Q2 2023 Lundin Mining Corporation Earnings Call
[music].
Good morning, ladies and gentlemen, and welcome to the Lundin mining second quarter, Tony John Mcphee results call and webcast. At this time all lines are in a listen only mode. Following the past.
Mutation they will conduct a question and answer session. If at any time. During this call. You are quiet you need assistance. Please press star zero for the operator.
Call is being recorded on Thursday August 20 <unk>.
I would now like to turn the conference over to CEO , Peter back and Gal. Please go ahead Sir.
Thank you operator, and thank you everyone for joining today I will draw your attention to the cautionary statements on slide two.
We will be making several forward looking statements during the prepared remarks and likely during the Q&A as well on the call to assist with the presentation and answer questions are tighter paulson, our SVP and CFO and one under Admiral our SVP and CFO .
Beginning with the key highlights for the second quarter on slide four we delivered solid operating results across the portfolio producing nearly 95000 tonnes of copper equivalent metals.
As planned production continues to be modestly weighted to the second half of the year and we are tracking at or above the midpoint of guidance for copper gold and nickel and at the lower end for zinc.
We completed the Cassa Rudi's acquisition early in the third quarter. The operation had a strong first half of the year, producing 70000 tonnes of copper on a 100% basis.
Generating approximately $120 million in cash.
<unk> is off to a solid start for Q3.
The winter season in Chile, usually run from late May to late August and so far castroneves has yet to experience any seasonal or winter weather impacts.
With our second quarter results, we have improved cash cost guidance for Chipotle and zinc Rubin from realized savings lower consumable pricing and byproduct credits.
We generated attributable net earnings for our shareholders of nearly $60 million and adjusted EBITDA of over $160 million.
These results were achieved concerning lower metal prices during the quarter and impacts of adjusted realized pricing.
Adjusted operating cash flow was over $110 million, including the release of working capital operating cash flow totaled nearly $195 million or.
Our balance sheet means very strong with approximately $1 6 billion of liquidity today as tighter will speak to we continue to realize the benefits from our foreign exchange hedging program with approximately $14 million of gains realized in the second quarter.
In addition, the mark to market value of the remaining hedges has a current value of over $70 million.
In April we also initiated diesel hedging program to protect the operating cost structure a candle area.
With Yesterdays financial results, our board of directors maintained our peer leading regular dividend of Canadian nine cents per share for the quarter or <unk> 36 on an annualized basis, which is roughly a three 1% yield.
As announced we are very excited to have closed the cast erroneous acquisition early in the third quarter.
Immediately after announcement in March we established an integration team, which has been extremely effective and has allowed us to have a very smooth transition during closing.
The same team has also been outweighing the numerous synergies, which we believe we will start to capture this year.
It is clear that many opportunities exist for synergies, especially with our current operation a candle area and in the future with Jose Maria.
We continue to advance our Jose Maria copper gold project with much of the focus in the second quarter on several optimization and trade off studies, while onsite also upgrading roads and completing the camp facilities.
Discussions with a number of parties continue with respect to potential future partnerships.
Our candle area steady work evaluating the expansion of the underground mine to add roughly 20000 tons of copper per year has been completed we do.
<unk> approval of our 2040 year age proceed at which time, we'll ensure the economic study is reflective of any changes.
In short we delivered a solid operating quarter and are pleased with the improved operational stability of our assets, we have been able to lower our cash cost guidance a number of assets and are extremely focused on bringing down our cost at our remaining assets.
I will now turn the call over to Juan Andres to speak to a summary of our production results.
Thank you Peter.
As planned our production continues to be slightly weighted to the second half of the year copper production was essentially flat from the first quarter and going forward will include our recent acquisition of <unk>.
Overall, we produced approximately 95000 tonnes of copper equivalent in the second quarter.
Now look at copper copper production was 60056 tons, which is essentially flat compared to the first quarter of the year Candelaria had a good quarter processing $6 9 million tons of ore slightly better grade and softer ore from phase 11 contributed to the production.
We expect the second half of the year to maintain the slightly better grades from lower benches in the pit.
I have scheduled downtime of the ball mill at Takeda limited throughput during the month of April these issues have been resolved and we should see a stronger second half of the year, we expect higher grade material as we will reduce the use of stockpile and prioritize the feet of freshwater copper.
Copper production is tracking well to annual guidance of 296 to $3 25000 tons.
This is including captured on this production.
Let's now look at zinc zinc production was lower quarter over quarter at 36115 tonnes.
Additional downtime of 11 days at zinc Ruben was taken to the tie in of the new sequential flotation circuit.
Commissioning is progressing well and we expect full ramp up this year zinc recoveries are improving from the upper eighties into the lower nineties.
I've never portable after a strong first quarter during Q2 and planned downtime at the Sag mill together with higher grade variability impacted zinc production.
Ramp up of seeing expansion project I'd never scored book progressed in line with planned production is expected to increase over the course of the year with initiatives to enable <unk> to consistently achieve nameplate capacity that will result in throughput and metal recovery improvements.
For now we see zinc production tracking to the lower end of the annual guidance of 180 to 195000 tons.
Let's now move to nickel nickel production of over 4686 tonnes was 25% higher quarter over quarter from higher throughput and grade profiles equal.
Both copper and nickel production at Eagle were impacted in the first quarter by rehabilitation works at the main ramp mechanical issues and one of the ball mills and weather events.
The slower than planned start in Q1, but a strong second quarter nickel production is tracking well to our annual guidance of 13% to 16000 tons.
Finally gold production was approximately 34000 ounces from the second quarter.
As mentioned earlier <unk> had additional maintenance downtime that impacted throughput, we continue to track well toward our annual guidance for goal of 140 to 150000 ounces all in all a good first half of the year I Speeder mentioned before production will be modest to be weighted to the second half as we.
Are tracking well to meet guidance on all metals. Thank you I will now turn the call to tighter who will provide summary of financial results.
Okay. Thank you Andreas so if you move to slide six starting with the topline we generated close to 590 million in revenue.
Our sales remains leverage to copper generating 65, a share of the quarter's revenue.
And gold contributed 14, and 9% respectively, while <unk> contributed 6%.
Lower realized pricing of metals during the quarter impacted overall financial performance compared to last quarter.
The realized copper price was $3 37 per pound versus last quarter of $4 49 per pound.
A reduction of roughly 25%.
With the price of copper in several of the other metals, we produce decreasing during the quarter revenue was negatively impacted by 75 million of prior period pricing adjustments.
A summary of realized copper zinc nickel prices for the quarter are presented in the charts on this slide.
Ultimately, we realized prices of $3 37, as I said per pound of copper.
83 cents per pound of zinc.
And $9 47.
Cents per pound of nickel.
<unk> thousand $842 per ounce of gold for the second quarter, including the adjustments.
At the end of the second quarter, approximately 82000 tons of copper were provisionally priced at $3 77 per pound and remained open for final pricing adjustments as did over 28000 tons of zinc at $1 eight.
And over 1700 tonnes of nickel at.
At $9 25 per politics.
On slide seven production costs totaled 405 million in the second quarter, which is in line with the previous quarter.
The bottom right chart on this slide presents the relative impact of key drivers of the total operating cost and capital cost by operation for the quarter and demonstrates the material drop off of cost for diesel and electricity compared to Q4 last year.
Particularly at Candelaria and <unk> Corp.
Well, it's kind of various diesel and electricity costs have improved compared to last year to total production costs during the quarter were negatively impacted by higher maintenance and contracting costs.
However, both of these cost increases are likely to be temporary in nature, and we retained the full year cost guidance for candelaria.
At your potash production costs improved from new transportation contracts.
So ocean freight prices dropped around 47% to around $50 per dry metric tonne.
Here. We also are seeing the benefit from lower fuel and explosives pricing and somewhat offset by a slightly stronger local currency.
Potash cash cost guidance was lowered from $2 55 to 275 cents per pound of copper to 235 to $2 55 per pound of copper.
They are as cargo cash cost increased during the quarter, primarily due to lower production volumes and byproduct credits.
<unk> pricing has been mixed with saving on diesel and electricity offset by Smith explosives in the strengthening euro.
Cash cost guidance at Neves Corvo remains unchanged for the year.
$2 10 to $2 charge, you broke out of copper.
Eagle's production costs were in line with expectations. However, our cash costs were impacted by lower byproduct credits.
Cost guidance has been revised upward to $2 32 to <unk> 45 per pound of nickel in 2023 and.
And this is primarily the result of the lower byproduct credits from lower realized pricing.
I think driven as production costs were lower than those of the first quarter, primarily as a result of inventory movements.
Cash cost guidance has been revised down to between 45% to 50 cents per pound zinc in 2000 and for industry S you'd realize higher byproduct credits.
Just offsets lower production.
Good metrics on slide eight during the second quarter revenue as his head was just below 519 million.
Which was impacted by the lower commodity prices enterprising adjustment in and departure.
Generated adjusted EBITDA of 162 million and adjusted operating cash flow of 111 million along with free cash flow from operations of 21 million.
Details of all these adjustments are broken down in our M. D N a.
He remained in a strong financial position, we finished a porch or in the deposition of 200 and talk to your million and today have in that position.
Of approximately 900 and talk to you a million factoring in the closing of.
Casserole opposition.
Flight nine per cent greater detail after the sources and uses of cash in the second quarter.
Before changes in working capital hour operation, So as I say it generated 110 million.
Mm net of Tokyo 3 million of cash taxes paid during the second quarter.
After working capital adjustments and sustaining capital expenditure operations generated 21 million of free cash flow.
During the second quarter.
With two quarterly dividend payments during the second quarter amounting to in total of 104 million. In addition to spending 92 million home depot somewhere ER Girls project.
The company generated a negative free cash flow of 84 million.
Into the second quarter.
With the recent closing off the Corona transaction combined with the closing of a new $800 million term loan. The company continues to have significant liquidity headroom of 1.6 billion with a carton net debt of approximately 900 and talk to a million on 100 per cent consolidated basis.
Well that rubs off the financial section and I will now turn to call back to pizza.
Thank you tighter fly.
Slide 11 highlights the meaningful scale on material the growth of our corporate portfolio.
As mentioned, we're very excited about the cats aren't as acquisition.
[noise] erroneous compliments, our existing portfolio and large scale and long life copper him and loved him production in a jurisdiction in which we already operate.
Cats erroneous proximity to candle area will allow us to leverage our knowledge experience relationships supply chain some potential infrastructure in the region to unlock further synergies.
Along with the continued integration synergies there'll be a focus for us during the second half of the year. We continue to make good progress advancing are Jose Maria copper Gold project and are continuing in a deliberate manner to minimize the risks and will work towards the construction decision at the appropriate time candle areas life of mine has been extended to 2046 with mineral.
Serve estimate announced in February .
The base case plan of the corresponding touched on it before it does not include the Candler underground project, which has the potential to add roughly 20000 tons of copper production per year.
And lastly on this slide in February we announced the maiden indicated resource estimate for the soul of a discovery interview it at the first of many iterations of an increasing mineral estimates to come.
We're very excited about this discovery and will continue evaluate potential expansion opportunities to best exploit the significant mental resource base and the growing so a deposit.
I also want to take this opportunity to highlight the significant the expiration potential within the emerging Vicuna district, and specifically me on our existing land package.
Fly 12 illustrates extensive land package of more than 58000 hectares in Chile that we acquired with the cats around your transaction.
We have identified multiple priority exploration targets, which we will be pursuing this fall.
These include higher grade brecciate targets near and below the existing pit and targets adjacent to the loss of a lot of property, where they've had some of their highest grade intercepts.
Light Green and Pete shading, the map indicates or Jose Maria land packaging claims.
Also illustrated as the plan Hosam area infrastructure, including the process plant tailings facility and bedded Arrow camp.
We believe Jose Maria is well positioned to be the center of future development and expansion of this emerging Lacuna district.
The Jose Maria land packages also presents crossing exploration prospects, notably the Duenow Aussie target, which was formerly pocho cliffs.
In April I injected mineral supported some of the highest grades in the district from this area and it is on trend with the highest salted aviation system observed Philo mining.
Our plan in 2023 is to drill 800 meters on the lunar Watson target.
Additionally, the poor Tony target and deeper hole beneath the horses, and Maria or body offer clear district level of resource potential.
We have approximately 2400 meters or drilling planned for this year and 5000 meters in 2024.
And slight 13 to summarize.
Possession attractive portfolio of high quality minds and are steadily advancing growth projects in a disciplined manner. The.
The first half of the year show solid operational performance and supported our strong financial standing which serves as the foundation for our future growth.
We are currently position to meet our full year production guidance and have been able to lower our costs at several of our operations.
[noise] forward, we will remain focused on driving costs down further.
While maintaining focus on growth, we continue to exercise a prudent allocation of shareholders capital, ensuring a balanced and disciplined approach.
Previously mentioned our board of directors continues to support our commitment to providing the leading regular dividend to our shareholders.
We remain well positioned both operationally and financially to execute on our strategy.
In addition to our European in the U S operations, we've assembled the various strategic package of assets and chili and into the emerging Vicuna district, which we believe puts us in the driver's seat of one of the most prolific emerging copper districts.
And with that operator, I would like to open the lines for questions.
Thank you thanks, ladies and gentlemen, you will now begin the question and answer session.
So do you have a question. Please press <unk> followed by the number one on your touch <unk> again that style followed by the number one on your Touchtone Sally if you would like to think about your request police <unk> followed by the Limburg town.
Yeah. Our first question comes from the line of August 12th Dalfen Scotiabank. Please go ahead.
Hi, good morning.
Morning, Peter wanted to find out how you're thinking about the capsule Ronettes acquisition with respect to impacting Jose Maria obviously, there are some potential there to share infrastructure and I'm wondering how long do you think it might take to get a handle on what those opportunity to look like and then how that will.
Impact your thinking on the Jose Technical report and how that project move forward.
Good morning, West Ah that's a.
Good question I may give you a bit of a long winded answer.
You know obviously the first phone focus if you only casts erroneous.
Yeah, the integration of the asset now that the team done an amazing job they started right away.
It was a very very seamless, but after the integration next focus will be on synergies, but it will be more targeted towards candle area. Initially.
We prioritize I guess you could call. It the low hanging fruit is probably about 30 different items that we're going after on a bit of a contract by contract basis.
It's quite a detailed process that's going to be a starting as we speak and then there's a bit of a a further out concentric circle that we're looking at if you will and that starts getting more involved with things like that to concentrate shipping Ah and things of that nature and and then more of an organizational structure that we're looking to create.
Once we get through that then we start talking about the Jose Maria some of the discussions on Jose Maria.
Will arguably be a bit time sensitive in the sense that there are elections going on in Argentina, and some of the things that you're going to want to have discussions on with arguably involve the government and so you know they got through the provincial election.
But you do have the federal one still coming up on October 22nd.
So any kind of work in that area weather be involved with you know desalinated water going from one side to the other concentrates shifting things of that nature, they'll probably be they'll probably take a little bit further we're doing this study work as we speak but those are going to require engagement from government officials as well.
The computer does that when.
When we think about that timeline does that maybe suggests that the Jose Technical report is now more more likely a H 124 type of event yeah.
Yeah, I mean, I I I think that will be one of the reasons. The report gets pushed out a little bit but on the same note you know, we're kind of finishing off the onsite work right now it's basically almost done completing phase one of the captains in road upgrades, but.
We're spending a lot of time doing trade off studies, right now and optimization studies and areas of focus would be like planned throughput after recoveries, but also as I mentioned the concentrated transport is one optimization were doing and then some conceptual work on some supplemental our studies.
So all of that is gonna feed into it.
We are getting good results pretty much across the board on this work, but to your point it probably does push the timeline out a little bit so that will affect the release of that information and and perhaps is also part of the explanation for the reduction in the Capex.
Okay. Thank you and just wanted to final one if I could the the technical report on couch eroded the cost profile. There I assumes reflects more of the status quo. How much improvement do you potential do you see with respect to some of these synergies with with candle area and also take reducing.
Some of the yesterday at a cost, which which seemed elevated understandable basis.
I think all three of us are going to tackle that question because it kind of goes into different areas, but on the SG&A. There's probably 50 people are positioned in Santiago, which without getting too specific on this call is arguably a higher number than necessary. So we've already come up with an operating model that is going to put the two companies together and then there's.
Going to be key roles that feed into that so you would reduce that duplication pretty quickly and perhaps you'll see an area where there's leads in certain specific departments again.
Probably not to get into on this specific call.
Other areas.
I'm sorry.
Oh, I mean <unk> like this the C. One costs, we are guiding speak.
Speak slightly worse is hope because they're all new used food classified there. She won't go so hours he won't costano entirely consistent with how weak I see women costs on all other other sites.
And essentially the way we have approached us to look at the historical stuff, because we will never know and that sort of extrapolate it on the basis going forward and again as we've said previously was all hours he won't cost guidance we.
We we took a relatively conservative approach on on cost estimation from last year, which was just sort of a high point of them. Then you have two consumables.
Thus also when you're shooting coming through now with certain cost reductions.
All the sites.
Yeah, I I would add that we have just taking operator sheeple. The site. So there were in a in a learning curve beyond what we learned during the due diligence of course, so we will be working with a with a team and optimisations and applying or operational excellence.
<unk> that we use at our other sites. So we are in the short term will probably have a good plan with initiatives to continually improve our outcomes.
Okay. Thank you very much.
Thank you. Your next question comes on the line if I wanted to <unk> some.
Some like in Stanley. Please go ahead.
Yes. Good morning May 17th Thanks for taking my questions. The first thing you say it again on on the <unk> topic seeing you spoken to pass around potential to get some of the excess to Sunday made its will to capacity <unk> with with <unk> what's.
What's the time frame for for you to be able to provide more visibility on that and then we'll be all the aspects you poke around the <unk> operational excellence et cetera on the mall near term.
Soon as your prospects do weeks should we expect an update before the end of this year or was it the 20th and before updates from Ya.
Thanks for the thanks for the question I think you'll get it this year, because we're well advanced on a lot of it I mean, we're talking about a very thorough review on contracts could range from you know fuel lubricants tires lime all sorts of things, where we have identified who.
Who may be he has a better contract the buying and then we're gonna get the economies of scale by consolidating those into where were you know going with whichever team has the better approach.
But that started pretty quickly into the integration process. So we're we're kind of well advanced on it.
And I think in our next quarter, we're gonna be able to provide a lot more clarity we're gonna be at site, both candle area and cast erroneous with our entire board in September and you know and part of that presentation will be a very fulsome review of the potential synergies.
One of your other symptoms.
Okay cool.
Perfect. Thank you very much for that and just one more question for me <unk>.
On the MBNA you talk about <unk>.
Discussions on infrastructure.
Four Jose Maria around Texas Road, and the power line and possibility to have a really good deal set on stomach as investments can you, perhaps elaborate a bit here and what you're looking for a cheese and what's the potential benefit in in Capex.
Well I think I mean, I think both tired and I'll answer that but the one thing I'll say is I think these discussions are will be from a timing perspective will be a little bit challenging because I I think I mentioned earlier Nicol.
July 2nd you just had a new governor going in the San Juan they're very pro mining, but it is a party that's been in opposition for 20 years. So.
While they're very supportive I think we're going to anticipate the process for a sectoral permits in different commercial agreements will probably.
Take a little part time to get through just being realistic and then as he also mentioned you have the the federal elections, which are taking place October 22nd.
Yeah, I guess woken up economic you what it boils down to is that whichever it infrastructure investments, we're making within the province.
We can offset thumped against the provincial royalty that for Ya, you're paying so it's a leftist in mechanicsville.
Financially that's also the thing with would work.
I see <unk>. Thank you very much Ah as I say I think towards the end of the year, we're hopefully going to be able to give you a better clarity on that works for the government.
Oh in place.
Thank you.
Huh.
Thank you.
Your next question comes from the line of glad complain 17th of Katie. Please go ahead.
Yeah. Thank you Peter and everybody else my questions very much along the same lines. My my understanding is the cats or any technical report you just put out was really just the base case.
I'll just I'll just talk to all the cost, but I'm also talking about the production side of things what opportunities do you see a casserole needs itself.
Without even jose Maria or or canceled area coming to touch it to improve the production profile.
Well I think the great great. Thanks for the question.
We're very excited about the acquisition and I think with candle area that the focus is probably more on synergies for the cost side them unnecessarily that production side.
But as mentioned you know cats are oriented 70000 times in the first half, which is a pretty impressive number we've used a lot of caution in the technical support and the guidance. The high end of the guidance is basically that number so again relatively cautious and I just think being a new asset you.
You know, we we wanted to take a cautionary approach you out of the chute, but we're very comfortable with the numbers I would add a couple of other items, which is.
You know in the last two years I've had some pretty difficult winters of course prior to that he had COVID-19 you look at the five year average and it was 129 29000 times.
And the winter.
And chili excuse me runs from late made a late August approximately we've had absolutely no winter weather interruptions, so far which we factored into our numbers to some degree. In addition to that they did have a record July for throughput, which is quite interesting. So needless to say July .
It is starting extremely strong.
And I think that puts us in a great position.
For 2023.
And as we get more comfort with the asset if we feel in the third quarter that there's any type of revision that needs to be made.
I think we'll make it at that time.
Okay just.
Thinking about the pit itself and you had <unk> July is the areas of soft or a hot or anything like that that would.
In fact that throughput rate on a on a an intermittent basis or is it regular pretty consistent.
It's pretty consistent but the one of the things you know there there are limitations or had been limitations on how much water they were getting.
And they're dancing rehabilitation and put some new wells in since we got involved with the protest.
And they're now getting sick.
Okay, great. Thank you.
Thank you.
My next question comes from the line is Ralph the city from Amy Capital. Please go ahead.
Good morning, Thanks, operator, Peter.
You know you mentioned cause erroneous is off to a pretty good start in the first half right 70000 tons of copper production, just wondering where cash costs came in in the first half. If you have that figure just trying to get a sense of you know.
Tracking first half versus second half and the new technical report that will be very helpful. The yeah, we we haven't.
Given us he won't cash cost this hutch for the first album, you know just to remind people. The premise of the deal is a lockbox from first to January so we have taken economic interest in the opposite from for January of this year.
And in that context, we have announced stuff to do the opposite generated.
Free cash flow into production, we've announced 70000 tongues for the first time, so we generated free cash flow.
I'm about to just over $100 million and then within the violence you. There's a lot of books from the beginning there was supposedly working capital of my.
Mother twenties. So that's how we go through a told the cash position of hundred and 20.
At at half here.
It looks like that when we talk about.
Topics I know you also boat all physical don't complex, we've got older than 10 million for the second half and the conflicts facing is a buck and loaded 40 year due to the mining sequins and industry.
That will take place in the second half wishes first off.
But as I said essentially the patient person reading a motto for us because the deal was effective January so what are we spend more or less in first or second half.
Doesn't really impact the 40 year old come forward for disaster for us.
Yeah, Yeah, well understood. Okay, yeah, Thank you and Peter.
The total exploration guidance for twenty-three was unchanged at $45 million you know I believe that some of the commentary talked about some casual want us drilling in the fall just wondering how those to reconcile where you attract mom and now you're coming.
Towards an unchanged category or can we expect another update on exploration spend later no I mean right now I think part of it is Ah you know, there's a little bit of a cut back at one or two other sites, but I think in the presentation materials.
Uh-huh.
I used to do a real number so I can follow up with you Ralph and go through it on a bit of a side by side basis.
But really the money that would have been being spent.
And Jose Maria and Cats erroneous Ah it is coming from a small pullback in some other sites.
Gotcha.
Thanks Peter.
Yeah. Thanks.
Thanks for all.
Your next question comes from the line of Clinton last <unk>. Please go ahead.
Yeah. Good morning, and thanks for taking my question I have to cancel erroneous I'm just curious how much of a recent fine with me anticipated and how much of this issue is expected to persist.
Okay. So that it's actually an hour. Thanks for the question when he was in our technical report. So this was a very much anticipated in no time and came in.
I would say bang on when we expected as at the dollar value. So it's going back to some items that were in between 2015 and 18, we have 100 per cent of them in any coverage on that and so I you know I think it's the fact that it came up early for us.
You know in a way a positive and it would be dealt with this weekend we move forward.
Ford basis, you know, we're going to be flying Lundy mining standards, even though they do have high standards add caster groanings and given our footprint in any out of camera region and we will ensure that you know we are deemed to be a a partner of choice in the region.
Okay. Okay. Thank you so <unk> I guess, there isn't really much more <unk>.
Extra scrutiny from the government does it some people may have interpreted but.
<unk> any impact on expansion plans either project in the country.
No not at all you know again, we're going to be down there in September we have very good support from a number of different government officials. This was you know a historical issue and you know the fact that we are able to resolve pretty quickly here and move forward I think is a positive.
And we've done a lot of work at site to show you know what our intentions are on a going forward basis, and it seems to be well indoors by the government officials. So I don't see that as an issue whatsoever.
Okay, great. Thank you very much.
Thank you.
Ladies and gentlemen, just say my issue do you have a question. Please press star followed by the number one on your touch Downs Fine you. Our next question comes from the line of Stefan <unk>. Some climax of Katie's. Please go ahead.
Yeah. Thanks, very much just just curious on the exploration frightened vicuna in terms of on that map on July 12th at the <unk> Palace. When do you think you might actually have the the permit to go ahead and start drilling there.
Our our goal will be to start drilling this fall actually and so I think I.
Went through some of the targets stuff on during.
The earlier part of the call we can sit down with you and go through the maps, but we've got it pretty well figured out as I said I'm not doing philosophy target is gonna be yeah listen I know you know what well how it's sandwiched between the other two projects.
We've got some interesting things go after it casts erroneous below the existing pit.
Where they've had some encouraging results.
But given that they're not our drill holes, we want to follow up on that and that that's gonna be a focus as well.
Okay, Great and you said you said, you're looking to drill 800 meters that lunar washy proper. This fall then yes, Okay and then and then I started just sorry housekeeping, but you you mentioned 5000 meters next year is that over is that at Luna washing over the greater sort of area that would be the greater area in that region, but not okay. So you're getting into the public opportunities as well as underneath.
San Jose God, Okay, perfect. Good luck, thanks very much.
[noise].
Thank you and there are no further questions at this time I'd now like to turn to call back and I'd like to see them, if they're backing down by any closing remarks, Oh. Thank you operator, and thank you everyone for joining US today I think it was disgusted over the call you have a very strong operational quarter, and we're well positioned to achieve our guidance.
For 2023, and perhaps even more important I think resetting the company up for success in 2024, So look forward, they're giving everyone. A further update come in the fall. Thank you for joining.
Thank you thanks, ladies and gentlemen does conclude your conference calls like today, we thank you for participating and ask that you. Please disconnect your lines.
Okay.
You as well.
[noise].