Q4 2023 Capstone Copper Corp Earnings Call
Operator: Good afternoon, ladies and gentlemen, and welcome to the Capstone Copper Q4 2023 results conference call. At this time, all lines are in listen-only mode.
Good afternoon, ladies and gentleman and welcome to Capstone operate Q.
Results Conference call.
At this time all lines are you listen only mode.
Operator: 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 the operator. This call is being recorded on Thursday, February 22, 2024. I would now like to turn the conference over to Gerald Annett. Please go ahead. Hello!
Following the presentation, we will conduct a question and answer session.
At any time during this call you require assistance. Please press star zero for the upgrades.
This call is being recorded on Thursday February 22nd 2024.
I would now like to turn the conference over to Gerald.
Please go ahead.
Hello.
Gerald Annett: I'd like to welcome you all to Capstone Copper's Q4 2023 conference call. Please note that the news release and regulatory filings announcing Capstone Copper's 2023 fourth quarter financial and operational results are available on our website and on CDAR Plus. If you're logged into the webcast, we will announce or advance the slides of today's presentation, which are also available in the investor section of our website. I'm joined today by our CEO, John McKenzie, our President and COO, Cashel Marr, our Chief Financial Officer, Raman Randhawa, and our Senior Vice President, Risk, ESG, and General Counsel, Wendy King. Following our brief remarks, there will be an opportunity for questions. Please note that the comments made on the call today will contain forward-looking information within the meaning of applicable securities laws. This information is, by its nature, subject to risks and uncertainties, and actual results may differ materially from the views expressed today.
I'd like to welcome you all to Capstone Koppers Q4, 2023 conference call. Please note that a news release and regulatory filings announcing capstone Copper's 2023 fourth quarter financial and operational results are available on our website and on SEDAR plus if you are logged into the webcast.
First we will announce our advance the slides of today's presentation, which are also available in the investors section of our website I'm joined today by our CEO, John Mckenzie, our President and C. O O Castle Maher, our Chief Financial Officer, Robin <unk>, and our senior Vice President risks.
ESG and general Counsel Wendy King.
Following our brief remarks, there will be an opportunity for questions.
Please note that the comments made on the call today will contain forward looking information within the meaning of applicable securities laws. This.
This information by its nature is subject to risks and uncertainties and actual results may differ materially from the views expressed today.
John Mckenzie: For further information on the risks and uncertainties pertaining to our business, please see Capstone's most recent filings, which are available on our website and on CDAR+. And finally, I'll just note that all amounts we will discuss today are in U.S. dollars unless otherwise specified. Now, I'll turn the call over to John McKenzie. Thank you, Niles. Good afternoon, everyone in North America, and good morning to those dialing in from Australia. We're pleased to present our fourth quarter 2023 results and our achievements for the year. Starting with slide five,
For further information on the risks and uncertainties pertaining to our business. Please see capstone <unk>. Most recent filings which are available on our website and on SEDAR plus and finally I will just note that all amounts we will discuss today are in U S dollars unless otherwise specified now I will turn the call over to John Mccain.
Z.
Thank you.
Good afternoon, everyone in North America, and good morning to those dialing in from Australia.
We're pleased to present, our fourth quarter 2023 results and our achievements for the year.
Starting with slide five.
John Mckenzie: We produced just over 44,000 tons of copper at consolidated C1 cash costs of $2.67 per pound in Q4. It was our strongest quarter of the year with respect to both production and costs, and that translated into our strongest quarter of the year from a financial perspective. After a strong finish to 2023, our operations are set up well for 2024. For the full year in 2023, we produced 164,000 tons of copper, which is in line with our second half guidance. Our consolidated C1 cash costs were impacted by lower production levels at the start of the year and our higher-cost cathode production.
We produced just over 44000 tons of copper at consolidated C. One cash costs of $2 67 per pound in Q4.
It is our strongest quarter of the year with respect to both production and costs and that translated into our strongest quarter of the year from a financial perspective.
After a strong finish to 2023 operations I'll set up well for 2024.
For the full year in 2023, we produced 164000 tons of copper, which is in line with our second half guidance.
Our consolidated C. One cash costs were impacted by lower production levels at the start of the year.
And our higher cost cathode production.
John Mckenzie: However, we expect our consolidated unit costs to decline as our Montevideo development project in Chile ramps up. It was a significant accomplishment for our team to have completed the construction phase of MVDP and to now be focused on the commissioning and ramp-up of the project. There are no changes to our previously announced total capital budget of $870 million for the project, nor to the commissioning timeline as described in our guidance release in January. This project is the culmination of many years of dedicated effort by our team, from the exploration, studies, permitting, and engineering, to the building of the mine, and it's tremendously exciting that we're now approaching first production. MVDP is transformational for Capstone Copper and will drive a step-change improvement in our consolidated unit costs and a pathway to record operating cash flow generation. Continuing with our achievements in 2023, I'm also very proud to highlight that both our Montevideo and Montes Blancos mines in Chile were awarded the copper mark. Responsible operating practices are a vital component of our commitment to the environment, our employees, local communities, and government, and must remain friends of mine in everything we do.
We expect our consolidated unit cost to decline as a months have added development projects in Chile ramps up.
It is a significant accomplishment by our teams have completed the construct construction phase of MVP and should now be focused on the commissioning and ramp up of the projects.
There are no changes to our previously announced total capital budget of $870 million for the projects.
And also the commissioning timeline as described in our guidance release in January.
This project is the culmination of many years of dedicated effort by our team from the exploration studies permitting and engineering to the building of the mind and its tremendously exciting that we are now approaching first production.
Okay.
MVP is transformational for capstone copper as well.
Drive a step change improvements in our consolidated unit costs and the pathway to record operated two record operating cash flow generation.
Continuing with our achievements in 2023 I'm also very proud to highlight that both our months of Eddie and monsters Plunkers mines in Chile, we rewarded the copper mark.
Responsible operating practices are a vital component of our commitment to the environment, our employees local communities and governments and must remain front of mind in everything we do.
John Mckenzie: The Copper Mark is a powerful assurance of transparency and accountability and reinforces our values of responsible, sustainable production. We take pride in the achievements of our Chilean operations, and we're actively striving to replicate the success at Pinsa Valley in Cozumel. We also made great strides this year by broadening our senior management bench strength.
The copper Mark is a powerful assurance transparency and accountability and reinforces our values on responsible sustainable production.
We take pride in the achievements of oxy in operations and we exited the striving to replicate this success at Pennsylvania because of it.
We also made great strides this year by broadening our senior management bench strength.
John Mckenzie: We now have new general managers at three of our mines, and we've made several key additions throughout the year to our corporate technical team. We've been able to attract very talented and experienced individuals to join our team, and I believe we're poised for success. Lastly, I would also like to highlight that in 2023, we diversified our shareholder base through a secondary placement of shares by our largest shareholder, Orion Mine Finance. We continue to bolster our shareholder register this year with the furthest held down by Orion, in addition to a primary equity raise by Capstone. On February 2nd, we announced that our shares commenced trading on the Australian Stock Exchange under the ticker symbol CSC.
We now have new general managers at three of our mines and we've made several key additions throughout the year to our corporate technical team.
We've been able to attract very talented and experienced individuals to join us.
And I believe we're poised for success.
Okay.
Lastly, I would also like to highlight that in 2023, we diversified our shareholder base through a secondary placement of shares by our largest shareholder Orion mine finance.
We continue to bolster our shareholder register earlier this year with a further sell down by Ron In addition to a primary equity raised by Capstone.
On February the second we announced that I'll say is commenced trading on the Australian stock exchange under the ticker symbol CSC.
John Mckenzie: We grew our shareholder base in the Asia-Pacific region substantially last year. The ASX is a premium market with a long track record as a platform for mining companies. We're committed to improving the liquidity on our shares on the ASX over time. And with that, I'll pause over to Raman for our financial results. Thank you, John.
We grew our shareholder base and the Asia Pacific region substantially last year.
Asics as a premium markets with a long track record as a platform for mining companies.
Our commitment to improving the liquidity what I'll say is on the asics over time.
And with that I'll pass over to Robin for our financial results.
Thank you John.
Raman Randhawa: We are now on slide six. In Q4, we recorded copper production of 44.1 thousand tons and copper sales of 43.3 thousand tons. LME copper prices during the quarter averaged $3.70 per pound, down 2% compared to $3.79 per pound in Q3 2023.
Now on slide six.
In Q4, we recorded copper production of $44 1000 tonnes of copper sales of $43 3000 tonnes.
<unk> copper prices during the quarter averaged $3 70 per pound down 2% compared to $3 79 per pound in Q3 2023.
Raman Randhawa: Our realized copper price of $3.74 per pound was largely in line with the LME average price. As a result, we recognized net revenues in the quarter of $354 million. We recorded a consolidated fee one cash cost of $267 per payable pound in Q4, which was within our second half guidance range and represented our lowest quarterly C1 cost of the year. We expect costs to trend similarly in the first half of this year between $2.65 to $2.85 per pound before a large step change in our consolidated unit cost in the second half driven by our Manto Verde development project down to $2.10 to $2.30 per Adjusted EBITDA in Q4 of $88.3 million increased by 41% compared to Q3, driven by our stronger operational quarter with 10% higher production results. Adjusted net income to shareholders of $10.8 million, or $0.02 per share, excludes unrealized derivative and FX losses of $21 million.
Our realized copper prices of $3 74 per pound was largely in line with the <unk> average price.
As a result, we recognized net revenues in the quarter of $354 million.
We recorded consolidated C. One cash cost of $2 67 per payable pound in Q4.
Which were within our second half guidance range and represented our lowest quarterly C. One cost of the year.
We expect cost to trend similarly in the first half of this year between $2 65 to $2 85 per pound.
For a large step change in our consolidated unit cost in the second half driven by our mental very development project down to $2 10 to $2 30 per pound.
Adjusted EBITDA in Q4 of $88 3 million increased by 41% compared to Q3, driven by a stronger operational quarter, but 10% higher production results.
Adjusted net income to shareholders of $10 8 million or <unk> <unk> per share excludes unrealized derivative and FX losses of $21 million.
Raman Randhawa: Moving on to slide seven, we summarize our available liquidity, which at year-end 2023 was approximately $353 million, including $127 million of cash and short-term investments and $226 million of undrawn amounts on our $700 million corporate revolving credit facility. Earlier this month, we closed a $356 Canadian dollar primary equity raise as part of a larger $431 million Canadian dollar buyout deal, which included a secondary sale by our largest shareholder, Orion Mine Finance. The equity raise improves our liquidity and financial flexibility; our pro forma liquidity, including the net proceeds of the primary offering, totals now $606 million. After accounting for the offering on a pro forma basis, we have a consolidated net debt of $674 million and an attributable net debt balance of $523 million. Our balance sheet is in excellent shape.
Moving onto slide seven.
On the left hand side, we summarized our available liquidity, which as at year end 2023 was approximately $353 million, including $127 million of cash and short term investments and $226 million of undrawn amounts under $700 million corporate revolving credit facility.
Earlier this month, we closed a 356 <unk>.
Canadian dollars primary equity raised as part of a larger $431 million.
Canadian dollars bought deal, which included our secondary sale by our largest shareholder Orion mine finance.
The equity raised improves our liquidity and financial flexibility, our pro forma liquidity, including the net proceeds other primary offering total is now $606 million.
After accounting for the offering on a pro forma basis, we have a consolidated net debt of $674 million and attributable net debt balance of $523 million.
Our balance sheet is in excellent shape.
Raman Randhawa: The chart on the right-hand side illustrates our EBITDA sensitivity at various copper prices. In the first two bars, you can see that we expect significant near-term EBITDA growth with mantoverde sulfides at full run rate production. In the near term, this year in 2024, our EBITDA will double from our 2023 levels with NBDP ramping up. And then, with NBDP at full capacity, we expect to generate approximately $1 billion of annual EBITDA, assuming a $4 copper price.
The chart on the right hand side illustrates our EBITDA sensitivity at various copper prices in the first two bars you can see that we expect significant near term EBITDA growth.
With Manto vary sulfides at full run rate production in the near term. This year in 2024, our EBITDA will double from our 2023 levels with MVP ramping up.
And then with Mbdtf full capacity, we expect to generate approximately $1 billion of annual EBITDA.
Assuming a $4 copper price.
Cashel Marr: The EBITDA generation associated with Mantra Verde will enable us to focus on generating free cash flow to de-lever our balance sheet and be below 1x net leverage at spot copper prices, which provides additional liquidity to advance our future growth pipeline in terms of the amount of already optimized, expiration, and Santo Domingo, depending on market conditions. Now I'll hand it over to Cashel for the operations review. Thanks, Robin.
The EBITDA generation associated with mental Verde will enable us to focus on generating free cash flow to delever, our balance sheet and be below one times net leverage at spot copper prices.
Which provides additional liquidity to advance our future growth pipeline in terms of naphtha Verde optimized exploration in Santo Domingo, depending on market conditions.
Now I will hand, it over to casual for the operations review.
Thanks Robin for now on slide eight.
Cashel Marr: We're now on slide eight. Pinto Valley produced 15,933 tonnes of copper at a C1 cash cost of $2.36 per payable pound during Q4. It was our strongest quarter of the year at Pinto Valley, as we started to see benefits from our new Asset Integrity Program, and in my view, the mine is positioned well for this year. We have guided for 58,000 to 64,000 tonnes of copper production at Pinto Valley in 2024, at C1 cash costs of $2.50 to $2.70 per payable pound. We expect copper production to be weighted towards the second half of the year.
Pinto Valley produced 15933 tonnes of copper at.
<unk> cash costs of $2 36 per payable pound during Q4.
It was our strongest quarter of the year at Pinto Valley.
We started to see benefits from our new asset integrity program and in my view, the minus positioned well for this year.
We have guided for 58% to 64000 tons of copper production at Pinto Valley in 'twenty four.
Let's see one cash costs at $2 50 to $2 70 per payable pound.
We expect copper production to be weighted towards the second half of the year drip.
Driven by grades.
Our guidance implies throughput up around 52000 tonnes of ore per day versus the mill capacity of 60000 tons per day.
Cashel Marr: Our guidance implies throughput of around 52,000 tonnes of ore per day versus the mill capacity of 60,000 tonnes per day. As we continue to execute on our asset integrity program, we believe we will be able to increase the mean time between failures and improve our overall availability to be able to deliver higher throughput more consistently. Also of note, Pinto Valley completed a third-party gap assessment for the copper mine. 2024 Capital Expenditure Guidance also reflects our efforts to improve tailings stewardship as we work towards implementing the global industry standards for tailings management by year-end 2028. Moving the slide now.
As we continue to execute on our asset integrity program. We believe we will be able to increase the meantime between failures and improve our overall availability to be able to deliver more consistently higher throughput.
Also of note last year Pinto Valley completed a third party GAAP assessment for the copper market in 2020 for our capital expenditure guidance also reflects our efforts to improve tailings stewardship as we work towards implementing the global standards for tailings management by year end 'twenty.
28.
Moving to slide nine.
Postmen mine delivered a solid Q4, producing 6564 tonnes of copper at cone cash costs of $1 76 per payable pound.
Cashel Marr: Postman Mine delivered a solid Q4, producing 6,564 tonnes of copper at a C1 cash cost of $1.76 per payable pound. The mine demonstrated another quarter of nameplate mining rates after transitioning to the new cut and fill mining method earlier last year. We have guided for 2024 production from Kozumin of 22 to 24,000 tonnes of copper. Although 2024 costs are higher than those in our most recently published technical report due to a stronger Mexican peso and additional use of the new cut and fill mining method, we believe there are opportunities to reduce unit costs in the future as the workforce improves its proficiency with cut and fill. Our Mantos Blancos asset is highlighted on slide 10. Total sulfide and cathode production yielded 11,587 tons.
The mind demonstrated another quarter of nameplate mining rates after transitioning to the new cut and fill mining method earlier last year.
We have guided for 2024 production from closing of 22 to 24000 tonnes of copper.
2024 costs are higher than those in our most recently published technical report due to a stronger Mexican peso and additional use of the new cut and fill mining method.
We believe there are opportunities to reduce unit costs in the future as the workforce improve proficiency with cut and fill.
Our mental blancos asset as highlighted on slide 10.
Total sulfide and cathode production yielded 11587.
Tony's of copper at a blended cone cash costs of $2 71 per payable pound.
Cashel Marr: Tonnies of Copper at a blended C1 cash cost of $2.71 per payable pound. However, sulfide operations this year have not performed consistently at nameplate levels. While the major components, including the crushing, grinding, and floating circuits, remain more capable of throughput rates in excess of 20,000 tons per day, linkages between these systems, including pumps and pipes, have exhibited bottlenecks. In Q4, we continue to execute on our plan to address plant stability, which includes improved maintenance and optimization of the concentrator and tailings system. We have also incorporated the learnings to date from operating the plant since the expansion was completed. We worked through several areas during the quarter, and we addressed several of the bottlenecks in the crushing and grinding area of the mine.
<unk> operations. This year have not performed consistently at nameplate levels.
While the major components, including the crushing grinding and floating circuits remained more capable of throughput rates in excess of 20000 tonnes per day.
Linkages between these systems, including pumps and pipes have exhibited bottlenecks.
In Q4, we continued to execute on our plan to address plant stability that includes improved maintenance and optimization of the concentrator and tailing system.
We have also incorporated the learnings to date from operating the plant since the expansion was completed.
We've worked through several areas during the quarter and we have addressed several of the bottlenecks in the crushing and grinding area of the mine.
Operating rates so far in 2024 have track more closely with our plan.
We have guided for sulfide production of 43000 49000 tons of copper.
Cashel Marr: Operating rates so far in 2024 have tracked more closely with our plan. We've guided per sulfide production of 43,000 to 49,000 tonnes of copper, with a larger weighting in the second half driven by higher throughput. During the first half of the year, our focus is on receiving and installing the engineering and infrastructure upgrades required in the tailings dewatering area of the plant. We expect to receive and install the necessary equipment in Q2, after which we expect Mantos Blancos to be operating at nameplate throughput rate. Included in our Sustaining Capital Guidance at Mantos Blancos for 2024 is approximately $35 million related to achieving sustainable run rate We are confident that we have both the team in place and the asset that will support full run rates.
With a larger weighting in the second half driven by higher throughput.
During the first half of the year, our focus is on receiving and installing the engineering and infrastructure upgrades required in the tailings dewatering area of the plant.
We expect to receive and install the necessary equipment in Q2 after.
After which we expect metals blancos to be operating at nameplate throughput rates.
Included in our sustaining capital guidance at <unk> for 2024, it's approximately $35 million.
<unk> to achieving sustainable run rate production.
We are confident that we have both the team in place and the asset that will support full run rates.
Our efforts are focused on achieving this and after that we will recommence our studies related to Mantas Blanco space too.
As we believe the ore body can support further expansion.
Now on to <unk> on slide 11.
Cashel Marr: Our efforts are focused on achieving. And after that, we will recommence our studies related to Mentos Blanco Phase 2, as we believe the ore body can support a further expansion. Now on to Manto Verde on slide 11.
Q4, 2023 oxide production was 10019 tons of copper and Cath Oded <unk> cash costs of $3 60 expense per payable pound.
During the first quarter of 2024, we welcomed a new general manager at mental burden Corsica Flores, who has significant experience ramping up in operating sulfide concentrator.
Cashel Marr: Q4 2023 oxide production was 10,019 tonnes of copper in cathode at C1 cash costs of $3.68 spent per payable pound. During the first quarter of 2024, we welcomed a new general manager at Manto Verde, Oscar Flores, who has significant experience ramping up and operating sulfide concentrators in his previous roles with Kinross, Anapagasa, Anglo American, and Codelco Our previous GM, Pablo Azain, will be staying on through the end of Q1, ahead of his retirement.
In his previous roles with Kinross and if the gasser.
American and Codelco in Chile, plus.
At this time at new Gold in Mexico, Australia, and Canada.
Our previous GM Pablo ethane will be staying on through the end of Q1 ahead of his retirement, we thank him for his stewardship admin poverty and wish him all the best.
Importantly, significant progress was achieved at the MVP during Q4.
Cashel Marr: We thank him for his stewardship at Manpoverde and wish him all the best. Important. Significant progress was achieved at the MVDP during Q4. Construction is effectively complete. Our project capital estimate of $870 million is unchanged.
Construction is effectively complete.
Our project capital estimate of 870 million is unchanged and at this stage, we do not anticipate any further increases to the capital budget for the project.
Our key commissioning milestones are listed on the right side of the screen.
Cashel Marr: And at this stage, we do not anticipate any further increase to the capital budget for the project. Our key commissioning milestones are listed on the right side of the screen, with the first door to the mill expected in Q1. First scalable concentrate in Q2, and the mine hitting its nameplate operating rates during the third quarter. Bento Verde will produce approximately 120,000 tonnes of combined cathode and copper in concentrate with over 30,000 ounces of gold per year once fully ramped up.
With first ore to the mill expected in Q1 first saleable concentrate in Q2 and the mind hitting its nameplate operating rates during the third quarter.
Bento Verde will produce approximately 120000 ton aesop combined cathode and copper in concentrate with over 30000 ounces of gold per year once fully ramped up.
During this ramp up year, we plan to produce between 61 to 75000, <unk>, a combined copper Atlanta Verde.
Cashel Marr: During this ramp-up year, we plan to produce between 61,000 to 75,000 tonnes of combined copper at Monteverde. Around mid-2024, we plan to release a study for Mantle Verde Optimize, which is a brownfield expansion to increase the ore throughput by approximately 40%. With a resource of over 1 billion tonnes of material not currently included in reserves, we would also continue to evaluate the addition of a second concentrator line at Antwerp. Slides 12-16 show our construction and commissioning progress on several key areas of the MBDP. Slide 12 shows the primary crusher on the left and the covered Corsora stockpile on the right.
Around mid 2024, we plan to release the study for mental Verde, optimize which is a brownfield expansion to increase the ore throughput by approximately 40%.
With a resource of over 1 billion tons of material not currently included in reserves. We would also continue to evaluate the addition of a second concentrator line.
And the verdict.
Slides 12 through 16 show, our construction and commissioning progress at several key areas of <unk>.
Slide 12 shows the primary crusher on the left and the covered coarse ore stockpile on the rate.
The fed first storage to the primary crusher during the fourth quarter and our covered coarse ore stockpile now sits at about a third full ahead of the ramp up.
Recall that the mining activities took place throughout 2023, and we have now stockpiled around 6 million Chinese a sulfide or waiting to be fed to the primary crusher and mills. We have also a further six months of sulphide ore exposed in the pit.
Cashel Marr: We fed the first store into the primary crusher during the fourth quarter, and our covered course or stockpile now sits about a third full ahead of the ramp. Recall that the mining activities took place throughout 2023, and we have now stockpiled around 6 million tonnes of sulfide ore waiting to be fed to the primary crusher in mills. We also have a further six months of sulfide ore exposed in the pit, further de-risking the ramp. Slide 13, shows a close-up of the sag and ball mills.
Further derisking the ramp up.
Slide 13.
Shows a close up of the Sag and ball Mills. This is the next major step in our systematic commissioning process.
Our engineering contractor Sanco.
Engaged for the commissioning and ramp up the mill operations.
We also hired a full complement of sulfide operators. In addition to our new plant manager who are working alongside the <unk> ramp up team.
Cashel Marr: This is the next major step in our systematic commissioning process. Our engineering contractor, Asenko, is engaged for the commissioning and ramp-up of the mill operation. We have also hired a full complement of sulfide operators in addition to our new plant manager, who are working alongside the Asenco ramp-up.
Last week, the mills were energized and have been turning without or we are working with <unk> Smith, our equipment manufacturer as they perform their final instrumentation and calibration tracks prior to the first ore being fed into the mills.
Cashel Marr: Last week the mills were energized and have been turning without ore. We are working with FL Smith, our equipment manufacturer, as they perform their final instrumentation and calibration tests prior to the first ore being fed into the mill, which we expect later this quarter. On slide 14, you can see a bird's eye view of the processing flow sheet. We will continue to systematically commission the plant, working through the flotation, filtration, and tailings areas over the next few months. On slide 15, you'll see the tailing storage facility. Monteverde sits approximately 900 meters above sea level and is one of the driest areas on the planet. In our view, it is among the best places on earth to have been built and to be ramping up.
Which we expect later this quarter.
On Slide 14, you can see a bird's eye view of the processing flow sheet.
We will continue to systematically commissioned the plant working through the flotation filtration and tailings areas over the next few months.
On slide 15, Youll see the tailings storage facility.
Monteverdi sits approximately 900 meters above sea level and it's one of the driest areas on the planet.
And our view is among the best places on Earth.
<unk> has built and be ramping up a copper concentrator.
Lastly, on slide 16, Youll find our desalination plants on the coast about 30 kilometers away from the mine.
It has now been expanded to support the MVP.
I am excited to continue commissioning and ramping up Demento Verde development project over the next few months.
Wendy King: Copper concentrate. Lastly, on slide 16, you'll find our desalination plant on the coast, about 30 kilometres away from the mine. It has now been expanded to support the MTA. I'm excited to continue commissioning and ramping up the Mantoberti development project over the next year. Now over to Wendy King for sustainability. Thank you, Cashel. We're now on slide 17 with a review of our Sustainability Highlights. In November, we published our first combined sustainability report for Capstone Copper, Growing Responsibly. This report provides enhanced information on our global sustainability policies and more in-depth information on community engagement and biodiversity management. We also reported emissions intensity data per unit of ore processed and unit of copper produced to give a clear and transparent picture of our emissions.
Now over to Wendy King for the sustainability review.
Cash flow, we're now on slide 17, with a review of our sustainability highlights.
In November we published our first combined sustainability report for Capstone copper growing responsibly.
This report provides enhanced information on our global sustainability policies and more in depth information on community engagement.
Biodiversity management.
We also reported emissions intensity data per unit of ore processed and unit of copper produced to give a clear and transparent picture for our mission.
In 2024, we will continue this trend of enhanced reporting by disclosing the results of our climate related risk and opportunity assessment and scenario analysis, which we started in 2023.
This work will further inform our business strategy and de Carbonization plan.
Wendy King: In 2024, we will continue this trend of enhanced reporting by disclosing the results of our climate-related risk and opportunity assessment and scenario analysis, which we started in 2023. This work will further inform our business strategy and decarbonization plans. Along with other Canadian mining companies, we will issue our first modern slavery report on our supply chain responsible sourcing practices. We are pleased to report that Manto Verde was named the 2023 Company of the Year by Corpora Atacama at its annual general meeting.
Along with other Canadian mining companies, we will issue our first modern slavery slavery report on our supply chain responsible sourcing practices.
We are pleased to report that Monteverdi was named the 2023 company of the year by Corp, Proa Atacama at its annual General meeting.
Cozman was recognized with three different awards, including the socially responsible company distinction award from the Mexican Center for philanthropy.
Essex and values award for its corporate social responsibility practices from the Confederation of industrial Chambers in Mexico.
Wendy King: Kozman was recognized with three different awards, including the Socially Responsive Company Distinction Award from the Mexican Center for Philanthropy, the Ethics and Values Award for its Corporate Social Responsibility Practices from the Confederation of Industrial Chambers of Mexico, and the Company Committed to Human Rights Award from the Zakataka State Human Rights Commission. These awards are a testament to the work done by our sites to be corporate and industry leaders in our At Manto Verde, we are working with Wisconsin, Chile, and the Atacama regional government to provide desalinated water to the towns of Flamenco and Las Piznas to meet all of their water needs. This is an important example of how mining companies can give back and improve the well-being of the communities in which they operate.
The company committed to human rights awards from the <unk> State Human Rights Commission.
These awards are a testament to the work done by our sites to be corporate and industry leaders in our communities.
At <unk>, we are working with this concept of Chile in the Atacama regional government to provide desalinated water to the towser flamenco.
Yes, Keith.
To meet all of their water needs.
This is an important example of how mining companies can give back and improved the wellbeing of the communities in which we operate.
At Pinto Valley.
Are there supply wells have been converted from diesel powered to electric and then our mine fleet. We are working to replace diesel equipment with electric or lower emission equipment as replacements come due.
Wendy King: At Pinto Valley, water supply wells have been converted from diesel-powered to electric, and in our mine fleet, we are working to replace diesel equipment with electric or lower emission equipment as replacements come due. And we have implemented a new dust suppression system that saved approximately 17 million gallons of water last year. Initiatives like these will reduce our carbon footprint and improve our sustainability. In 2023, Kozeman published a biodiversity handbook based on a two-year flora and fauna monitoring program, which provides the basis for estimating net losses and gains at the site. This handbook was shared with universities and schools as part of our environmental education program and helps to illustrate the delicate balance between human activity and wildlife preservation and how mining can coexist with nature.
And we have implemented a new desk suppression system saved approximately 17 million gallons of water last year.
Initiatives like these will reduce our carbon footprint and improve our sustainability.
In 2023, Cozman published a biodiversity Handbook based on a two year flora and fauna monitoring program, which provides the basis for estimating net losses and gains at the site.
In 2023, Cozman published a biodiversity Handbook based on a two year flora and fauna monitoring program, which provides the basis for estimating net losses and gains at the site.
This handbook with shared with universities and schools as part of our environmental Education program.
And helps to illustrate the delicate balance between human activity and wildlife preservation and mining can coexist with nature.
In 2020 for Capstone will be developing a global buyout biodiversity standard outlining our commitments related to biodiversity.
Wendy King: In 2024, Capstone will be developing a global biodiversity standard outlining our commitments related to biodiversity. All of our sites continue to support local community priorities during the fourth quarter, highlighted by the removal of an 8000-foot abandoned water pipe. National Forest Land in Arizona, and Mantos Blancos hosted an idea fair in Anifagasta with children and youth to promote the themes of innovation, development, and entrepreneurship, important skills to promote in our youth.
All of our sites continue to support local community priorities during the fourth quarter highlight.
Highlighted by the removal of an 8000 foot abandon water pipe.
National Forest land in Arizona, and Mantas Blancos hosted an idea there is that if augusta with children and youth to promote the themes of innovation development and entrepreneurship important skills to promote in our youth.
John Mckenzie: And with that, I'd like to pass it back to John. Thanks, Wendy. Turning to slide 18, I've outlined our sector-leading growth plan and some of the additional upside within our portfolio. As can be seen, we expect MVDP at its full production run rate to bring us to a consolidated annual level of around 260,000 tons of copper at costs approaching close to $2 per pound. As Castle mentioned, we plan to release a Feasibility Study for our Monteverde Optimised Project later this year, which is a low-risk brownfield expansion that we think will unlock another 20,000 tonnes of copper per year, at highly attractive capital efficiency of $7,500 per tonne of annual production. From there, we have a pathway to over 380,000 tons of copper production with a fully permitted Franco Domingo project, which is 35 Beyond that, there is further upside across our portfolio with underutilized SXCW capacity in Chile, another low-risk brownfield expansion opportunity at Montesblanco, the ability to unlock cobalts in our MVSD district, and lastly, we believe we can also create a world-class mining district at our Pinto Valley mine in Arizona, on slide 19.
And with that I'd like to pass it back to John.
Thanks Randy.
Turning to slide 18.
We've outlined our sector, leading growth plans and some of the additional upside within our portfolio.
As can be seen we expect MVP at its full production run rates to bring us to a consolidated annual level of around 260000 tons of copper.
At cost approaching close to $2 per pound.
As Kessel mentioned, we plan to release, a feasibility study 12 months a very optimized project later this year, which is a low risk relatively expansion that we think will unlock another 20000 tons of copper per year with a highly attractive capital efficiency of $7500 per ton of annual production.
From there we have a pathway to over 380000 tons of copper production with a fully permitted sensitive Ingo project.
Which is 35 kilometers from months of edit and we believe will create a world class mining districts in Chile.
Beyond that is further upside across our portfolio with underutilized Sx EW capacity in Chile.
Another low risk brownfield expansion opportunity at <unk>.
The ability to unlock Cobalts <unk> district.
And lastly, we believe we can also creates a world class mining district at our <unk> mine in Arizona.
On slide 19.
We highlight the timelines for some of the aforementioned studies and other milestones as we execute on our growth plans.
Finally, I would like to highlight that we are on the cusp of a transformation of capstone as we ramp up months of EDA, whilst delivering the studies that will define our next stage of growth.
Operator: We highlight the timelines for some of the aforementioned studies and other milestones as we execute on our growth plans. Finally, I would like to highlight that we're on the cusp of a transformation at Capstone as we ramp up Monteverde whilst delivering the studies that will define our next stage of growth. And with that, we're now ready to take questions. Thank you, ladies and gentlemen. We will now conduct the question and answer session. If at any time... If you have a question, please press star 1 on your touch point. If you wish to cancel your request, please press star 2.
And with that we're now ready to take questions.
Thank you, ladies and gentlemen, we will now conduct the question and answer session.
If at any time.
If you have a question. Please press star one on your touch points.
If you wish to cancel your request please press star two.
Your first question comes from August will Codell from Scotiabank. Your line is now open.
Orest Wowkodaw: Your first question comes from Orest Wowkodaw from Scotiabank. Your line is now open. Hi, good afternoon. Congratulations on completing the construction on the Meno Verde Salt Flide. The question for Cashel, I mean, as you're, I guess you're in your second month here of commissioning, where do you think is the biggest risk to meeting the timeline that you put out for ramp up? Yeah. So the way we're obviously doing it is we're doing sequential commissioning. The reality is not that one area is at risk. It's that risk that exists in every single ramp-up that I've been involved with and that I'm familiar with within the industry, that you could run into problems that were baked in several years ago during the fabrication process.
Hi, good afternoon.
Congrats on completing the construction on the <unk> sulphide.
The question for cash I mean, that's your I guess your second month here up commissioning, where do you think is if you had to pick one area of the startup where do you think the biggest risk is to meeting the timeline that you've put out for ramp up.
Yes, so the way obviously the way we're doing it is we're doing sequential commissioning.
The actual it's not that one area is at risk it's that risk that exists in every single ramp up that I've been involved with in that im familiar with within the industry.
That you could run into problems that were baked in.
Several years ago during the fabrication process and Thats why you have vendor affirmation on all these processes that they ensure that their warranties are stable and good because their products are functioning as designed.
Orest Wowkodaw: And that's why you have vendor affirmation in all these processes is that they ensure that their warranties are stable and good because their products are functioning as designed. So that process, the risk it would have, typically adds a week here or a week there with the individual items that might be identified. But there's not really a massive risk otherwise.
So that process the risk it would have it typically adds a week here or a week there with the individual.
Items that might be identified.
But theres not really a massive risk otherwise in one of the reasons I say that is rather simple.
Cashel Marr: And one of the reasons I say that is it's a rather simple process line. It's been proven time and again in some six mines that Asenko has commissioned in the past, including Carapatina most recently, Mina Justa, Constancia, Katie Ease, Lumuana, and I might be missing a couple. But this is just one line.
Process line, it's been proven time and again in some six mindset of Cinco has commissioned in the past.
Including <unk>.
Garrett patina, most recently Mena whose to constancia.
<unk> Lamont.
Among I might be missing a couple.
But this is one line.
Cashel Marr: They have done this in the past. It's led by their very experienced staff. The ramp-up team, which is different from their construction team that has most recently done this, like I said, at Carapatina and Mina Justa. So we feel we're in very good hands. The other thing we have is that we have our operators on site also who are facilitating, monitoring, and learning the process. 127 people have been employed, including the plant manager, his supervisors, the operators, and the maintenance personnel. So we feel we have a good complement of people there to review any of the normal commissioning risks and processes that are there so that we attain a very efficient and robust sort of commissioning process through this ramp that you're at this point in time; you're not seeing anything to get you overly concerned. No, no, not at all.
They have done this in the past, it's led by Theyre very experienced.
Yeah.
Ramp up team.
Which is different from their construction team.
Most recently done this like I said, our care patina in Houston. So we feel we're in very good hands. The other thing. We have is we have our operators on site also that are facilitating monitoring and learning the process of 102007 people who have been employed including.
The client manager his supervisors the operators and the maintenance personnel. So we feel we have a good complement of people there to review any of the normal commissioning risks and processes that are there so that we attain a very efficient.
And robust sort of commissioning process through this ramp up.
At this point Youre, not seeing anything to get you overly concerned.
No no not at all.
Cashel Marr: Like I said, in what I spoke about, the project and the update is that we're just turning the two mills now under F. L. Smith's supervision, so we should be able to start loading them with ball charges very shortly. So that's a very good sign for us because that's really the most critical piece of equipment in the whole area. The rest we've undergone all the hydro testing, moving water around the whole process and plant site. And so then it's all about, you know, will it handle slurry?
Like I said in the.
And what I spoke about.
The project in the update is we're just turning the two mills now under FL Smith's.
Supervision.
So we tend to be able to start loading them with ball charge is very shortly so that's very good sign for us because thats really the most critical piece of equipment in the whole area. The rest we've undergone all the hydro testing moving water around the whole process and.
And plant site and so then it's all about will they handle slurry and those are pumps and pipes and we're pretty certain with the design that the cinco has delivered to us.
Cashel Marr: And those are pumps and pipes. And we're pretty certain with the design that Asenco has delivered. Okay, and just one quick follow-up if I could. Do you still envision the CapEx for the optimization study or optimization work for the expansion to go to 45,000 tons a day at Meta Verde? Do you still expect that CapEx to be around $150 million? Yeah, yeah, somewhere in that ballpark, I'd say. Thank you.
Okay, and just one quick follow up if I could do you still envision that capex for the optimization study our optimization work the expansion to go to 45000 tonnes a day better Verde do you still expect that capex to be around $150 million.
Yes, yes somewhere in that ballpark I'd say.
Okay.
Yes, no problem.
Your next question comes from.
Ralph <unk> from eight capital your line is now open.
Operator: Your next question comes from... Ralph Profiti from 8 Capital. Your line is now open. Thanks, operator. Good afternoon.
Thanks, operator, good afternoon.
My question is on the challenges that you think.
You could possibly face in meeting that.
Second half 2020 for cash cost guidance by $1 45 to $1 75, and I'm just wondering if youre seeing in these early days any deviations things like concentrate logistics or energy costs or other cost pressures versus windows guidance guidance expectations were set.
Ralph M. Profiti: My question is about the challenges that you think you could possibly face in meeting that, second half of 2000, for Orest. Yeah, thanks for the question, Ralph. I think at this stage, we're not seeing anything that makes us think any differently from what we've put out in the guidance. I would sort of emphasize that the primary driver behind the cost reduction that we see in the second half is the ramp up of months of advertising, and the reason that the cost comes down is it just raises the percentage of high-grade sulfide ore that we're processing across our business. We're almost doubling the grade across our average portfolio as we bring Monteverde on board, from 0.35% last year up to 0.6% across the portfolio this year. And with that, comes increased recovery.
Yeah. Thanks for the question Ralph.
I think at this stage, we're not seeing anything thats.
It makes us think any differently to what we've put us in the guidance.
I would sort of emphasize the pro.
<unk> driver behind the cost reduction that we see in the second half is the ramp up of months of it and the reason that the cost comes down is it just raises the percentage of.
High grade sulfide ore that we're processing across our business.
Almost doubling the grade.
Sort of across our average portfolio as we bring months of Eddie on for <unk>.
Three 5% last year up to 6% sort of across the portfolio. This year and with that comes increased recovery, we get better recoveries out of the concentrate is than we do off of the.
John Mckenzie: We get better recoveries out of the concentrators than we do out of the beach plants. So there are a few other things as well. So obviously, there's sort of scale and throughput, but those are the sort of fundamental drivers behind the reduction in costs that we forecast. And I would also say that it's really about grade and recovery.
Each.
So.
There are a few other things as well so if obviously this sort of scale is the throughput, but those are the sort of fundamental drivers behind.
Behind the reduction in costs that we forecast.
And I would also say this is really about sort of grade and recovery we are already.
John Mckenzie: We've already got 6 million tons of sulfide ore stockpiled at Monteverde. I would say there's been excellent reconciliation between our sort of block model and what we've actually mined. So I think at this stage we don't see any reason to be deviating from the guidance we've given. Thanks, John. And, you know, maybe it's a question for Robin, there's $75 million in Monteverde capitalized stripping in. A lot of that is associated with the sulfide ramp up, but just wondering how much that fall off, if any, is significant to the fall off starting in 2025, and what's a good run rate? at Mental Birdy.
Got 6 million tons of sulphide ore was stockpiled at months of it.
I'd say theres been excellent reconciliation between sort of block.
Block model and what we've actually mined.
I think at this stage, we don't see any reason to be deviating from.
The guidance we've given.
Thanks, John.
Maybe a question for Robyn there is $75 million in Monteverdi capitalized stripping in 2024.
A lot of that is associated with the sulfide wrap up just wondering how much does that fall off if any is there a significant falloff starting in 2025 and what's a good run rate for cap stripping metals.
And that's a very specific way.
Raman Randhawa: Yeah, more of a function of the accounting, Ralph, like it's based on the, you know, obviously, the ore to waste ratios, and the accounting we're doing is different than the tech reports, which assume no deferred stripping capitalization. So that number can, it's going to vary by year, but it'll be in that ballpark of like 50 to 70 kind of going forward. And it's actually capitalized by pit.
Yes more of a function of the accounting Ralph it's based on the obviously oxide the ore to waste ratios.
The accounting, we're doing is different than the tech reports, which assume no deferred stripping capitalization. So that number it's going to vary by year, but it'll be in that ballpark like 50 to 70 kind of going forward and it's actually capitalized by pit. So it depends which it's not just what we're moving in the year for the total mine in spite pit and there.
Raman Randhawa: So it depends on which pit we're in. It's not just what we're moving in the year for the total mine; it's by pit. And there are, you know, multiple pits we're in. So even though we're mining in a particular pit for sulfides now, at the same time, we're actually stripping two more pits that we're going to mine the sulfides in three years from now. So that's why you kind of see that run rate continue. That's very helpful. Yep, very helpful. Thanks, everyone. Your next question comes from... Dalton Baretto from Conocord. Your line is now open.
Multiple pits, where and so even though we are mining in a particular pit for sulfides now the same time, we're actually stripping to more pets that we're going to mine the sulfides and from three years from now so thats why you kind of see that run rate continue.
That's very helpful very.
Very helpful. Thanks, everyone.
Your next question comes from <unk>.
Barreto from Canaccord. Your line is now open.
Operator: Great, thanks very much, and good afternoon, guys. I wanted to ask about the upcoming Santa Domingo study. Presumably, you guys are getting close to the finish line here, and I'm just wondering...
Great. Thanks, very much and good afternoon guys.
Wanted to ask about the upcoming Santa Domingo study, presumably you guys are getting close to the finish line here.
Just wondering.
Dalton Baretto: In addition to marking a market on the CapEx or the OpEx, what are some of the material differences I guess we can expect versus the existing feasibility? Yeah, thanks, Dalton, for the question. And I think I'll probably pass most of that across to Castle to respond to. But I would say, you know, it's looking in really good shape.
In addition to marking to market on the on the Capex or the Opex what are some of the material differences I guess, we can expect versus the existing feasibility study.
Yeah. Thanks for the questions I think I'll, probably pass most of that across to two castle to respond to that.
I would say, it's looking in really good shape.
John Mckenzie: I think we're sort of, really excited about kind of the direction that it's headed in. I think, You know, obviously, we did a sort of original feasibility study in 2018, so there's been sort of now six years of capital inflation that we've included since that time. But you know, there were two other elements that have come into it. So the one is incorporating synergies with Monteverde and various sort of infrastructure-type synergies. And the other one was just relooking at the actual design itself, sort of design optimizations.
I think we sort of.
Really excited about kind of the direction that it's headed in I think.
Obviously, we did do a sort of.
<unk>.
Original feasibility was done in 2018, so theres been sort of now six years of capital inflation that we've included since that time, but there were two other elements that have come into it. So the one is incorporating synergies with months of it.
And there is some infrastructure synergies.
And the other one was just re looking at the actual design itself sort of design optimizations I.
Cashel Marr: I think we've been able to take out about 40% of the footprint as a result of just a more efficient design than was used previously. We've, I think, just with a bit more experience in our technical team about processing ores in that area, we've made some adjustments to the process flow sheet that certainly give us, I'd say, higher confidence in the actual process flow sheet itself, but also will, perhaps not sort of lowering CAPEX, but will give significant benefits on the operating cost side in the future. So maybe with that just sort of passing across to Cashel, just to add anything to that. Yeah, there's been a real complete revamp of the design while maintaining the same critical footprint as required by the permit. Of course, this has its own DL 600 and is a permitted plant.
I think we've been able to take off about 40% of the footprint.
As a result of just more efficient design and as in previously.
<unk>.
I think just with a bit more experiencing I'll take nickel team abbotts processing always in that area.
We've made some adjustments to the process flow sheet.
So can you give us I'd say higher confidence in the actual process flow sheet itself, but also perhaps not sort of lowering capex.
We'll give significant benefits on the operating cost side.
In the future.
So maybe that's just sort of passing across two two cash flow throughs to add anything to that.
Yes, it's been a real complete revamp on the design, while maintaining the same critical footprint as required by the Permian of course has its deal 600 is a permitted plant.
Cashel Marr: There's an opportunity we see here to increase throughput. Changing the flow sheet, John mentioned, you know, the reduction in steel and concrete required based on the footprint. So we are being more capital efficient, and that's just using what Asenco has done for us at Mento Verde and some of their other plants here in Santo Domingo. With that being said, we're looking to bring in more tonnes, a little more life of mine opportunity. We also noted that with the re-evaluation of the resource itself, there's actually a little higher grade copper there than what we had previously thought due to density weighting. The iron ore, as you know, has a higher density, and we weren't weighting it properly.
There is an opportunity we see here to increase throughput.
Changing the flow sheet, John mentioned, the reduction in steel and concrete required based on the footprint. So we are being more capital efficient.
And Thats, just using what <unk> has done for us at <unk> and some of their other plants.
Here at Santa Domingo.
With that being said, we're looking to bring in more tons, a little more of a life of mine opportunity.
We also noted that.
With the reevaluation of the resource itself, there is actually a little higher grade copper there than what we had previously thought.
<unk>.
Density weighting.
Iron ore as you know has a higher density and we werent waiting it properly so.
Cashel Marr: So that's been a little modification that we believe will bring more copper sooner, for longer, I should say, over a longer period of time where the copper grade dropped off maybe in year six or seven. We might get a couple more years out of it. So that's another sort of area of improvement. And then I think this will more break out the opportunities section within the feasibility study where we'll have a better idea and evaluation of what possibly some of the strip material could be. John mentioned the synergies, you know; some of the oxide that's available to us in that strip material would never merit an SXCW plant on its own.
That's been a little modification that we believe will bring more copper sooner.
For longer I should say over a longer period of time, where the copper grade dropped off maybe in year six or seven we might get a couple more years out of it. So that's another sort of.
Area of improvement.
And then.
This will more.
Breakout the opportunities section within the feasibility study, where we'll have a better idea in evaluation of what possibly some of the strip material John mentioned the synergies some of the oxide thats available to us and that strip material would never merits on its own and Sx EW plant. However.
Cashel Marr: However, Manto Verde has capacity, as we know, and there's a real opportunity there, we believe, in the future, to process that material. And the other one, of course, is our budding cobalt business. We're doing some pilot testing right now in Manto Verde, and we believe that Santa Domingo could provide a considerable amount of feed to that processing plant that we might achieve at Manto Verde in the future.
<unk> mental Verde has capacity as we know and there's a real opportunity there we believe in the future to process that material and the other one of course is our budding cobalts business. We're doing some pilot testing right now in mental burden.
And we believe that Santa Domingo could provide considerable amount of feed to that processing plant that we might achieve at Minto Verde in the future. So it will outline among other things all of those things.
John Mckenzie: So, it'll outline, among other things, all those things. And I think one of the important things for the analyst community is to have a refresh of a present and achievable capital cost estimate and also the returns we expect from that project. So, it's a good time to update all those things. So, we're really looking forward to that, to completion. Thanks, Cashel. And then just as a follow-up, you know, I know the Cobalt study is coming a little bit later, but just in terms of the JV process that you guys are running, is this study going to be enough to move that forward, or are you going to wait until the Cobalt study? Okay. Dalton, we're going to talk about the JV process. Yeah, just the partnership on Santo Domingo. Oh, bringing in a partner for Santo Domingo.
And I think one of the important things for.
The analyst community is you'll have a refresh of a.
At present and achievable capital cost estimates and also the returns we expect from that project. So I'd say its a good time to update all of those things. So we're really looking forward.
To completing it.
Great. Thanks, and then just as a follow up.
No the cobalt studies coming a little bit later, but.
Just in terms of the JV process that you guys are running is this study going to be enough to move that forward or are you going to wait until the cobalt study is done.
So it also when you talk about the JV process.
Yes, just the partnership on Santo Domingo.
Bringing a partner for <unk>.
John Mckenzie: Yeah. Look, ultimately, I think the partner process will sort of require us to have the sort of completed feasibility study. I think within that study, as Castle mentioned, is the base case, which I think he described well, and then on top of that are the opportunity sections.
Yes.
Ultimately I think the the partner process will sort of require us to have this as completed feasibility study.
I think within that study as Kessel mentioned is.
The base case, which I think you described well.
And then on top of that what are the opportunities sections.
John Mckenzie: So, I think. You know, those areas, the work on them started a little bit later than the feasibility work that's been done on the rest of Santo Domingo, so there's a slightly longer timeline to bring those to the same level of study and confidence, but we're already quite some distance down the track, so I think those will certainly be opportunities that we would be discussing with potential partners for Santo Domingo. I got it.
I think.
Those those areas.
<unk> started a little bit later than sort of the feasibility work that's been done on the rest of the sensor Domingo so slightly longer timeline to bring those to the same level of study and have confidence.
But we are already quite some distance down the tracks.
I think those those will certainly be sort of opportunities that we would be discussing with potential partners.
For sensor Domingo.
Got it thanks, Shannon, maybe if I can just squeeze one last one John can you talk a little bit about the rationale behind the recent equity raise.
John Mckenzie: Thanks, John. And maybe if I can just squeeze one last one in, John, could you talk a little bit about the rationale behind the recent equity race? Yeah, certainly. So.
Yes, certainly.
John Mckenzie: You know, when we first of all, we saw sort of in the markets a relatively attractive sort of opportunity in terms of, you know, windows to raise certain amounts of funding, you know, what seems to be a reasonable valuation, and what we've been doing is we are relatively conservative in terms of the way we approach our balance sheet. And what we've been doing is really holding back on a lot of expenditure that would sort of drive some really interesting future values, and the real reason for that is, whilst we're sort of fully funded for the Montevideo project, I certainly don't want to be sort of, you know, spending money until we've actually sort of seen the ramp up, seen all sorts of, you know, seen the project delivering the cash flow that we expect.
So.
Yes.
I would say festival.
We saw sort of in the markets sort of relatively attractive sort of opportunity.
In terms of.
Windows to raise certain amounts of funding.
What seems to be a reasonable a reasonable valuation.
And.
What we've been doing is we relatively conservative in terms of the way we.
Approach.
Our balance sheet.
And.
What we've been doing is really holding back on a lot of expenditure.
<unk>.
Good sort of drive some some really interesting future value.
And the real reason for that is whilst we sort of fully funded full for the months of added project.
I, certainly don't want to be sort of.
Spending money until we've actually sort of seeing the ramp up.
Sort of.
Seeing the project delivering the cash flow that we expect.
John Mckenzie: However, that does mean that we've been holding back a little bit on some sort of really exciting opportunities, and just to sort of list some of those, we've got, you know, the northern section of Montevideo; we've got highly, highly prospective exploration targets that we believe could sort of significantly increase the resource base for Monteverde. We've obviously got months of data optimized and, as Castle mentioned earlier, sort of a CapEx number of probably about $150 million. It's got a really short payback period, that project.
However that doesn't mean that we've been holding back a little bit on some really exciting opportunities and just to sort of list some of those.
We've got the northern section of months of Ed We've got highly highly perspective exploration targets that we believe could.
Of.
Significantly.
Increase the resource space <unk> months of EDA.
We've obviously got months away they optimized and.
Kessel mentioned earlier sort of the Capex number probably about $150 million.
It's got a really short payback period that project.
John Mckenzie: And so, you know, the sooner we can do it, the better. And then also, as we approach sort of Santo Domingo thereafter, to me, it's sort of best practice to actually advance the detailed engineering of the project before one actually kind of gives full notice to proceed with the actual construction. It just gives you a much tighter confidence level in terms of kind of where your CAPEX is going to be for the project. So this raise... Had we not done the raise, we would probably have been kind of keeping the brakes on for certainly a little bit longer. I would say there were, on the other hand, as well; part of it was the secondary sale by Orion.
The sooner we could we can do it the better.
And then also as we approach sort of sensor Domingo thereafter.
To me sort of its best practice to actually advance the detailed engineering of the project before one actually.
Kind of gives full notice to proceed on the actual construction that just gives you a much.
Tied to a confidence level in terms of kind of where your capex is going to be for the project. So.
This this raise sort of facilitates our ability to execute on each of those things, which.
Had we not done the raise we would probably have been.
Kind of keeping the breaks on full.
Certainly a little bit a little bit longer.
I would say that.
On the other hand as well part of it was the secondary sale by Ron I think that's.
John Mckenzie: I think that, both with the primary and the secondary market, we have improved the liquidity in our stock. I think that's clearly sort of an objective of ours to do that. And then I think finally, when we looked at our shareholder register, there were quite a number of, you know, blue chip shareholders that sort of blue chip funds that we saw on some of our competitors' registers and who were not on ours. And so one of the objectives was to, you know, facilitate the entry of some of those funds onto our register.
Okay.
With the primary and the secondary we improved the liquidity in our stock.
I think thats Thats clearly.
Sort of an objective.
To do that.
And then I think finally, when we looked at all our shareholder Register.
Quite a number of.
Blue Chip shield is that sort of.
So the blue chip funds that we saw in some of our competitors registered into northern analysis. So one of the objectives was to.
To facilitate the entry of some of those funds are registered and I think we were really pleased to see.
John Mckenzie: And I think we were really pleased to see kind of the uptake by those funds. And we think... in terms of our share register now, it's for looking at a good place. That's great, John. Thank you for that. That's awesome. Your next question comes from Stefan Ioannou from Cormac Securities. Your line is now open.
Kind of.
The uptake by those funds and.
We think.
And then in terms of Australia just announced.
Sort of looking at a good place.
That's great John Thank you for that that's all for me.
Okay.
Your next question comes from Stefan <unk> from Cormack Securities. Your line is now open.
Stefan Ioannou: Great. Thanks, guys. Maybe just more of a curiosity from me with MVDP. Just curious, you mentioned you've got a good chunk of material now stockpiled and then also opened up in the open pit. Is the grade fairly variable or not, or is it all mostly low-grade material?
Okay. Great. Thanks, guys, maybe just more of a curiosity for me with them MVP. Just curious you mentioned you got a good chunk of it.
Material now stockpiled and then also opened up opened up in the open pit is the.
Great fairly variable in that or is it all mostly low grade material I'm. Just curious as you do ramp up does do you have any flexibility on grade as you go through that process to play with.
Cashel Marr: I'm just curious, as you do ramp up, do you have any flexibility on grade as you go through that process to play with? Yes, and within the stockpileing strategy, they put some high grade and low grade, so they're separated out. So just with the, you know, the normal ramp-up process, you know, in the very beginning with very few tons, there's very little grade going through obviously because I dial in the flotation cells and those types of things, but after that, you know, when we get the process going and things, we want to put through the high grade, and that's available.
Yes.
Within the stockpiling strategy, they put some high grade and low grade so theres separated out.
So.
Just with.
The normal ramp up process and the very beginning with very few tons theres very little grade going through obvious areas.
Dial in the flotation cells and those types of things, but after that.
When we got the process going and things we want to put through the high grade.
Cashel Marr: Okay, so yeah, so you have access to both. Okay, thanks very much, guys. Yeah.
It's available to us okay.
Okay. So yes, you have access to both great. Okay. Thanks, so much guys.
Yes.
Operator: Perfect, Ladies and gentlemen, as a reminder, should you have a question, please press the star followed by the number one. There are no further questions at this time. Mr. John McKenzie, please continue. Thank you. So, we look forward to updating you again in early May with our Q1 results, and until then, keep well and feel free to reach out to Gerald or Daniel if you have any further questions. Thank you for your continued support, and have a good day. Ladies and gentlemen, this concludes today's conference call. Thank you for joining us. You may now disconnect.
Okay.
Ladies and gentlemen, as a reminder, should you have a question. Please press star followed by the number one.
There are no further questions at this time, Mr. John Mckenzie. Please continue.
Thank you.
So we look forward to updating you again in early May with our Q1 results and our full then keep well and feel free to reach out to general Daniel If you have any further questions. Thank.
Thank you for your continued support and have a good day.
Ladies and gentlemen, this concludes today's conference call. Thank you for joining you may now disconnect.