah.
How much development would it take to get there and could you be accessing that in 'twenty 'twenty. Four for example, and then finally is it on land subject to the silver stream. Thanks very much.
Thank you very much.
D C.
With these.
These drill holes that we have.
Buena surfacing.
Or a three meters away.
The main infrastructure so the it is not correct.
The the.
Cerro Lindo mine.
Eight years of life of mining the main refractor and as you can see we have seen that year over year.
So the hooker saia and hold us round in areas that we are finding that we are seeing that it's all been in shell peanuts. This area.
We'll be below that new salary. This is coming later on.
No.
I would say during this year next year.
What we have in that area.
And because of that we will plan to coordinate these three kilo members in the coming years. So this is more the second wave of jeopardy.
Yes.
Okay, Yeah. Good luck.
Hopefully you're on.
Lucas I was actually at the balance sheet.
Oh.
Yeah.
There will be a we are.
A part of dominion's restructure.
And I will say, we are replacing that.
The little bit that the all the mineralized zones and Diebold is our open.
In the.
And.
In the aggregate.
Deb.
Of the mine. So this is good opportunities to replace what we consume over the year.
Regarding the silver stream.
I understood.
Understood correctly does that assume you solely in India in the core earnings perspective, and Youll be in all these infrastructures are in Raleigh, The Idaho site.
<unk> is not involved in that silver stream.
To remind that the silver stream.
I presume that we give.
<unk> is going down in the coming years.
Okay.
Okay.
Thank you very much.
Thank you very much thank you.
Yeah.
Again, if you have a question. Please press Star then one.
Our next question will come from Pedro Nunez with Bank of financial you May now go ahead.
Hello, Thank you very much for the opportunity.
Wanted to ask a question on your smelting EBITDA and on the 26 million positive impact of Mark to market could you. Please give some detail as to what's what was the reason for the positive impact.
Sean.
Several below market prices that are higher than you expected. So wanted to get some more detail on that thank you.
Yeah.
Yes.
<unk>.
This.
Barry.
Yeah.
As a reminder, we.
We.
Yeah.
The smelting business is very straight forward, we have four sources of revenue.
The first one is the 15% of missing.
Thats concentrated y and that's linked to oil prices.
The second one is that is the thesis that we get and.
And that this is a year of higher than previous years, yes. The bar is around 200.
Bob.
Third one is the premiums that also are higher this year because well.
That does.
The assortment of the smelters.
Now in Europe .
In the energy prices some of them are backed by some of them.
So the premiums are high <unk> highway and the fourth is our microbes.
Casey.
Mainly.
Yeah, so yeah.
So who reacted in Cambodia, so because of this we got.
Yeah.
Very positive results in.
In this manner.
You were talking about a 26 million.
Yes, there is.
Additional impact.
Related to higher prices, which has two effects really.
One related to the cost of the inventory because those in.
Those concentrates were bought at lower prices.
And also due to the higher prices.
Mark to market.
Every at the end of every month.
So that also has a benefit.
On the results of the company.
Mark to market is based on the latest the latest prices on the at the end of each of each month.
And that also contributed to better results that are shown in the EBIT.
Okay. Thank you okay. Thank you.
I would now like to turn it over to Rodrigo come out of the funnel for questions from the webcast.
Okay.
Yeah.
Thank you operator.
We have a question from from my Bills Morita from Bradesco <unk>.
Uh huh.
<unk> two questions the first one.
If you could provide a bit more color on zinc and copper demand fundamentals for 2023.
And then the second question would be about that Rick Wanna what.
The current capacity that running rate capacity outside of China.
And I'll start with the second question, which is very straightforward.
Capacity at EUR 19 between 60 and 72%.
We're looking optimistically.
The evolution of <unk>.
Yes.
With regards to the first question as I had mentioned during the presentation.
We believe that there is very a strong fundamentals both for copper NC definitely copper have more visibility.
More about but zinc is also a lot.
Very important a.
A very important metal obviously in relation to the infrastructure just the hopper, but also in the energy transition as it is used for energy storage.
For our solar power or weak power. So it's a more.
Under the radar missile that is also very important that in the annual.
Energy transition a together with corporate debt.
On the demand side.
Therefore, there are very strong fundamental and on the supply side.
As you know copper grades continue to the nine in general.
It takes longer.
To bring up a new a new mining ratio, whether it's corporate scene and do too.
Due to a <unk>.
Environmental and social conservation there has to be carried out ahead of time.
So it takes longer a.
It's more costly because prices.
Costs have gone up as well so you will require higher prices to have the right incentives to invest in new products.
So taking all those into consideration we continue to believe that these are very these are very strong fundamentals.
Obviously, there can be there can be temporary volatility that overall medium to long term we are very comfortable.
Yes, yes.
What's the catalyst to say from.
From a practical point of view you know that we sell a 600000 of zinc.
In the market.
45% that goes into the Brazilian and Latin America markets.
The rest is going to Europe Asia, and the U S D.
What we see in that specific wrong is that demand is weaker but it's not that weaker.
<unk> is strong.
So my comment is around that in terms of demand demand than supply.
We are a very strong still a strong the problem is that all this noise that the economy around the China.
Ukraine.
Russia rises and the recession in Europe .
What's going to happen.
As a leader in this race of borrowers.
The fundamental balance short term easy straw.
These on a monthly basis.
So hopefully.
The coming months that is going to reflect buses with as you can see that zinc prices are low.
And we are waiting to see.
The positive evolution of that in the coming months.
Okay.
Okay.
<unk> for the questions.
Now we will have a question from Orlando, where you got from spark capital.
Can you. Please provide an update regarding the new mining tax Mato Grosso state.
I guess.
This is a new tax.
It also.
That didn't have a lot of exploratory in terms of mining.
And a.
These stack that we have been.
That has been provided in the last few months is new new to us.
I can say that is the rate is much higher than the average in the industry in Brazil.
So we are trying to speak to the lower middle but we'd also want to make sure that we are.
We face market practices.
You said that.
Yes.
In that in that in the short term there is nothing we can do we have to pay that back it's around.
In our calculations on or all three or $4 million there.
Their year.
And we expect that to evolve.
To that.
Market practices in the coming months or years, but this is working Brooks.
Okay.
Now we'll have a question also from the webcast from somebody else Silva from BTG Pactual.
Should we expect a reversal of the working capital negative effect in the coming quarters, and what would drive that working capital group.
Yes.
These negative working capital variation in the first quarter is something that we plan it has to do with seasonality.
Typically there are a lot of expenses.
Cash cash disbursements towards the end of the year Oh, sorry, there are a lot of accounts payable at the end of the year, which are paid.
In the first quarter, so that makes that.
Outstanding payables.
Payable.
While down representing a negative impact.
Additionally, there has been an increase in accounts receivable related to a higher sales and higher high area. Let me prices, which also have a negative impact on noteworthy.
This is seasonal and is in line with what we planned for the first quarter.
So this will gradually reverse route.
Okay.
Okay.
We have another question.
Follow up question from a Billboard Edaphon Bradesco BVI.
In terms of capital allocation the company looking for anything opportunities through M&A.
Our default focus remain on ramping up our deployment.
Yes.
The priority in the short term is ramping up but it will not this is not reality, it's only going through a process of the ramp up on <unk>.
Our reality.
I would like to mention and hoping that it will not.
Daily.
We want to make sure that we have.
And long life mine what are the 100 days in your mind, so we create more opportunities with more profitability in the coming years. So maybe we have we had 11 years today, we have 14 and hopefully towards the end of this year is going to be.
So this is a.
Our priority for the second one the second one is as I was mentioning several possible.
And several of the basketball really presents an opportunity for us because we connect the two mines underground, we will be able to recover some email audio resources, especially in a quarter that is.
U S long life of mine widening will not recover these resources because if you.
Excluding restructuring of course.
<unk> sold by lowering the infrastructure.
Here, we will be able to do that.
Therefore buying us if that is going to be robust.
Adam.
So these are the priorities virtual.
The robot from an M&A point of view and capital allocation.
We are looking for opportunities we have some early stage projects.
That we are working.
Working right now and we are.
Keeping the market, we're looking for it seemed to uncover opportunities. So we explained that before and this is it seems like as the market is not easy, but we are.
You think that variety in the next 12 to 14 months, we will be able to find something that you see me not the mines that we have we won sizes.
Such as a leading though whatsapp and whatnot. So we are active on that front.
Okay. We have one question from the phone.
Alright.
Okay.
Yes.
Okay.
Yes. Good morning. Thank you very much Ignacio just kind of a question, maybe especially into the working capital.
I was asked before.
How do you see the progression of the free cash flow because.
In most of the last several quarters has been negative.
And I understand that at any point out obviously had an impact on these.
But it will be interesting to see if now that <unk> is ramping up.
Despite potentially lower.
Yeah.
Despite potentially a lower commodity prices and a stronger BRL.
Yeah, if you baked.
Lastly, free cash flow to two to show up in the coming months quarters, and a couple of months quarters. Yeah. No. That's very important and thank you for the question.
You will report that you are right.
I would like to start by saying that the.
Usually that gaslog.
The smelting segment, let's mezzanine is very stable as I was saying before because of the sources of revenue.
But in terms of mining U S law, you must know vehicles.
One is that LIBOR.
Two weeks of the Orlando.
It has an impact on the Gaslog until renews at the mine are very broken down and the second one you point out I think.
We're not in Cerro Lindo mine.
Our short term cash flow more or less we're 45 days to $48 million in Delaware.
And the reason behind that is that while we are ramping up.
The only production that we already acquired.
Was it $2 5000 votes and this is changing.
Positively in the second quarter.
We were to start breakeven in that in the next one so we depending on prices depending on prices.
But if we use an average price of last year.
The mining segment, we will be able to make cash flow towards the end of the year, including at ecolab and including the fact that added whatnot has been ramping up.
The question around why are we not.
Having gas, though and this is a reflect of the previous years the azo resetting for now because even if the if that is the capex or whatnot.
$625 million with which we formed last year.
Why not have working cap.
The operating expenses as a lot of bodies around expenses that create a more a bigger amounts that is.
Turning to the slide so.
I'll give you an idea last year, we said that it was $290 million.
But the capex pricing mix.
<unk> expenses so.
Once we.
It's up on Ronnie.
And we have the rest of the mines.
This cash flow, we don't see why.
The cash flow profile.
Are these going out is going to be a much better substantially better.
That's mainly the view that I can't give you that.
Alright, Thank you guys.
Thank you guys.
Okay.
We have another question from miles from the webcast. This question comes from Omar <unk>.
From up demand.
Why do you expect the apex for the Portland Union at our quartz integration.
And the second question would be when do you expect to deploy this investment.
Yes, it's early days as we were saying we have a.
We.
Our advancing in bill.
Analyses.
The number that we thought like I give you revenue between $160 million to $200 million and this is going to be deployed between 24 and would you say.
So part of the idea that we have is that we deploy these.
These are various specific investments so we deploy these while running the mine.
So the idea is that with our cash flow will be.
Or linear Abuja.
Find them.
On.
We are working towards that result, and as I was saying before.
I would say towards the end of <unk>, what the Union of all this is that it will be ready we are ready.
We will have a technical reports of these as well.
And we will submit this proposal and award for the effort and we will be more specific investments I mean timetables. Once this is approved.
Okay.
Okay.
No.
We don't have any other questions. Thank.
Thank you very much.
As always within the whole.
As you know.
I would like to say that we would like to thank Hugo West Applebee's five years, working with us in Investor Relations. She.
She's a fantastic professional cheez it.
We appreciate very much all the work that she has done well the hook out our models on all of our new Investor mindset.
Mine is a very level or you can take to make also team after this.
And we look forward to speaking to you in the next quarter.
Ali This is Steve.
I realize.
No.
One on supply.
Hopefully, we have better signals from the macroeconomic environment in the world. So we can.
The benefit from the.
The cash flow that we can generate the highest right. Okay. Thank you very much.
Have a good weekend.
The conference has now concluded. Thank you for time today presentation, you may now disconnect.
Yeah.
Yeah.