Full Year 2023 Metals Acquisition Ltd Earnings Call
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Operator: Good day everyone and welcome to today's Metals Acquisition 2023 Financial Results Presentation. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. Please note, today's call will be recorded, and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Mick McMullen, CEO of Metals Acquisition. Please go ahead, sir.
About the weekend.
[music].
None: Good day, everyone and welcome to today's metals acquisition 20 twenty-three financial results presentation. At this time all participants are in a listen only mode.
None: Later, you will have the opportunity to ask questions. During the question and answer session. Please.
Mick McMullen: Thank you very much, and thank you everyone for dialing in from wherever you are in the world. So my name is Mick McMullen, and I'm the CEO of Metals Acquisition. Also on the call, we have Mornay Engelbrecht, who's our CFO. We have Dan Vukic, who's our Chief Development Officer. Chris Rosario, our General Counsel, and Sandy Noyes, who is head of IHARP
Please note today's call will be recorded.
None: We'll be standing by should you need any assistance. It is now my pleasure to turn the conference over to Mike Mcmillin CEO of metals acquisition. Please go ahead Sir.
None: Yeah.
Mike Mcmillin: Thank you very much and thank you everyone for dialing in from wherever you are in the world.
Mike Mcmillin: Tomorrow I'm as Mac Mcmillan on let's say a metals acquisition.
Mike Mcmillin: Also on the call we have a multi angled breakthroughs I'll say about how we have done did you choose that chief development officer.
Mick McMullen: Today we'll be running everyone through the financial results for 2023, which, as you would know, was a large year for us in terms of acquiring the CSA copper mine in Western New South Wales in the middle of the year, and so we thought it would be useful to run everyone through the results, to try and separate out some of the non-recurring and one-off items mainly related to that. Moreno will be controlling the slides, so we'll just skip through the disclaimers.
Mike Mcmillin: Christopher Zairy Allergan counsel on Saturday noisy he's head of IR.
Mike Mcmillin: After that he will be running everyone through the financial results for 2023.
None: Which as you would know it was a large crops in terms of acquiring to say as I call them on.
None: Western New South Wales in the middle of the year.
And so I always thought it would be useful to Rodney go on through the results.
None: She tried and ship ride out some of the a nonrecurring one off items.
None: Slide into that acquisition.
None: More and I will be controlling the slides I will just get through the disclaimers.
Mick McMullen: This presentation has been lodged with the ASX, so you can look at it at your leisure, and if we go to the next slide, Mornay, for the company overview, as I said, you've got myself as CEO, Mornay, Dan, and Chris all on the line. This is the team that's been charged with taking this business forward, and, as you can see, a significant amount of experience in both turnarounds and Our view is to try and build this business, but right now, we're pretty heavily focused on sorting out the CSA copper mine. Can we go to the next slide, please, Mornay?
None: This presentation has been lodged with the ice age Oh.
None: Sorry, everyone can read that at your leisure and if we go to the next slide the company out of the view.
None: You've got myself to say I mean, what I can and crystal warm along.
None: And this.
None: This is the team that's been charged with taking this business forward.
None: And as you can see a significant amount of experiencing by turnarounds.
None: Acquisitions, So I guess, we've lift acquisition and benign for raising that our view is to try and build this business.
None: Right now we're pretty heavily focused on on sorting out and say, it's a couple of months.
None: If we go to the next slide please.
Mick McMullen: As most people would know, this is a mine that's been running for a very long period of time, since 1967 in its current format. It's been producing around about 40,000 tons of copper a year and 4,500,000 ounces of silver.
None: As most people would know this.
None: That's been running for a very long arms installing 67 in its current format.
It's been producing around about 40000 tonnes of copper a year.
None: For 500000 ounces of silver.
Mick McMullen: And again, as you would know, we have streamed silver off to Cisco, which currently has a reserve of just under 8 million tonnes of 4% copper and we've been working quite heavily on a new reserve and resource estimate, which should be coming out shortly. We have a significant amount of drilling that's gone into the new resource and reserve estimate, as we've announced to the market in recent past. We have around about just under 500 employees working out there, and again, it's been producing at sort of a C1 of just under $2 a pound, and when copper's just hit $4.20 a pound overnight, it's obviously a good time to be in copper. Next slide, please, Mourner.
None: And again as you would know we have strength so we're off to see Scott.
None: It currently has a reserve of about just under 8 million tonnes of zinc copper.
None: And we've been working quite heavily on.
None: A new reserve and resource estimates.
We should be coming out shortly.
None: We have a significant amount of drilling that's gone into.
None: Into the new resource and reserve estimate.
None: As we announced to the market in recent past.
None: We have around about just under 500 employees working out they are.
None: And again, it's been producing it sort of say one of just under $2 a pound.
None: And Mike Kalb has just hit $4 20, a pound out of and audits. It's obviously, a good time to being caught up.
Next slide please <unk> morning.
None: Yeah.
Mick McMullen: Again, for those of you who follow the company, you'd have seen this slide before. It's the mines out in western New South Wales. It's a fantastic place to operate because it's been running for so long, it's got all of its infrastructure in place, and because we listed on the NYC first, we have a fairly standard North American cap structure, which is a low number of shares, high share price as opposed to the usual We've decided to differentiate ourselves on the ASX by maintaining that structure rather than doing a split. We'd like to be a little different from the rest of the pack.
None: Again for those of you who followed the company you've seen this slide before it's the bonds out in Western New South Wild is a fantastic place to work right.
None: It's because it's been running for so long, it's got all of its infrastructure in place and.
None: We because we've listed on the NYSE first we have a fairly standard north American cap structure.
None: There's a lot of number of shades heart shaped products as opposed to the usual Australia large number of shades luxury products, we've decided to differentiate ourselves on the asics by.
None: By maintaining that structure rather than doing a split.
None: We would like to be a little different from the rest of the pack.
Mick McMullen: And, you know, we've got a fantastic shareholder base, very supportive, large equity holders. And, you know, as you would also know, we recently listed on the ASX, which brought a significant amount of capital into the business post the December 31 balance sheet date we'll discuss today, and as Morneau will discuss, we've used much of that cash to pay down interest-bearing liabilities. Just under 70 million shares in issue and again, as I said, very heavily weighted to large institutions who are sort of backing us to build a mid-tier copper business. Next slide, please, Morno. And our growth strategy is obviously organic initially, so we believe that the CSA copper mine has the potential to carry on for significantly longer than its current reserve life, subject to the exploration results and conversion of resources to reserves.
None: And we've got a fantastic shareholder buys them very supportive large equity holders.
None: And as you would all know we recently listed on the ASX.
None: Which brought a significant amount of capital into the business post the December 31 balance sheet date, we will discuss today.
None: And as more and I will discuss we've used much of that cash to pay down interest bearing liabilities.
None: Oh, just under 70.
None: 70 million Chase me shoot and again as I say very heavily weighted to large institutions.
It was sort of backing us too to be able to meet the coffee business.
None: It makes a lot more.
None: And our growth strategy is obviously.
None: Initially.
We believe that that's a comfortable and has the potential to carry on for significantly longer than its current reserve life sub.
None: Subject to the exploration results and and conversion of resources to reserves.
Mick McMullen: But we also are very focused on growing the business in general, clearly multiple assets. Certainly something that the market is open to, I believe, and we've got a track record of doing that. So again, this has been our strategy from day one. We've executed on part one of that strategy, but we still expect to have a few other things to move forward with, to carry on with him. Next slide there, Morne. We might move into your part shortly, I think. I'll hand it over to Morne.
None: But we all saw very focused on growing the business in general.
None: Clearly our multiple assets logic business is certainly something that the market is open for I believe.
None: We've got a track record of doing that side of the game.
None: This has been our strategy from day, one we've executed on one of that strategy, but we still expect to have a few other things too.
None: To carry all my team.
None: Slide there bought highway March, leaving New York Heart, shortly I think I'll hand, it over to the morning, and he can discuss the financial results for our FY2023.
Mornay Engelbrecht: Thank you, Mick. Good evening, and morning, everyone.
Mornay Engelbrecht: My name is Maureen Engelbrecht, and I'm the CFO for Metals Acquisition Ltd. I will mainly take you through the high-level results and some of the one-off and non-cash items that create some noise, for lack of a better term, in the P&L. And then I see those reported for 2023. These one-off and non-cash items mainly relate to the acquisition of the CSA copper miners, as Mick has sort of outlined, and the associated financial instruments. Fair Valley through P&L. I've also covered some elements of the capital structure and liquidity. I was just going through to slide 11.
Morning: Thank you Mike.
None: Good evening good morning, everyone. My name is.
None: On the CFS acquisition limited.
None: Our mining thank you to the high level results in some of the one off cash.
None: Cash items that create some noise for lack of a better time in the P&L.
And then as seen as reported for 2023.
None: This one off noncash items, mainly relate to the acquisition of CSI come on as you sort of outline for near Sachet financial instruments.
None: Fair value through P&L.
I'll also cover some elements of the capital structure and liquidity.
None: Maybe just two.
None: To slide 11.
Mornay Engelbrecht: The main point to note and keep in mind when you read the results is, One, that the results reflect the first six months of the ownership and operation by Max of the CSA copper mine that was acquired on 16 June 2023, and the underlying earnings test will represent roughly half a year's underlying operating results. Secondly, as I mentioned before and Nick just mentioned as well, there are some significant non-cash and one-off items hitting the P&L for around US$71 million. Uh off one o'clock, and non-cash fair value adjustments of around $47 million US are being recognized in the P&L. Going to the results for 2023, you would have seen that we recorded a statutory loss on the tech, so $145 million U.S. In that result, you will also note the significant administration expense of $79 million USD.
And the main the main points Tonight and keep in mind.
None: The results one.
None: The results for <unk>.
None: Sponsored the ownership and operation by Mac.
None: Off the CSI copper mine that was required on 16th of June 23.
None: And the underlying earnings base will represent roughly.
Coffee is on the line as operating results.
So you can see.
None: As I mentioned before when makes expansion as well.
None: As you can noncash and one off one off items.
None: Hitting the P&L with around 71 million U S.
None: Off one off items.
None: Non cash value.
None: <unk> of around $47 million.
None: Being recognized in our P&L.
None: Turning to the results for 2023.
None: You would've seen that we recorded a statutory loss.
After tax of $145 million.
None: As a result, you will also not insignificant administration expense was $79 million U S.
Mornay Engelbrecht: Included in this number are a number of one-off items relating to the acquisition, namely SAM-30, about $48 million, advisor fees of $13 million, redundancies of $2 million, legal costs of $8 million, and inventory movements of about $10 million. Also, I should note that the cost of goods sold is inclusive of depreciation and amortization. [inaudible] I am providing some guidance in terms of the depreciation expected for 2024, which is expected to be around 90 to 100 million dollars US. Uh, this is obviously driven by production and the reserves and resources that drive the life of the mine over which the assets are depreciated and will therefore be impacted by production levels in 2024 and any changes to the reserves and resources, as Nick has outlined as well, which will be released shortly.
Included in this number.
None: Our number of one off items relating to the acquisition.
Namely stamp duty for.
None: About $48 million advisor fees 13, redundancies up too.
None: Legal costs and inventory movements.
None: Also about <unk>.
None: Also.
None: I should note that included in the cost of goods sold depreciation amortization.
None: Expand so.
None: Cash of $47 million.
None: And this is obviously based on the values of the assets in accordance with the purchase price allocation, which is causing the accounts.
None: And I am providing some guidance in terms of the depreciation expenses for 2024, as well to be around $90 million to $100 million UAS.
None: This is obviously driven by.
None: <unk> production and the reserves and resources to drive lots of mine overreached aspects I would appreciate it.
None: And.
None: We will therefore be impacted by that.
And then also in 'twenty, four and any changes to.
None: The reserve and resource SaaS make us this fall.
None: So they really shortly.
Mornay Engelbrecht: We negotiated off-take agreements with Glencore and found that the previous historical constraints that existed do not exist under the current off-take agreements as reflected in the accounts and that the pricing is linked to industry mixes over a quotational period. The last thing to cover here is just a note that we do have a HBook in place in the form of swaps, at a strike price of $3.72 US per pound. So this covers roughly 30% of the production in 2024 and 2025 and less than 15% in 2026. And we recognize a realized loss of about $600,000 in the 2023 accounts for these contracts. [inaudible] Now we are showing the witness liaison from the Lost Ark Attack. EBITDA. The major adjustments here relating to fair value adjustments are the non-cash stamp duty acquisition costs relating to the acquisition of the CSA mine and the next fair value adjustments manual related to, Um, [inaudible] of the cash inflows of the company under these copper price scenarios. I'm just moving to.
None: The other key point Tonight in terms of the underlying cash generation of the company of electricity.
None: I actually had an offtake agreements with blank cool and that the previous historical constraints that exist that does not exist under the current off take agreements.
None: As reflected in the accounts and.
None: At the pricing stinks industry mixes I.
None: Additional period.
None: Yes.
None: The last thing to kind of guess just deny that we do have a hedge book in place in the form of swaps.
None: A strike price of $3 72.
None: You're right.
None: So this covers roughly steady.
None: Thank god that production.
None: <unk> 24, and 25 and <unk>.
None: <unk>.
None: In 2006.
None: And we recognize a realized loss of about $600000 in their 2023 accounts for these contracts.
None: Okay.
None: Going to slide 12 now.
None: Australia, the weakness in the ice and from the loss of after tax to EBITDA, which you can find our understanding Si.
None: And then with his crop stocks and then to the underlying <unk>.
None: Talk to the right.
None: The major adjustments here relating to save on your adjustments.
None: The noncash stamp duty acquisition cost right to the acquisition of CSI mine.
None: And the next day about your adjustments menu lights.
None: Two.
None: Laura sorry, it's about spending $10 million a day.
None: That mainly reflects the change in value of the warrants over the period.
None: Mezzanine debt, so there's about $9 million gain our country the P&L.
None: This relates to the valuation of some of the embedded derivatives.
None: Within just trying to think to the cash settlement price and voluntary repayment.
None: Option there.
None: Thirdly, these based on swaps.
Mornay Engelbrecht: Here I just wanted to cover the capital structure quickly. These are the shares, including the most recent ASX issuance, and then also showing the fully diluted securities on the 2nd of April 2024. The main point to note here is that the private and public warrants can be called by MAC at any time through conversion for cash, or in full on a non-cashless basis through the issue of max shares, with the conversion to max shares on a cashless basis to be based on a table published on IFCOR in May 2023. If, for example, we had to call for the redemption of the private and public warrants today on a Alternatively, if, for example, all the warrants were to be called for cash, then this would raise an additional US$217 million, and the full dilution, as shown on the table, would be the outcome. I also note the senior MS deaths on the table there, but I'll cover that in the next two slides.
None: $15 million that's been recognized.
None: In terms of the change in value, which obviously is linked to the underlying contract value basis.
None: The future consensus copper price.
None: But also noting that sandy senoco production over that period of time like I say 25, and 26 is on the edge. So we benefit on the other side in terms of the.
None: At this time, but it is the cost.
None: Contingent consideration so.
None: Thanks to the phase out of your persistence and contingent consideration payable to Glencore.
None: The enemy, causing copper price exceeds 425 <unk> per pound.
None: Period.
None: And $4 50.
None: He always told us per pound 20, running 24 month period, So again, noting that you need to conserve the cash inflows to the company.
None: I think it's a couple of price scenarios.
None: Just moving to slide 13.
None: Yes, just wanted to kind of the capital structure quickly.
None: These are the changes, including the most recent IEA sakes.
None: Issuance and then also showing a fully diluted securities at April 24.
None: The main points of Nike is that they are.
None: Private and public warrants can be caused by Mac at anytime.
None: Conversion from cash full on and on.
None: Cashless spices through the issue of match shares.
None: With the conversion to match Chase on cashless basically Blackstone a table on the title published high school in my 2023.
None: For example, we had to call for the redemption of the private and public warrants today on a cashless basis shaped plasma $13.
None: Sure Dan.
None: Parents would be settled by issuing that points back shares well.
I wanted to ask for the title.
Alternatively, if for example, the warrants would be close to cash and this provides an additional $217 million.
None: And the full dilution as shown in the table would be the outcome.
None: Also nice messenia missed it on the table there, but I'll cover that in the next two slides.
Mornay Engelbrecht: Moving to slide 14, I just wanted to touch on the liquidity of the company, which again has made this fund receive a much-needed boost through the ASIC's IPO subsequent to 2023, which raised about $325 million Aussie on the equivalent of $240 million, and $214 million US. The raising of the equity provides greater flexibility for us and a much stronger balance sheet as a result. We have aimed to show here some of the subsequent inflows and outflows of cash, with the overwhelming use of funds dedicated to the reduction of interest-bearing liabilities. Of note, we repaid. The first consideration was Glencore, which amounted to some $83 million US, which we bet on in February. We also repaid the Revolving Facility, which is around $25 million US. We settled a working capital facility which was interest-bearing at $9 million. We repaid a portion of the senior facility amounting to around $8 million, and we've also paid advisor and IPO fees of $10 million. And then we also started, importantly, the graphic agenda in terms of, you know, commencing or continuing our exploration and development programs at SIPC.
None: Moving to slide 14.
None: I just wanted to touch on the liquidity of the company.
None: Which again is to make this a fine received a much needed boost through the Asics Ipi subsequent to 2023.
None: Which raised about $25 million Aussie when equivalents of $240 million to $14 billion U S.
None: The rising of the equity provides great.
None: Alright, thanks ability for us and.
None: How much stronger balance sheet as a result.
None: We have time to show.
Some of the subsequent year.
None: The inflows and outflows of cash with.
None: With the overwhelming use of funds dedicated to the reduction of interest bearing liabilities.
None: Off note we repaid.
None: The clinical which amounted to some $83 million.
None: Between that and Safeway.
None: We also repaid our revolving facility, which is around $25 million anyways.
None: We say it all.
None: Capital facility with just interest bearing up $9 million.
None: We repaid a portion of the senior facility.
None: Im asking to around 8 million U.
None: U S.
None: And also I would pause at Nokia fees of $10 million.
None: And then we also thought it.
None: The graph the agenda in terms of.
None: Yes.
None: So we'll continue exploration and development programs.
None: Sorry.
Mornay Engelbrecht: I'm looking to more recent material cash inflows as well; we had a late shipment in March which will only receive the cash for in April, and then an early shipment came in in April as well. Both of these will bring in around $48 million in cash to the company. So overall, and subsequently, year-end, we appraised significant equity, which, as I said, provided us..., and this really gives us the opportunity to focus not only on reducing our interest-bearing debt, but also keep growing the company through organic means as outlined. We also have the beneficiaries in recent times authorizing copper prices, which we are definitely highly leveraged to. On our theme of reducing interest-bearing liabilities, we can move to slide 15, where I wanted to show the current repayment profile of our senior MS-BED facilities. Again, our ASX IPO credits are much...
None: Looking to more.
None: And material cash outlays as well, we had a light delight shipment in March which will receive the cash for in April and then in any shipment plan.
In April as well, a bunch of diesel bringing around $48 million in.
None: And cash to the company.
None: So overall and subsequent to year end.
None: Significant equity, which is as I say prolonged.
None: Better flexibility and balance sheet strength and.
None: And this really gives us the opportunity to focus not only on.
None: And reducing our interest bearing debt, but also to keep growing the company.
None: Organic things.
None: As outlined.
None: We also have the beneficiaries in recent times.
None: After rising copper price, which we designate.
None: Leverage too.
None: <unk>.
None: But our theme of reducing interest bearing liabilities.
None: Move to slide 15.
I wanted to show the current retirement class followup out senior Mezz debt facilities.
None: Again it.
None: It takes ipi credits on licensing and flexibility and strengthen our balance sheet.
Mornay Engelbrecht: on a sheet, just coupled with the fact... As Mick has mentioned, we're close to issuing our reserve resource statement and the exposure to rising copper prices. We've got funded capital expenditure, obviously for the IPO as well, increased revenue, and lower costs that provide us with the ideal time to look at our financing structure and our capital structure, mainly with the purpose of reducing our interest-bearing debt, reducing the overall cost of our debt as well, and preserving our cash to fund our organic and inorganic growth opportunities for the company. So all of these current compositors really lend themselves well for us to approach the debt markets and seek better terms for our debt, which in turn will provide us with a stronger balance sheet and improve our future cash flows as well.
None: This coupled with the fact.
None: As Mick has mentioned because too.
None: Issuing a reserve for those type of event.
None: And the exposure to rising copper prices.
None: On the capital expenditure, obviously for the IPO as well.
Increased revenue and lowering cost.
<unk>.
None: Neal time to look at our financing structure and our capital structure.
None: Mainly with the purpose of reducing our interest bearing debt, reducing our LOE cost of all buybacks as well and preserve our cash to fund organic and inorganic growth.
None: Opportunities for the company.
None: So all of these current partners really lends itself well last year price markets and seek better terms for all day, which in turn will provide us with.
None: A stronger balance sheet and approves all future cash flows as well.
Mornay Engelbrecht: So looking at the current repayment profile, we'll also be looking at how we can secure longer-term money with bullet repayments, and more practically, we also need to put in place a letter of credit facility for our environmental bond, which is about $43 million Australian. So overall, we have a really positive market setting in terms of copper generally as a commodity with prices remaining strong and increasing. We had a really positive engagement with investors with the ASX IPO, with high demand for equity. This provides a really strong balance sheet and creates the ability to strengthen the balance sheet and simplify the capital structure going forward as well. So with that, I'll hand it back to Mick for some closing remarks before we go to Q&A.
None: So looking at the kind of rebound.
None: Repayments by fall of long haul somebody looking at that we can secure longer term money with.
None: With a bullet repayments and more practically real estate it could put in place a net of credits was 74.
None: Environmental bonds, which is about 43 million.
None: So all of those already.
None: So overall we have.
None: Really positive market sitting in terms of corporate generally is a commodity but processes remaining strong and increasing.
None: We've got a very positive engagement with investors with guidance takes IPO.
None: With high demand for our equity.
This provides.
A really strong balance sheet and creates.
None: Relative to strengthen the balance sheet and simplify our capital structure.
None: Florida as well.
Make: So with that I'll hand back to make for some closing remarks before we go to Q&A.
Mick McMullen: Thank you, Mornay. And again, we've lodged this presentation so that people can sort of pull those graphs apart and try and really, we've tried to put some information out where people can look at what's cash and what's non-cash impacts on the P&L because, as Mornay indicated, we do have a fairly large amount of non-cash impacts of, sort of, revalid various instruments do impact the P&L, and they I think the copper price setting that we've sort of found ourselves in is significantly different from when we bought the mine. You'll notice on that repayment schedule on the liquidity slide that we've sort of back-end loaded all of the repayments, which allow us to get on our feet and build a significant cash balance. Our cash inflows are relatively lumpy.
Make: Thank you <unk>.
Mike: And again, we've launched this presentation sorry for the people.
Mike: You can sort of polarized grafts, the pod and drawn really we've tried to put some information out where people can look at what's cash and what's noncash impacts on the P&L because as Bob indicated.
Make: We do have a fairly large amount of noncash impacts of sort of re valid various instruments.
Make: Do impact the P&L.
Make: And they are noncash.
Make: And we we obviously acknowledge that we've got a few of those instruments on the balance sheet.
Perhaps we might not want to have the longer term.
Make: I think they the copper price setting that we've sort of found that <unk> see.
Significantly different to when we bought them all.
Make: You'll notice on that.
Repayment schedule on the liquidity slide.
Make: We've sort of backend loaded at all of the repayments, which allow us to get up on outfit build a significant cash balance our cash balances or cash inflows are relatively lumpy.
Mick McMullen: Each ship is, as Mauna indicated, around US$24 million worth of revenue now. When we bought the mine, that was around US$18-19 million, and that's the same volume of copper in it. That's just the increase in the price.
A ship these as more I indicated around about 24 million U S dollars, but where the revenue there.
Make: We bought them all and that was around about I think about $8 million and thats.
Make: <unk> volume of copper in it that's just the increase in the price side.
Mick McMullen: I think we're in a really good spot to renegotiate all of that lending. Um, the first half that we owned the mine for obviously a lot of one-off items with really closing costs which we laid out in the prospectus at the time. Again, a fair bit of noise in those results that are non-recurring that we just don't have on a go-forward basis. And so we are working diligently with our teams to get a new resource and reserve estimate out, which will come out at some point during April, and we've always indicated that we felt that this mine had a four to five year reserve life for nearly 60 years. With a bit of extra drilling that we've been doing, we believe that we can push that reserve life out by a reasonable amount, which is clearly beneficial for A, the market, but B, when we're having discussions with lenders, clearly, a longer reserve life is beneficial. So with that, I'd like to thank the team; there's been a lot of work going into pulling these results together, and clearly, we've got many things underway, having not that long ago closed off the ASX IPO, doing the R&R, and then obviously operational improvements, so we're very busy but happy to take questions at this point from anyone.
Make: I think we're in a really good spot to.
Make: Renegotiate all of that lending.
Make: The first half, but we are in the mine for obviously a lot of one off items, we really closing costs, which we laid out in may in the prospectus at the time.
Make: Again, it's a bit of noise in those results.
Make: Nonrecurring that we just don't have on a go forward basis.
Make: And so we.
Make: We are working diligently with that seems to get a new resource and reserve estimate out.
Make: It will come out at some point during during April.
Make: And we've always indicated we felt that the small and has had a four to five year reserve life.
Make: 60 years.
With a bit of extra drilling that we've been doing we think we believe that we can push that reserve block out a reasonable amount, which which clearly is beneficial for the market, but the win.
Make: When we're having discussions with and there's clearly a longer reserve life is beneficial.
Make: So with that.
Make: I'd like to thank the team there's been a lot of work going to call.
Make: Colleague base results together and clearly we've got many things.
Make: I mean, not that long ago closed off the ice takes all IP.
Make: Doing yarn and then obviously operational improvements so we are very busy but.
None: Happy to take questions at this point for many of them.
None: Okay.
Operator: At this time, if you would like to ask a question over the phone, please press the star and 1 on your telephone keypad. You may withdraw yourself from the queue at any time by pressing Star 2. And once more for your questions, that is star and one. And we'll pause just a moment to allow any questions to queue. And once more, that is star number one. We'll move first to David Radcliffe with Global Mining Research. Your line is open.
At this time, if you would like to ask a question over the phone. Please press the star and one on your telephone keypad.
None: You may withdraw yourself from the queue at any time by pressing star two.
None: And once more for your questions that is star one.
None: And we'll pause for just a moment to allow any questions to queue.
None: Okay.
None: Yes.
None: And once more that is star one.
None: We'll move first to David Ratcliffe with Global mining Research your line is open.
David Radcliffe: Hi, good morning Mick and team. My question is an operational one actually. I was just wondering if we could get a bit of an update on how plans are progressing to de-bottleneck the mine and specifically the initiatives around, you know, improving level ventilation and the stoping and the stoping sequence there, so when we can start to maybe see that coming through in terms of the production data.
David Ratcliffe: Hi, good good morning may contain.
David Ratcliffe: My question is operational one actually I was just wondering if we could get a bit of an update on how plans are progressing to debottleneck the mine and specifically the initiatives around improved.
Improving level ventilation.
None: And this typing in this type of a sequence there.
When we can start to maybe see that coming through in terms of the production data.
Mick McMullen: Sure, Well, it won't be this year in terms of its impact, but the work is underway. We're out there geotech drilling at the moment to put in those return air rises. So it's, you know, it's obviously a... It's not a quick fix in terms of doing it in the space of a quarter, so really, you won't see any benefit during the course of this year; it'll be into next year before you really see the benefit. But I think, as you've correctly spotted, return air rise at the very bottom of the mine is actually our key limiting factor.
None: Sure well it won't be this year in terms of the impact of it.
None: Work is under way, we're out there drilling at the moment to put them out as they arise.
None: So it's obviously it sounds.
None: It's not a quick fix in terms of doing it in the space of a quarter.
None: So really it's Hugh you want to say any benefit during the course of this year it'll be into next year before you really see the benefit, but I think as you've correctly spotted.
None: <unk> is at the very bottom of the mall I mean is that a limiting factor.
Mick McMullen: Okay, and then maybe just one follow-up on the cash flow. Obviously, this quarter there was one deferred shipment, but how many shipments actually did go out this quarter?
None: Okay, and then maybe just wanted to follow up on the cash flow. Obviously this quarter. There was one deferred shipment, but how many shipments as you did this quarter.
Mornay Engelbrecht: Good question.
None: Quick question morning.
Mornay Engelbrecht: We had one late last year, and then we had a couple this quarter. So, as I said, the last one in March just slipped over into... We'll recognize the revenue from an accounting point of view, but from a cash point of view, that cash will only flow in April at $24 million. And then we've got an early shift from the May pool as well. And it sort of follows, you know, like a week and a half after the last shipment in March, so that's sort of a question of $48 million there.
None: Yeah.
None: Great.
None: One.
None: Like last year, and then we get a.
None: A couple this quarter so.
None: The last one.
None: In March just slipped over into.
We will recognize the revenue from an accounting point of view, but from a cash point of view that cash flow and exploring.
None: On April.
None: $24 million.
None: And then we've continued to ship in April as well.
That sort of follows.
None: We can half after they are.
None: The last shipment in March.
None: So that's sort of a question of $49 million a day.
Mick McMullen: Brilliant, thanks. I'll pass it on.
None: Okay brilliant thanks, I'll pass it on.
Mick McMullen: Yeah, so that one that the ship got loaded in March, but of course, you get paid about ten days later, so loaded in March, paid at the start of April. Right?
None: Yeah. So that's one that that ship got loaded in March but of course, you get paid about 10 days later sorry.
None: Florida The March pie.
None: Out of April.
None: Alright. Thanks.
David Radcliffe: Thanks.
And well move next to Eric Windmill with Scotiabank.
Operator: And we'll move next to Eric Windmill with Scotiabank. Your line is open.
Eric Windmill: Your line is open.
Eric Windmill: Hi Mick and team. Thanks very much for taking my question.
Eric Windmill: Yeah.
Eric Windmill: Oh, Hi, Mick and team thanks, very much for taking my question.
Mick McMullen: I just wanted to ask a little bit about the drilling results that came out. Obviously, some pretty good widths and grades, especially relative to the current reserve grade. I know you mentioned the release that won't be included in this update in April, but I'm just wondering how you should think about that after you apply dilution or what the nature here is in terms of what you think the mineable grade is and possible impact on tonnage, if you can speculate on that at this time.
Eric Windmill: I just wanted to ask a little bit about the drilling results that came out obviously, some pretty good widths in grades, especially relative to the current reserve grade and I know you mentioned in the release there won't be included in this update in April but just wondering how we should think about that.
Eric Windmill: After you apply dilution or whats the nature here in terms of.
Eric Windmill: What do you think the mineable grade is in <unk>.
Eric Windmill: Hassan will impact on tonnage of people speculate on that at this time.
Mick McMullen: It's a bit early to speculate because we haven't actually put it into the new bot model yet, but yeah, clearly that stuff is well above reserve grade. Now, I would sort of say that, you know... We're not going to just mine the high-grade core only because even if something's only 3% copper, it's still pretty economical for us, right? So you're going to try and take all of it. What I would say is we're on the mine plan. You know, we've been working away looking at how we can mine the higher grade core in priority from a scheduling point of view and come back and mine, again, what we call lower grade, but still maybe 3% copper later on. If you think about it as an open pit, you'd dive down and mine your highest grade, highest margin material first, and then you'd stockpile all your lower grade stuff to mill later.
None: It's a bit early to speculate because we haven't actually put it into the new model, yet, but yes clearly.
None: That stuff is well above reserve right now I would still say that.
None: No.
None: We're not going to just more on the high grade core only because even if something's only.
<unk> zinc copper.
None: It's still pretty economic for us right, so you're going to try and take a look.
None: What I would say is where in the mine plan.
None: We've been working a wide looking at how can we more in the high grade core in priority from a scheduling point of view.
None: And come back and more on again, what we call lower grade, but still it might be 3% copper.
None: Later on.
None: If you think about it as an open pit.
None: You dive down on board your highest grade highest margin material first and then you'd stop Paul already allowed right stopped mill Lidar.
Mick McMullen: We've been looking at the mine plan in that context and seeing if we can do that, and I think that's directionally where we'll end up, but yeah, it's a bit early to work out what that is, what those drill results are going to mean in terms of the next resource and reserve upgrade because they clearly have come up well after the cut-off for this new resource and reserve we're going to stick out. I think it just highlights the kind of stuff that is in the ore body. And the other way I look at it is, well, if copper was to fall precipitously, what would you mine? You'd go and mine that stuff, and clearly, you still have them on.
None: We've been looking at the mine plan in that context, and saying if we can if we can do that.
None: I think that's directionally, where it will end up at but yeah look it's a bit early to work out what that is what that is drill results regarding domain in terms of the next resource and reserve upgrade because they clearly have come off well after the call for this this new resource and reserve, we're going to seek out but I think it just highlights the caught up stuff that easy in the ore body.
None:
None: And the other while I look at it as well.
None: What was the full precipitously what would your MAU on dollar bond that stuff lately.
None: And still have a moment.
None: Yeah for sure no. Thank you that's super helpful.
Mick McMullen: Yeah, for sure. No, thank you. That's super helpful. Maybe just one more follow up too. I know there was some zinc and lead in there as well, which isn't really focused on you guys, but any comments on that additional work that you're doing in that respect?
None: And maybe just one more follow up to I know there was some some zinc and lead in there as well, which isn't really a focus for you guys, but any comments on that and any additional work that you're doing in that respect.
None: Yeah, well yeah.
None: Yes is the short answer sorry, because those people who have long memories.
None: The CSI mall and actually started out as a very high right.
None: Zinc mine.
None: And.
None: Looking at the data historical data.
None: That was a hot topic.
Mick McMullen: Well, yes is the short answer, so for those people who have a long memory. The CSA mine actually started out as a very high-grade zinc mine, and we've been looking at the data, the historical data, that was in hard copy and is not dual compliant because it's old data and we don't have all the QAQC stuff for it, but based on that old data, there is significant zinc mineralization in the upper portions of the mine. And we put a drill rig on it, and we are actually drilling that material right now. We don't quite know what it will all come out to be, but there's a fair bit of work to be done. It does look like there is a reasonable amount of pretty high-grade zinc plus a little bit of lead and copper mineralization in the upper parts of the mine. As with all these things, you need to drill it first to see what you've got, and then you make a plan afterwards as to how you're going to deal with that material.
None: And he's not Youll compliant.
None: It's all Dod or are we done with you IQ say software bot.
None: Based on that all data there there is significant zinc mineralization in the upper portions of the Marlin.
None: And we've put a drill rig on it and we are actually drilling that material right now.
None: So we don't quite know what it will come out to be but.
None: There is still.
None: There's a fair bit of work to be done in that but it does look like that there is a reasonable amount of pretty hard right Z plus a little bit of lag in copper.
None: The realization in the upper parts of the Mod yet so.
None: As with all these things you need to drill at first to see what you've got and then you make a plan afterwards as to how you're going to deal with that material.
None: Okay, great well, thanks for that I'll hop back in the queue, but great to see the results and look forward to seeing the new reserve update and the production. So thanks so much.
None: Thank you.
Okay.
None: And once more for your question that is star one we'll pause just a moment to allow any further questions to queue.
None: And it does appear there are no further questions at this time I would now like to turn the call back to management for any closing remarks.
Eric Windmill: Okay, great. Well, thanks for that. I'll hop back in the queue. But it's great to see the results and look forward to seeing the new reserve update and the production. Thanks for watching.
None: Yeah.
Management: Well again, thanks for everyone for dialing in.
None: We will have.
None: A conference call around Q4, where you'll get the opportunity to ask more questions.
Operator: And once more for your questions, that is star and one. We'll pause just a moment to allow any further questions to queue. And it does appear that there are no further questions at this time. I would now like to turn the call back to management for any closing remarks.
None: We put a bit more information in the marketplace.
None: And we.
We'd just like to thank everyone for their time this morning.
None: Good evening.
None: Yes.
None: This does conclude today's program. Thank you for your participation you may disconnect at any time and have a wonderful evening.
Mick McMullen: Well, again, thanks to everyone for dialing in. You know, we will have a conference call around Q4 where you'll get the opportunity to ask more questions after we put a bit more information into the marketplace. I'd just like to thank everyone for their time this morning.
None: Hum.
None: [music].
Operator: This does conclude today's program. Thank you for your participation. You may disconnect at any time and have a wonderful evening.
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