Q3 2024 Teck Resources Ltd Earnings Call
Yeah.
Speaker Change: Ladies and gentlemen, thank you for standing by welcome to Tech third quarter 2024 earnings release Conference call.
Speaker Change: This time, all participants are in listen only mode.
Speaker Change: Later, we will conduct a question and answer his question.
Speaker Change: Join the question queue Press Star then one on your Touchtone phone.
Speaker Change: Should anyone need assistance during the conference call. They may signal, an operator by pressing Star then zero.
Speaker Change: This conference call is being recorded on Thursday October 24th 2024.
Speaker Change: I would now like to turn the conference over just Fraser Phillips Senior Vice President Investor Relations Relations and strategic analysis. Please go ahead.
Fraser Phillips: Thanks, Jamie and good morning, everyone and thank you for joining us for Tech third quarter 2024 Conference call. Please note today's call contains forward looking statements various risks and uncertainties may cause actual results to vary Teck does not assume any obligation to update any forward looking statements.
Fraser Phillips: Please refer to slide two for the assumptions underlying our forward looking statements.
Fraser Phillips: We will reference various non-GAAP measures throughout this call explanations and reconciliations regarding these measures can be found in our MD&A. The latest press release on our website.
Fraser Phillips: Turning to the agenda on slide three Jonathan Pryce, our CEO will begin today's call with an overview of our third quarter results Crystal Presto <unk> CFO will.
Fraser Phillips: As additional color on the quarter.
Fraser Phillips: Jonathan will conclude today, sorry for closing remarks, followed by Q&A session.
Fraser Phillips: With that over to their jobs.
Jonathan Pryce: Thank you Fraser and good morning, everyone.
Speaker Change: On slide five our shifts to a pure play GP transition metals company with more supposed to close the sale of remaining interest in the steel there's Talbot on July <unk>.
Speaker Change: But that aside we received U S $7 $3 billion in cash and the lifestyle side use of proceeds including the law is passed by.
Speaker Change: Yeah.
Speaker Change: Company's history.
Speaker Change: Further our labor in the third quarter, we progressed deployments of those proceeds as we return.
Speaker Change: $20 million to shareholders through dividends and share buybacks in the quarter and over $1 3 billion in returns to shareholders.
Speaker Change: As of yesterday.
Speaker Change: Reduce debt or U S. One 5 billion, putting us in a net cash position of $1 8 billion deficit.
Speaker Change: And retained funding for a volume of pretty significant projects in preparation for our next studies called the drugs.
Speaker Change: We also achieved several operational highlights for the quarter.
Speaker Change: We continue to grow our copper production is set another consecutive record quarter copper production as <unk> continues to wrap up.
Speaker Change: Hello, I'm, sorry, I'll focus resulted in higher zinc and concentrate production at Red dog compared to the same period last year.
Speaker Change: We all know they are in the final stages of excuse me Russell.
Speaker Change: We completed the QB two project in the quarter demobilize the construction workforce.
Speaker Change: Essentially all of our claims are closed and our crew.
Speaker Change: Rueful waiting all project capital guidance range of U S. Eight six to $8 8 million.
Speaker Change: At the same time, we continue to progress our wealth funded capital efficient copper both portfolio moving our nuclear projects towards potential sanction in 'twenty five.
Speaker Change: Overall, we made significant progress in the delivery of our bodies.
Speaker Change: This trust.
Speaker Change: On slide six we continue our focus on safety health.
Our sustainability leadership.
Speaker Change: We are deeply saddened.
Speaker Change: Oh and employee fatality at Pennsylvania, Jerry container Assembly at the warehouse area on July 24th.
Speaker Change: In response, the joint venture management team at Pasadena supported by the joint venture partners, including Tech conducted a thorough investigation to identify root causes and implement any required actions.
Speaker Change: Ratings across the industry to help prevent future visits.
Speaker Change: Over the third quarter of high potential incident frequency rate remained low at 0.10, which is a 33% reduction from the same period last year.
Speaker Change: We continue to progress the rollout with mental health first aid training for frontline leaders across our operations towards our target of 50% completion by year end.
Speaker Change: Completion by the end of next year.
Speaker Change: Earlier. This month, we were recognized on the Forbes list of the world's best employers 2024.
Speaker Change: Meaningful.
Speaker Change: Well, he's driven ranking with multinational companies and institutions promote over 50 countries worldwide.
Speaker Change: Turning now to an update on the ramp up of <unk> operations on slide seven.
Speaker Change: Copper production at QB improved quarter over quarter to $52 5000 tons from 51.3 facts.
Speaker Change: Q2.
Speaker Change: However, production was impacted by lower grade ore volumes as expected following the geotechnical issues that restricted our access to higher grade material.
Speaker Change: It's the grades as being consistent with prior quarters of 0.58% and based on the throughput and recoveries that we achieved our production would be 56000 subs.
Speaker Change: Localized geotechnical issue that we had identified and disclosed last quarter has diabetes results. We have controls in place and we're continuing to advance the mine plan.
Speaker Change: We expect higher grades in the fourth quarter and going forward normal grade variability as expected.
Speaker Change: Theory.
Speaker Change: Mill throughput rates increased quarter over quarter concerning the robustness of our plant design.
Speaker Change: As you can see in the charts on the less fruit boats has been ramping up steadily quarter after quarter towards nameplate capacity and is currently near design throughput rates.
Speaker Change: We expect to achieve there's always throughput rates by the end of the year.
Speaker Change: We've also seen evidence of our ability to operate above design throughput rates were.
Speaker Change: Working hard on mill optimizations to postpone let's pause ninth place on all our plans for Debottlenecking.
Speaker Change: Recoveries also continued to improve as shown in the charts on the right where that increase quarter over quarter as increasing stability.
Speaker Change: I'll, mostly copper production declined marginally in September primarily as a result of additional planned and unplanned maintenance.
Speaker Change: We proactively take some downtime in readiness for the pilot test work of the grinding and flotation circuits to ensure improved cost in U S E. During the test.
Speaker Change: The test was successful and we've seen improved growing si coupled with selected reagents that enhance processing of all in the transition zone between the supergene in hydro <unk> mineralization, which has high playful text as.
Speaker Change: As a result, we expect improved recoveries going forward.
Speaker Change: We also have unplanned downtime on our Sitka on furniture failure of the mill feed and by reducing our tons milled.
Speaker Change: Our focus remains on improving recoveries and increasing over the lifetime.
Speaker Change: See progress following the completion of the test works as long with minor equipment modifications through improved reliability scheduled for the first half of 2020 five.
Speaker Change: This is expected to gradually improve molybdenum recovery Copa club stability on equipment reliability through the first half of 'twenty towards bite.
Speaker Change: Overall, as we close out the QB project and look towards completing the ramp up of QB operations. The design throughput rates, we expect to generate significant cash flows in 2025 and beyond.
Speaker Change: We have updated certain guidance targets twice before which is summarized on slide eight.
Speaker Change: Zinc, we have improved our net cash unit cost guidance range by <unk> 10 cents per pound. So 45 to 55 cents per barrel, reflecting the results of strong operational performance Red dog.
Speaker Change: A portion of this reduction was driven by improved operating costs, which allowed us to also improve our total cash unit costs rose by five cents to.
Speaker Change: The 65 sentences about et cetera.
Speaker Change: There is no change to Red Hawk production guidance.
Speaker Change: We've lowered our volumes revised sorry refined zinc guidance for Tri operations to $2 40 to 250, Cyrus says its usual localized fire at one of the units and the electrolytic zinc blocks in late September.
Speaker Change: We are looking at operating the other sections of the mine that would allow us to recover some of the production loss. However, this evaluation is still underway.
Speaker Change: And copper.
Speaker Change: Total production guidance range was lowered and narrowed with the bottom end of the range reduced by 15000 tons due to lower expected production from Highland Valley.
Speaker Change: Our revised guidance is now 424 55000 tons from 435 to 500 size it sounds previously.
Speaker Change: Production guidance for us in Mina conga and acquire a box unchanged.
Speaker Change: Our Q V, reflecting the slower ramp up this year, we have narrowed our <unk> production guidance. The 200 to 210000 tons to 2012 full from 200 to 265 sizes.
Speaker Change: We've revised our price towards the final production guidance range for Q V 240 to 290000 tons from 290 to 310000 tonnes, reflecting planned activities to improve copper recovery and equipment reliability scheduled to run through the first half of 'twenty to 'twenty five.
Speaker Change: What are your production at Highland Valley is now expected to be between 97 to 105000 tons from 112 to 125000 tons due to the delay in accessing the higher grade <unk> pit in Q3.
Speaker Change: For molybdenum our production guidance is reduced to three to 4000 tons from four three to $5 5000 tonnes in line with the changes to our copper production guidance.
Speaker Change: We have reduced our Q V molybdenum production guidance to 0.8 to one two times in silence for 'twenty to 'twenty four.
Speaker Change: And it's a four to 5.5 thousand tons for 2025.
Speaker Change: One eight to $2 4000 tons of five to $6 4000 tons respectively.
Speaker Change: Despite the lower total moly production guidance are favorable copper unit cost guidance is unchanged demonstrating our focus on managing costs across our operations.
Speaker Change: Turning to slide nine as.
Speaker Change: As we continue to progress on the issue of copper projects for potential sanctioning 25, all subjects and other works.
Speaker Change: To be the ramp up continues and we are progressing well on defining uhm opportunity for optimization debottlenecking in the existing assays to achieve improved throughput and recovery.
Speaker Change: Pilot body, a revised environmental assessments and permit application to the mine life extension was accepted in July or we continue to progress through the permitting process.
Speaker Change: We expect substantial completion of engineering and project execution planning in Q2 2025.
Speaker Change: And the project could be ready for a sanction decision at that time.
Speaker Change: So receipt.
Speaker Change: The joint venture San Nicolas continues to pay with application process and engagement with <unk> and stakeholders. This altogether.
Speaker Change: Project sanction decision is anticipated to following completion of the feasibility study and receipt of necessary permits in the second half of 'twenty to 'twenty five.
Speaker Change: Of course, we are closely monitoring the evolving political situation in Mexico.
Speaker Change: It's not for a while.
Speaker Change: Also get received the main environmental combing required we are being disciplined had bossy works are progressing detailed engineering, which gives more clarity on construction and associated capital before we sanction the project.
Speaker Change: We can sell them or the construction permit application development through Q3 slides towards the five.
Speaker Change: The project could be ready for sanctioning in late 2025, following receipts construction paninis and completion of detailed engineering.
Speaker Change: We look forward to create meaningful value for our shareholders through these low capital intensity higher Sydney copper projects.
Speaker Change: I'll now hand over the call to Crystal to provide further details on our third quarter results.
Crystal Presto: Thanks, Tom and good morning, everyone, starting on slide 11, with our financial performance in the third quarter at 2024.
Speaker Change: As Jonathan noted we began to deploy the proceeds received from the sale of our remaining interest in steelmaking coal basin to shareholders through significant traffic trends.
Speaker Change: And that is strengthening our balance sheet.
Speaker Change: Turning to slide $720 million to shareholders in the quarter, including $322 million in dividends and 398 million on share buybacks.
Speaker Change: We have refined over one 3 billion to shareholders year to date as of yesterday.
Speaker Change: To execute our previously announced share buyback program next week like two five.
Speaker Change: As a result of the completion of the sale of our remaining interest in our steelmaking coal business on July 11.
Speaker Change: E are resolved.
Speaker Change: Discontinued operations for all periods reported in our Q3 financial statements.
Speaker Change: Yeah.
Speaker Change: We had strong financial performance in the quarter with our adjusted EBITDA more than doubling.
Speaker Change: Active etfs.
Speaker Change: Replay compared to the same period in the previous year due to strong copper and zinc prices.
Speaker Change: Copper sales volumes, reflecting the benefit of the ramp up of key the operational.
In Q3, we had higher finance expense depreciation and amortization expense compared to the same period last year as most of the QB assets were considered available for use at the end of 2023.
Speaker Change: Depreciation starting in 2024, and we are no longer capitalizing interest on the QVC project.
Speaker Change: Our third quarter financial results were also impacted by a noncash after tax impairment charge of 828 million on our trail operations.
Speaker Change: As required under wraps me regularly assessed whether I'm kind of indicators are pregnant and parents are required.
Speaker Change: Pardon Me Trail is a result of the challenging environment for treatment charges due to our global zinc concentrate.
Speaker Change: Operating losses combined with the recent fire in the electrolytic zinc plant, which is expected to affect fourth quarter operations.
Speaker Change: Importantly, we remain committed to our trail operations as a core part of our strategy of providing critical minerals, particularly given a strong integration with Red Dog Trail.
Speaker Change: Trail remains an important asset in our portfolio and we remain focused on improving its profitability and cash generation through a range of initiatives that are currently being deployed.
Speaker Change: Overall, excluding the impact of tariffs.
Speaker Change: We saw significant improvement in our financial performance in the third quarter compared with the same period last year.
Speaker Change: Slide four summarizes the key drivers of our financial performance in the third quarter.
Speaker Change: The increase in adjusted EBITDA in the quarter compared to the same period last year was primarily driven by strong copper and zinc pricing as well as higher copper sales volumes.
Speaker Change: Operating cost increased due to the inclusion of the operating cost. This year in Q3 last year CD costs were generally included and capitalized cost.
Speaker Change: Continue to focus on managing our controllable costs across our business.
Speaker Change: Now looking at each of our reporting segments in greater detail, starting with copper on slide eight.
Speaker Change: Our gross profit before depreciation and amortization from our copper segment more than doubled compared to the same period last year to $604 million as we realize the benefit of keeping wrapping up.
Speaker Change: The increase was driven by higher sales volumes higher prices and an increase in byproduct credits and partially offset by the inclusion of the operating cost this year.
Speaker Change: We had another consecutive record quarter of copper production with increased production across all of our operations.
Speaker Change: <unk> ramp up continues to support increased quarterly copper production.
Speaker Change: Higher copper production at <unk> was driven by increased copper only ore as expected in the mine plan as well as higher mill recoveries.
Speaker Change: Water availability at some of that play out it's pretty it's resulting in higher mill throughput and production.
Speaker Change: And while Highland Valley production also increased it was lower than expected due to delays in accessing the lora kit, which has the highest rates.
Speaker Change: <unk> was attributable to lower our haul truck availability and challenges with labor availability and the autonomous systems as new haul trucks. This has been largely resolved and we expect to close that's more one off in the fourth quarter.
Speaker Change: Sure.
Speaker Change: Our cost of sales was higher year over year as expected and reflects the ramp up of QED and depreciation on its operating assets.
Excluding <unk>, our net cash unit costs remain the same as in Q3 last year, our U S $1 87 per pound.
Speaker Change: As Jonathan outline we have updated our annual copper production guidance to 420 455000 tons.
Speaker Change: <unk> hundred 35 to 500000 tons at our total molybdenum production guidance to $3.
Speaker Change: There are a thousand times from four 3% to $5 five.
Speaker Change: Despite the reduction in our annual copper and molybdenum production guidance, our copper cash unit cost guidance remains unchanged.
Speaker Change: Turning now that's where I think segment on slide slide 14.
Speaker Change: Overall, our gross profit before depreciation and amortization from I think segment was $358 million, an increase of 49% in the quarter compared to the same quarter last year, reflecting higher zinc prices and substantially higher silver and lead by product revenue as well as lower treatment charges.
Speaker Change: Russia had another very strong quarter of operating performance.
Speaker Change: Higher zinc and lead production was driven by higher mill throughput, reflecting our operational focus to improve mill availability and minimize unplanned maintenance.
Speaker Change: Sales volumes were strong and in line with our targets despite difficult weather conditions.
Speaker Change: In September we achieved a monthly record for concentrate loaded onto vessels were supposed to have closer integration between our operations and commercial teams.
Speaker Change: The shipping season, I'd say can you get to the fourth quarter with shipments dependent upon weather conditions, and we expect to complete our shipping season as planned.
Speaker Change: Our net cash unit costs accretive compared to the same period last year, reflecting strong operating performance lower smelter processing charges and higher silver and lead by product credits.
Speaker Change: At Trail operations, while we did report it is how many of the third quarter are you kiss that boy, our operated well and achieved near record online time and throughput.
Speaker Change: Our refined zinc production was impacted by the fire in the left electrolytic safe plant in September.
Speaker Change: Going forward, we expect taking concentrate sales for red dog of 155 to 185000 tons in the fourth quarter, reflecting the normal seasonal pattern.
Speaker Change: For the full year, we've improved our full year guidance range for net cash unit costs by Sun sets you asked per pounds <unk> 45 to 55 cents per pound from U S 55 to 65 cents per pound.
Speaker Change: A portion of this reduction is driven by increased operating costs.
Speaker Change: As a result, we've also includes ours. They total cash unit cost guidance five five cents per pound to <unk> 65 to 75 cents per pound from you at 70 to 80 cents per pound.
Speaker Change: Our guidance for zinc and concentrate production is unchanged and our guidance for refined zinc production was lowered to 240 to turn around 50000 tons from 275 to 290000 clients due to the fire and electrolytic stayed flat at trail.
Speaker Change: Turning now to slide 15, and our resilient balance sheet.
Speaker Change: Since the close of the Edr transaction on July 11th.
Speaker Change: We've made significant progress in the planning of the transaction proceeds to the balance sheet and to shareholders.
Speaker Change: We've reduced our debt by USD, one 5 billion to date, including a cash tender offer for you lost $1 4 billion of our outstanding term notes repayment of EUR $140 million of short term loans that probably you have to play out and open market repurchases of an additional 9 million terminals.
Speaker Change: Overall, we strengthened our balance sheet in the third quarter and you're in a net cash position of one eight times medium as at September 30.
Speaker Change: Our financing income increased in the quarter due to interest earned on our higher cash balance, which is currently 2 million $7 8 billion.
Speaker Change: The quality of our balance sheet, along with confidence in our business outlook and our focus on lowering our financing costs resulted in us reducing the size of our sustainability linked revolving credit facility by $1 billion you asked last week.
<unk> 3 billion.
Speaker Change: Alex.
Speaker Change: In the quarter, we returned significant cash to shareholders through the payment of a regular base quarterly dividend of 12 and half cents per share and a supplemental dividend of <unk> 50 per share for a total of $322 million.
Speaker Change: And the purchase of $6 3 million class B shares for 398 million under our normal course issuer bid.
Speaker Change: We are proud they were trying to over $1 3 billion to shareholders year to date, including the purchase of $13 6 million class B shares.
Speaker Change: Built on our strong track record of shareholder returns, which total over $5 billion since 2019.
Speaker Change: With a resilient balance sheet and are strongly positioned to execute on our growth strategy and create value for our shareholders.
Speaker Change: With that I'll turn it back over to Jonathan.
Jonathan Pryce: Thanks Crystal.
Jonathan Pryce: Starting with slide 17.
Jonathan Pryce: We shift to a pure play energy transition metals company, we remain true to our purpose and values guided by our capital allocation framework that balances growth with caf reduced sharply.
Jonathan Pryce: Our strategy is focused around four key pillars, which drive office use of responsible growth and value creation.
Jonathan Pryce: On slide 18, we are delivering on our strategy.
Jonathan Pryce: The sign of the be all it means that we now have a portfolio that is 100% energy transition metals.
Jonathan Pryce: We continue to focus on driving operational performance.
Jonathan Pryce: Our corporate production continues to grow.
Jonathan Pryce: We've closed on <unk> projects and are progressing towards the final stages of the ramp up of <unk> operations as the key driver of our near term copper growth.
Jonathan Pryce: I'll now focus on operational performance enabled a reduction in our full year guidance range for zinc net cash unit costs.
Jonathan Pryce: We continue to balance cash returns to shareholders with a highly competitive copper growth opportunities. So far this year, we've returned over $1 $3 billion to shareholders and deployed $302 million towards advancing our portfolio of growth progress.
Jonathan Pryce: And we significantly strengthened our resilient balance sheet in the third quarter.
Jonathan Pryce: <unk> all sales proceeds we paid down 1.5 billion U S deaths, we have a net cash position of $1 8 billion as of September 30.
Jonathan Pryce: To conclude with slide 19.
Jonathan Pryce: As an energy transition metals company, our focus remains on creating value for our shareholders.
We will drive strong operational and financial performance embedded by I'll focus on core excellence.
Jonathan Pryce: Pushing costs and what's the final stages excuse me run above which should set us up for strong cash generation and financial performance.
Jonathan Pryce: We are maintaining the balance between growth and shareholder suits.
Jonathan Pryce: We continue to progress our record returns to shareholders. The three to 5 billion authorized by the board this year.
Jonathan Pryce: And with a resilient balance sheet, we are well positioned to continue to progress all well funded capital efficient nature Coker projects for potential section in 'twenty twice twice.
Jonathan Pryce: Thank you with that operator, please open the line for questions.
Jonathan Pryce: Certainly.
Speaker Change: The question queue. Please press Star then one on your Touchtone telephone you'll hear a tone acknowledging your request.
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Speaker Change: Our first question is from our it work at all with Scotia Bank. Please go ahead.
Speaker Change: Hi, good morning.
Speaker Change: <unk> on QB two.
Speaker Change: So second consecutive quarter of guidance cuts here for 'twenty four.
You've now cut 25 by 12%.
Speaker Change: I mean at this point what.
Speaker Change: Can you share what gives you any confidence that these numbers are achievable and twenty-five.
Speaker Change: Just given all the cuts we've seen this year and I'm curious also what you're anticipating in terms of that guidance range for 25, how much of that improvement over 24 is driven by throughput first grades recoveries.
Speaker Change: Yeah morning, RF. Thanks, Thanks for the question.
So just to start with a bit of context around the 'twenty 'twenty four and the reduction of the guidance and then I'll go on to your question around 2020 volume I know as I said applause designed a few b is robust and we have continued to make very good progress on mill throughput and you can see that improvement quarter over quarter and.
Speaker Change: We do expect to be operating as designed mill throughput rates by the end of 'twenty pool.
Speaker Change: The key for US here is to ensure that we achieve these design, where it's more consistently through maximizing our online site.
Speaker Change: Oh recovery and are we expecting some challenges in Q3 as we went through higher license plates and those transitional was between supergene in FIFO G.
Speaker Change: Despite that we did make some progress through higher recovery rates quarter over quarter and as I mentioned, we have completed testing of dosage and reagent mixes, which are showing both improved recoveries and better stability in the plant work will be ongoing in that regard both through the fourth quarter.
Speaker Change: But this year and into 2025.
Speaker Change: The other components of course aside from fruit outrage is great and we're seeing a good level of accuracy and graded material weak volume versus what we expected all plans we have expected loan growth in Q3, as we said and we do expect improvements in grade into Q4, and as I mentioned, if all else being equal.
Speaker Change: If we'd had the same grade in Q3 as we have in Q1 and Q2 and we've operated with the throughput and recoveries that we did in the third quarter that we would have produced 56000 tons drove a 52, so great being the big driver of our lower production in Q3 relative to expectations.
Speaker Change: Also important to note because we discussed this in the last quarter that the geotechnical issue between Caribbean is under control and it gives us confidence that with Bulks combined bladder.
Speaker Change: So in a way we're happy with the progress we're making on throughput recoveries are very much a work in progress with test, we're continuing to move above and vaccines then into 2025.
Speaker Change: And twice twice by some of the work we're planning to do a rate recovery.
Speaker Change: Orion dosing, but also some of the work that has to be done on the plant will go through the first half of 2025, so that will involve some additional dimes all of them in 2025 said to drive those improvements into first off when we do expect that to translate into much stronger and more consistent recovery.
Speaker Change: Performance through the balance of the year.
Speaker Change: The throughput you know we are very encouraged by that we do see periods, where we are operating above.
Speaker Change: Nameplates, and as I mentioned basketball, thereby driving more consistency.
Speaker Change: In the upside and then online time associated with the plums and again there are some modifications that will be made to areas of the plant through the backend of this year, but also through the first half of 2020, but so.
Speaker Change: We've looked very hard at all the all the operational performance drive to see it we believe that the 25.
Speaker Change: The guidance that we put forward theories is very much ashish.
Speaker Change: Achievable, but you'll notice in the range that we put around that with the 240 to two ADC is relatively broad and his Bachelor reflect.
Speaker Change: Some level of ongoing uncertainty associated with an asset that is still in the ramp up phase.
Speaker Change: Yeah.
Speaker Change: Okay, just as a follow up in your presentation Slide page seven you show designed recoveries of 86% to 92%.
Speaker Change: Is that a revised life of mine assumption or do you still think you can get to 90 192 on a consistent basis.
Speaker Change: Yeah, there's no revision that artists a lot of that has been designed in and we still think that's a that's achievable here.
Speaker Change: However, she wishes that to talk about that in just a moment, but lets just say you know as we benchmark the performance of the ramp up of QB against all the major ramp ups of the victory.
Speaker Change: We are buying in line with the ramp up kits or pumps to throughput.
Speaker Change: Recovery is the area, where as I've mentioned, we have more work to do but even so we're not encountering some of the recovery issues that some of the major projects have encountered over the time. So again, that's what gives us the confidence to continue to push higher but I'll hand over to our chief operating officer is that to give a bit more color on.
Speaker Change: Recoveries, specifically, because that's a very important point thanks Jonathan.
Speaker Change: No.
Speaker Change: We have achieved pretty decent recoveries. When we you know what that typical ore types, but have struggled with some of the transitional ores, which has a higher place.
Speaker Change: And I think our performance has been with 83%, 84% over the last quarters, and we actually even better numbers now.
Speaker Change: But the most important part is as we introduced the mortgage circuit as well that had some impact as well and that's what that Jonathan mentioned has given us a good resolution on what.
Speaker Change: Reagents to use and that is being implemented here in late October early November.
Speaker Change: And we will then fine tune that.
Speaker Change: Oh, well into the into the first half of 2025.
Speaker Change: And the range that you mentioned of 86 to 92.
Speaker Change: It depends on what ore types are being set and and we do expect some transition ores are well into the first half of 2025, So we won't get to those numbers of 92% in the first half and hence a philadelphia.
Speaker Change: So all the impact on the 2025 on the 2025 guidance.
Speaker Change: And of course the.
Speaker Change: <unk> 86 to 92 is over a longer term period.
Speaker Change: A quarter or so over the life of mines are you'll see variability on that swap.
Speaker Change: Thank you.
Speaker Change: The next question is from Bryce Adams with Seattle.
Speaker Change: Please go ahead.
Bryce Adams: Thanks, Bill I appreciate the presentation.
Bryce Adams: I wanted to ask on San Nicolas in open pit mining in Mexico, Jonathan I think you had mentioned in the comments that you are monitoring the situation.
Bryce Adams: Is there anything that you can add to that.
Bryce Adams: It looks like the current has shifted towards being more positive.
Bryce Adams: Would you agree with that and could that be reconsidered as an underground operation is that something that's being evaluated.
Jonathan Pryce: Bryce Thanks very much for the question.
Jonathan Pryce: As mentioned, we are still monitoring the situation in Mexico, I think it's fair to say, there's still a level of uncertainty there, but I would agree with your assertion that the the tone has moved to a slightly more positive physician or alternatively, a slightly less negative position depending on how you look at that.
Speaker Change: You know we've we've done a lot of work on what is the optimal powerful developments of this assay I think your question is geared around trying to avoid the the open cost issue. We still think that the open cut mine is going to deliver the best for students associated without assets and we continue on the purchasing process.
Speaker Change: On that basis, we can see you on our feasibility study in engineered wood on that basis and we are.
Speaker Change: Hopeful of a resolution.
Speaker Change: For the open cut mining, particularly in the context of Sun Nicholas in due course, but I think we have to be realistic enough that there is uncertainty in regards to that are still in the environment today.
Speaker Change: Okay. Thanks, that's all for me I appreciate that and then the extra color on our Q Big just in the last few minutes. Thank you.
Speaker Change: Thanks Brooks.
Speaker Change: The next question is from Carlos de Alba with Morgan Stanley. Please go ahead.
Speaker Change: Yeah. Thank you very much good morning.
Speaker Change: Two questions one on the semi class and annoying on QB cynical as maybe just a follow up.
Speaker Change: Thank you.
Can you remind us if you already have a open pit mining concession for the project or do you have only an exploration license what exactly do you have yesterday and one of the biggest local my corporate users mention that for one of their projects.
Speaker Change: They are not worried about any changes in the in the legislation because they already have the concession. So I just wanted to understand exactly what do you have.
Speaker Change: Yeah, that's what we we believe that we do have protection under the concession that we have costs associated with San Nicolas.
Speaker Change: Whether one off through this consideration around the future of open kind of mining that converts into appendix of development is really the open question.
Speaker Change: Presence, so the extent to which there was a grandfathering of those prior rights into the into the current situation is something we still have to work our way through them.
Speaker Change: Good day, and getting to me by the San Nicolas JV, and then also postponed as ourselves like Veeco Eagle with the with the Mexican authorities as we tried to figure out the appropriate path forward here for our projects.
Speaker Change: Alright that makes that makes total sense and then on on QB.
How much how many days in September.
Speaker Change: What was the operation down for the maintenance that you mentioned in the release that that was taken and I think I heard you mention that in the first half of next year, there's going to be also some downtime can you maybe provide a bit more color what months, you kind of a sense of how many days.
Speaker Change: In those months, there Bruce will be down.
Speaker Change: Yeah, I'll I'll I'll.
Speaker Change: Policy to tissues that on that as you know, we we thought that cadence of major.
Speaker Change: Shut items, if you like every quarter and then in addition to that there would be some additional more opportunistic shutdowns that we've taken on specific areas as long equipment. So she's out if maybe you can call it.
Speaker Change: Comment on September and then and then broadly speaking on next year.
Speaker Change: Well Carlos in September a we took an extra three days to do some of the work on bell changes in some of the minor changes and we needed to do ahead of that test work.
Speaker Change: And then also as Johnson mentioned have taken out issues that we had where we were at the mills were down but they were running that limit limited rates because of salt because of water ratios of recovery from the taken there. So it's a it's not just a matter of downtime. It's it's some of the limitations those issues have been resolved.
Speaker Change: And the pictures and.
Speaker Change: We continue to address issues as an example, one.
Speaker Change: We found that a follow on on our mills Werent.
Speaker Change: Having the lives that we that we were expecting so we went around change the design change the material and those have been installed some off of bell developing itself did not last but we change the material and the design of that to get so these are the types of things that you encounter in a startup that that.
Speaker Change: Definitely our dressing and Q1.
Speaker Change: Oh downtown.
Speaker Change: Sometimes you extra downtime release to address several other items that we've identified just didn't increase.
Speaker Change: The design life of those components of the equipment. So non fatal flaw at all it's just a matter of like improving the reliability of some of the components.
Speaker Change: So the Q1 numbers are a few percentage points below our target on availability and then some in Q2 as well.
Speaker Change: Forms the guidance for 2025.
Speaker Change: Alright, Okay. Thank you very much I'll follow up with more questions later, thank you.
Speaker Change: Thanks, Joe.
Speaker Change: Yeah.
Speaker Change: The next question is from Chris <unk> with Jefferies. Please go ahead.
Speaker Change: Thanks, Operator, hi, it's crystal permanent thank you all for taking my question and thanks for the additional insight so far in the Q&A.
Crystal Presto: Just had some follow up on on the QB ramped and how we should think about incremental costs and how that's going to flow through the P&L and the cash flow statement in 2025, So I think Jonathan He said that project Capex is basically done.
Crystal Presto: But with production guidance now for 2025 being lower you talked about the additional work that you need to do to get to full capacity when I hear work in mining I think costs are high.
Crystal Presto: Do we think about the kind of the cost impact in 2025.
Crystal Presto: And just also wanted to confirm its project Capex now doing this with everything just kind of flowing through.
Crystal Presto: Kind of asset level.
Crystal Presto: Reading expenses in Capex, or where my Incrementals and you're saying that earlier. Thank you.
Crystal Presto: Sure.
Speaker Change: Thanks for the questions there, Chris So I suppose the first bought yesterday the project Capex is down not U S.
Speaker Change: Eight six to eight one day, we we fallen in that range and as I said was there were some claims outstanding but they've been accrued for and are captured in that range and we fully T. Mobile lines. So when you consider the project to be done and in the rear view mirror now to your points on some of the works we're talking about doing next year I mean these things are.
A minor in the scheme of things and so small you know you're unlikely to see them a tool going out bidding and all costs.
Speaker Change: This is essentially a light switch.
Speaker Change: Full of preventative maintenance or minor improvement work, we'll be doing around the sides. So don't see losses do you have any significant additional capital cost burden.
Speaker Change: So your final point.
Speaker Change: Yes, essentially with the with the project close all of these expenditures now will will run through the the operation you know of course, where there's capital being spent on sustaining works those things will be capitalized, but but other operating costs in the normal course will run through the P&L.
Speaker Change: First of all if there's anything you wanted to do lots of luck no I think the only thing I guess I would say as you know we've reiterated our guidance for for the copper business as well as for QB for for 2024, despite seeing some reduction in our our production guidance I think that just really reiterates the point about our focus on our cost and where we're working.
Speaker Change: To demobilize contractors and we've seen some success in that as well.
Speaker Change: Right.
Speaker Change: So the 2025 reduction in production will will be associated with an increase in cost right. So we should expect.
Speaker Change: All else equal your unit costs, and <unk> will be higher for 2025, because your volumes are lower at the very least.
Speaker Change: There was that additional kind of clear what we have is that correct.
Speaker Change: Yes, well, we haven't guided yet Chris but for 2025, obviously, if you assume that operating costs are the same as you apply a lower production cost and all else being equal to get a higher operating cost of course, but we need to assess what those costs are.
Speaker Change: For next year guidance, but your gross.
Speaker Change: And I guess the key Jonathan like you said I mean, it's not like there's a lot of additional capex just as a matter of ramping this thing up and yes.
Speaker Change: The operating question I might be a bit higher in the first half of the year, but there's nothing else that we have to really worry about it I mean I guess the second the follow up to that is you've talked in the past about.
Speaker Change: Kind of waiting until 2025 before sanctioning new projects and I think part of the reason for that was we wanted to get to be too up to full capacity.
Speaker Change: To the extent that this is being delayed in terms of the ramp does that push back timing on kind of sanctioning of other projects or is it still possibly see some.
Speaker Change: Some of those sanctioned projects come through in the second half of next year. Thank you.
Speaker Change: So let me let becomes a line of sight, Chris just Crystal was there anything else you wanted to say on the unit cost base just to close that out yeah. I mean currently I just really confirm we haven't put out our guidance for unit cost for 2025, I would expect them to be lower than 2024, because we had you know obviously factors with <unk>.
Speaker Change: Ramp up with using alternative shipping.
Speaker Change: Shifting arrangements, we've had lower moly production, which has an impact on our net cash unit costs, because we don't get the tamale credit so those things are.
Speaker Change: We should see those resolve in 2025 and and we'll put out our guidance as we normally do in January restaurant.
Speaker Change: Understood. Thank you Crystal and then just.
Speaker Change: Do you have in the projects sanctioned.
Speaker Change: The remaining work we have to do on QB.
Speaker Change: Just I've mentioned is very much in the first half of next year as we look to optimize.
Speaker Change: Conditions, the civic reagents for better online time and improve recoveries that the two things. We're focused on we expect to have that starting in the first half.
Speaker Change: Even if we achieve all of the permits on the timeline, we're working to complete our studies.
Speaker Change: And and have positive economics associated with the capital cost of these projects, we wouldn't be sanctioning anything before the second half of next year and in any event.
Speaker Change: So we remain.
Speaker Change: Confidence in you know sort of the full ramp up of QB and I. Just wanted that we'll look at we're looking at other projects and I'm talking about Greenfield projects in the second half of the S. H B C mine life extension being a Brian field of course is one that we will.
Speaker Change: Pursue as quickly as possible, but again I think that runs into the system next year in any event.
Speaker Change: Great. Thanks again good luck.
Speaker Change: Thanks, Chris.
Speaker Change: The next question is from Liam Fitzpatrick with Deutsche Bank. Please go ahead.
Speaker Change: Okay.
Speaker Change: Good morning, Jonathan first one just on production guidance I wanted to clarify whether.
Speaker Change: The update today.
Speaker Change: Updates for your other assets in terms of 2025 guidance or will we be getting further revisions to those in in November or January.
Jonathan Pryce: Yeah, so as to the ugly updates we've made for 2025 are the ones. We've communicated today and of course that just relates to QB, where.
Speaker Change: For the issues.
Speaker Change: We've identified we understood clearly today, who would never be a change to prior guidance for next year at all.
Speaker Change: All of our assets as we work through the planning process and there is sorry, if you have any guidance will be updated in the normal course of January.
Speaker Change: And then on the on the growth strategy.
Speaker Change: I mean, you're clearly not alone in terms of the the challenges in building and ramping up copper assets are you still convinced that getting ahead with other greenfields further down the line is basically the right strategies the tick.
Speaker Change: We are Liam for a for a number of reasons I mean, firstly the projects that we have in the in the pipelines are ahead of us a significantly smaller in scale scope and have much lower complexities in the GB. So.
Speaker Change: We're also doing a significantly more work around derisking projects prior to prior to sanction the ear and soon to be you know the level of engineering.
Speaker Change: We'll be undertaking for example, which will give us greater certainty as to capital spend schedule.
Speaker Change: And execution pathways.
And we believe that the low capital relatively low capital intensity of these greenfield projects are well off a very good returns to our shareholders.
Speaker Change: Seattle was and you know to us it certainly looks like the more attractive strategies and M&A.
Speaker Change: A great deal as those are the upside can be paid away through premiums to acquire assets. So we do think it's the right strategy of course through going through something like QB in sense of the nature of construction and development as a S. Adverse and then there's a ramp up process that we're working through yes, we take significant Luna.
Speaker Change: <unk> from glass and build enormous organizational capability that we can take forward onto on future projects. So we do think it's the right way forward.
Speaker Change: Projects are not simple they they never all but we are working very hard on building that capability capacity systems processes inside the organization.
Speaker Change: To underwrite a successive future project development.
Speaker Change: Thank you and my last quick one if I may just on working capital. So there was a reasonably big build in Q3 about half a billion any color on guidance.
Speaker Change: Guidance on how and when that will.
Speaker Change: And in the quarters ahead.
Speaker Change: Yeah, Thanks, Dan well I mean, if all of that.
Speaker Change: Some of that at least relates to Q V. So I'll toss over to chewy and Amazon, Our Chief commercial officer, who can explain a little bit about the production boost the sales profile that we see in the operation.
Speaker Change: Yeah. Thank you very much for the question Liam maybe important just saying at the beginning but of course sales and production don't always match and that could occur for you know a variety of reasons, including cutoffs, where the reporting period in system and in transit inventory vessel scheduling bloating windows things like that so for example.
Speaker Change: You know what.
Currently we have just a couple of holds of cargo with the port.
Speaker Change: Those are scheduled to load imminently and Theres really no excess inventory there in terms of the working capital question, though the difference.
Speaker Change: See in the disclosure is attributable to material. This off the mine and that's built up during the transition kind of claim materials challenge that we referred to in disclosure. So this material is being transferred now with filtration plants into the courts and we will go out for loading in for sales and we expect a good portion of that to occur in Q4.
Speaker Change: And the remainder expected Q1, so we'll knock Dave since the volumes will reconcile overtime, but important just to come back to the fact that of course sales and production of oil patch.
Speaker Change: And then I I'm, sorry, Chris I would just add in relation to timing of sales. We did have very strong both copper and zinc sales in the month of September until you see some of that built into your into the E. R, which will be collected in the normal course as we go through the.
Speaker Change: The rest is back into Q4.
Speaker Change: Okay. Thank you.
Speaker Change: Thanks Lee.
Speaker Change: The next question is from Myles Allsop with UBS. Please go ahead.
Speaker Change: Thanks for the opportunity. So first of all maybe on the buyback could you just give us a sense are you maxing out with the buyback during Q3 should we assume that a similar rate can be achieved in Q4 and during 2025, if you go around $400 million.
Speaker Change: Quarter.
Speaker Change: Sure.
Speaker Change: Sales at malls, where they're not backstairs a lot we all being.
Speaker Change: <unk> prudent in the way, we execute against that buyback so with lower share prices, we are buying back more shares and that's at the highest prices we'd be buying back less there's nothing. That's also indicates that we call them continue running at the same pricing in Q4 that we did in Q3 in fact would be somewhat accelerated because in July due to a.
Speaker Change: Blackout period, we wouldn't buying back shares so we would expect.
Speaker Change: Again, all else being equal to buyback more shares in Q4, as we get into Q3.
Okay that makes sense and then just going back to Q B I'm sorry, It's obviously the key question obviously.
Speaker Change: Obviously, we've talked a bit about optimizing all optimization and debottlenecking, which is not in the guidance, but yeah. Some of.
Speaker Change: Of that upside medium term.
Speaker Change: When would we get more clarity on this when will you stop building into guidance is this going to be end of next year. Once you hit steady state tool.
Speaker Change: How should we think about that should we start factoring in throughput above 143000 tonnes, a day or should we just stick a 143, given the track record over recent quarters.
Yeah. Good question Myles I mean first off I'll say that at our on our Investor Day, a couple of weeks from now we will talk about this off for what's the QB assay in some more detail.
Speaker Change: I think for the time being our best to stick with the nameplate capacity because you know our focus is on improving that consistently by getting the ongoing time wherever it needs to be we have communicated that we think there is an opportunity to optimize above boxes, as we talked about optimizations being up to 10% increases through.
Speaker Change: Which can be accommodated by our existing permits beyond the box.
Speaker Change: Any additional upside in the plant would really come through more of a debottlenecking.
Speaker Change: Approach, which would require some minor modifications that upgrading certain plants and equipment in fact could potentially deliver another 15% of.
Speaker Change: All upside youtubes of throughput.
Speaker Change: But the the studies associated with that work are underway, we expect to have a much better line of sight into the path forward by the end of the year, but we will.
Speaker Change: Communicating more of somebody who can talk about this in some more detail in a couple of weeks time at the Investor day.
Speaker Change: Okay. Thanks.
Speaker Change: The next question is from Lucas pipes with B Riley Securities. Please go ahead.
Lucas Pipes: Thank you very much operator, thank you very much for taking my question and Ed Jonathan.
Speaker Change: When you have your site tour at Highland Valley on November 5th and still have labor needs I might be tempted to fill out a job application seller. So please remind me of that.
Speaker Change: But all all are all joking aside I wanted to touch on on trail for four for a moment you mentioned a range of initiatives that youre looking at.
Speaker Change: Two to improve the operational stability at that asset what will it take capex life time wise too.
Speaker Change: To improve.
Speaker Change: The performance there. Thank you.
Speaker Change: Not really.
Speaker Change: We were just.
Thinking of processing you drove up the case scenario, we missed the assay you were referring to could you just repeat that please.
Speaker Change: That is a trail.
Speaker Change: Right. Okay. Finally pizza box, yeah, if we we all and we've seen a recent improvement in performance of trial, absolutely. We broke the kids are back online is performing.
Speaker Change: It very well and we are looking at our cost reduction approaches that cause it to further improve but I'll I'll discus she's ought to give you a little bit more color on some of the work that we're.
Speaker Change: Doing in front of them.
So Lucas.
Lucas Pipes: We've made some recent leadership changes there as well and with a renewed focus on cash generation as Christopher mentioned earlier.
Lucas Pipes: Maximizing product margins and cost reductions and particularly in the maintenance and non routine work area.
Lucas Pipes: We are we are going through.
Lucas Pipes: A lot of metallurgical work as well in order to improve recoveries from the rest of it use it with really good success right now.
Lucas Pipes: That will help us to be able to take different fees, while maintaining the margins from those feeds with improved recoveries.
Lucas Pipes: And of course, coupled that with a with a strong focus on cost reductions to get us back to profitability.
Speaker Change: Thank you and Capex why if any any any ballpark figures to think about.
Speaker Change: Okay.
Speaker Change: The only major capex associated with these changes.
Speaker Change: Thank you very much for that and I wanted to touch on the balance sheet really quickly.
Speaker Change: Krystal can you remind us how much more you your youre looking to allocate towards capital returns how much more you're looking to allocate towards debt reduction from here going forward and just a bigger picture.
Speaker Change: What do you think.
Speaker Change: Do you need in terms of cash to run the business and also be prepared for for growth.
Speaker Change: If you could comment on that I would I would appreciate the color. Thank you.
Crystal Presto: Yeah, No problem I think they get it in terms of maybe I'll start with the fat reduction.
Crystal Presto: A piece of it when we announced the use of proceeds we had allocated $2 billion U S to that and today.
Crystal Presto: We've completed over $1 5 billion with the combination of the the buyback of our.
Crystal Presto: Well, let's see.
Crystal Presto: A reduction in the CBA short term long and so I think we have around 80 400 million. You asked remaining are earmarked for debt reduction and we're continuing to review how we may deploy that the auctions, obviously relate to the project financing for HCV assay.
While there are some some leasing that we have on the balance sheet.
Crystal Presto: Exploring those I think they will take a little bit more time for us to execute because we obviously have partners huh.
Crystal Presto: And thanks to you to resolve in that regard.
Crystal Presto: And then in terms of the of this shareholder return. So we've obviously, we pay the supplemental dividend for 50 cents per share in September.
The board had authorized 3.25 billion of buybacks. If you also include the 500 million from from earlier in the year through yesterday, we had executed 882 million of that so we'll have the remainder are attacks I think it will take us.
Crystal Presto: For 12 to 18 months a longer kits to conclude that it is as Jonathan noted that will depend on obviously the price of our shares in <unk> and with consideration of I'll tell you.
Crystal Presto: So that's on the buyback and then in terms of.
The growth projects, we had when we issued the use of proceeds again, we had disclosed a range of capital for those projects and I think our exposure from July and we are we're continuing to review those capex numbers and assess those as we go through the detailed engineering work and conclude the <unk>.
Crystal Presto: So well we will provide updates in due course as needed, but I think you can refer back I don't have the number at hand, but you asked 3132.
Crystal Presto: Three six to 4.3, you can double check in July and freezer can fill it up with you offline, but so that's got to be in regard to growth in leased earmarked proceeds for that and we're holding it at cash we expect <unk> to generate significant cash flow as we get up to the full production in <unk> and into 2025 and we.
As per our capital allocation framework, if we generate cash in excess of our needs. We would return that to shareholders and our capital allocation framework enables us to do that without minimum 30% of available cash returned to our return to shareholders. So that's generally how we think about it.
Crystal Presto: And if he has I guess follow up questions happy to take that.
Speaker Change: Thank you very much for all the color and I look forward to seeing you in November.
Speaker Change: Thanks, So I guess, we'll see you then.
Speaker Change: The next question is from Timna Tanners with Wolfe Research. Please go ahead.
Timna Tanners: Hey, good morning, Thanks for squeezing a fan and I just had two that I hadn't heard addressed if I Miss them. One is just on the updated economics.
Timna Tanners: And so for now I'm you know, it's been awhile since I've seen at least a C. One cost estimate pre COVID-19 and besides me asking all that would that be something we can hear about in November or can you just remind us on the timing of any update there.
Speaker Change: Yeah. Thanks for the question. So yes, we will provide more updates on those projects in in November.
Speaker Change: Alright lets stay tuned and then my other question I, just thought it'd be appropriate cap paying you on the zinc market because you know as much as we all talk about copper and other commodities zinc has been one of the biggest high Flyers that we've followed I know one article I read that to be the Cal fire may be to some of the strength right now.
Speaker Change: If you could provide for us in terms of color on your in your outlook of how sticky that sun strength might be would be great. Thanks.
Speaker Change: And timna. Thanks, Thanks for asking yes, okay. Yes. Thank you for the question Timna, you know interesting that in both the zinc and copper concentrate markets youre seeing structural deficits in concentrate.
Speaker Change: I would differentiate those two and zinc what we see is actually a chronic shortage and an investment.
Speaker Change: In terms of mice and then challenged of course, both by disruptions that have occurred within the last couple of years and shutdowns as a result of the previously low price. So looking forward you know you're really relying on three mines coming online in order to improve that concentrate picture capuche, She oeser annoying Tara.
Speaker Change: Capuche you of course has been a bit slow to ramp up they've been shipping over quarter, three and have revised our guidance ozone or uncertain of the condition of that in the future and not material of course, because the trust him with go to China, and then believe in Tara began in Q3 and have begun with a smaller staff complement and look.
Speaker Change: Likely not to return to the same production levels that they had previously so all of that speaks to us about a chronic shortage of concentrate youre seeing that reflected in the record low Pcs that are occurring and certainly in the major reach research houses.
Speaker Change: We're looking forward to that T. C. In 2025, I'm expecting it to be a significant level as possible you can record loss. So I think that's why you're seeing our zinc responding the way that it has in terms of finished metal price finished metal prices in North America at least have come up a little bit in the last in the last while and that's positive.
So we were looking to sink for a bright future of 2012 five thanks for the question.
Speaker Change: Thank you thanks Timna.
Speaker Change: Yes.
Speaker Change: I will now hand, the call back over to Jonathan for closing remark.
Speaker Change: Okay.
Jonathan Pryce: Thank you operator, and thanks again to everyone for joining US today, we look forward to seeing many of you in person in Vancouver, and a couple of weeks for our strategy day on the Highland Valley site visits.
All of those presentations will be posted to our website detect dot com. Shortly after the event. So thank you once again and as ever if you have any further questions. Please reach out to Fraser our ILC.
Jonathan Pryce: Enjoy the rest of your day.
Jonathan Pryce: Yeah.
Speaker Change: This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
Jonathan Pryce: [music].
Jonathan Pryce: Yeah.
Jonathan Pryce: Okay.
Jonathan Pryce: [music].
Jonathan Pryce:
Jonathan Pryce: Yeah.
Jonathan Pryce: [music].
Jonathan Pryce:
Jonathan Pryce: Hum.
Jonathan Pryce: Hum.
Jonathan Pryce: [music].
Jonathan Pryce: Hum.
Jonathan Pryce: [music].
Jonathan Pryce: Uh huh.
Jonathan Pryce: Yeah.
Jonathan Pryce: Yeah.