Q1 2025 Silvercorp Metals Inc Earnings Call

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Operator: Thank you for standing by. Good afternoon. My name is Julie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Silvercorp first quarter fiscal 2025 financial results conference call. All lines have been placed on mute to prevent any background noise.

Julie: Thank you for standing by. Good afternoon, my name is Julie and I will be your conference operator today. At this time I would like to welcome everyone to the Silvercorp first quarter fiscal 2025 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks there will be a question and answer session. If you'd like to ask a question during this time, simply press star then the number one on your telephone keypad. If you'd like to withdraw a question, please press star then the number two. Thank you. I would now like to turn the conference over to Lon Shaver, president of Silvercorp. Please go ahead.

Operator: After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, then the number 1 on your telephone keypad. If you'd like to withdraw your question, please press star, then the number 2. Thank you. I would now like to turn the conference over to Lon Shaver, president of Silvercorp. Please go ahead.

Lon Shaver: Thank you, Julie. On behalf of Silvercorp. I'd like to welcome everyone to the call this morning. Today we'll discuss our first quarter of fiscal 2025 financial results, which will be released yesterday after the close of the market. A copy of the news release, RMDNA, and Financial Statements are available on our website, and see it here plus. Before we get going, please note that certain statements on today's call will contain forward-looking information within the meaning of applicable securities law, and also please review the cautionary statements in our news release, as well as the risk factors described in our most recent regulatory filing. Now to recap our quarterly financial results. We kicked off the fiscal year with record quarterly revenue of $ 72 million.

Lon Shaver: Thank you, Julie. On behalf of Silvercorp, I'd like to welcome everyone to the call this morning. Today we'll discuss our first quarter of fiscal 2025 financial results.

Lon Shaver: which were released yesterday after the close of the market. A copy of the news release, our MD&A and financial statements are available on our website and CDAR Plus.

Lon Shaver: That was a 20% increase from last year. This growth was driven by a robust commodity market, which led to notable improvements in realized metal prices, particularly in China compared to Q1 of last year. In particular, the realized silver price rose by 36%.

Speaker Change: Before we get going, please note that certain statements on today's call will contain forward-looking information within the meaning of applicable securities laws.

Speaker Change: And also, please review the cautionary statements in our news release.

Speaker Change: as well as the risk factors described in our most recent regulatory filings.

Lon Shaver: Gold by 18%, Lead by 18%, and Zinc by 23%. Silver remains our most important metal, contributing 63% of our Q1 revenue, followed by lead at 22%. I'll note that silver was 59% of revenue in Q1 of 2024 and 55% of revenue in Q4 of 2020. The results of this quarter reinforce why investors should own our shares, namely demonstrating that we provide leverage to higher metals prices through the response in our financial results. Moving down the income statement, attributable net income for Q1 was $22,012,000 per share.

Speaker Change: Now to recap our quarterly financial results, we kicked off the fiscal year with record quarterly revenue of $72 million. That was a 20% increase from last year.

Speaker Change: This growth was driven by a robust commodity market which led to notable improvements in realized metal prices, particularly in China compared to Q1 of last year.

Speaker Change: In particular, the realized silver price rose by 36%.

Speaker Change: Gold by 18%, Lead by 18% and Zinc by 23%

Speaker Change: Silver remains our most important metal, contributing 63% of our Q1 revenue, followed by lead at 22%.

Speaker Change: I'll note that silver was 59% of revenue in Q1 of 2024 and 55% of revenue in Q4 of 2024.

Speaker Change: The results of this quarter reinforce why investors should own our shares, namely demonstrating that we provide leverage to higher metals prices through the response in our financial results.

Speaker Change: Moving down the income statement, attributable net income for Q1 was $22 million or $0.12 per share.

Lon Shaver: This is up significantly from $9 million, or $0.05 per share, in Q1 of fiscal 2020. The increase in our bottom line reflects higher metals prices partially offset by lower sales volume and higher business expenses related to the Adventist acquisition. On an adjusted basis, removing the impact of non-cash and one-time items, our attributable adjusted net income for the quarter was $21 million, or $0.12 per share, compared to $12 million or $0.07 per share in Q1 of last year.

Speaker Change: This is up significantly from $9 million, or $0.05 per share, in Q1 of fiscal 2024.

Speaker Change: The increase in our bottom line reflects those higher metals prices partially offset by lower sales volume and higher business expenses related to the Adventus acquisition.

Speaker Change: On an adjusted basis, removing the impact of non-cash and one-time items, our attributable and adjusted net income for the quarter was $21 million or $0.12 per share, compared to $12 million or $0.07 per share in Q1 of last year.

Lon Shaver: Looking at cash flow from operating activities, our mines generated $40 million this past quarter. This is up 38% year over year and largely reflects increased metals prices. But also, if we look at cash flow from operations before changes in non-cash working capital items, the increase was 65%. Additionally, in the quarter, we invested $20 million in our mines. This is up 23% from last year, largely stemming from increased underground development and tailing storage facility construction activities.

Speaker Change: Looking at cash flow from operating activities, our mines generated $40 million this past quarter. This is up 38% year-over-year and largely reflects those increased metals prices. But also, if we look at cash flow from operations before changes in non-cash working capital items, the increase was 65%.

Speaker Change: Additionally, in the quarter, we invested $20 million in our mines.

Speaker Change: This is up 23% from last year, largely stemming from increased underground development and tailing storage facility construction activities at Ying.

Lon Shaver: Despite the increase in capital expenditures, we ended the quarter with 216 million cash and cash equivalents on short-term investments, an increase of 31 million from March. This position does not include our investments in Associates and other companies, which had a total market value of $108 million as of June.

Speaker Change: Despite the increase in capital expenditures, we ended the quarter with $216 million in cash, cash equivalents on short-term investments, an increase of $31 million from March, our year-end.

Speaker Change: This position does not include our investments in associates in other companies which had a total market value of 108 million as of June 30th.

Lon Shaver: Turning our attention to our operating results, as reported in July, our mines performed as expected in Q1. We mined 344,000 tons and milled 308,000 tons of ore during the quarter, representing year-over-year increases of 13% and 4%, respectively. Despite higher quarterly throughput, our production of silver, lead, and zinc decreased by 4%, 12%, and 6%, respectively, due to lower head grades in the current mine. Additionally, we stockpiled 59,000 tons of ore at yang, which will be milled after the mill number two expansion is completed later.

Speaker Change: Turning our attention to our operating results, as reported in July , our mines performed as expected in Q1. We mined 344,000 tons and milled 308,000 tons of ore during the quarter, representing year-over-year increases of 13% and 4%, respectively.

Speaker Change: Despite higher quarterly throughput, our production and silver lead and zinc decreased by 4%, 12% and 6% respectively due to lower head grades in the current mine plan.

Speaker Change: Additionally, we stockpiled 59,000 tons of ore at Ying, which will be milled after the Mill No. 2 expansion is completed later this year.

Lon Shaver: We remain confident in achieving our annual production guidance set in April, which, as a reminder, was between 6.8 to 7.2 million ounces of soap. On the unit cost front, we were also on track to produce a production cross average of $80 per tonne Q1, 2% higher than last year's results but in line with our annual cost guidance of between $77 to $80 per tonne. The increase was mainly due to more mining preparation tunnels and great control drilling completed and expense as part of the mining cost in the current. Our cash cost per ounce of silver net of by-product credits was negative $1.67 in the quarter.

Speaker Change: We remain confident in achieving our annual production guidance set in April , which as a reminder was between 6.8 to 7.2 million ounces of silver.

Speaker Change: On the unit cost front, we're also on track. Production costs average $80 per ton Q1, 2% higher than last year's results, but in line with our annual cost guidance of between $77 to $80 per ton.

Speaker Change: The increase is mainly due to more mining preparation tunnels and great control drilling completed and expense as part of the mining cost in the current quarter.

Speaker Change: Our cash cost per ounce of silver net of by-product credits was negative $1.67 in the quarter. And that's a significant improvement from a negative 31 cents in the prior year quarter. And this change was driven by higher by-product credits from higher metals prices.

Lon Shaver: And that's a significant improvement from a negative 31 cents in the prior year quarter. This change was driven by higher by-product credits from higher metals. All in sustaining costs, production costs rose by 4% year over year to $140 per ton in Q1, but remain below our annual cost guidance of between $144 to $152 per ton. Our own sustaining cost per ounce of silver netted by product credits was 982, which is 4% higher than Q1 last year due to the previously mentioned sustaining capital expenditure.

Speaker Change: All in sustaining costs, production costs rose by 4% year-over-year to $140 per tonne in Q1 but remain below our annual cost guidance between 144 to 152 per tonne.

Speaker Change: Our own sustaining cost per ounce of silver net of by-product credits was $9.82, which is 4% higher than Q1 of last year due to the previously mentioned sustaining capital expenditures.

Lon Shaver: Turning to the Yeane Growth Projects, the No. 2 capacity expansion remains on track and on budget to be completed by November of this year. As a reminder, this project will increase Yeane's total production capacities by 4,000 tons per day. Construction on the third Tailing Storage Facility is expected to be completed later this year. With $14 million spent to date, the total cost of construction is expected to be below the original estimate of $38 million.

Speaker Change: Turning to the Yean Growth Projects, the No. 2 capacity expansion remains on track and on budget to be completed by November of this year. As a reminder, this project will increase Yean's total production capacities due to 4,000 tons per day.

Speaker Change: Construction on the third tailing storage facility is expected to be completed later this year. With $14 million spent to date, the total cost of construction is expected to be below the original estimate of $38 million.

Lon Shaver: We plan to release an updated Ying Technical Report, an LX43101 compliant report with an effective date of June 30th, imminently. I will incorporate drilling completed up to the end of 2023 to update reserves and resources as well as provide an updated life of mine plan including a. Regarding the Kwan Ping project, the environmental assessment report was approved in July, and the remaining mine safety report is pending approval by the province. We expect to commence development in fiscal 2025 and have allocated $1 million for mine construction in this year's budget.

Speaker Change: We plan to release an updated Ying technical report imminently. This 43-101 compliant report, with an effective date of June 30th, will incorporate drilling completed up to the end of 2023 to update reserves and resources, as well as provide an updated life-of-mine plan, including economics.

Speaker Change: Regarding the Kwan Ping project, the environmental assessment report was approved in July , and the remaining mine safety report is pending approval by the province. We expect to commence development in fiscal 2025 and have allocated $1 million for mine construction in this year's budget.

Lon Shaver: Last but not least, after the quarter ended, we successfully completed the acquisition of Adventus Mining on July 31st. This is a significant step in our strategy to create a globally diversified green metals producer, and provides an excellent opportunity to leverage our technical expertise and financial strength to unlock value for off-take holders through the development of the Aldomo Prize. Also, after the acquisition closed, Ecuador's Ministry of Energy and Mines issued the Resolution of Change of Phase for El Domo, a milestone that enabled the construction and subsequent operation of the mine.

Speaker Change: Last but not least, after the quarter ended, we successfully completed the acquisition of Adventus Mining on July 31st. This is a significant step in our strategy to create a globally diversified green metals producer.

Speaker Change: It provides an excellent opportunity to leverage our technical expertise and financial strength to unlock value for all stakeholders through the development of the Eldomo project.

Speaker Change: Also, after the acquisition closed, Ecuador's Ministry of Energy and Mind issued the resolution of change of phase for El Delmo, a milestone that enables the construction and subsequent operation on the mind.

Lon Shaver: Once in operation, El Doma will make a meaningful contribution to our production profile and financial results while simultaneously adding country and commodity diversification. We are dedicated to working collaboratively with the government of Ecuador, local communities, and Salazar Resources, our in-country partner. Our commitment to modern, responsible development will benefit both the local communities and the country as a whole.

Speaker Change: Once in operation, El Doma will make a meaningful contribution to our production profile and financial results while simultaneously adding country and commodity diversification.

Speaker Change: We are dedicated to working collaboratively with the government of Ecuador, local communities, and Salazar Resources, our in-country partners.

Speaker Change: Our commitment to modern, responsible development will benefit both the local communities and the country as a whole.

Operator: We intend to provide more indications of our plans for the development of the El Domo project in the near future. With that, I'd like to open the call for questions. Thank you, sir. Ladies and gentlemen, we will now conduct a question and answer session. If you would like to ask a question, press star then number 1 on your telephone keypad. If you would like to withdraw your question, press star 2. If you're using a speakerphone, please leave the handset before pressing any keys.

Speaker Change: We intend to provide more indications of our plans for development of the El Domo project in the near future.

Speaker Change: With that, I'd like to open the call for questions.

Speaker Change: Thank you, sir. Ladies and gentlemen, we will now conduct a question and answer session. If you'd like to ask a question, press star, then the number 1 on your telephone keypad. If you'd like to withdraw your question, press star 2. If you're using a speakerphone, please leave the handset before pressing any keys. One moment, please, for your first question.

Operator: One moment, please, for your first question. The first question comes from Joseph Reagor from Roth Capital Partners. Please go ahead. Hey Lon, congrats on a good quarter and thanks for taking questions. Thanks, Jill. Thanks for running.

Speaker Change: Your first question comes from Joseph Reagor from Roth Capital Partners. Please go ahead.

Joseph Freeger: Pete Lawn, Congrats on a good quarter and thanks for taking questions.

Lon Shaver: So, Adventist's New Age just said that you guys would be providing updates. It was kind of like a rough timeline on, you know, what we should expect as far as news flow post acquisition. Now that's closed.

Speaker Change: Thanks Joe, thanks for joining us.

Speaker Change: So on advantage, I know you just said...

Speaker Change: that you guys will be providing updates soon, but can you give us kind of like a rough timeline on you know what we should expect as far as news flow post-acquisition now that it's closed?

Lon Shaver: Well, as I said, we're going to be putting out an update in terms of what the go-forward plan is. Adventus and the Cura Mining team did a great job developing El Domo, and so what we're looking to do is kick off the advancement of more detailed engineering and other project activities and look at some of the areas where we can get going with the development of the project. Early lead time items and certain projects that are going to be necessary to build the mine while we're looking at advancing the status of engineering and potentially fine-tuning some of the other development plans. Okay, fair enough. Also, you mentioned the Yang technical report that's coming. I think the wording you used was vague.

Speaker Change: Well, as I said, we're going to be putting out an update in terms of what the go-forward plan is.

Speaker Change: Adventus and the Cura Mining team did a great job developing El Domo.

Speaker Change: And so, what we're looking to do is kicking off the advancement of more detailed engineering and other project activities, and looking at some of the areas where we can get going with development of the project, early lead time items and certain projects.

Speaker Change: that are going to be necessary to build the mine while we're looking at advancing the status of engineering and potentially fine-tuning some of the other development plans.

Speaker Change: Okay, fair enough.

Speaker Change: also you mentioned the Yang Tech Horde port that's coming, I think they're already used through the eminently.

Lon Shaver: Will this report be designed to show a full use of the mill, or should we expect a certain level of capacity utilization? Well, I think Joe, you should wait for the report. I don't want to give you an advance.

Speaker Change: Will this report be designed to show a full use of the mill or should we expect a certain capacity level utilization?

Speaker Change: Well, I think, Joe, you should wait for the report. I don't want to give, you know, advance...

Lon Shaver: Advanced Use until the actual report is out, but the report does contemplate and factor in the expansion that's underway. Okay, and remind us what the current expectation is as far as the completion date for the mill? November. I think I should add, Joe, the thing is that the mill expansion is only one element of the expansion program.

Speaker Change: Advanced use until the actual report is out, but the report does contemplate and factor in the expansion that's underway.

Speaker Change: Okay, and remind us what's the current expectation as far as the completion date for the mill.

Gamber: Hi, November .

Speaker Change: November . Okay. All right, I'll turn it over. I think I should add, Joe, the thing is, is that the mill expansion is only one element of the, of the expansion program.

Lon Shaver: Recall that, you know, we're changing mining methods. We're also looking at getting the permits renewed and extended to allow for an increased throughput rate, so all of these things have to dovetail together, and this would get covered off in that report. Okay, fair enough. I'll turn it over.

Speaker Change: recall that you know we're shifting mining methods we're also looking at getting the permits renewed and extended to allow for an increased throughput rate and so all of these things have to dovetail together and this would get covered off in that report

Lon Shaver: Thanks, Lon. Okay, thanks, Joe. Ladies and gentlemen, as a reminder, if you'd like to ask a question, press star 1 on your cell phone keypad. Your next question comes from Felix Shafigullin from Hades Capital. Please go ahead.

Speaker Change: Okay, fair enough. I'll turn it over. Thanks, Lon. Okay, thanks, Joe.

Speaker Change: Ladies and gentlemen, as a reminder, if you'd like to ask a question, press star 1 on your cell phone keypad. Your next question comes from Felix Scheffig-Ohlin from Haight Capital. Please go ahead.

Lon Shaver: Hey Lon, congratulations on a good quarter. Thanks, Felix. Yeah, just a couple of questions for me. Regarding the mining cost at the end that kind of, I guess, ticked up a little bit in this quarter compared to a year ago, should we be looking at that as kind of just a one-off due to, you know, more tunneling and great control drilling that was expensed? Or is that something, is that like an issue that might persist for some time going into the future? What is the right way of looking at it?

Felix Scheffig-Ohlin: Hey, Lon. Congratulations on a good quarter.

Felix Scheffig-Ohlin: Thanks, Felix. Yeah, just a couple of questions for me. Regarding the mining cost that kind of, I guess, ticked up a little bit in this quarter compared to a year ago quarter, should we be looking at that as kind of just a one-off due to, you know, more tunneling and great control drilling that was expensed?

Speaker Change: or is that something, is that like an issue that might persist for some time going into the future? What is kind of the right way of looking at it?

Lon Shaver: Well, again, we're so close to a life of mine plan to speak to what are going to be year averages to not be caught up in sort of a quarter to quarter basis. You know, we don't think that the uptick that we saw in this quarter is... I think I've just asked for your patience on that report when it's out, and we look at sort of more longer-term numbers.

Speaker Change: Well again we're so close to a life of mine plan to speak to you know what are going to be year averages to not be sort of caught up in sort of a quarter to quarter basis you know we don't think that

Speaker Change: the uptick that we saw in this quarter is you know hugely material so I think I've just asked for your patience on that report when it's out and we look at sort of more longer term numbers you know that that's a question we can address at that time

Lon Shaver: That's a question we can address at that time. Okay, all right. So my next question, I mean, I imagined. Looking at this 59,000 tons of ore that was stockpiled in this current quarter, and I think the production update also said that it will basically be more ore that will be added to the stockpile, as I'm trying to wrap my head around it, I don't recall this kind of thing happening in the past.

Speaker Change: okay all right so my next question I mean I imagined

Speaker Change: would probably also be addressed in the report, but I'll ask it anyway. So looking at this 59,000 tons of word, I was stockpiled in this current quarter. And I think, uh,

Speaker Change: The production update also said that it'll basically be more ore that will be added to the stockpile. As I'm trying to wrap my head around it, you know...

Lon Shaver: And yes, the additional 1,500 tons of additional capacity from the new production line would resolve those issues, presumably, but why did so much ore just not get processed? It seemed kind of strange that this happened.

Speaker Change: I don't recall this kind of happening in the past, and yes, the additional kind of 1,500 tons per day additional capacity from the new production line would resolve those issues presumably, but why did so much ore just not get processed? It seemed kind of strange that this happened.

Lon Shaver: Actually, if you look back, we have seen some carryover, and even in our Q4, which traditionally is our weakest quarter because of the Chinese New Year, mining activity ceases because of the shutdown, but it's easier to keep the mill running. And so we actually, even in this last Q4, we did play a bit of catch-up in Q4 to cover some of the inventories that were developed in Q3. So it's just more the fact that as we're advancing and developing, we're looking at ramping up that mining activity, and we are hitting capacity limits at the mill.

Speaker Change: Actually, if you look back, we have seen some carryover, and even in our Q4, which...

Speaker Change: in the traditionally as our weakest quarter because of Chinese New Year.

Speaker Change: You know, mining activity ceases because of the shutdown, but it's easier to keep the mill running. And so we actually, even in this last Q4, we did play a bit of catch up.

Speaker Change: in Q4 to cover some of the inventories that were developed in Q3. So, it's just more the fact that as we're advancing and developing, we're looking at ramping up that mining activity and we are hitting up on those.

Lon Shaver: And so I think this is sort of evidence of why the expansion plan and why the mill expansion specifically is needed as part of delivering this growth and production that we're expecting to show in this life of mine plan that will come out in the report. Don't know if that helps, but some of this order was stockpiled, you know. If I understand correctly, some of it is kind of, I guess, let's just say, you know, runoff from Q1. Is that kind of the right way to think about it?

Speaker Change: capacity limits at the mill. And so I think this is sort of evidence of why the expansion plan and why the mill expansion specifically is needed as part of delivering this growth in production that we're expecting to show.

Speaker Change: in this life of mine planned that will come out in the report.

Speaker Change: I don't know if that helps, but... So some of this ore that was stockpiled, you know...

Speaker Change: If I understand correctly, some of it is kind of, I guess, let's just say, you know, run off from Q1. Is that kind of the right way to think about it?

Lon Shaver: Uh, yeah, yeah, I mean, it's mine. Okay, Q1 calendar 24 is what I mean, so Q4... No, no, no, no, no, no, no, no, no, this increase was generated in this quarter. Oh, okay, gotcha. Yeah, what I was referring to is the fact that even in the last Q4, we were able to mill more than we mined in Q4 because of what had been mined and stockpiled in Q3. So, as I was saying, we have had the ability to play catch-up in Q4 because mining activity has been less than milling. And in this case, we've got mining activity greater than milling in Q1, so that's created that inventory stockpile that we're going to mill through by the end of this fiscal year.

Speaker Change: Uh, yeah, yeah, I mean, it's, it's mine. Okay, Q1 calendar 24 is what I mean.

Speaker Change: So cute for physical? No, no, no, no, this increase was generated in this quarter.

Speaker Change: Okay, gotcha. Yeah, I don't know what I was referring to as the fact that even in the last Q4, we were able to mill more than we mined in Q4 because of what had been mined and stockpiled in FQ3.

Speaker Change: So, as I was saying that, you know, we have had...

Speaker Change: The ability to play catch up in Q4, because mining activity has been less than milling. And in this case, we've got mining activity greater than milling in Q1, so that's created that inventory stockpile that we're going to mill through.

Lon Shaver: Okay, that makes sense. Thank you. One last question before I go. I think you mentioned the remaining kind of capital expenditure on the new tailing facility, but I didn't quite catch it. What's the number that we should be looking at there? The budget for this year is 13 million.

Speaker Change: by the end of this fiscal year.

Speaker Change: Okay, that makes sense. Thank you. One last question before I go. I think you mentioned the remaining kind of CapEx spend on a new tailings facility, but I didn't quite catch it. What's the number that we should be looking at there? Budget for this year is $13.

Lon Shaver: So that's the remaining amount. Thank you. Thank you. Yeah, that's the remaining for the year, and obviously, we've put in a bit, you know, that'll include some of the 14 that was spent today because we do pick up what was spent in this tournament.

Speaker Change: Million.

Speaker Change: So that's the remaining.

Speaker Change: Yeah, that's the remaining for the year and obviously we've put

Speaker Change: That will include some of the 14 that was spent to date because we do pick up what was spent in this current quarter.

Speaker Change: Okay, gotcha. All right. Thank you, Lon. Appreciate it. Okay. Thanks, Joseph.

Lon Shaver: Okay, gotcha. All right. Thank you, Lon. Appreciate it. Okay. A year from now, the next question comes from Dalton Baretto, from Catechloride, and please go ahead.

Speaker Change: Your next question comes from Dalton Baretto from Canaccord. Please go ahead.

Lon Shaver: Thanks. Good morning, guys. Lon, I wanted to ask you about the permit at El Domo, you know, the lower courts throughout the challenge. And I'm just wondering, do you guys think it will be appealed?

Speaker Change: Thanks, good morning guys. Alon, I wanted to ask you about the permit at El Domo, you know, the lower courts throughout the challenge, and I'm just wondering, do you guys think it will be appealed and

Speaker Change: How are you planning your next steps based on that?

Lon Shaver: And how are you planning your next steps based on that? Well, I think the indications that were put out to the market were that the plaintiffs indicated at the end of the first lower court hearing that they intended to appeal. And so we fully expect that to take place, um... and uh... you know that will move them from the local court to the provincial court and uh... you know we intend to uh... uh... respond to the case uh... you know as advances and uh... the the team in in ecuador have been uh... We feel positive about the outcome, just given what we see not just in terms of the outcome of the hearing, but in terms of the case, the way it was handled, the commitment from all parties on our side to.., to descend against the allegations made by the...

Speaker Change: Well, I think the indications that were, you know, put out to the market were that the plaintiffs indicated at the end of the first lower court hearing that they intended to appeal.

Speaker Change: And so we fully expect that to take place.

Speaker Change: And, you know, that will move then from the local court to the provincial court.

Speaker Change: And, you know, we intend to respond to the case, you know, as Adventists and the team in Ecuador have been.

Speaker Change: and we feel positive about the the outcome just given what we've seen not just in terms of the outcome of the hearing but in terms of the case the way it was handled the commitment from you know all parties you know on our side to

Speaker Change: to defend against the allegations made by the plaintiffs.

Lon Shaver: So, from our standpoint, I guess the second part of your question is, you know, we don't intend to, you know, hold back from advancing the project pending that. Bob, are there any restrictions on you guys while this is still in the court system, or can you move ahead as if the thing is fully open? We can move ahead, and then, in the event that it gets all the way up to the Supreme Court, what sort of timeline are we talking about here?

Speaker Change: So from our standpoint, I guess the second part of your question is, you know, we don't intend to, you know, hold back from advancing the project, you know, pending that appeal.

Speaker Change: Are there any restrictions on you guys while this is still in the court system, or can you move ahead as of the thing is fully approved? We can move ahead.

Speaker Change: Got it. Okay. And then, in the event that it gets all the way up to the Supreme Court, what sort of timeline are we talking here?

Lon Shaver: Well, to be specific, the Supreme Court, in this case, if it makes it to the sort of the third level, which would be the Constitutional Court, you know, that could be a matter of two to three years.

Speaker Change: To be specific, the Supreme Court in this case, if it makes it to the third level, which would be the Constitutional Court, that could be a matter of two to three years potentially.

Lon Shaver: And in some cases, there are other cases in the country that have outstanding challenges that have, you know, been open for years and not. Knot, Pedressed, Would you guys be willing to put shovels on the ground while this is going on in the background? Yeah, I think that's what we're indicating in the sense that the development plans that we're going to come out with are going to speak to the activities that we are looking to target initially to move forward and build the project. Maybe one last one for me.

Speaker Change: And in some cases, there's other cases in the country that have outstanding challenges that have, you know, been open for years and not.

Speaker Change: not addressed or resolved.

Speaker Change: and Roger, do you want to head? Yes, so would you guys be willing to sort of put shovels on the ground while this is going on in the background?

Roger: Yeah, I think that's what we're indicating in the sense that this development plans that we're going to come up with are going to speak to the activities were, you know, were.

Lon Shaver: How are you thinking about financing the actual build? Well, the actual build based on the previous feasibility study and our work that we think we can make some improvements on can be covered off based on the funding package from Wheaton as well as cash on hand. Got it. Thanks very much, Lon. Okay, thanks. Your next question comes from Kevin O'Halloran from BMO. Please go ahead.

Roger: We're looking to target initially to move forward and build the project.

Speaker Change: Got it. Maybe one last one for me. How are you thinking about financing the actual build?

Speaker Change: Well, the actual, you know, build based on the previous feasibility study and our work that we think we can make some improvements can be covered off based on the funding package from Wheaton as well as cash on hand.

Operator: Thank you for standing by. Good afternoon.

Julie: My name is Julie, and I will be your conference operator today.

Speaker Change: Got it, thanks very much Lon. Okay, thanks Dalton.

Julie: At this time, I would like to welcome everyone to the solo corp, first quarter, physical 2025, financial results conference call, a line that emplaced on mute to prevent any background noise. After the speakers are marked, there will be a question and answer session. If you'd like to ask a question during this time, Samper Press star, then number one on your telephone keypad. If you'd like to wish a question, please press star, then the number two. Thank you.

Speaker Change: Your next question comes from Kevin O'Halloran from BMO. Please go ahead.

Lon Shaver: Hey Lon, thanks for taking my question. Um, just on the Ying, I'll... Yeah, on the Ying optimizations and the technical report. Will the other optimizations you're making, like the XRTs and the equipment upgrades, will those all be included in the updated life of mine plan? And then maybe if you could just give a quick comment on how those are tracking? Yes, they will because we're looking at operating costs, cut-off grades, you know, based on all these different factors coming to play, mining method, whether that be shrinkage, resuming, also introducing two other mining methods on a very minor basis from a tonnage standpoint. So, we've been looking at all of those factors and looking at the costs, both for determining the reserve resources as well as coming up with the life of mine plan and economics.

Lon Shaver: So you'll see all of that in that report, and comments would say yes, things are tracking well, tracking to plan, and, if anything, some of the work that we've been doing in developing these ramps has opened up areas, new access, identified, you know, new zones that were, you know, previously unknown. So seeing some ancillary benefits from this development plan and the shift in, you know, Okay, great. Yeah, I'm looking forward to seeing that come through in the report.

Speaker Change: Hey Lon, thanks for taking my questions.

Speaker Change: Just on the ying, I'll...

Kevin: Yeah, on the Ying optimizations and the technical report, will the other optimizations you're making like the XRTs and the equipment upgrades, will those all be included in the updated Life of Mine plan? And then maybe if you could just give a quick comment on how those are tracking?

Lon Shaver: I would now like to turn the conference over to Lon Shaver, president of Silvercorp. Please go ahead. Thank you, Julie. On behalf of Silvercorp, I'd like to welcome everyone to the call this morning. Today, we'll discuss our first quarter of physical 2025 financial results, which will release yesterday after the close of the market. A copy of the news release, our MDNA and financial statements are available on our website and seed our plus.

Kevin: Um...

Kevin: Yes, they will, because we're looking at...

Kevin: Operating costs, cutoff grades, based off of all these different factors coming to play, mining methods, whether that be shrinkage, resuming, also introducing two other mining methods.

Speaker Change: on a very minor basis from a tonnage standpoint. So we've been looking at all of those factors and looking at the costs and...

Lon Shaver: Before we get going, please note that certain statements on today's call will contain forward-looking information within the meaning of applicable securities laws. Also, please review the cautionary statements in our news release, as well as the risk factors described in our most recent regulatory filings. Now to recap our quarterly financial results, we kicked off the fiscal year with record quarterly revenue of 72 million. That was a 20 percent increase from last year.

Speaker Change: both for determining the reserve resources as well as coming up with the life of mine plan and economics. So you'll see all of that in that report.

Speaker Change: and...

Speaker Change: in terms of comments I'd say, yes, things are tracking well, tracking to plan, and if anything

Speaker Change: You know, some of the work that we've been doing in developing these ramps have opened up areas, new access, identified new zones that were previously unknown. So seeing some ancillary benefits from this development plan and the shift in mining.

Lon Shaver: This growth was driven by a robust commodity market, which led to notable improvements in realized metal prices, particularly in China, compared to Q1 of last year. In particular, the realized silver price rose by 36 percent, gold by 18 percent, lead by 18 percent, and zinc by 23 percent. Silver remains our most important metal, contributing 63 percent of our Q1 revenue, followed by lead at 22 percent. I'll note that silver was 59 percent of revenue in Q1 of 2024 and 55 percent of revenue in Q4 of 2024.

Speaker Change: Okay, great. Yeah, looking forward to seeing that come through in the report. Last one for me is, can you just remind us of the timeline that you're envisioning for Kuan Ping in terms of getting that into development and then how long until first production?

Lon Shaver: Last one for me is, can you just remind us of the timeline that you're envisioning for Juan Ping in terms of getting that into development, and then how long until first production. Well, that's going to be sort of a bootstrapping situation where we will break ground and develop and, obviously, looking at developing, how would I say, you know, efficiently and finding a way to get into early ore, even if that's development ore that we can bring to the mill, but looking to see ground broken and the mine starting to be built by the end of this fiscal year. Okay, I gotcha. I think, you know, I think you should manage expectations in terms of what initial tonnages are going to be, but look to break ground and get that mill up and running.

Speaker Change: Well that's going to be sort of a, you know, a bootstrapping situation where we will break ground and develop and obviously looking at developing, I want to say,

Lon Shaver: The results of this quarter reinforce why investors should own our shares, namely demonstrating that we provide leverage to higher metals prices through the response in our financial results. Moving down the income statement, attributable net income for Q1 was 22 million or 12 cents per share. This is up significantly from 9 million or 5 cents per share in Q1 of fiscal 2024. The increase in our bottom line reflects those higher metals prices partially offset by lower sales volume and higher business expenses related to the event's acquisition.

Speaker Change: You know, ground broken and the mine starting to be built by the end of this fiscal year.

Speaker Change: OK, gotcha, thanks. I think I think you know, I think just should manage expectations in terms of what initial tonnages are going to be, but but look to break ground and get that mill up and running. So I get that mine up and running.

Lon Shaver: On an adjusted basis, moving the impact of non-cash and one-time items, our attributable and adjusted net income for the quarter was 21 million or 12 cents per share compared to 12 million or 7 cents per share in Q1 of last year. Looking at cash flow from operating activities, our minds generated 40 million in this past quarter. This is up 38 percent year-over-year and largely reflects those increased metals prices. But also if we look at cash flow from operations before change in the non-cash working capital items, the increase was 65 percent.

Lon Shaver: So I'll get that mine up and running by your end early in the night. Okay, great. Thanks, Lon, and congrats on a strong quarter. Thanks, Kevin. Your next question comes from Felix Shafigullin from Haight Capital. Please go ahead. Yeah, thanks. I have just one question for you. I just wanted to double check the XRT sorters are operational already, right? Well, they're coming in on a phased approach, and so we've got one that's in trial that has been installed and is operating on a trial basis at mill number two, and it's based off of the results on a more consistent operating basis that will determine the addition of the other two that are planned at the other mine sites.

Speaker Change: Um...

Speaker Change: Um...

Operator: Okay, gotcha. Thank you all. This concludes the question and answer session. I would now like to turn the conference back over to management for any closing remarks. Great. Well, thanks, operator, and thanks to everyone. Thank you everyone for joining us today. If anyone has any further questions, please feel free to call or email us. We look forward to hearing from you and look forward to following up with some of these exciting news items that we are going to be releasing in the coming weeks. Have a great day! Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Thank you. Thank you.

Speaker Change: by year end, early in the new year.

Speaker Change: Okay, great. Thanks a lot and congrats on a strong quarter.

Speaker Change: Thanks, Kevin.

Speaker Change: Your next question comes from Felix Shafigullin from Haight Capital. Please go ahead.

Speaker Change: Yeah, thanks. Just one question for me. I just wanted to double-check. The XRT sorters are operational already, right?

Lon Shaver: Additionally in the quarter, we invested 20 million in our minds. Sales. This is up 23 percent from last year, largely stemming from increased underground development and tailing storage facility construction activities at Ying. Despite the increase in capital expenditures, we end of the quarter with 216 million in cash, cash equivalents and short-term investments, an increase of 31 million from March our year end. This position does not include our investments in associates and other companies, which had a total market value of 108 million as of June 30th.

Speaker Change: Well, they're coming in in a phased approach and so we've got one that's in trial that has been installed and is operating in a trial basis.

Speaker Change: at mill number two, and it's based off of the results on a more consistent operating basis that will determine the addition of the other two that are planned at the other mine site locations.

Speaker Change: Okay, gotcha. Thank you, Lon.

Speaker Change: This concludes the question and answer session. I would now like to turn the conference back over to management for any closing remarks.

Lon Shaver: Turning our attention to our operating results, as reported in July, our minds performed as expected in Q1. We mined 344,000 tons and milled 308,000 tons of order in the quarter, representing year-over-year increases of 13 percent and 4 percent respectively. Despite higher quarterly throughput, our production and silver led in zinc decreased by 4 percent, 12 percent and 6 percent respectively due to lower head grades in the current mine plan. Additionally, we stockpiled 59,000 tons of order at Ying, which will be milled after the mill number two expansion is completed later this year.

Speaker Change: Great, well thanks Operator, and thanks everyone for joining us today. If anyone has any further questions, please feel free to call or email us. We look forward to hearing from you, and look forward to following up with some of these exciting news items that we are going to be releasing here in the coming weeks.

Speaker Change: Have a great day

Speaker Change: Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Thank you. Thank you.

Lon Shaver: We remain confident in achieving our annual production guidance set in April, which as a reminder was between 6.8 to 7.2 million ounces of silver. On the unit cost front, we were also on track. Production costs average $80 per ton in Q1, 2 percent higher than last year's results, but in line with our annual cost guidance of between $77 to $80 per ton. The increase was mainly due to more mining preparation tunnels and grade control drilling completed and expense as part of the mining cost in the current quarter.

Lon Shaver: Our cash cost per ounce of silver, net-of-by-product credits, was negative $1.67 in the quarter. That's a significant improvement from a negative 31 cents in the prior year quarter and this change was driven by higher by-product credits from higher metals prices. All in sustaining costs, production costs rose by 4 percent year over year to $140 per ton in Q1, but remain below our annual cost guidance of between 144 to 152 per ton.

Lon Shaver: Our all in sustaining cost per ounce of silver, net-of-by-product credits, was 982, which was 4 percent higher than Q1 last year due to previously mentioned sustaining capital expenditures. Turning to the Yean Growth Projects, the No. 2 capacity expansion remains on track and on budget to be completed by November of this year. As a reminder, this project will increase Yean's total production capacity due to 4,000 tons per day. Construction on the third tailing storage facility is expected to be completed later this year.

Lon Shaver: With 14 million spent to date, the total cost of construction is expected to be below the original estimate of 38 million. We plan to release an updated Yean Technical Report imminently. This 43-101 compliant report with an effective date of June 30th will incorporate drilling completed up to the end of 2023 to update reserves and resources as well as provide an updated life of mine plan including economics. Regarding the Quanting Project, the Environmental Assessment Report was approved in July, and the Remaining Mind Safety Report is pending approval by the province.

Lon Shaver: Excellence. We expect to commence development in fiscal 2025 and have allocated $1 million for my construction in this year's budget. Last but not least, after the quarter ended, we successfully completed the acquisition of Adventist Mining on July 31. This is a significant step in our strategy to create a globally diversified green metals producer. It provides an excellent opportunity to leverage our technical expertise and financial strength to unlock value for all stakeholders through the development of the Aldomo project.

Lon Shaver: Also, after the acquisition closed, Ecuador's Ministry of Energy and Minds issued the resolution of change of phase for Aldomo. A milestone that enables the construction and subsequent operation on the mind. Once an operation, Aldomo will make a meaningful contribution to our production profile and financial results while simultaneously adding country and commodity diversification. We are dedicated to working collaboratively with the government of Ecuador, local communities, and Salazar resources, our in-country partners. Our commitment to modern, responsible development will benefit both the local communities and the country as a whole. We intend to provide more indications of our plans for development of the Aldomo project in the near future.

Operator: With that, I'd like to open the call for questions. Thank you, sir. Ladies and gentlemen, we will now conduct a question and answer session. If you'd like to have a question, press start at the number one on your telephone keypad. If you'd like to which way a question, press start to. If you're using your speakerphone, please leave the handset before pressing any keys. One moment please for your first question.

Joseph Rieger: Your first question comes from Joseph Rieger from Roth Capital Partners. Please go ahead. Thank you, Ron.

Lon Shaver: Congrats on a good quarter and thanks for taking questions. Thanks, Joe. Thanks for joining us. So on an event, I know you just said that you guys will be providing updates and we can give us kind of a rough timeline on what we should expect as far as news flow post acquisition. Now that's closed. Well, as I said, we're going to be putting out an update in terms of what the GoFord plan is.

Lon Shaver: Adventists and the care mining team did a great job developing Aldomo. And so what we're looking to do is kicking off the advancement of more detailed engineering and other project activities and looking at some of the areas where we can get going with development of the project. You know, early lead time items and certain projects that are going to be necessary to build the mine while we're looking at advancing the status of engineering and potentially fine tuning some of the other development plans.

Joseph Rieger: Okay, fair enough. Also, you mentioned the Yang Tech Horde report that's coming. Yeah, I think the wording you used was imminently. Will this report be designed to show a full use of the mill or should we expect a certain capacity level utilization? Well, I think Joe, you should wait for the report. I don't want to give, you know, advance. Advanced Use until the actual report is out, but the report does contemplate and factor in the expansion that's underway. Okay, and remind us what's the current expectation as far as the completion date for the mill. On November. November.

Lon Shaver: Okay.

Lon Shaver: All right, I'll turn it over. I think I should add, Joe. The thing is that the mill expansion is only one element of the expansion program. Recall that, you know, we're shifting mining methods. We're also looking at getting the permits renewed and extended to allow for an increased throughput rate. So, all of these things have to dovetail together, and this will get covered off in that report.

Joseph Rieger: Okay, fair enough.

Lon Shaver: I'll turn it over. Thanks, Lon. Okay, thanks, Joe.

Operator: Ladies and gentlemen, as a reminder, if you'd like to ask a question, press the one on the phone to your next question.

Felix Shafigullin: Come some Felix Shafigullin, from Hades Gapto. Please go ahead. Hey, Lon. Congratulations on a good quarter. Just a couple of questions from me. Regarding the mining cost of being that kind of, I guess, ticked up a little bit in this quarter, compared to a year ago quarter. Should we be looking at that as kind of just a one-off due to, you know, more tunneling and great control drilling that was expense? Or is that something, is that like an issue that might persist for some time going into the future?

Felix Shafigullin: What was this kind of the right way to looking at it? Well, again, we're so close to a life of mine plan to speak to, you know, what are going to be year averages to not be sort of caught up in quarter to quarter basis. You know, we don't think that the uptick that we saw in this quarter is, you know, hugely material. So I think I've just asked for your patience on that report when it's out and we look at sort of more longer-term numbers.

Felix Shafigullin: You know, that's the question we're going to address at that time. Okay. All right. So my next question, I mean, I imagine Pralo will also be addressed in the report, but I'll ask it anyway. So looking at this 59,000 tons of order was stockpiled in this current quarter and I think the production update also said that it'll be basically more orderly added to the stockpile. As I'm trying to rub my head around it, you know, I don't recall this kind of happening in the past.

Felix Shafigullin: And yes, the additional kind of 1500 tons per day additional capacity from the new production line would resolve those issues presumably. But why did so much or just not get processed? It seemed kind of strange that this happened. Actually, if you look back, we have seen some carryover and even in our Q4, which traditionally is our weakest quarter because of Chinese New Year mining activity, you know, ceases because of the shutdown, but it's easier to keep the mill running.

Felix Shafigullin: And so we actually even in this last Q4, we did play a bit of catch up in Q4 to cover some of the inventories that were developed in Q3. So it's just more of the fact that as we're advancing and developing, you know, we're looking at wrapping up that mining activity and, you know, we are hitting up on those. Capacity Limits at the Mill. And so I think this is sort of evidence of why the expansion plan and why the Mill expansion specifically is needed as part of delivering this growth and production that we're expecting to show in this life of mine plan that will come out in the report.

Felix Shafigullin: Don't know if that helps, but some of this order that was stockpiled, you know, if I understand correctly, some of it is kind of, I guess, let's just say, you know, run off from Q1. Is that kind of the right way to think about it? Yeah, yeah, I mean, it's mine. Q1 calendar, 24 is what I mean. So Q4 fiscal? No, no, no, no, no, this increase was generated in this quarter.

Felix Shafigullin: Oh, okay, gotcha. Yeah, what I was referring to is the fact that even in the last Q4 we were able to mill more than we mined in Q4 because of what had been mined and stockpiled. In say Q3. So I was saying that, you know, we have had the ability to play catch up in Q4 because mining activity has been less than milling. And in this case, you know, we've got mining activity greater than milling in Q1. So that's created that inventory stockpile that we're going to mill through by the end of this fiscal year. Okay, that makes sense. Thank you.

Lon Shaver: One last question before I go. I think you mentioned the remaining kind of capex spend on a new tailing facility, but I didn't quite catch it. What's the number that we should be looking at there? Budget for this year is 13 million. So that's the remaining. Yeah, that's the remaining for the year. And obviously, we've put, you know, we put a bit, you know, that will include some of the 14 that was spent today because we do pick up what was spent in this current quarter. Okay, gotcha. All right. Thank you, Lauren. Appreciate it. Okay, thanks.

Dalton Baretto: Your next question comes from Dalton, Birido, from Canaclord. Please go ahead. Thanks.

Lon Shaver: Good morning, guys. Lauren, I wanted to ask you about the permitted El Domo, you know, the lower court courts throughout the challenge. I'm just wondering. Do you guys think it will be appealed? And how are you planning your next steps based on that? Well, I think the indications that that were, you know, put out to the market were that the plaintiffs indicated the end of the first lower court hearing that they intended to appeal.

Lon Shaver: And so we fully expect that to take place. And, you know, that will move then from the local court to the provincial court. And, you know, we intend to respond to the case, you know, as Adventists and the team in Ecuador have been. And, you know, we feel positive about the outcome just given what we've seen not just in terms of the outcome of the hearing, but in terms of the case, the way it was handled, the commitment from, you know, all parties, you know, on our side to.., to defend against the allegations made by the plaintiffs.

Lon Shaver: So, so from our standpoint, I guess the second part of your question is, you know, we don't intend to, you know, hold back from advancing the project, you know, pending that appeal. Are there any restrictions on you guys while this is still in the court system, or can you move ahead as the thing is moving? We can move ahead. Got it. Okay. And then in the event that it gets all the way up to the Supreme Court, what sort of timeline are we talking here?

Lon Shaver: Well, to be specific Supreme Court in this case, if it makes it to the sort of the third level, which would be the Constitutional Court, you know, that could be a matter of two to three years, potentially. And in some cases, there's other cases in the country that have outstanding challenges that have, you know, been open for years and not addressed or resolved. And the project you got on ahead. So would you guys be willing to sort of put shovels on the ground while this is going on in the background?

Lon Shaver: Yeah, I think that's what we're indicating in the sense that this development plans that we're going to come up with are going to speak to the activities where, you know, we're looking to target initially to move forward and build the project. Got it.

Dalton Baretto: Maybe one last one for me. How are you thinking about financing the actual build? Well, the actual, you know, build based on the previous feasibility study and our work that we think we can make some improvements can be covered off based on the funding package from Wheaton, as well as cash on hand. Got it. Thanks very much. Okay.

Dalton Baretto: Thanks, Paul.

Kevin Oh: Your next question comes from Kevin. Oh, hello. Run from BMO.

Kevin Oh: Please go ahead. Hey, Lon. Thanks for taking my questions. Just on the young up, yeah, on the young optimizations and the technical report, will the other optimizations you're making? Like XRTs and the equipment upgrades? Will those all be included in the updated life of mind plan? And then maybe if you just give a quick comment on how those are tracking? Yes, they will because we're looking at operating costs, cutoff grades, you know, based off of all these different factors coming to play.

Kevin Oh: Mining method, whether that be shrinkage, resuming, also introducing two other mining methods on a very minor basis from a tonnage standpoint. So we've been looking at all of those factors and looking at the costs and both for determining the reserve resources as well as coming up with the life of mind plan and economics. So you'll see all of that in that report. And in terms of comments, I'd say, yeah, things are tracking well, tracking to plan.

Kevin Oh: And if anything, you know, some of the work that we've been doing in developing these ramps have opened up areas, new access identified, you know, new zones that were previously unknown. So seeing some auxiliary benefits from this development plan and the shift in.., and Mining.

Lon Shaver: Okay, great. Yeah, looking forward to seeing that come through in the report.

Kevin Oh: Last one for me is, can you just remind us of the timeline that you're envisioning for quenping in terms of getting that into development and then how long until first production? Well, that's going to be sort of a, you know, a bootstrapping situation where we will break ground and develop and obviously looking at developing, I want to say, efficiently and finding a way to get into early or even if that's development or that we can bring to the mill but looking to see, you know, ground broken and the mind starting to be built by the end of fiscal year.

Kevin Oh: Okay, got you. I think, you know, I think, you know, I think, you know, manage expectations in terms of what initial tonnages are going to be but look to break ground and get that mill up and running. So I get that mind up and running, you know, by year end early in the ground quarter. Thanks, Kevin.

Felix Shafigullin: Your next question comes from Felix Scheffi-Golin. Some hate gap though.

Lon Shaver: Please go ahead. Yeah, thanks. Just one question for me. I just wanted to double check the XRT sworders are operational already, right? Well, they're coming in in a phased approach and so we've got one that's in trial that is being installed, has been installed and is operating in a trial basis at mill number two and it's based off of the results on a more consistent operating basis that will determine the addition of the other two that are planned at the other mind site locations. Okay, gotcha. Thank you, Long.

Lon Shaver: This concludes the question and answer session. I will now turn the conference back over to management for any closing remarks. Great. Well, thanks, operator and thank you everyone. Thanks everyone for joining us today. If anyone has any further questions, please feel free to call or email us and we look forward to hearing from you and look forward to following up with some of these exciting news items that we are going to be releasing here in the coming weeks. Have a great day.

Operator: Ladies and gentlemen, this concludes the conference call. You may now disconnect. Thank you.