Q1 2024 Endeavour Silver Corp Earnings Call
Operator: Thank you for standing by. This is the conference operator. Welcome to the Endeavor Silver Corp. first quarter 2024 financial results conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then 0. I would now like to turn the conference over to Galina Meleger, Vice President of Investor Relations. Please go ahead.
Thank you for standing by this is the conference operator, welcome to the Endeavour Silver Corp, first quarter 'twenty 'twenty four financial results Conference call. As a reminder, all participants are in listen only mode and the conference is being recorded.
Galina Meleger: After the presentation, there will be an opportunity to ask questions.
Operator: And the question queue. You May Press Star then one on your telephone keypad should you need assistance during the conference call you may see those operators by pressing Star then zero.
Operator: I would now like to turn the conference over to Molly.
Galina Meleger: Vice President of Investor Relations. Please go ahead.
Galina Meleger: Thank you, operator, and good morning, everyone. Before we get started, I ask that you read our MD&A Precautionary Language regarding forward-looking statements and the risk factors pertaining to these statements. Our MD&A and the financial statements are available on our website at www.edrsilver.com. With us on today's call is Dan Dickson, Endeavor Silver's CEO; Libby Senez, our Chief Financial Officer; and Don Gray, our Chief Operating Officer. Following Dan's formal remarks, we will open the call for questions.
Galina Meleger: Thank you operator, and good morning, everyone.
Galina Meleger: Before we get started I ask that you view I'm DNA for cautionary language regarding forward looking statements and the risk factors pertaining to these statements our MD&A and financial statements are available on our website at www Dot Edr's Sobered dotcom.
Galina Meleger: With us on today's call is standex Endeavour Silver's CEO.
Galina Meleger: Will it be finessed, our chief financial Officer.
Donald P. Gray: And Don Great Art.
Donald P. Gray: <unk> operating officer.
Galina Meleger: Following Dan's formal remarks, we will open the call for questions and now open again.
Daniel W. Dickson: Thank you, Galina, and welcome, everyone. In 2024, we've hit the ground running with a solid start. Market sentiment has heated up as gold's reached new all-time highs and silver is starting to fall. Our cash flow will benefit from these higher prices, and our share price has outperformed our peer set thus far in 2024. From an operating standpoint, our operations are hitting their targets. Moreover, we made remarkable progress in the construction of our next cornerstone mine, Terranera, solidifying a bright future for the company. It's exciting to think that this time next year, Terranera will be contributing production to our profile.
Speaker Change: Thank you Galina and welcome everyone.
Daniel W. Dickson: On 'twenty 'twenty four we hit the ground running with a solid.
Daniel W. Dickson: Market sentiment has heated up.
Daniel W. Dickson: <unk> reached new all time highs.
Speaker Change: So we're starting to see.
Daniel W. Dickson: Our cash flow will benefit from these higher prices in our share price.
Daniel W. Dickson: Sure.
Daniel W. Dickson: Thus far in 2024.
Daniel W. Dickson: From an operating standpoint, our operations are hitting their target. Moreover, we made remarkable progress in the construction of our next cornerstone nine turn there.
Daniel W. Dickson: So we'll find a bright future for the company.
Daniel W. Dickson: I need to think that this time next year, Sharon there will be contributing production to our profile.
Daniel W. Dickson: Consolidated Q1 silver equivalent production totaled 2.3 million silver equivalent ounces, or 1.5 million ounces of silver and 10,000 ounces of gold. This puts us in great shape to achieve 2024's production guidance of between 8.1 to 8.8 million silver equivalent ounces. The performance of both operating mines, Guanus V and Bolonidos, remains steady, and for lack of a better word, gold grades at both operations were slightly ahead of plan, offset by silver grades that were slightly below plan. Silver equivalents are flat, and we expect a similar grade profile throughout 2024.
Daniel W. Dickson: Consolidated Q1, silver equivalent production totaled $2 3 million silver equivalent ounces or one 5 million ounces of silver and 10000 ounces of gold.
Daniel W. Dickson: This puts us in great shape to achieve 2024 production guidance between eight one to.
Daniel W. Dickson: $8 8 million silver equivalent ounces.
Daniel W. Dickson: The performance of both operating mines, <unk> remained steady and for lack of a better one.
Daniel W. Dickson: Gold grades at both operations were slightly ahead of plan offset by silver grades that were slightly below plan silver equivalents are flat and we expect similar grade profile throughout 2024.
Daniel W. Dickson: Moving to our financials, we reported top line revenue of $64 million, up 15% year over year due to higher volume sold and their higher realized gold price compared to Q1 2023. Cost of sales totaled $52 million, also up 32% from Q1 2023, due to a combination of increased ounces sold, higher direct costs, and depreciation. Direct costs have stabilized and aligned well with our 2024 plan cost. Mine operating earnings total $12 million. After expiration, G&A and income tax expense will report a net loss of $1.2 million, or 1 cent per share.
Daniel W. Dickson: Moving to our financials, we reported topline revenue was $64 million up 15% year over year due to higher volumes sold and higher realized gold price compared to Q1 2023.
Daniel W. Dickson: Cost of sales totaled $52 million also up 32% from Q1 2023 due to a combination of increased Allison sold higher direct costs and depreciation.
Daniel W. Dickson: Direct costs have stabilized and aligned well with our 2024 planned costs.
Daniel W. Dickson: Mine operating earnings totaled $12 million after exploration G&A and income tax expense, we reported a net loss of $1 $2 million for one cents per share.
Daniel W. Dickson: At the site level, Guanasli delivered mine-free cash flow pre-tax of $6.5 million, and Bolonidos contributed $4.5 million. The higher gold price has significantly benefited our Bolonidos operation. The full effect of the 2023 cost escalations and appreciation of the Mexican peso impacted direct operating costs compared to Q1 2023. As a result, our direct operating costs per unit were significantly higher compared to last year. However, compared to the 2024 budget, our direct operating costs aligned well with the budget.
Daniel W. Dickson: At the state level want us lead delivered mind free cash flow pre tax of $6 $5 million and bowling windows contributed $4 $5 million the higher gold price has significantly benefited our following year's operation.
Daniel W. Dickson: The full effect of the 2023 cost escalations and appreciation of the Mexican peso.
Daniel W. Dickson: Impacted direct operating costs compared to Q1 2023.
Daniel W. Dickson: As a result, our direct operating costs per ton were significantly higher compared to last year.
Daniel W. Dickson: Compared to 2020 for budget, our direct operating costs aligned well with budget.
Daniel W. Dickson: To be clear for our listeners, our direct offering costs are defined as mining, processing, and indirect costs. Royalty, special mining duty, and purchase store are included in our direct cost metrics and are all impacted by the higher metal prices. These costs, again, included in our direct cost per ton, have all exceeded budget due to the higher metal price.
Daniel W. Dickson: To be clear for listeners are direct operating costs are defined as mining processing and indirect costs royalties special mining duty and purchased or are included in our direct cost metrics and are all impacted by the higher metal prices.
Daniel W. Dickson: These costs again included in our direct cost per tonne have all exceeded budget due to the higher metal prices. These account for roughly $50 per ton on our direct cost per tonne.
Daniel W. Dickson: These account for roughly $50 per ton on our direct cost per ton. On a net basis, we did benefit from the higher byproduct gold credit, resulting in our cash costs and our all-in sustaining costs reporting below guidance. At March 31st, we had cash on hand of $35 million and working capital of roughly $56 million. During Q1, we raised gross proceeds of $39 million via our ATM.
Daniel W. Dickson: On a net basis, we did benefit from the higher byproduct gold credit, resulting in our cash cost and our all in sustaining cost reporting below guidance.
Daniel W. Dickson: At March 31, we had cash on hand of $35 million in working capital roughly $56 million. During Q1, we raised gross proceeds of $39 million via our ATM.
Daniel W. Dickson: As a reminder, it's essential to highlight that, in adherence to our agreement for drawdown on the Senior Secure Debt, we were committed to self-fund development for up to $150 million before gaining access to the $120 million credit facility. After the quarter ended, we satisfied this condition, which in turn enabled us to draw on the first installment of $60 million of the $120 million committed. In connection with the drawdown, we also executed the final hedge contract terms to reduce the financial risk on the project.
Daniel W. Dickson: As a reminder, it's essential to highlight and adherence to our agreement for draw down on our senior secured debt. We were committed to self fund development for up to $150 million before gaining access to the $120 million credit facility.
Daniel W. Dickson: After quarter end, we satisfied satisfied this condition, which in turn enabled us to draw on the first installment of the $60 million of the $120 million.
Daniel W. Dickson: In connection with the draw we also excuse the final hedge contract terms to reduce financial risks on the project first.
Daniel W. Dickson: First, capitalizing on the strong gold price environment, we executed forward sale contracts for 68,000 ounces of gold at $2,325 per ounce. This represents 55% of the planned gold by-product production during Terranera's initial three years of operation. Second, we secured the cost of the pesos by entering four purchases of $45 million of U.S. equivalent Mexican pesos, which covers the remaining construction period at a fixed rate of $16.56 per U.S. dollar.
Daniel W. Dickson: First capitalizing on the strong gold price environment, we executed forward sales contracts for 68000 ounces of gold at 2000 and $325 per ounce. This represents 55% of the planned gold byproduct production during <unk> initial three years of operations.
Daniel W. Dickson: Second we secured the costs of the pesos by entry in forward purchases of $45 million U S equivalent Mexican pesos, which covers the remaining construction period at a fixed rate of $16 56 per U S. Dollar overall, we're pleased with the terms of the debt package is our finance team dedicated significant effort to secure favorable.
Daniel W. Dickson: Overall, we're pleased with the terms of the debt package as our finance team dedicated significant effort to secure favorable terms while safeguarding the upside for our shareholders. We anticipate completing the remaining draw of $60 million in Q3, aligning with the completion of the Terranera build completed in Q4. Let me give you a quick update on construction progress at Terranera. By the end of Q1, we achieved a significant milestone by surpassing the halfway point of construction, achieving 53% completion, and we can see progress on both surface construction and underground mine development. As I mentioned earlier, we spent $38 million on development, bringing our total expenditure to $158 million.
Daniel W. Dickson: <unk> will safeguarding the upside for our shareholders we.
Daniel W. Dickson: We anticipate completing the remaining draw of $60 million in Q3 aligning with the completion of the turn narrow built completed in Q4.
Daniel W. Dickson: Let me give you a quick update on construction progress at Geron there by the end of Q1, we achieved a significant milestone by surpassing the halfway point of construction.
Daniel W. Dickson: 53% completion, and <unk> seen progress at both surface construction.
Daniel W. Dickson: Mine development as I mentioned earlier, we spent $38 million towards development, bringing our total expenditure to $8 million or project commitment now stands at $225 million, representing 83% of the $271 million.
Daniel W. Dickson: Our project commitment now stands at $225 million, representing 83% of the $271 million capital budget. With site activities advancing rapidly, we are concentrating our effort on structural steel installation, which is 80% complete, and major equipment installation for our upper mill platform. As our quarterly reporting is very comprehensive, I'll provide a few recent highlights of progress. Over the past year, we've emphasized the importance of accelerating mine development rates to four meters per day per critical heading, a goal we are steadily achieving to meet our production timeline.
Daniel W. Dickson: With site activities advancing rapidly we concentrate our effort on structural steel installation, which is 80% complete and major equipment installation on our for our upper mill platform.
Daniel W. Dickson: As our quarterly reporting it's very comprehensive I'll provide a few recent highlights the progress over the past year, we've emphasized the importance of accelerated mine development rates to four.
Daniel W. Dickson: Meters per day per critical heading.
Daniel W. Dickson: We are steadily achieving to meet our production timeline.
Daniel W. Dickson: In this quarter alone, we completed over 1,000 meters of underground mine development, bringing our total to over 3,200 meters, keeping us on track for initial ore access in Q2. The majority of construction activities have progressed well at the upper plant site. Currently, surface construction stands at 56% complete. On the procurement front, our bulk materials purchasing is on track with the construction schedule, allowing us to install many components upon their immediate arrival to site, while making use of the project's lean footprint.
Daniel W. Dickson: In this quarter alone we completed over 1000 meters of underground mine development, bringing our total to over 3200 meters keeping us on track for initial or access in Q2.
Daniel W. Dickson: The majority of construction activities have progressed well at the upper plant site currently surface construction standards.
Daniel W. Dickson: On the procurement front, our bulk materials purchasing is on track with the construction schedule, allowing us to install many components. Upon immediate arrival. Despite we're making use of the project lean footprint. Our C. O O us optimize a just in time delivery framework, which has proven highly effective.
Daniel W. Dickson: Our COO has optimized a just-in-time delivery framework, which has proven highly effective, all while maintaining a steadfast focus on continuous safety measures. Thanks to a growing workforce at the site, which now totals 550 employees and contractors, this quarter saw the achievement of other significant milestones. This includes the successful setting of both the sag and ball mills, placement of the re-grind mill and flotation cells, and the commencement of installation for the crusher belt conveyors and apron feeders.
Daniel W. Dickson: Maintaining a steadfast focus on continuous safety measures.
Daniel W. Dickson: Thanks to a growing workforce at site, which now totals 550 employees and contractors this quarter saw the achievement.
Daniel W. Dickson: Other significant milestones. This includes successful setting in both the Sag and ball mills.
Daniel W. Dickson: <unk> is the re grind mill and flotation cells and the commencement of installation.
Daniel W. Dickson: Sure belt Conveyors and April Peters.
Daniel W. Dickson: Additionally, during Q1, we initiated excavation of the TSF embankment, the key trench, and the lower platform area, which are 60% and 45% complete, respectively. Concrete work is anticipated to start in Q2 on the lower platform. And lastly, on the community relations side, a new mini-trainer program for local community members was established to provide training and employment.
Daniel W. Dickson: Additionally, during Q1, we initiated excavation of the TSA and banking key trends in the lower platform area, which are 60% and 45%.
Daniel W. Dickson: Please respectively concrete work is anticipated to start in Q2 on the lower platform and lastly on the community relations side, a new mine minor trainer program for local community members was established to provide training and employment.
Daniel W. Dickson: If you're interested in viewing photos and video footage of the construction in progress, I encourage you to visit our website. You'll find our quarterly photo gallery showcasing the latest developments, as well as a video filmed in mid-March. Before we move to Q&A, I'd like to highlight that we recognize that our long-term success goes beyond achieving financial metrics. Next week, we will publish our 2023 sustainability report that speaks to our ongoing actions to mine responsibly and help shape a more inclusive, sustainable future for our business and our stakeholders.
Daniel W. Dickson: If you're interested in viewing photos and video footage of the construction Dream progress I encourage you to visit our website. You'll find are currently photo gallery showcases the latest developments.
Daniel W. Dickson: It was filmed in mid March.
Daniel W. Dickson: Before we move to Q&A I'd like to highlight that we recognize that our long term success and achieving financial metrics next week, we'll publish our 2023 sustainability report, which speaks to our ongoing actions to mine responsibly and help shape, a more inclusive sustainable future for our business and our snake oil.
Daniel W. Dickson: 2023 marked the second year of implementing our three-year sustainability strategy, and we will be reporting on our progress to date. I recommend you take time to view our new report after it's published online. Additionally, we're pleased to announce the nomination of a new board member, Angela Johnson, at our 2024 Annual Meeting of Shareholders to be held on May 28. Her technical background and ESG experience are an exceptional fit for our existing board members and helps us achieve succession planning objectives to ensure core board competencies and expertise. That wraps up my formal comments for today. Together with the other members of our management team, we would be happy to take questions. Operator, please open the line.
Daniel W. Dickson: <unk>.
Daniel W. Dickson: 2023, Mark the second year implementing our three year sustainability strategy.
Daniel W. Dickson: We will be reporting on our progress to date.
Daniel W. Dickson: Recommend you take time to view, our new report after it's published online.
Daniel W. Dickson: Additionally, we are pleased to announce the nomination of a new Board member Angela Johnson at our 2024 annual meeting of shareholders to be held.
Daniel W. Dickson: On May 28.
Daniel W. Dickson: Technical background and ESG variance is an exceptional fit for our existing board members and helps us achieve succession planning objectives core board competencies expertise.
Daniel W. Dickson: That wraps my formal comments for today together with the other members of our management team, we would be happy to take questions. Operator, Please open the lines.
Operator: We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then T. We'll pause for a moment as scholars join the queue. The first question comes from Lucas Pipes B. Reilly. Please go ahead.
Daniel W. Dickson: We will now begin the question answer session to join the question queue. You May Press Star then one on your telephone keypad, you will hear a tone acknowledging your request.
Operator: Using a speaker phone please pick up your handset before pressing any keys to withdraw your question. Please press Star then two will foster a woman as college trying to cute.
Speaker Change: The first question comes from Lucas pipes B Riley.
Speaker Change: Please go ahead.
Lucas Nathaniel Pipes: Thank you very much, Operator, and good afternoon, everyone. Dan, I wanted to ask a little bit about the exchange rate in Latin America and how you would expect that to impact your operating cost expectations as well as any impact on capital costs. Thank you very much.
Speaker Change: Thank you very much operator, and good afternoon, everyone.
Speaker Change: Dan I wanted to ask a little bit about.
Lucas Nathaniel Pipes: The exchange rate in.
Speaker Change: Kind of Latin American and how you would expect that to both impact.
Lucas Nathaniel Pipes: You're kind of operating cost expectations as Ross at any impact on the cost side. Thank you very much.
Daniel W. Dickson: Yeah, Lucas, that's a good question. We did use a 17 to 1 ratio in our assumptions and our guidance for 2024. Group 2-1, we were effectively very close to 17 to 1. Our expectation is the Mexican pay, so we'll hover right here around 17 to 1. So from an operating standpoint, we stick with where our guidance is, which is ultimately $14 to $15 cash costs; all in sustaining costs, we expect to be $22 to $23.
Dan: Yeah Lucas that's a good question, we did use a 17 to one ratio and our assumptions in our guidance in 2020 for Q1 were effectively rate close to 17 to one.
Daniel W. Dickson: Our expectation as the Mexican peso will hover right year round 17 to one.
Daniel W. Dickson: So from an operating standpoint, we stick with where our guidance is which is ultimately $14 $15 cash costs. All in sustaining costs were affected by 'twenty two to 'twenty three.
Daniel W. Dickson: Obviously, in Q1, we're below that guidance, and I think that's a function of the gold price. But if you look at our costs, our direct operating costs per ton, they're in line with where our plan was. From a construction standpoint, we entered into $45 million worth of FX contracts, so we've effectively locked that in at $16.6 million. Hence, the impact for Terranera going forward would be muted because of that. But of course, as I say, I think the pace was going to It seems to have stabilized here at 17 to one. I expect that to stay there for the year.
Daniel W. Dickson: Obviously in Q1 were both below that guidance and I think that's a function of the gold price. If you look at our cost.
Daniel W. Dickson: Our direct operating costs per ton they are in line with where our plan was.
Daniel W. Dickson: From a construction standpoint, we entered into a $45 million worth of FX contracts. So we have effectively locked that in at $16 six.
Daniel W. Dickson: So the impact for <unk> going forward will be muted because of that.
Daniel W. Dickson: But of course.
Daniel W. Dickson: Like I say I think the peso's going to it seems to stabilize here at <unk> I expect that to stay there for the year.
Daniel W. Dickson: Thank you. Thank you, Dan. And then. Good job at Guana Cebi, and you noted that the silver grates were slightly below plan, so my question is when you would expect those to be maybe more kind of on plan or above plan, and with the plant there, you exceeded the 1,200 tons per day level, and I'm curious. There's more to do on that. Thank you very much.
Speaker Change: Thank you. Thank you Dan and then.
Speaker Change: Good good job.
Daniel W. Dickson: The ban and you noted that Suffolk rates were slightly below plan.
Daniel W. Dickson: So my question is when you would expect.
Daniel W. Dickson: Does that mean, maybe more kind of on plan or above plan and.
Daniel W. Dickson: With the plant there you exceeded the 1200 tonnes per day level Im curious.
Daniel W. Dickson: If there's more to do on that thank you very much.
Daniel W. Dickson: Yeah, from a grade standpoint, we actually exceeded plan this quarter from a gold standpoint and slightly under plan from a silver standpoint on grades that we want to be. That's normal variation in the ore body, and we expect it to be similar for the next three quarters as well. So we're just over 400 grams of silver and about 1.2 or just under 1.2 grams of gold. I think those are very favorable grades and that's our expectation for the year.
Dan: Yeah from a grade standpoint, we actually exceeded plan this quarter from a golf standpoint and slightly under plan.
Daniel W. Dickson: Silver standpoint aren't grades that want us to be.
Daniel W. Dickson: That's normal variations in the ore body and we expect to be something similar for the next three quarters as well. So we are just over 400 grams silver and about one point you were just under one two grams. A goal I think those are very favorable favorable grades and thats, our expectation for the year as far as running 200 tonnes per day through.
Daniel W. Dickson: As far as running 1,200 tons per day through the Gwanasee plant or exceeding our capacity of 1,200 tons per day, our hope is that will continue. Obviously, we put guidance out with the estimation of 1,200 tons per day, but we did a lot of work in the plant in 2023 of refurbishing things, and obviously, we have the ability to push beyond that 1,200 tons per day. Now it's all predicated on the mind keeping up with speed. We don't want to get too far ahead of ourselves. At the same time, like I said in my comments, the quantity has been very steady, and the expectation is that we'll easily meet that 1,200 tons going forward.
Daniel W. Dickson: The guar honestly plants are exceeding our capacity of 200 tonnes per day. Our hope is that we'll continue obviously, we put guidance out with the estimation of 1200 tons per day, but you did a lot of work in the plants in 2023 of refurbishing things and obviously, we have the ability to push it beyond that 1200 tonnes per day now that's all predicated on the Mark.
Daniel W. Dickson: Keeping up to speed, we don't want to get too far ahead of ourselves.
Daniel W. Dickson: Same time okay.
Daniel W. Dickson: Like I said in my comments on its feet and very steady.
Daniel W. Dickson: Expectations as we'll easily meet that 400 tons going forward.
Daniel W. Dickson: Thank you very much and maybe a quick one, just with the backdrop of much higher precious metal prices. What's your take on M&A in the space, either kind of as a buyer yourself or more broadly in the ecosystem? Thank you very much.
Speaker Change: Thank you very much and maybe a quick one.
Daniel W. Dickson: With the backdrop of.
Daniel W. Dickson: Much stronger precious metal prices.
Daniel W. Dickson: What what should take on on M&A and space at either kind of as a as a buyer yourself four or more broadly and in the ecosystem. Thank you very much.
Daniel W. Dickson: Yeah, I mean, from ourselves, our standpoint is we need to execute on Terranera and get Terranera into production. I think at the end of this year, if we can execute on Terranera, and get commissioning in Q4 for commercial production for 2025, we're going to see that reflected in our share price. I think cash is important. Obviously, there hasn't been a lot of capital available in our industry, and there needs to be investment from an exploration standpoint and a development standpoint, which will create more opportunity for prices to increase, especially from a silver standpoint. I can't speak for the entire industry,
Speaker Change: Yeah, I mean from ourselves our standpoint, as we need to execute on Turner Turner.
Daniel W. Dickson: At the end of this year, we can execute on <unk>, Eric commissioning in Q4 and for commercial production for 2025, we're going to see that reflected in our share price.
Daniel W. Dickson: Now you never say never Theres always opportunities out in the marketplace from our standpoint, we want to see something that's accretive, but I don't think the full value of <unk> built into our share price yet again, I think that needs to be executed this year for that to be reflected there and from.
Daniel W. Dickson: From a broader standpoint, yeah, we're seeing higher prices, obviously last year, we saw margins get constrained just because of the higher costs.
Daniel W. Dickson: Thank God percolate its way through the industry.
Daniel W. Dickson: I think cash is important obviously, there hasn't been a lot of capital available in our industry and there needs to be an investment.
Daniel W. Dickson: From an exploration standpoint, and a development standpoint.
Daniel W. Dickson: Which will create more opportunity for prices to increase especially from a silver standpoint.
Daniel W. Dickson: I know that at Endeavor, we want to be here 10 years from now. We continue to look for development projects. We look for exploration projects. But right now, our resources are dedicated to Terranera, mainly from a cash standpoint and also from a labor standpoint. There's only so much time and energy that we have that we can put into certain projects, and we really like our Pizzeria project that's coming in behind Terranera. So again, for us, I think we want to get through 2024 and look at that landscape. And from a broader standpoint, I think people are always going to be inquisitive, and you always try to build a bigger, better company.
Daniel W. Dickson: I can't speak for the entire industry I know as endeavor, we Wanna be here 10 years from now we continue to look for development projects, we look for exploration projects, but right now our resources are dedicated towards Sharon era, mainly from a cash standpoint, and also from from a labor standpoint, theres only so much time and energy that we have that.
Daniel W. Dickson: We can put into certain projects and we really like our fifth Korea project, that's coming in behind <unk>. So again for US I think we want to get through 2024 and look at that landscape and then.
Daniel W. Dickson: From a broader standpoint, I think people are always going to be inquisitive and you always try to build a bigger better company.
Lucas Nathaniel Pipes: Dan, I appreciate your thoughts. Keep up the good work. Thank you.
Speaker Change: Dan I appreciate the thoughts keep up the good work. Thank you.
Daniel W. Dickson: Thanks, Lucas, and thanks for the questions.
Speaker Change: Thanks, Lucas and thanks for the questions.
Heiko Felix Ihle: The next question comes from Heiko Ihle of H.C. Wainwright. Please go ahead.
Speaker Change: The next question comes from Hydro <unk> of H C. Wainwright. Please go ahead.
Heiko Felix Ihle: Hey there, Dan and team. Thanks for taking my questions, and I assume you can hear me okay?
Heiko Felix Ihle: Hey, there Dan and team thanks for taking my questions and I assume you can hear me okay.
Daniel W. Dickson: We can hear you well, Heiko. Thanks.
Heiko Felix Ihle: We can hear you well heiko.
Heiko Felix Ihle: Thank God. I was just glancing at the gold with silver ratio during the quarter. Obviously, gold production increased quite markedly. In fact, gold was so strong that it made quite a measurable impact on cash costs given gold by-product credits. At this point, we're halfway through Q2, and gold is still at $23.30. Just conceptually, can you provide a bit of guidance on whether you expect to see this through the remainder of the year and the impact on cash costs? And if you anticipate this fully upsetting the impact of the higher Mexican peso?
Daniel W. Dickson: Got it.
Heiko Felix Ihle: Just scratching at the Gulf with silver ratio during the quarter, obviously gold production increased quite markedly in fact goal was so strong that it made quite a measurable impact on cash costs given coal byproduct credits at this point, we're halfway through Q2 and Gulf still at 23 30.
Heiko Felix Ihle: Separately can you provide a bit of guidance. If you expect to see this through the remainder of the year.
Heiko Felix Ihle: And the impact of cash cost and if you anticipate this fully offsetting the impact of the higher Mexican peso.
Daniel W. Dickson: Yeah, the higher Mexican peso is all built into our guidance to start with at 17 to 1. So, of course, if we see an appreciation in the Mexican peso, a higher gold price offsets that. Again, I think the Mexican peso stabilizes here. So, hopefully, it stays where it is because it is a significant portion of our costs. From a labor standpoint, it's about 30% of our operating costs, which is obviously tied to the Mexican peso. For gold, like I said in my comments initially, our gold grades were slightly ahead of plan, and that's just normal variations in the body. Where I think there is opportunity is Bolonidos.
Speaker Change: Yeah, Hi.
Heiko Felix Ihle: Higher Mexican peso is all built into our guidance to start with 17 to one so of course, if we see the appreciation in the Mexican peso, a higher gold price offsets that again I think the Mexican peso stabilized here.
Daniel W. Dickson: So we yeah.
Daniel W. Dickson: It stays where it's at because it is a significant portion of our costs from a labor standpoint, it's about 30% of our operating costs, which is obviously tied to the Mexican peso.
Daniel W. Dickson: For gold.
Daniel W. Dickson: Like I said in my comments initially our gold grades were slightly ahead of plan and that's just normal variations in body, where I think there is opportunity as bowling Idose, obviously ball and he knows as more gold production on a proportional basis compared to want us to me and it allows us to potentially get into some other areas of millennials, but we haven't been in.
Daniel W. Dickson: Obviously, Bolonidos has more gold production on a proportional basis compared to Guanasavie, and it allows us to potentially get into some other areas of Bolonidos that we haven't been to because of the lower gold price. So if we have higher gold production, of course, that means a bigger gold credit. I think Heiko, what we look at as a management team is our direct operating costs per ton, so the things that we can manage, mining costs, processing costs, and the indirect costs, so our G&A on site.
Daniel W. Dickson: Because of the lower gold price. So if we have higher gold production of course that means a bigger gold credit I think HEICO, what we look at it as a management team as our direct operating costs per ton and so the things that we can manage finding costs processing costs direct costs, while our G&A on site.
Daniel W. Dickson: Our goal is to meet plan on that, and we end up in a higher gold price environment. Of course, that byproduct credit lowers our all-in sustaining costs and our cash costs. But we're, like I say, we try to control what we can control, and that's the inputs that are going into our operating costs.
Daniel W. Dickson: Our goals to meet plan on that and we ended up in a higher gold price environment of course that byproduct credit lowers our all in sustaining costs and our cash cost.
Daniel W. Dickson: But we're like I say, we try to control what we can control.
Daniel W. Dickson: And that's the inputs that are going into our operating costs.
Heiko Felix Ihle: Fair enough. And then, just a longer-term question, your direct operating costs in the quarter increased by about 10%. In your release, you state this was based on ongoing ventilation and water management challenges that affect productivity. Obviously, none of this translates to Terranera at all. And I just looked at some of the pictures here on your website, and it looks like this thing's really coming together. But then you also state in the release that you're encountering ongoing inflationary pressures and costs that I assume may ultimately be seen at Terranera a bit.
Speaker Change: Fair enough and then just a longer term question your direct operating costs in the quarter increased by about 10%.
Heiko Felix Ihle: You released the state. This was based on ongoing ventilation Waterman shale water management challenges that affect the productivity obviously, none of this translates the terra in there at all.
Heiko Felix Ihle: And I just looked at some of the pictures Yeah. Your website and it looks like this thing is really coming together, but then you also state in the release that you're countering ongoing inflationary pressures and costs that I assume may ultimately be seen natera and they are a bit I mean commissioning at this point you know Q4 is not that far out should.
Heiko Felix Ihle: I mean, commissioning at this point, you know, Q4 is not that far out. Should the analyst community start thinking about a bit of inflationary costs for the site, or should the current numbers that we have stay as a good baseline for where we should be at?
Heiko Felix Ihle: Should the analyst community start thinking a bit of inflationary costs for the side or should the current numbers that we have stay as a good baseline for what we should be at.
Daniel W. Dickson: Yeah, that's a very good question, Heiko, and we haven't provided guidance from an operational standpoint for Terranera since April of 2023, when we announced the construction decision. And at that time, we put out an optimized plan that highlighted an $81 cost per tonne. And that cost per tonne had come down from the feasibility study of $87 to $81 because the economy is on a scale going from 1,700 tonnes per day to 2,000 tonnes per day.
Heiko Felix Ihle: Yes, that's a very good question <unk> and we haven't provided guidance from an operational standpoint procuring era since April of 2023, when we announced construction decision.
Daniel W. Dickson: And we at that time, we put out and optimize as Glenn highlighted and $81 cost per ton and that cost per ton had come down from the feasibility study of $87 to 81 because of the economies of scale.
Daniel W. Dickson: 800 tonnes per day in 2000.
Daniel W. Dickson: That estimate was done effectively in December of 2022 and January of 2023. Since the start of 2023, across the industry and specifically in Mexico, we've had an appreciation in the Mexican peso by 15%. You've had inflationary pressures specifically on steel reagents, power costs, all in Mexico. So it would be very fair to assume that you've had escalations from an operating standpoint at Terranera going from $81, maybe getting into the $95 or $100 range.
Daniel W. Dickson: That estimate was done effectively December of 2020 to January of 2023.
Daniel W. Dickson: Since the start of 2023 across the industry and specifically.
Daniel W. Dickson: In Mexico, you've had the appreciation in the Mexican peso by 15% you'd had inflationary pressures specifically on steel reagents power costs all in Mexico.
Daniel W. Dickson: It would be very fair to assume that you've had escalations from our operating standpoint of turning around going from $81, maybe get into the 95 or $100 range, we haven't gone through and rebuilt.
Daniel W. Dickson: We haven't gone through and rebuilt those estimates from an operational standpoint. As we go into production, hopefully later this year, like I say, commissioning for Q4, management will update those costs and will provide guidance in the marketplace going into 2025. But again, if you just look at what's happened across the industry, what's happened in Mexico, it's fair to say that those operational costs are higher than what we put out when we initially did that optimized plan.
Daniel W. Dickson: At Smiths from an operational standpoint, as we go into production. Hopefully later this year like I say commissioning for Q4 management will update those costs and we will provide guidance in the marketplace going into 2025, but again, if you just look what's happening across the industry whats happened in Mexico, It's fair to say that it was operational costs are higher than what.
Daniel W. Dickson: We put out when we initially did that off price plan.
Heiko Felix Ihle: Fair enough. Great answer, great quarter, obviously, the stock's reacting quite favorably, and I'll get back to you. Thank you.
Speaker Change: Fair enough great answer great quarter, obviously, the stock's reacting quite favorably and I'll get back in queue. Thank you.
Daniel W. Dickson: Thanks, Heiko. Thanks for the question.
Speaker Change: Thanks, Tycho thanks for the questions.
Craig Hutchison: The next question comes from Craig Hutchison of TD Securities. Please go ahead.
Daniel W. Dickson: The next question comes from Craig Hutchison of TD Securities. Please go ahead.
Craig Hutchison: Hi, guys.
Daniel W. Dickson: Can you talk about the cadence of the remaining spend at Terranera? I think you said 53% in March, commissioning maybe six to nine months away. I would imagine that the spend that you guys reported last time, about 2 to 3% a month, will accelerate. But if you could just sort of talk about how that spend will accelerate between now and commissioning.
Craig Hutchison: Can you talk about the cadence Hey, Dan can you guys talk about the cadence of the remaining spend at Turner I think you said, 53% in March.
Daniel W. Dickson: Commissioning, maybe six to nine months away.
Daniel W. Dickson: And that the spend that you guys reported last time about 2% to 3% a month will accelerate but if you could just sort of talk to how that expandable accelerate between now and when the commissioning.
Daniel W. Dickson: Yeah, it's a good question, Craig. And the fact that we are reaching our peak construction within, well, this month, next month, through August, the key components being the upper platform, as I said, 80% of the steel is complete there. So now we're going into piping and electrical, and that's been going very well with our contractor.
Daniel W. Dickson: Yeah.
Daniel W. Dickson: That's a good question Craig and the fact that we are reaching our peak construction.
Daniel W. Dickson: With within well really this month next month through August.
Daniel W. Dickson: Key components being the upper platform as I said, 80% it feels complete there. So now we're going into piping and electrical.
Daniel W. Dickson: That's been going very well with our contractor mine development remains the critical path into production, we are hitting or in Q2.
Daniel W. Dickson: Mine development remains the critical path into production. We are hitting ore in Q2. So this quarter, we expect to start having ore come out of the mine. We have crossed the vein. Everything looks really good from that standpoint.
Daniel W. Dickson: So this quarter, we expect to start having or come out of the mine we have crossed the bane everything looks really good from that standpoint.
Daniel W. Dickson: So there's additional spend from a mine development standpoint, and then the key other critical path is our tailings facility. We call it the lower platform.
Daniel W. Dickson: So there is additional spend permitted mine development standpoint, and then the key other critical path is our tailings facility our tailings facility, we call. It the lower platform, that's where our dry stack tailings facility will be our concentrator will be and ultimately our LNG plant our LNG plant remains.
Daniel W. Dickson: That's where our dry stack tailings facility will be, our concentrator will be, and ultimately our LNG plant. However, our LNG plant remains delayed. It's expected to start putting in the concrete this quarter, and then obviously vertical construction after that. Our expectation is that the LNG plant won't be complete, which is about 10% of the production of 100%. That won't be completed until 2025, so we will be on diesel gem sets when we go into commissioning in Q4.
Daniel W. Dickson: Delayed.
Daniel W. Dickson: It is expected to start commencing putting in the current creek this quarter.
Daniel W. Dickson: And then obviously bertel construction after that our expectation is that LNG plant won't be complete which is about 10% of the production of 100%.
Daniel W. Dickson: That won't be completed until 2025, we will be on diesel Gen sets. When we go into commissioning in Q4.
Daniel W. Dickson: But ultimately, from the 2% to 3%, that's going to pick up significantly. And we're going to get, like I said, we have $225 million committed. A lot of that's going to be pushed through in this quarter and then early Q3. So lots going on, but we really have no more procurement. It's now just about executing, and as we execute the embankment for the tailings facility, which has been going relatively well, we'll be on track for commissioning in Q4.
Daniel W. Dickson: But ultimately from the 2% to 3% that's going to pick up significantly and we're going to hit.
Daniel W. Dickson: As I say I think we said we have $225 million committed a lot of that is going to be pushed through in this quarter and then early Q3, so lots going on but we have really no more procure minutes now it's just about executing as we execute the embankment from the tailings facility, which has been going relatively well we'll.
Daniel W. Dickson: We will be on track for commissioning in Q4.
Daniel W. Dickson: Okay, great. And just to follow up on that understatement, the LMG getting commissioned again in 2025. How much throughput can you run the plant at on diesel?
Speaker Change: Okay, Great and just maybe as a follow up on that.
Daniel W. Dickson: My understating, the LNG getting commission.
Daniel W. Dickson: Beginning in 2035.
Speaker Change: What's the throughput you can run the plant that on diesel alone.
Daniel W. Dickson: Yeah, our diesel gen sets will have the same output as our LNG plant, which is just shy of 13 megawatts. So the plan is, everything should be up and running on these diesel gen sets. But what the diesel gen sets will do is increase our operating costs compared to the LNG plant.
Daniel W. Dickson: Yes.
Daniel W. Dickson: Our diesel Gen sets will have the same output as our LNG plant, which is just shy of 13 megawatts.
Daniel W. Dickson: So the plan is everything should be up and going on these diesel Gen sets what the diesel Gen sets will do is increase our operating costs.
Daniel W. Dickson: Compared to the LNG plant.
Daniel W. Dickson: Once you guys reach commissioning, what's the time frame to reach commercial production? What is the definition for you guys of commercial production? How long do you think it'll take to get there?
Speaker Change: Okay great.
Daniel W. Dickson: And then.
Daniel W. Dickson: Once you guys are to reach commissioning what sort of timeframe to reach commercial production like what type of what is the definition for you guys for commercial production and how long do you guys think it will take to get there.
Daniel W. Dickson: Yeah, I don't have the specific definition. It's a multitude of factors that go into getting into commercial production or qualifying for commercial production. We initially estimate it will take three to four months. I think we can do that a lot quicker than three to four months, but as we approach and understand where our bottlenecks are, and if we can pre-commission some of the upper platform before Q4, that would be ideal, but we'll give guidance to the marketplace as we approach Q4.
Daniel W. Dickson: Yeah.
Daniel W. Dickson: I don't have the specific definition, it's a multitude of factors of getting into commercial production or qualifying for commercial production. We initially estimated three to four months I think we think we can do that a lot quicker than three to four months.
Daniel W. Dickson: But as we approach and understand where bottlenecks are and if we can pre commission some of the upper platform before Q4 that would be ideal.
Daniel W. Dickson: But we will give guidance for the marketplace as we approach approach Q4 on that.
Daniel W. Dickson: Okay, great. One last question for you. Just on the second Toronto straw down, can you remind me what the milestone is to access that additional money?
Speaker Change: Okay, Great and one last question for you just on the second tranche drawdown can you remind me what the milestone is to access that additional money.
Daniel W. Dickson: Yep, in that right now, we like to say in April we pulled off $60 million, and in that, we have a cash requirement sitting in an account which we ultimately call an overrun facility of $24 million. We're required to build that up to $28 million, and then independent engineers are doing a visit for the lenders in late May just to get an update to make sure what's happening in our reports is what's happening on-site, and that's one of the terms, and then other minor terms that need to be executed on going into that.
Daniel W. Dickson: Yes.
Daniel W. Dickson: Right now we like to say it in April we pulled off $60 million and in that we had a cash requirement is sitting in our accounts ultimately cost overrun facility of $24 million were required to build that up to $28 million in the independent engineers are doing that is it for the lenders late may just came out.
Craig Hutchison: Okay, great. Thanks, guys.
Craig Hutchison: Hate to make sure what's happening in our reports is what's happening on site network.
Craig Hutchison: The terms and then other minor.
Craig Hutchison: Minor terms that need to be executed ongoing into that.
Craig Hutchison: Okay.
Speaker Change: Okay, great. Thanks, guys.
Daniel W. Dickson: Thanks, Craig, for the questions. The next question comes from Robert Carlson.
Speaker Change: Thanks, Greg for the questions.
Robert Carlson: The next question comes from Robert Carlson of Janie Montgomery Scott. Please go ahead. Congratulations on the quarter and progress made so far.
Daniel W. Dickson: The next question comes from Robert Carlson Janney Montgomery Scott. Please go ahead.
Robert Carlson: Congratulations on the quarter and quick one crop progress made so far but did you guys utilize their use.
Robert Carlson: Yeah.
Daniel W. Dickson: Yeah, Robert. Well, we entered into a gold hedge, which is a requirement under our lending facility. We entered into 68,000 ounces of gold that will be delivered through 2025 and 2026, a little bit into 2027. And that was priced out at $2,325 per ounce of gold.
Robert Carlson: Yeah, Robert while we entered into a gold hedge which is a requirement under our lending facility. We entered into 68000 ounces of gold that will be delivered through 2025, and 2026, a little bit into 2027 and that was priced out of 2000 and $325 per ounce of gold.
Daniel W. Dickson: Otherwise, we don't hedge silver. One of our mandates is to make sure that for our shareholders who are investing in Endeavor Silver, we provide that upside that we expect to come from a silver price standpoint. From an interquarter standpoint, we'll enter into things very short term, so under 90 days, but that's just generally trying to take advantage of spikes in the silver price. So with Tenera coming on board next year, there are no plans to establish a hedging program for silver. No, there is no plan to establish a hedging program for silver.
Daniel W. Dickson: Otherwise, we don't hedge silver.
Daniel W. Dickson: One of our mandate is to make sure that for our shareholders who are investing in endeavour silver is to ride the upside that we expect to come on a silver price standpoint.
Daniel W. Dickson: Inter quarter standpoint, we will enter into things very short term so under 90 days, but.
Daniel W. Dickson: But thats, just generally try and take advantage of spikes in the silver price.
Daniel W. Dickson: So whichever coming on board.
Daniel W. Dickson: There's no plans to.
Daniel W. Dickson: Just what's your hedging program for silver.
Daniel W. Dickson: I think what we're seeing right now in the silver market is an environment that's going to be very favorable to the silver price. I mean, from an industrial standpoint, we've seen significant demand increase because of solar panels, the electrification of the world, obviously trying to reduce carbon, but the monetary story for silver has been lagging for the last kind of two, three years. And we've seen gold really take off and ultimately make new all-time highs.
Daniel W. Dickson: No. There is no plan to establish a hedging program.
Daniel W. Dickson: What we're seeing right now in the silver market is.
Daniel W. Dickson: An environment, that's going to be very favorable to silver price I mean from an industrial standpoint, we've seen significant demand increase.
Daniel W. Dickson: The solar panels, the electrification of the world, obviously trying to reduce carbon but the monetary story for silver has been lagging for the last kind of two three years and we've seen gold really take off and ultimately make new all time highs silver still well off its all time highs of $50.
Daniel W. Dickson: Silver is still well off its all-time highs of $50. Today, obviously, we're sitting just above $28. And so I think there's a lot of runway there for silver over the next year or couple of years. And we want to leave that upward movement in the silver price for our shareholders.
Daniel W. Dickson: Today, obviously, we're sitting just above 28.
Daniel W. Dickson: So I think theres a lot of runway there for silver over the next kind of year couple of years.
Daniel W. Dickson: We want to leave that upwards movement in silver price for our shareholders.
Speaker Change: Great. Thank you.
Speaker Change: Thanks Robert.
Jacob G. Sekelsky: Once again, if you have a question, please press star then 1. The next question comes from Jake Sekelsky of Alliance Global Partners. Please go ahead.
Daniel W. Dickson: Once again, if you have a question. Please press Star then one.
Jacob G. Sekelsky: The next question comes from Jake Zukowski of Alliance Global Partners. Please go ahead.
Jacob G. Sekelsky: Hey Dan and team, thanks for taking my question. So just building on that last question. Pipes. You know, I'm going back to the tailwind from stronger gold byproduct credits this quarter and more so at current levels. I'm wondering if there's a level in gold where you'd look at hedging out some additional gold production outside of the requirements for the Paranara facility.
Jacob G. Sekelsky: Hey, Dan and team thanks for taking my questions.
Jacob G. Sekelsky: So just a job.
Jacob G. Sekelsky: Building on that last question that.
Jacob G. Sekelsky: Going back to the tailwind from stronger gold byproduct credits this quarter and more so.
Jacob G. Sekelsky: Current levels.
Jacob G. Sekelsky: I'm wondering if there's a level gold where you'd look at hedging out some additional gold production outside of the requirements for the <unk> facility.
Daniel W. Dickson: Yeah, I mean, that's a fair question. I think there's a lot of runway left in the precious metal space, but it's not something that we'd really entertain. Obviously, there's always downside potential, but we use 1840 in our guidance forecast. And from a cash flow standpoint, maybe we get into Q3 and we sell some gold forward a little bit, but we wouldn't get beyond the 90 days.
Speaker Change: Yeah, I mean, that's a fair question I think there's a lot of runway left in the precious metal space.
Daniel W. Dickson: We'd really entertained.
Daniel W. Dickson: For this year, obviously, we want to make sure we protected the downside of the company with having so much investment going into turn narrow, but we think the 60000 ounces of gold that we've already hedged out for one again to operations.
Daniel W. Dickson: <unk> provides that.
Daniel W. Dickson: Of the remaining operation the ball needles and want us to be able to reproduce about 30 to 35000 ounces of gold.
Daniel W. Dickson: We're comfortable that gold plants way upwards, obviously, there's always downside potential.
Daniel W. Dickson: But we used 18 40.
Daniel W. Dickson: Our guidance forecast.
Daniel W. Dickson: And from a cash flow standpoint.
Daniel W. Dickson: Again, maybe we get into Q3, and we felt some gold forward a little bit.
Daniel W. Dickson: But we won't get beyond the 90 days.
Daniel W. Dickson: Okay, that's fair. And then, just on Saranara, can you just touch on the labor outlook there as we head towards commissioning later this year?
Speaker Change: Okay, that's fair.
Daniel W. Dickson: And then just on <unk> can you can you just touch on the.
Daniel W. Dickson: Labor outlook, there as we head towards the commissioning later this year.
Daniel W. Dickson: Yeah, I mean, from a labor standpoint, we handle all the mine development internally. So our mining team, which will transition from development into operations, will be consistent and be fully up to speed on labor from an operational readiness standpoint for the plant. We've already started that process, we've made hires for plant operations, and obviously, from an indirect standpoint, we were relatively staffed up there as well. So there shouldn't be a significant change or a huge hiring process between now and Q4. We have people that we need to add, but we've already been working on operational readiness plans so we can execute well in Q4.
Daniel W. Dickson: Yeah, I mean from a labor standpoint.
Daniel W. Dickson: We handle all the mine development internally, so from our mining team, which will transition from development into our operations will be consistent.
Daniel W. Dickson: And be fully.
Daniel W. Dickson: Up on labor from our operational readiness standpoint for the plant.
Daniel W. Dickson: We've already started that process, we've made hires for plant operations.
Daniel W. Dickson: And obviously from an indirect standpoint.
Daniel W. Dickson: We're relatively staffed up there as well.
Daniel W. Dickson: So there shouldn't be a significant change or a huge hiring process between now and Q4 or we have people that we need to add but we've already been working on operational readiness plans.
Daniel W. Dickson: So we can execute well in Q4.
Daniel W. Dickson: Again, from a labor cost standpoint, everything we've done this year from an operational standpoint was done at 17 to 1 in Mexico's peso to the U.S. dollar. When we go into operations for Terranera, that would be a similar FX rate that we would use. For Bolonidos and Guanacivi, 30% of our cost is related to labor, and that's similar for Terranera. Again, when we go back and look at 2022's optimized plan, that would have been done at a 21 to 1 ratio, so now that's at a 17 to 1 ratio, so you'd have higher labor costs from an operational standpoint, just because we have F-X move. Again, when we go into 2025, we'll provide that additional detail for the market.
Daniel W. Dickson: Again from a late to the labor cost standpoint, everything we've done this year from an operational standpoint is done at 17 to one at Mexico.
Daniel W. Dickson: The peso to U S dollar when we go into operations for Taro narrow that would be a similar effort.
Daniel W. Dickson: FX rate that we would use.
Daniel W. Dickson: At Pall and Ido is going to want us to be 30% of our cost is related to labor and that's similar for <unk>.
Daniel W. Dickson: Again, when we go back and look at 2020 twos optimized plan that would have been done at 21 to one ratio of <unk> 17 to one ratio would seem to have higher labor costs from an operational standpoint.
Daniel W. Dickson: We have a smooth.
Daniel W. Dickson: Again, when we go into 2025 will provide additional detail for the market.
Daniel W. Dickson: Yeah.
Jacob G. Sekelsky: Got it. Okay, that's all for me. Thanks again.
Speaker Change: Got it okay. That's all from me Thanks again.
Daniel W. Dickson: Thanks for the questions, Jake. It is much appreciated.
Speaker Change: Thanks for the questions shake much appreciate it.
Daniel W. Dickson: This concludes the question and answer session. I would like to turn the conference back over to Dan Dixon for any closing remarks.
Daniel W. Dickson: This concludes the question and answer session I would like to turn the conference back over to Dan Dickson for any closing remarks.
Daniel W. Dickson: Thanks, Operator. And thanks to everyone who's tuned in today for our Q1 2024 earnings release. Again, I think we've done an extremely good job of just executing our plan from an operational standpoint. It's our job to execute on Terranera this year. We can execute on Terranera over the next two quarters, and we should be in commissioning for Q4 2024. And it'll be nice to see that production profile come into the Endeavor production profile for 2025. Thanks, everyone. Have a good day!
Daniel W. Dickson: Thanks, operator, and thanks to everyone, who tuned in today for our Q1 2024 earnings release.
Daniel W. Dickson: Again, I think we've done an extremely good job of just executing our plan from an operational standpoint, our job to execute on <unk>. This year, we can execute on terra narrow over the next two quarters, we should be commissioning for Q4, 2024, and it would be nice to see that production profile come into the endeavor production profile.
Daniel W. Dickson: 2025, thanks, everyone and have a good day.
Daniel W. Dickson: Okay.
Operator: This brings to an end today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
Speaker Change: This brings to end today's conference call. You may disconnect. Your lines. Thank you for participating and have a pleasant day.
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