Q1 2025 Hudbay Minerals Inc Earnings Call
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John Tumazos, Greg Barnes, Farooq Hamed, Orest
A film by Peter Kukielski Directed by Peter Kukielski Screenplay by Peter Kukielski Cinematography by Peter Kukielski Music by Peter Kukielski Sound by Peter Kukielski Music by Peter Kukielski
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Speaker Change: Good morning, ladies and gentlemen, thank you for standing by.
Speaker Change: Welcome to the HUD Bay minerals incorporated first quarter 2025 results conference call.
Speaker Change: At this time, all participants are in listen only mode.
Speaker Change: Following the presentation, we will conduct a question and answer session.
Speaker Change: Joining the question queue you May Press Star then one on your telephone keypad.
Speaker Change: Should you need assistance during the conference call you May signal, an operator by pressing Star then zero.
Speaker Change: I would like to remind everyone that this conference call is being recorded today May 12, 2025 at 11, a M eastern time.
Speaker Change: I will now turn the call over to Candace Brule, Vice President Investor Relations. Please go ahead.
Candace Brule: Thank you operator, good morning, and welcome to HUD Bay's 2025 first quarter results conference call.
Speaker Change: I based financial results were issued this morning and are available on our website at Www Dot High Bay Dot Com a corresponding Powerpoint presentation is available on the Investor event section of our website and we encourage you to refer to it during this call. Our presenter today is Peter can kill ski HUD based president and Chief Executive Officer.
Speaker Change: Accompanying Peter for the Q&A portion of the call will be Eugene Lee, our Chief Financial Officer, and Andre loads on our Chief operating officer.
Speaker Change: Please note that comments made on today's call may contain forward looking information and this information by its nature is subject to risks and uncertainties and as such actual results may differ materially from the views expressed today.
Speaker Change: For further information on these risks and uncertainties. Please consult the company's relevant filings on SEDAR Postern. Edgar. These documents are also available on our website. As a reminder, all amounts discussed on today's call are in U S dollars, unless otherwise noted and now I'll pass the call over to Peter could kill ski.
Speaker Change: Thank you Candice good morning, everyone and thank you for joining us for today's call.
Strong performance in the first quarter of 2025 demonstrated the benefits of HUD Bay's unique copper and gold diversification from our enhanced operating platform in North and South America, and our resilience through effective cost control.
Speaker Change: This has allowed us to continue to generate substantial free cash flow and achieved industry leading margins.
Speaker Change: Consistent execution across all three of our operations has delivered inline consolidated copper production and better than expected gold production this quarter.
Speaker Change: We continue to benefit from strong and consistent mill throughput in Peru, higher grades and higher mill throughput in Manitoba and ongoing optimization efforts in British Columbia.
Speaker Change: We are extremely well positioned to deliver our full year 2025 consolidated production and cost guidance.
Speaker Change: We also made significant progress in advancing our growth strategy during the quarter, we consolidated ownership at copper mountain to increase our exposure to a high quality asset in a tier one jurisdiction.
Speaker Change: And we are now fully permitted at copperweld, which once in production will increase our long term copper production by more than 50%.
Speaker Change: We're executing our plan to continue to increase exposure to copper and gold and unlock significant value for all our stakeholders.
Speaker Change: Turning to slide three the results through the first quarter reflect stable copper production complementary gold production and exceptional cost performance across the business.
Speaker Change: Consolidated copper production was 51000 tons in line with quarterly cadence expectations.
Speaker Change: Consolidated gold production was 74000 ounces exceeding our expectations for the quarter, primarily due to continued outperformance in Manitoba, which I'll touch on in a moment.
Speaker Change: We had another quarter of industry, leading cost performance with record low consolidated cash costs of negative <unk> 45 per pound and sustaining cash costs of 72 cents per pound.
Speaker Change: These costs significantly improved compared to last quarter as a result of higher byproduct credits and strong operating cost performance across all business units, partially offset by planned lower production levels in Peru during the quarter.
Speaker Change: First quarter adjusted EBITDA achieved a new quarterly record of $287 million and represents a further 12% increase compared to the strong adjusted EBITDA generated in the fourth quarter.
Speaker Change: Adjusted net earnings per share was 24 cents in the first quarter, representing a sharp increase from the fourth quarter as a result of higher gross margins from the strong revenue growth on the back of higher realized copper and gold prices and strong unit cost control.
Speaker Change: We ended the quarter with $583 million in cash and cash equivalents, including short term investments.
Speaker Change: Our net debt was $526 million, maintaining a leverage ratio of 0.6 times at the end of the first quarter in line with the last quarter.
Speaker Change: HUD Bay has successfully delivered seven consecutive quarters of meaningful free cash flow generation as shown on slide four.
Speaker Change: This is a result of the benefits from recent brownfields investments continuous operational improvement efforts and steady cost control across the business.
Speaker Change: Over the last 12 months, we have generated more than $350 million in free cash flow and nearly $900 million in adjusted EBITDA.
Speaker Change: While the majority of revenues continue to be derived from copper gold represented a higher portion of total revenues at 38% in the first quarter compared to 35% in the fourth quarter of 2024.
Speaker Change: Oh unique copper and gold diversification provides significant leverage to higher copper and gold prices.
Speaker Change: For every 10% increase in annual copper price operating cash flows are expected to increase by an additional $100 million.
Speaker Change: And a similar 10% increase in annual gold price adds $56 million to operating cash flows.
Speaker Change: The unique copper and gold diversification together with strong operating cost performance at all operations continues to position Hebei is the lowest cost copper producer among our peers.
Speaker Change: Our fortified balance sheet and robust free cash flow generation will allow us to continue to prudently reinvest in our portfolio of attractive high return brownfield and greenfield opportunities to drive near term and long term production growth.
Speaker Change: Now turning to our operating assets starting on slide five.
Speaker Change: Peru's first quarter production was in line with quarterly cadence expectations. As we are completing the final stripping phase of pump a gunshot cleansed.
Speaker Change: Constancia produced 20000 tons of copper 8000 ounces of gold 550000 ounces of silver and approximately 400 tons of molybdenum.
Speaker Change: We are on track to achieve our 2025 production guidance for all metals in Peru.
Speaker Change: The Constancia mill achieved an average of approximately 90000 tonnes per day in the first quarter consistent with recent quarters and far exceeding the original design capacity.
Speaker Change: Mill recoveries for all metals remained in line with our metallurgical models for the old type that was being processed.
Speaker Change: The operations delivered better than expected cost performance in the first quarter combined unit operating costs were $11 nine per ton at 27% improvement over the fourth quarter as we experienced lower overall onsite costs in the previous quarter was impacted by a planned plant shutdown.
Speaker Change: Our unit operating cost performance continues to position Constancia is one of the lowest cost open pit copper mines in South America.
Speaker Change: Cash costs in the first quarter were $1.11 per pound, which outperformed our quarterly cadence expectations. As a result of strong operating cost performance and higher byproduct prices.
Speaker Change: Cash costs outperformed the low end of the 2025 guidance range positioning us well to achieve the full year cash cost guidance in Peru.
Speaker Change: Looking forward, we are advancing engineering studies for the construction of a pebble crusher constancia commencing in late 2025.
Speaker Change: This is expected to further increase throughput levels starting in the second half of 2026.
In Manitoba, we achieved impressive metal production and cost performance in the quarter as shown on slide six.
Speaker Change: This resulted in gold production and cash cost significantly exceeding our budgeted targets for the quarter.
Speaker Change: The operations produced 60000 ounces of gold a meaningful 17% increase compared to the fourth quarter due to higher grades the.
Speaker Change: The operations also produced three 5000 tonnes of copper six 3000 tons of zinc and 286000 ounces of silver in the first quarter.
Speaker Change: We saw significant improvements in all quality at Lalor, which aligns with the improvements in mining techniques, we have been implementing including long hold muck fragmentation and anticipated higher grade precious metals sequences.
Speaker Change: Recent enhancements at both the new Britannia install mills have been contributing to the strong performance in snow Lake.
Speaker Change: <unk> achieved an average throughput of 2100 tonnes per day in the first quarter with the installation of new elongated cycle times.
Speaker Change: This upgrade mirrors successful upgrades previously completed its toll as we continue to look for low capital projects to boost throughput, while maintaining strong gold recoveries.
Speaker Change: Brittania gold recoveries of 90% were consistent with the fourth quarter.
Speaker Change: At the stall mill is slight quarter over quarter reduction in throughput occurred as we were able to divert more or two new Britannia.
Speaker Change: The mill achieved gold recoveries of 70% in the quarter realizing the efforts of our recent recovery improvement programs.
Speaker Change: The Manitoba operations continued to drive operating efficiencies, resulting in improved cost performance on both a unit operating basis and on a cash cost basis.
Gold cash costs were $376 per ounce, a 38% decrease compared to the fourth quarter as a result of higher gold production lower mining and milling cost and favorable exchange rates.
Speaker Change: We are well on track to achieve our production guidance for all metals and cash cost guidance in Manitoba in 2025.
Speaker Change: Moving to our third operating business units on slide seven our British Columbia operations benefited from ongoing optimization efforts in the first quarter.
Speaker Change: We continue to focus on advancing our optimization plans for copper mountain, including opening up the mine and optimizing the mine ore feed for the plant as well as implementing plant improvement initiatives.
Speaker Change: This has resulted in increased total tonnes moved and improved mill reliability.
Speaker Change: The operations produced 7000 tonnes of copper five 6000 ounces of gold and approximately 80000 ounces of silver production.
Speaker Change: Production of all metals increased compared to the fourth quarter largely due to higher grades.
Speaker Change: We are on track to achieve our 2025 production guidance for all metals in British Columbia, and we continue to expect higher production levels in the second half of the year associated with the completion of mill improvement projects.
Speaker Change: On the mining side, we continued to execute the three year accelerated stripping program to bring higher grade ore into the mine plant.
Speaker Change: The focus in the quarter was on mining efficiencies and operator recruitment to effectively utilize the available hold truck fleet.
Speaker Change: As a result total material moved is expected to continue to increase quarter over quarter in 2025 as per the mine plan.
Speaker Change: Mill throughput in the first quarter was similar to the fourth quarter and a number of initiatives were implemented to increase throughput later this year.
Speaker Change: Additionally, with the planned conversion of the third ball mill to a second Sag mill in the second half of 2025 mill throughput is anticipated to ramp up towards 50000 tonnes per day in 2026.
Speaker Change: The accelerated stripping if it's unlocked a higher grade mining sequence during the first quarter, which reduced the use of stockpiles for feed and enabled higher milled copper and gold grades in the quarter compared to last quarter.
Speaker Change: Copper recoveries was 78% and gold recoveries was 63% in the quarter.
Speaker Change: Similar to our other operations British Columbia achieved strong cost performance cash costs were $2.44 per pound in the quarter an improvement over the fourth quarter as a result of higher byproduct credits and the realized benefits from ongoing optimization efforts. We are on track to achieve our 2025 cash.
Speaker Change: Cost guidance range in British Columbia.
Speaker Change: At the end of March we announced the acquisition of Mitsubishi materials, 25% minority interest in copper mountain.
Speaker Change: The transaction closed at the end of April and resulted in Hebei consolidating 100% interest in the cough months in mind.
Speaker Change: This highly accretive transaction increases our exposure to a long life high quality copper asset in a tier one mining jurisdiction and demonstrates our conviction in the long term benefits from our optimization efforts.
Speaker Change: It also reinforces HUD based position as the second largest copper producer in Canada.
Speaker Change: At the end of March we released our three year production outlook with our annual reserve and resource update as summarized on slide eight.
Speaker Change: In Peru annual production is expected to average approximately 88000 tons of copper and 31000 ounces of gold over the next three years. This.
Speaker Change: This reflects steady copper production levels as higher mill throughput is expected to offset lower grades starting in 2026 after the depletion of pump a country in late 2025.
Speaker Change: In Manitoba the life of mine production schedule has been optimized for higher mill throughput rates at new Britannia maximizing gold production and cash flows.
Speaker Change: Snow Lake annual gold production is expected to average more than 193000 ounces over the next three years.
Speaker Change: We increase the gold production guidance in all three years compared to prior guidance and the most recent technical report as a result of the continued impressive operating performance.
Speaker Change: In British Columbia annual production is expected to average approximately 44000 tons of copper and 28 6000 ounces of gold over the next three years.
Speaker Change: Upon completion of HUD based optimization activities 2027, copper production is expected to be 60000 tonnes, representing 827% increase from 2024.
Speaker Change: The 2027 copper production guidance is 20% higher than the contemplated production in the most recent technical report as a result of the deferral of higher grades from 'twenty to 'twenty six to 2027 with the current accelerated stripping schedule.
Speaker Change: Consolidated copper production over the next three years is expected to average 144000 tonnes, representing a 4% increase from 2024.
Speaker Change: This increase is driven by higher copper production in British Columbia, which more than offsets the depletion of the pump a conscious deposit in Peru at the end of 2025.
Speaker Change: Consolidated gold production over the next three years is expected to average 253000 ounces with higher gold production levels in Manitoba compared to prior guidance.
Speaker Change: These steady copper and gold production levels over the next three years will allow us to continue to generate meaningful cash flow to reinvest in our high return brownfield opportunities and our copperweld growth project.
Speaker Change: Turning to slide nine Copperweld is the most advanced greenfield projects in our portfolio and offer significant copper exposure and highly attractive project economics.
Speaker Change: Copperweld is a fully permitted project on private land and is expected to produce 85000 tons of copper per year over the initial 20 year mine life in the first phase the project generates an NPV of $1 $1 billion and an after tax IRR of 19% at a copper price of $3.75.
Speaker Change: Per pound.
Speaker Change: Harper World is one of the highest grade open pit copper projects in the Americas with mineral reserves of 385 million tonnes at 0.54% copper.
Speaker Change: Once in production Copperweld is expected to be the fourth largest copper producer in the United States and will increase our consolidated copper production by more than 50% from current levels as mentioned earlier.
Speaker Change: Copperweld will be a meaningful copper producer in the U S domestic supply chain, producing maiden America copper cathode to be sold to domestic U S customers.
Speaker Change: In January of 2025, we received the final major permits required for the development and operation of Copperweld.
Speaker Change: Since then we have commenced the minority joint venture partnership process and they've been focused on advancing feasibility studies to progress the project towards a potential sanction decision in 2026.
Speaker Change: We have several exploration opportunities as part of our long term growth pipeline, including many promising targets in snow Lake.
Speaker Change: <unk> 10 summarizes the three fold strategy, we are executing with the largest exploration program currently underway in snow Lake.
Speaker Change: The first goal is to focus on near mine exploration at Lalor and 19, no one to enhance near term production and extend mine life at Lalor northwest follow up drilling continued to intersect copper gold mineralization, including $16 four grams per tonne gold was three seven meters as well as two six.
Speaker Change: Percent copper over three five meters.
Speaker Change: Our plans for 2025 include continued surface drilling at both La northwest and Laura down plunged test the extent of the mineralization.
Speaker Change: Additionally, we released positive step out drilling results at 19 O. One in March that intersected significant copper gold mineralization, including 14, 3% copper over two five meters and eight three grams per ton gold over three two meters.
Speaker Change: Further exploration that 19, no. One is planning for 2025 targeting additional step out drill holes to potentially extend the ore body and infill drilling to convert inferred mineral resources in the gold lenses to mineral reserves.
Speaker Change: The second strategic goal is to test regional satellite deposits will potential ore feed to utilize the available processing capacity at our stall mill and further increase production.
Speaker Change: With our significant snow Lake land package, we have an attractive portfolio of regional deposits, including the Talbot rail into what's three zone and women deposits.
Speaker Change: And finally, the third and probably the most exciting goal is to explore our large land package for a new anchor deposit to significantly extend the mine life of our snow Lake operations.
Speaker Change: We are conducting the largest geophysics program in our history in snow Lake consisting of 800 kilometers of ground electromagnetic surveys and an extensive airborne Geophysical survey.
Speaker Change: Turning to slide 11, and important part of how we operate is in our commitment to earning trust and building transparency with communities near our operations.
Speaker Change: In Manitoba are indigenous relations strategy has been effective in guiding positive relationships with first nations communities and advancing shared opportunities.
Speaker Change: As part of this strategy. We are very pleased to have signed two exploration agreements over the first quarter.
Our first ever exploration agreement in Manitoba was signed with the Kitschy Whopper Cree nation in February reflecting our commitment to meaningful collaboration as we explore for new mineral resources in snow Lake and plentiful.
Speaker Change: In April we signed an exploration agreement with a moussaka Hagen cremation, marking a significant step towards building positive relationships on our projects and the Moose Lake region, including the Talbot copper zinc gold deposits.
We expect to commence the summer drill program at Talbot to potentially upgrade the existing mineral resource estimate.
Speaker Change: Additionally, insulin phone, we continue to advance tailings reprocessing studies to recover critical minerals in precious metals, while creating environmental and social benefits for the region.
Speaker Change: And early economic study on the zinc plant tailings reprocessing opportunity has confirmed the potential for a technically viable reprocessing alternative.
Speaker Change: And we are progressing with further engineering work.
Speaker Change: In Peru, the drill permits for the highly prospective Maria Reyna and cover Utah properties near Constancia continue to proceed through the regulatory process.
Speaker Change: The drill permit environmental impact assessments were approved by the government last year.
Speaker Change: The government is carrying out the remaining steps in the regulatory process and is targeting completion in 2025.
Speaker Change: Once we receive the drill permits we plan to initiate an extensive 18 month drilling program to test the potential of these properties that are located within trucking distance of the Constancia processing facility and provides significant growth potential for our Peru business.
Speaker Change: As part of our long term pipeline of high quality growth opportunities. We also have the Mason copper project in Nevada Mason.
Speaker Change: Mason as one of the largest undeveloped copper porphyry deposits in North America and has the potential to be the third largest copper mine in the United States once in operation.
Speaker Change: The mine plan contemplates a 27 year mine life with an average annual copper production of roughly 140000 tons over the first 10 years.
Speaker Change: We continue to advance our local stakeholder engagement as we advance additional metallurgical studies.
Speaker Change: While Mason is not as advanced as Copperweld Mason represents a significant opportunity to unlock value in our high quality copper asset located in the United States.
Speaker Change: Concluding on slide 12, HUD Bay's, leading copper development and exploration pipeline with low cost stable operating platform and tier one jurisdictions offers investors meaningful copper exposure complementary gold exposure and strong near term cash flow generation we.
Speaker Change: We currently produce more than 130000 tons of copper per year, which is further augmented by more than 250000 ounces of gold per year, offering commodity diversification and cash flow resiliency in volatile pricing environments.
Speaker Change: We believe that copper has the best long term supply and demand fundamentals in the sector as global copper mine supply will be unable to meet demand from the global energy transition and AI technology needs.
Speaker Change: HUD based strong operating platform and resilient balance sheet offers significant upside potential for further value creation at higher copper and gold prices and as we prudently advanced any high return copper growth opportunities.
Speaker Change: And with that we are pleased to take your questions.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session.
Speaker Change: To join the question queue you May Press Star then one on your telephone keypad.
Speaker Change: You won't hear a tone acknowledging a request if you were using a speakerphone. Please pick up your handset before pressing any keys to withdraw. Your question. Please press Star then two we will pause for a moment as callers join the queue.
Speaker Change: Our first question is from Auris walk of Dow with Scotiabank. Please go ahead.
Auris Walk: Hi, Good morning, a question around Peru, and Constancia, a throughput that you've been operating out it's been pretty impressive close to 90000 tonnes. A day do you I'm. Just curious if you think that's sustainable moving forward or at what point do you see the ore hardness.
Speaker Change: Perhaps starting to bring that down.
Auris Walk: <unk> thanks for the question.
Auris Walk: I mean, we've been Super pleased with the performance in Peru, It's actually been pleased with the performance throughout.
Auris Walk: It's a business that in this past quarter.
Auris Walk: We are fairly confident in operating in Peru at the moment, we think that the results that we have are repeatable, but why don't I turn it over to Andre to give you a little bit more color about hardness.
Speaker Change: Yeah, Hi, Earth foundry.
Andre: Thanks for the question so.
Andre: So in the quarter, we did a we did actually go through some harder materials, while theres some software and harder material. What our strategy has been is we've been using pebble rejection since about mid December when we get through the harder feeds them and even with some of those harder feeds we're seeing I know you quote the 90000 on average with those.
Andre: Here with me the things that we're seeing in excess of some days over 100000 tons per day, and we're very pleased with that and so what that does for us is where it allows us to push the test the limits of our flow sheet downstream application are thinking errors or pumps all of those in anticipation for the highest.
Andre: With a pebble crushers come in and so.
Andre: To your question is is the purple rejection has been being quite successful we have the ability to reject probably about a million tons of pebbles, a year and it has two benefits. The first one is you mentioned that youre seeing in throughput, but the other is on green because the pebbles that we reject tend to be much lower.
Andre: And around <unk> copper.
Andre: And the remaining are Pete is bumped up and we replenished the feed to the Sag mills with much higher grade material. So.
So I guess insured we're pretty comfortable in terms of what we've done to date and we were going to continue doing that through the course of the year and then as we Peter.
Speaker Change: Peter mentioned in the conference call mode.
Andre: That we're planning on putting pebble crushers in later this year.
Speaker Change: That will further enhance our production going in 2026 and beyond.
Speaker Change: Okay, and as a follow up the changes to the Peru regulations that you can flex up throughput by up to 10% is that.
Speaker Change: What's the baseline for that in terms of what that's being measured against.
Speaker Change: Great.
Speaker Change: Okay.
Speaker Change: I believe the final the final number and I don't have it in front of me.
Speaker Change: It gets up to the 20.
Speaker Change: The only candidate I don't have in front of me.
Speaker Change: And between 20.
Speaker Change: 24 million.
Speaker Change:
Speaker Change: We can we will get into T offline the accident the actual number but it's a.
I believe it's 24.
Speaker Change:
Speaker Change: For the Formula one.
Speaker Change: Hi.
Speaker Change: Yeah, well I'll have to get back to you on that was there.
Speaker Change: I don't have it in front of me here.
Speaker Change: Okay. Thank you very much.
Yes.
Speaker Change: The next question is from Matthew Murphy with BMO capital markets. Please go ahead.
Speaker Change: Hi, I'm, just looking at the cost performance strong costs.
Speaker Change: In Q1, and then maybe just starting on Manitoba.
Speaker Change: So the stall mill costs were down 10 Bucks a ton quarter over quarter anything funny in those numbers or can you talk about some of the optimization you're are.
Speaker Change: Putting in place to achieve these cost.
Tony Metro: Tony Metro.
Tony Metro: I think we've been just really really pleased with the level of performance of the of the Manitoba team. So they've been super disciplined in making sure that they are.
Speaker Change: <unk> continued to before they've done an incredible job introducing mine dilution and maximizing oil recovery through continuous improvements in the mining process.
Speaker Change: These operational improvements when you combine them with the identification of additional height.
Speaker Change: Ladies and gentlemen, this is the conference operator, we've lost.
Speaker Change: Our connection with the main speakers location and will join us shortly please standby.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: Uh huh.
Speaker Change: Hi.
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Speaker Change: [music].
Speaker Change: Ladies and gentlemen, the main speakers have connected with US. Please go ahead.
Speaker Change: Sorry about that Matt I was saying that the operating team at <unk> has done a really really good job of introducing mining dilution and maximizing oil recovery to the continuous improvement.
Speaker Change: This is in the mining at the mining side.
Speaker Change: These operational improvements when you combine them with the identification of additional high grade gold resources that resulted in a pretty positive reconciliation of the order of 10% and contained gold has been expected compared to our reserve modeling 2024. So I think we're in pretty good shape to be able to replicate that.
Andre: Andre would you add anything to that.
Andre: So our normal.
Speaker Change: Neither Peter Okay. Thank you.
Speaker Change: Okay, Great and then as another question just interested in a pump a contra as your stripping are you seeing anything that's going to inform how far it goes this year or is it a is it more or less as you expected in terms of what youre seeing in the pet.
Speaker Change: It is Matt it is more or less what do you expect that it's going to be depleted by the end by December of 2025, and there really is limited ability to extend it beyond Q4 of 2025, because the deposits are already well defined but that said no constancia is a super strong copper.
Speaker Change: You said, even after the depletion of Pampa <unk> and it will maintain the 85 to 90000 tonnes of copper production levels in 2026 and beyond.
Speaker Change: And as you know the next satellite opportunity that we have an extraordinary arena and Kevin Utah and those are highly prospective and located within trucking distance of Constancia and they've got the potential to significantly increase production beyond the 85 to 90000 tonnes per annum. So yes short answer to your question is pump country will be featured in 2020.
Speaker Change: But we've got line of sight to something much better and with the improvements that Andre talked about with throughput at the mine, we're very confident of our ability to sort of maintain production at the level that we're talking about.
Speaker Change: Okay. Thank you.
Speaker Change: Welcome.
Speaker Change: The next question is from Ralph <unk> with Stifel. Please go ahead.
Ralph: Thanks, Operator, good day, everyone, Peter and maybe Eugene have you begun the process of prioritizing certain partnerships a copper world.
Ralph: Narrowing down that list or useful in the process of sort of widening and it's more of a fulsome analysis still and specifically I'm looking at notwithstanding today's interest and in the gold price interest from gold mining partners, how does that come in proportion to the gold price or has that level of interest from that particular party been consistent.
Speaker Change: Thanks, Rob I would say that the JV process is progressing very well, we perceived lots and lots of interest as you would expect given the quality of the asset.
Speaker Change: And I think the fact is that permitted copper development projects in the U S. A.
Speaker Change: And permitted.
Speaker Change: Conversion facilities that will produce cathode copper from concentrate on existent outside of copperweld, so that layered on with the effect of gold prices resulted in an extremely robust process, we've had tons of interest.
Speaker Change: And yeah.
Speaker Change: Lead both parties have shown interest.
Speaker Change: I would not say disproportionately it's nothing beyond what you would expect but the interest has been very very strong and we're motoring along with the proceeds.
Speaker Change: As you'd expect.
Speaker Change: Okay.
Okay.
Speaker Change: And then you had mentioned a marina and Kobo <unk> both in the Q&A in your prepared remarks, and I was just wondering if you if we can be a little bit more definitive on unexpected completion within 2025 of getting those permits and whether or not it's a stretch to expect certain results are some results within 2025 on drilling.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: It's a good question. So if I back up a little bit I think that you are aware that we have the environmental impact assessments.
Maria Reyna: Maria Reyna <unk>.
Maria Reyna: Last year, we then agreed with the Peruvian government to combine the pivoting processes for both.
Speaker Change: Satellites, so that the government could continue with the remaining regulatory steps, but property simultaneously, which streamlines. The approach may take a little bit a little bit longer, but it'll be more efficient and better pool policies.
Maria Reyna: So.
Maria Reyna: What I'd say is.
Maria Reyna: The process that remains right now is the government drug process and we are being disciplined we are not rushing it I know that we know from our pump a country experience that sometimes it takes longer than you might expect.
Maria Reyna: But the key right now is to let the government completes its process.
Maria Reyna: <unk> been told that it will be completed this year.
Maria Reyna: We do know that these will be minus one day and I think that we have the right approach and be patient.
Maria Reyna: I believe that it's certainly worth the wait with that said I cant really define specifically when we would start drilling it will be literally as soon as we get the permits in hand, and we expect that that will be concluded this year.
Maria Reyna: But we can't rush the process.
Peter Koudelka: Thank you Peter for those important answers.
Speaker Change: Youre welcome.
Speaker Change: Again, if you have a question. Please press Star then one the next question is from Dalton Barreto with Canaccord Genuity. Please go ahead.
Dalton Barreto: Thanks, operator, and good morning, Peter and team and congratulations on a great quarter.
Dalton Barreto: Peter I'm trying to understand copper world space too in the context of sort of today's world. If you will.
Dalton Barreto: And I guess my first question is around permitting for phase two.
Dalton Barreto: Based on recent executive actions from President Trump what can you do on phase II permitting to bring it forward if anything and what would it take to get phase two on the fast 41 track.
Dalton Barreto: Sure and thank you for the time.
Vince.
Dalton Barreto: I think the first comment I'd make is that the permitting backdrop in the U S is very positive and constructive at the moment.
Speaker Change: That said your comment relates to phase two I will say that for phase one it kind of doesn't make a difference because it is early state permits that are required and it's fully permitted.
Speaker Change: It does certainly help with respect to the idea of advancing phase two a little bit earlier. It also adds to sentiment around phase II.
Speaker Change: Which helps in the joint venture partnering process. It helps all around I'd also add that it makes.
Speaker Change: It creates a lot more interest potentially Mason project.
Speaker Change: Which is.
Speaker Change: Specifically to phase two the focus right now is very much to be on phase, one and getting that going and when wouldn't really wants to.
Speaker Change: Confuse the process of phase one with phase II.
Speaker Change: The time for advancing phase two is not really now the time is once we get going with phase one.
Speaker Change: The fast in the first 41 thing has been around for a long long time, because two previous administrations and I think it creates a really good constructive sentiment in the space, but it is not really applicable to the copperweld project.
Speaker Change: Andre is there anything you would add to what I've said.
Andre: No I think you're quite clear.
Speaker Change: Great retail as the plan is the plan and.
Andre: We're happy with what the government.
Speaker Change: Promoting but.
Andre: But theres no change in what we want to do right now.
Speaker Change: Great. Thanks, guys and then maybe just as a follow up on the sort of financing side of copper World as you go on through the.
Andre: The JV process as well as maybe looking at re negotiating the stream are you putting in mechanisms.
Andre: Built in value for phase two and if so how are you thinking about that.
Speaker Change: Hi, Delta that you're doing here.
Speaker Change: Thank you for your question I think as Peter outlined there is lots of robust interest in <unk> world at the project and that includes a phase two we're not going.
Speaker Change: Going to negotiate with.
Speaker Change: The JV over the conference call. So I think we're not at Liberty to talk about what value stack and what people are attributing to it I think holistically as Peter outlined this is a multi phase project with 1 billion tonnes of copper at the highest grade undeveloped copper deposits as the Americas with the lowest capital intensity in that can go on for 20 years on private land.
Speaker Change: And it much more if we get into phase two so I think there is value in this asset.
Speaker Change: We expect that the parties will see that in the JV process.
Speaker Change: Great. Thank you Jane.
Speaker Change: Drop back in queue.
Speaker Change: The next question is from Bryce Adams with Desjardin Securities. Please go ahead.
Bryce Adams: Hi, I'm sorry, if this was asked already my call dropped and I had to rejoin but regarding the buyback program that was board approved if that TSA exit proved given your growth options how does it fit into the capital allocation framework. How active do you expect to be and are there any guideposts for how that program to be used.
Speaker Change: Hi, Thank you for your question Bryce at Eugene Lee again here regarding the NCI D. I think it really reflects.
Bryce Adams: The company maturing.
Bryce Adams: We believe it is good practice for companies of our size happening in CIB in place kind of like how we wildish base shelf prospectus last year.
Bryce Adams: In the context of the transformed balance sheet as you highlighted on the positive end and fairly easy volatile.
Bryce Adams: The negative and that's about that kind of result in some valley dislocations, we're going to consider share buyback as well as bond repurchases as part of our balanced capital allocation strategy to maximize risk adjusted returns.
Bryce Adams: We are very strong financial position to prudently advance our money high return growth initiatives.
Speaker Change: The copper mountain optimization that Peter and Andre talked about like bounce.
Speaker Change: Council projects spoken expansion in Peru, and Manitoba, and obviously, the copper gold development project.
Speaker Change: We have a long term goal of providing a meaningful shareholder returns in the form of sustainable dividends <unk> share repurchases and I think this anti it'd be filing at something that we would then tend to file kind of for many years all of them will give us a facility to consider that holistically as we allocate capital across the platform.
Speaker Change: And grow the company sustainably.
Speaker Change: Thank you Jay so it's good housekeeping, but not a priority that is that a quick summary.
Speaker Change: I think if we hadn't filed the NCI V. We don't have the ability to buy back shares today, we do and we will evaluate that in the context of the opportunities are available to us our.
Speaker Change: Understanding there are many high growth high return growth projects, So I would say it.
Speaker Change: We now can answer the question that we can buy back shares versus a month ago.
Speaker Change: We would not be in a position to win a year ago, our balance sheet with no position too. So I think again reflect as matured as a company and that's something that we'll consider.
Speaker Change: In the context of valuations as well as the opportunities for <unk>.
Speaker Change: Our risk adjusted returns in our portfolio.
Speaker Change: Okay. Thanks, Eugene Thanks Goodbye.
Speaker Change: And the final question today is a follow up from Dalton Barreto with Canaccord Genuity. Please go ahead. Thanks.
Dalton Barreto: Thanks for taking my follow up guys. Just a quick question on copper mountain name.
Dalton Barreto: Just around new anger back can you just give us an update on sort of where that permitting stands then remind us when that deposit comes into the mine plan.
Speaker Change: Sure Andrew would you like to take that.
Speaker Change: Sure sure so so the.
The permitting process has been going very well, we've been working very closely with the regulators and the local first nations in the upper and lower smoking bans.
Speaker Change: The process went through initial screening we just finished the what they call as a concordance review, which is a process where the government has gone through and see it and agreed that we provided all of the studies and it meets their criteria for rubles required and so now they're going into a wood.
Speaker Change: In simple terms, a regulatory review process and so we hope to be at a positive result by the end of this year early into next.
Speaker Change: It's probably within a couple of years that you would expect to see that that production that's.
Speaker Change: <unk> in our guidance.
Speaker Change: Great. Thanks for that Entre that's all of that.
Speaker Change: Yeah.
Speaker Change: This concludes the question and answer session I would like to turn the conference back over to Candace Brule for any closing remarks.
Candace Brule: Thank you operator, thank you everyone for joining us today and thank you for your patience as we work through that little technical here. If you have any further questions. Please feel free to reach out to our Investor relations team, Thanks and have a great day.
Candace Brule: This brings to a close today's conference call. You may disconnect. Your lines. Thank you for participating and have a pleasant day.
Candace Brule: [music].