Champion Iron Ltd
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Good morning, ladies and gentlemen, and welcome to the Champion Iron Limited Third Quarter Results of the Fiscal Year 2022 Conference Call. [Operator Instructions] This call is being recorded on Thursday, January 27, 2022. And I would now like to turn the conference call over to Mr. Michael Marcotte. Please go ahead.
Thank you, operator, and thank you, everybody, for joining our call. It's 8:30 in Montreal, just past midnight in Sydney for those eager to hear about our Q3 results. We're pretty happy to deliver some new milestones for you today. Before we get going, I'd like to highlight some forward-looking statements, which are available in our MD&A, including some risk factors. And all documents are available on our website at championiron.com, including the presentation that we are going to be using today. Joining me on the call today are David Cataford, our CEO; Michael O'Keeffe, our Executive Chairman; Natacha Garoute, our Chief Financial Officer; and Alexandre Belleau, our Chief Operating Officer.With that, I'll pass it on to David Cataford to do the formal part of the presentation, and we can open it up for Q&A at the end. David?
Thanks, Michael. Hi, everyone. Thanks for joining the call. Very happy to be able to present the results this morning. Well, first of all, I think one of the impressive highlights is that our teams have managed to navigate through the difficulties and the challenges of this pandemic and of the Omicron sort of startup that we've seen in a fantastic way. I mean we're announcing a record production in a shutdown month and not just any typical shutdown month. If you remember, this is the shutdown month where we did the major tie-in between the Phase 1 and the Phase 2, so where we essentially connected all of the crushing facilities from the Phase 1 to the Phase 2. So the team has managed to do a fantastic job in planning this very accurately, making sure that they deliver exactly as per the plan, which allowed us to produce a record production during this shutdown quarter. We navigated also very well in the pricing environment, managed to get healthy margins, which allows us today, even if we're building a Phase 2, which is doubling our production, it allows us during the construction and during a pandemic to announce our inaugural dividend of $0.10 per share. So very proud to be able to announce this today. If I turn over to health and safety and environment, I think one of the elements that really sets us apart is the concrete actions that we do in the communities to make sure that we work with our host communities. One of the major elements that we did is that the First Nations group of Uashat Mak Mani-Utenam contacted us to say that they were very concerned about the Omicron variant, and they asked us to be able to help on the vaccination campaign. So during the Christmas period and the holidays, we managed to send some of our nurses and some workers in the community to help in the vaccination campaign that is being done with the First Nations. What we've also done in the community, which I think is a historic first is that we're the first mining company in Canada to officially recognize the First Nations truth and reconciliation holiday as an official holiday at Champion. So this was something that our host communities said that was very important for them. We've worked with them since the past 30th of September to be able to make this a reality today, which is going to allow all of our employees to understand a little bit better all the past and the difficult past that the First Nation groups have lived through. And this also is continuing our partnership with the First Nation group being one of the largest employers of First Nations in the region. If we turn to the industry overview, looking at the iron ore prices, you probably saw that it was fairly volatile in the previous quarter. There was a lot of different views on where iron ore would land. But all in all, when you look at the price today, we're back in an environment where iron ore is around $170 per tonne for our material. And this is on the offset of a little bit of disruption that we saw out of Brazil. There was quite a lot of press that we saw. But realistically, the amount of tonnes that were really affected was much more minimal than was originally anticipated. But even that short disruption allowed iron ore prices to shoot back up. So we could see that the market is still very tight. We don't see any new projects being sanctioned on the iron ore side, but we're seeing quite a lot of movement on the steel side. So we feel the iron ore price is in a very good environment for us. And as the Winter Olympics in China finish next month, well, the sort of message that we're getting from most of our customers is that China is going to remove most of the restrictions that are on the steel production, which will allow more steel to be produced out of China. At the same time, as the world ex China is ramping up also their steel production and operating towards full capacity. If we look at our operations, I think the best word to describe is really consistency. What the teams have managed to do even if we're in challenging and difficult times is to keep production very stable. So again, during a shutdown quarter, the teams managed to navigate through this -- these different times and produce over 2 million tonnes of high-grade iron ore. So an impressive result by the teams, which again, have been doing a fantastic job. Also, just to highlight that the Fe recovery has been very stable since we reached our feasibility study levels, same with the ore mined and hauled. You might see that the strip ratio is a little bit higher than what it was in the past years. This is going to continue on in these sorts of levels as we prepare for our Phase 2 project and that we transition towards the Phase 2 project. These great operational results allowed us to have fantastic financial results as well. We generated a significant amount of cash, which puts us in a position to be able to announce our inaugural dividend. If we look at the provisional price adjustment, we managed to have minimal impact even with this high volatile prices. This is mainly due to the way that we structured our contracts. As you know, we have some backward-looking contracts with Japanese clients, and we have forward-looking contracts with the rest of the world. So this allowed us during that quarter to have a negative provisional impact of about $6 million or USD 3.3 per tonne. And if you look at where we booked our vessels or where we are planning -- what we plan to receive at the end of the quarter was roughly about USD 142 per tonne for the tonnes that are still on the water today. But realistically, when you look at iron ore prices today, we're closer to USD 170 per tonne. So again, we've booked them in a very conservative way, and we'll be able to see where this materializes at the end of the quarter. In terms of realized price, as we mentioned, because of the mix of the Japanese clients and the clients from the rest of the world, we managed to get a gross realized price of USD 155 per tonne, which is roughly about $25 over the P65 average for the quarter. So very happy with these results right now. In terms of cash, well, you see this is the quarter that we've invested the most in our Phase 2 project. This was planned. This is not a surprise. We had been hinting that near the end of the construction of the project. This is where we're going to have the largest sort of spend elements. The teams have done a fantastic job on the construction side as well to be able to keep us in line with our April startup. So even if there's quite a lot of challenges on the supply chain that we've been hearing on labor around the world, what we've been able to do here at Champion is to navigate through that. Most of the parts are already at site now to be able to finalize the piping and the electrical work at site, and we're still on target to be able to deliver the project in April. If we look at our balance sheet, the balance sheet is still positioned for growth. Pretty impressive when you take a little step back. In April, we're going to startup Phase 2. There's going to be over USD 4.5 billion invested in the ground at Bloom Lake, and we're going to be in a net cash position. So the company is in a great position to continue its growth trajectory. Not only are we continuing our growth trajectory, but we're also continuing our capital return strategy. So we've been working for quite a while now on setting up a dividend policy here at Champion. And what we've announced now is a $0.10 per share dividend. Again, this is very impressive. And if you go back to November 2020, when we announced the Phase 2 project, we never thought we'd be in a position to announce an inaugural dividend after repaying all of the preferred shares from the Caisse de dépôt and constructing Phase 2 out of our own cash flow. But the team has navigated very well through this high iron ore price environment, allowing us to continue our growth project of Phase 2 out of our own cash flow and today, announced our inaugural dividend of $0.10 per share. In terms of growth projects, well, as you know, one of the -- or the most important project that we have going on is the Phase 2 project. As we mentioned a little earlier, project is tracking correctly in terms of timing. We're very proud of that as the Omicron variant and other sort of difficult times, the teams have been able to navigate through those, and allow us to be able to announce today that our project is still tracking favorably for the April startup. Phase 2 is not the only growth project that we have. We're also working on a feasibility study to be able to take 8 million tonnes from Bloom Lake, and upgrade those tonnes to 69% Fe material. Why do we want to do this? While you've probably seen around the world, what used to be talked a few years ago is now materializing, and we're seeing more and more electric arc furnaces being sanctioned around the world. We're seeing in North Korea, we're seeing this in Canada. We're seeing this in Europe, even in China. Quite a lot of electric arc furnaces being built in China at the moment, and we're even seeing Japanese clients start investing in electric arc furnaces as well. So this is not just literature that we're reading. We're actually seeing boots on the ground transition towards electric arc furnaces, but we're not seeing any new supply of DRI, and there's so much scrap available in the world to be able to feed these electric arc furnaces. So we feel that the flotation plant is a very good potential project for Champion, and we'll be able to come back to the market once we have the results of this feasibility study mid-2022. We're also continuing our Kami feasibility study. So this is still tracking to be delivered in this calendar year. And once it's complete, we'll be able to come back to the market on the different elements of that study. But realistically, I think the important point about this is that the world is shifting towards more high grade, this is in terms of demand. And we're very well positioned with the resource base that we have, the projects that we have in line, the green power that's available here in Québec to be able to fully benefit from this increase in demand in our type of material. And when we speak about demand, well, you could see that the -- most people that are analyzing what is going to be the actual demand in DRI, this is one of the markets that is going to grow the most in the world. A lot of people are talking about lithium, graphite, cobalt as materials to be able to decarbonize the planet. Well, that's all well and good for the electric cars, but the importance of steel, as we'll be able to mention is going to be absolutely instrumental in this transition. And one of the materials that is going to be required the most to transition is DRI. And as we mentioned, we're not seeing many different -- many projects around the world being sanctioned, and there's very few areas around the world that can actually do this at interesting costs and using green technologies to be able to do it. We're very well positioned here in Québec and Canada, because in the ground, we have material that is easily convertible into DRI or easily upgradable to DRI, and we have all the infrastructure in place to be able to transition towards that. So very excited about the future of the DRI market, and we want to make sure that your company is well positioned to fully benefit from this. And when we talk about the different materials required for decarbonization, it's interesting because now literature is starting to come out. A few years ago, people got very excited speaking about lithium and these sort of commodities. But when you look at what is really required to transition into a low-CO2 world, well, the #1 metal that is required to do this is steel. We need steel in whatever solution we pick to be able to decarbonize the world. So not only will we need steel, but we will need green steel to be able to do this. So again, we feel that Champion is very well positioned for the future, and this is why we wanted to set up a capital return strategy that allowed us to navigate through different times, but also allowing us to continue our growth trajectory as we believe that's the most accretive portion for our shareholders. So again, thanks a lot to our staff for all the efforts and all the work that they've done to realize these results that I'm able to present today, and I'll turn it over to the question portion of the meeting.
[Operator Instructions] And your first question does come from Orest Wowkodaw from Scotiabank.
A couple of questions for me, if I could. First one, really positively surprised by the -- your price realization on iron ore in the quarter. It sounds like some of these backward-looking Japanese contracts really helped impact that. Just wondering how we should think about the current quarter if that -- if you anticipate that's going to unwind, just given the volatility in iron ore pricing, whether you expect that to flip from a positive adjustment to a negative adjustment this coming quarter?
Well, we typically get about 30% to 40% of our tonnes that are being sold into Japan. And this is not sort of a seasonal event or a quarter event. They buy tonnes through the whole year. So as you can appreciate, these tonnes are backward looking, and this is going to be the same for all quarters.
So -- but given just where the iron ore price has moved, does that positive adjustment now turn into a negative adjustment for the current quarter?
Well, the vessels have not been fully priced. Now they're not all received. So it's a bit difficult to answer that question 2 months or 1 month into a quarter. We'll be able to go through that once we get to the next results. But realistically, what we're seeing is that, again, the demand from Japan is stable. It's stable from quarter-to-quarter. And this is what we are forecasting. But again, when you look at what price we forecasted, our material for this quarter or at least the tonnes that are still on the water for the provisional pricing were set at around USD 142 per tonne and the current environment is about $170. So I think that should probably balance out what you've been asking your question.
Okay. Nice to see the dividend, it's certainly earlier than I expected. Now the company didn't release any kind of shareholder return framework. I'm just wondering how we should think about sort of how the board is going to look at capital returns moving forward? And sort of what might drive that, the level of dividend?
Well, I think one important message is that we still believe we're a growth vehicle. So the most shareholder accretion is going to be through growth, but we've also mentioned early on that we want to have the right mix between capital return strategy and growth. So right now, with the board we'll be evaluating many different scenarios. We wanted to make sure that the sort of level of dividend that we were paying now made sense during the construction period. We stress test that with many different scenarios of iron ore, and we felt that this was a good number for the first inaugural dividend. This will be evaluated every 6 months, and we'll be able to come back to the market on this one. But I think it's important to note that the main focus for the company right now, the Phase 2, the flotation, the DRI is still oriented towards growth.
Okay. And then just one quick accounting question, if I could. The release talks about the expansion of Bloom Lake reaching commercial production at the end of the calendar year. Does that mean that you don't plan to recognize that incremental production fails until the end of the calendar year in terms of EPS and EBITDA, for example?
No. What we're saying essentially, and it's going back to the feasibility study. It's when we expect to be at commercial production, but this is a gradual ramp-up. So come April, we're going to start making tonnes. The plan is not to stockpile those tonnes. If we go back to Phase 1, it took about 17 hours for us to reach sellable quality. So it might take a few hours more with Phase 2, but every tonne that we do produce out of Phase 2, we expect to be able to sell. So you should see a gradual ramp-up from April all the way to commercial production.
Okay. But the accounting will recognize some incremental tonnes from day 1?
Correct.
And your next question comes from Alexander Jackson from RBC Capital Markets.
I was just curious what you guys are seeing in terms of inflation with respect to operating costs or sustaining capital in calendar 2022?
Yes, thanks for the question. So essentially, we're in a very favorable position in the sense that when inflation hits and when we pay more for spare parts or we pay more for different equipment, it's usually because of the steel price. So as steel price moves up, well, typically, you'll see iron ore move up in tandem as well. So the inflation, obviously, we're not separate from the rest of the world, we're seeing it as well. But we're very favorable with being a commodity that is directly linked with that inflation and should benefit from these increased costs in the future.
Got it. And then just one more for me. Is there any preliminary details you might be able to provide on the DR plant feasibility that you guys are expecting to put out in mid-'22?
Yes. So right now, the team is still working on the main assumptions for that plant, working with the engineering firms to make sure that we come out with, again, a conservative number as we did with Phase 1 and Phase 2, this is the way Champion operates. We want to make sure that whatever we come out as a number, it's something that we can deliver. So this is what the team is working on right now, and it will be easier to respond to that question come mid this year.
And your next question comes from Gordon Lawson from Paradigm Capital.
Congratulations on another excellent quarter. You touched on this already in your MD&A. Your realized premium was well above expectations. Could you expand on the current market conditions and what you're expecting in the coming quarters as well as the level of premium you're expecting for the various direct reduction quality concentrates you're talking about producing?
Yes. Thanks for your question, Gordon. We're still a few ways from our DR feed material. So that's something that should we sanction the project, would take in the order of magnitude of about 2.5 years to be able to build. So we're not factoring in any premiums associated to this material for this calendar year. When we look at the market in general for the high grade, the spread is fairly healthy right now. We're looking at spreads in the order of magnitude of USD 25 to USD 30 per tonne. We see that as sustainable because there's not new high-grade material that's actually coming into the market. And as companies start sanctioning more and more electric arc furnaces or even start getting closer to their targets for 2030, well, they're going to need to secure higher grade-type material because that's the only known way for them to achieve their results. So all in all, when I look at premiums for the P65 material, we feel it's going to be very healthy in the coming years. Right now, we're delivering -- if you look at the average for the year, we're delivering a little bit over the P65 index, but this is in line with P66 material that we do make. Why did we have such a high realized price in the past quarter? It's really that great mix that we have between our Japanese clients and the rest of the world, where we have some contracts that are backward-looking, some that are forward-looking, so it allows us to really even out that volatility and allow us to have a more stable realized price.
Okay. And with the Kami feasibility study coming due, I mean, looking at some of the Bloomberg estimates, there appears to be some expectations of Kami possibly ramping up as early as your fiscal 2025. Could you provide any level of timeline with respect to permitting and first production assuming the board approval in the near term?
Yes. The good thing about Kami is that we're talking about a project that had already been permitted. So it's not as if it's a new project in a region that is not used to mining. And it's a project that was very well supported by the different communities by the indigenous communities as well. So we don't expect the permitting process to be the longest part of this project. But then again, this has to be evaluated once the project is done. But realistically, if you look at the timeline, at the end of this year, we're going to have the feasibility study, which we'll then evaluate with other potential options that we have. Our fiscal year 2025 seems pretty aggressive as a timeline to be able to deliver a brand-new mine in the current environment. So it will be easier to answer that question once you have the feasibility study because the timeline will be added in this feasibility. But I would probably put it a little bit further away from what you see as fiscal year 2025.
And your next question comes from the Alexander Pearce from BMO.
So this is related to one of the earlier questions. You mentioned you're looking for commercial production for Phase 2 by year-end, but I wondered if you could just give us a bit more detail on when you expect to hit that sort of full capacity of the system and do any of these higher-grade projects that you're looking at impact that eventual number?
Yes. We don't feel that the DR grade material will impact that number significantly. Realistically, the technology has a very high recovery rate. So we're not losing a lot of material once we're actually doing this. And it's a process that would be in a separate building, so we don't see any interactions between the current operations and the others. In terms of the ramp-up, well, we've penciled in 6 months to reach commercial production, so I'm going to go along those lines for the answer right now. This is a gradual increase, if we're able to do better, obviously, we won't hold back. And the teams will do everything we can to be able to get that plant running and deliver that nameplate capacity as quickly as possible. But for the commercial production right now, what we've penciled in is 6 months, which when you look at the comparables around the world, is still a pretty aggressive target compared to what we've seen. And not necessarily in feasibility studies but what we've seen in realized results.
And your next question comes from Lucas Pipes from B. Riley Securities.
My first question is on the growth projects. And what I'm interested in is, are they mutually exclusive from a development time frame perspective, would you consider developing Kami and DRI grade at the same time? Or would you sequence them? That's my first question.
Yes. Right now, we don't necessarily see these projects as having to be a sequence. They are 2 independent projects that would have various staff to be able to deliver them. There is so much that a company can do at the same time. So for us, the main next steps is really getting Phase 2 up and running, delivered and producing as expected. And then once we have the results for the flotation plant and for the Kami project, it will be a little bit easier to answer that question. But realistically, we don't have to finish one to be able to start the next one now.
Got it. Got it. And to kind of take that response and apply it on an even broader scale. When you layer in capital returns and your aspirations there and then maybe what else is available in the region. What's your -- what is your tactical view on that? Kami plus CRI plus increased capital returns, plus maybe M&A? Or would you say, look, this is really our #1 and 2 priority is the organic growth we have here. I would appreciate your perspective on that.
Yes. Thanks for the question. There's a few elements that we still have also in our back pockets when we look about growth in the sense that if you go back to the old feasibility studies at Bloom Lake pre-acquisition, they had a resource that was almost double what we have today. So it is possible to imagine also a Phase III directly at Bloom Lake. So this is obviously going to be evaluated by our teams. There's other smaller projects also that we could do at Bloom Lake to potentially de-bottleneck the current operations and ramp up a little bit more than our current 15 million tonne per year project. So I'd say for the next 3, 4 years, we've got plenty of growth projects in the pipeline that could increase the value of the company significantly. So we want to tackle those and be able to continue evaluating our capital return strategy at the same time.
Very helpful. I really appreciate that. And just a quick follow-up on the dividend. For modeling purposes, is it helpful to model it flat from here going forward? How would you approach that?
Well, on the capital return strategy, now we've set out our initial dividend. I'll let you be able to model that yourself. But realistically, we've implemented our inaugural dividend. We're very proud of that, and we'll be able to evaluate every 6 months what is the best position that we want to take. But what is important to note is that we stress test that number in many different scenarios. And what we've currently put is a number that we're comfortable with for this inaugural dividend.
Understood. Very helpful. Really appreciate all the color and continued best of luck in execution.
Thank you, Lucas.
[Operator Instructions] And your next question comes from Stefan Ioannou from Cormark Securities.
Great quarter. Just curious on the Phase 2 itself, it sounds like there's about $105 million left to spend. Is it fair to assume that there's still a fair bit of that goes into stuff with more related to the port? And I know in the past, like just given the ramp-up with the -- with Bloom Lake site with being done sort of in April and then the ramp-up through the end of the year, is that in part just reflecting the port up to speed as well? Or maybe just give us an update on the port itself, I guess, is what I'm getting at.
Yes, the port work is going very well. We're very proud of the SFPPN team. I think they're also navigating very well through these challenging times. They've set up a fantastic group of people to be able to deliver these projects because, as you remember, it's not just this $130 million that's being invested at the port right now. They're also finishing a project of $180 million of investments that has been going very well. So the SFPPN has ramped up significantly since the early days. We don't feel that this is going to be the element that is going to hold us back in the ramp-up period of Bloom Lake, and that ramp-up period is really more associated to the actual work at site, associated to delivering the plant, commissioning the plant and getting all the different equipment up to the right nameplate capacity. And at the same time, ramping up the mine with the new equipment that we're receiving. The good news is that I think we ordered the equipment in the right time, which means that most of that equipment has already been delivered at site and will be able to be commissioned in the coming weeks. So we see everything moving along in tandem to be able to reach that commercial production.
And your next question comes from Dalton Baretto from Canaccord.
Most of my questions have been answered, and I apologize if I missed this. But 2 questions on that 69% DRI product. First of all, is sanctioning the project purely going to be an economic decision? Or are you going to want to see firm customer commitments before you sanction that project?
Well, once we sanction that project, we'll have to hold people back in terms of wanting these tonnes. So we already know that this is material that will be required in the current market. But again, we see that as being increasingly important in the future. So we wouldn't necessarily have to have firm contracts associated to that because we see the DRI market as a market that is going to grow in the coming years.
I agree. So then on Kami, are you look -- as part of the feasibility, are you looking to produce some or all of that material as a DRI product?
Yes, you're correct. Our view is really that we're going to set ourselves apart because we're one of the only projects that is able to produce DRI at such interesting operating costs because of the nature of the power that we have here and also the type of material that's in the ground. So that's one of the main reasons why we're also revisiting the feasibility study from the previous owner is that they had penciled in 65% for their concentrate, we want to be closer to 69%. We really feel that this is the area that's going to be the most accretive for all of our shareholders.
That makes sense. And then maybe just take you one step further then as you look at your broader land package and you look at ways to kind of unlock value there, JVs, et cetera. Is this kind of a selling point or is there any reason other than economic considerations that you couldn't produce a 69% product from your broader land package?
No, we don't see any elements associated to our land package that would hinder us. One important thing to remember is that a lot of people talk about the Simandou project in Africa. Well, in our land package, we actually hold pretty much as many resources as what you can see or potential resources, as what you can see at the Simandou project. We hold over 8 billion tonnes of resources, just a few kilometers away from Bloom Lake. So we do have a lot of potential for growth with this type of material. And -- but there's nothing associated to that land package that would hinder us from producing 69% material.
And there are no further questions at this time. You may please proceed.
Thank you, operator. At this point, I'll turn it over to Michael O'Keeffe, Chairman, for closing remarks.
Thank you, Michael. And I have a pretty simple message, thank you very much. And first of all, to the team to be able to manage and navigate their way through COVID and again, have a record quarter for production. For me, it's an outstanding achievement. And to manage a board and oversee a company like this one, it's amazing effort. And I'm sure that all of you investors, you looked across the board and many times, people hadn't met expectations. And one of the big areas is also in developing new projects, but actually bringing this project on in 2018, and our Phase 2 being on time and on budget, which is very, very rare for resource companies to be able to achieve that. We're not quite there yet on the Phase 2, but it's looking very good. I think most people had us penciled in for midyear for decommissioning the plant, and we're now looking at April, so all going well. But just to let you know the process that everyone has to go through, and especially Alex at site, is living this on a day-to-day basis. And that's a fly in, fly out. So you can imagine the logistics, if we churn up the plane of 70 people, and you have to turn 50 of them back where it will really put them in that period of time. So look, it's an outstanding achievement and it was quite amazing. At the same time, you think about the steel prices rising. So we are going to quotes on railcars, yes, we signed agreements, but they were subject to pricing, too. So we're now seeing that change, and we'll be able to manage our way through that, managing the port with SFPPN. Like David said, there's a very good team there now, but there's a reason that team got down there is because Champion was overseeing from a broad level on SFPPN to change the management and also the restructuring of how that port should work, because we didn't want to go through what we had to go through in 2018, and we effectively commissioned it on their behalf. But look, it's all of those things that now sit in place, that it makes life for us a little easier. But it's still a great management achievement. And look, I'd also like to thank shareholders for their patience. It's been -- while I see it's been very quick, but people standing back may see it a bit slower when dividends are coming, but the board decided that there was enough cash and we had enough confidence. And we also -- the banks allowed, as you might remember, that there's certain covenants in our debt that couldn't allow us to do certain things and of that's to pay a dividend until there is certainty around Phase 2. So that's all been achieved, and we are able to stand here and talk about make dividend, I guess, thanking everyone for their patience and also the support and confidence in kicking us as a team. Also, as you know it's a proud day for us, as David mentioned, First Nations, we're the first mining company to recognize First Nations and call for public holiday. I think that's also typical of the team that while they're working hard, their respect for the community is very high. So again, I'd just like to simply thank everyone. We're looking at -- through the conversation and a lot of talk about growth and what we're doing. I see David's directly looking at this high-grade product will set this company in another stratosphere, because as really, there might be 1 mine in Brazil that can achieve this sort of feed. And everyone in the world is going to be chasing it, and they'll be knocking on our door for it. And also, we have those huge resources surrounding us. And what resonates with me is when I hear David talk about Simandou, every man and dog racing off there including the Chinese to do that. And we now have infrastructure that is required and the power that's required is mind boggling for me, they talk about $15 billion. I think that's only a touch of what's required when you look at the infrastructure we have and the support of government, I know where I'd be going. But -- so day-to-day operations, very good, good returns, dividend is starting to flow, about to double our capacity, looking at better product and the future growth which is fantastic. So thank you all, and look forward to talking at the end of the financial year.
Ladies and gentlemen, this concludes your conference call for today. We thank you very much for participating and ask that you please disconnect your lines.