NanoXplore Inc

TSX:GRA

Earnings Call Transcript 2023-Q4

[Operator]

Good day, ladies and gentlemen. Thank you for standing by. Welcome to NanoXplore Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Please note that today's conference is being recorded.

I will now hand the conference over to your speaker host for today, Sophie Rossignol. Please go ahead.

[Sophie Rossignol, General Counsel and Corporate Secretary]

[Foreign Language]

Good morning everyone and welcome to NanoXplore’s fourth quarter and year-end conference call. Today, I'm here with Soroush Nazarpour, our President and CEO, and Pedro Azevedo, our CFO. We will start with our prepared remarks and then a Q&A.

Please note that our discussion will include estimates and other forward-looking information, which our actual results may differ from in the future. We invite you to review the cautionary language in yesterday's earning release and in our MD&A regarding the various factors, assumptions and risks that could cause our actual results to differ.

With that, let me turn it over to Soroush.

[Soroush Nazarpour, President and CEO]

[Foreign Language]

Hello everyone and thank you all for joining our call today. We will first start with the review of the economy and the impact on our business. I will then expand our recent business and commercial development and I will end my remarks with an update on VoltaXplore.

After a year of volatility and interest rate hikes by central banks, the economy has proven surprisingly resilient. High labor market, high commodity prices, and the delayed impact of rising interest rates have all helped to sustain growth. While this has set the stage for a period of relative economic calm during the remainder of this year, some signs of slowing growth are emerging on some part of the economy. Despite this economic uncertainty, our business is growing and our customer forecasts remain strong as evidenced by our reported financial.

Our total revenue increased by 18% from the same quarter last year, increasing from $28 million to $33 million, which is a record quarterly revenue. Also, we closed the year with $123 million of revenue, which is 33% higher than last year and also record annual revenue. Our gross margin expanded during this quarter again and reached 21% resulting in a fourth positive adjusted EBITDA in the last five quarters.

In terms of operation, we're performing very well, and I believe this trend will continue in the current fiscal year. We also maintained our healthy balance sheet with more than $36 million of cash on hand. The strength of our current business, along with our healthy balance sheet, will help us execute on our growth strategy as disclosed in our five-year strategy plan.

Now let's talk about our recent business and commercial development related to our five-year strategy plan. Our anode material pilot line is now up and running, and we have fully tested our anode active material products. According to Benchmark Mineral, the United States battery capacity pipeline for 2031 now sits at near 1.2 terawatt hour, which requires around 360,000 tons of anode active material alone. We are planning to produce 8,000 tons per year of anode active material from our upcoming 16,000 tons per year anode and graphene production facility. Even though this facility will supply only a small fraction of North American need. This is an important milestone for NanoXplore as it paves the way for future expansion in this market.

[indiscernible] are working on the engineering of this facility and are in discussion with suppliers and contractors. They have also shipped samples out to partners and customers for testing and validation. Even though VoltaXplore will be a customer of this facility, they are in discussion with OEMs and their battery production partners to allocate the rest of the capacity. When it comes to financing of this 300,000 square feet plant, we'll benefit from federal and provincial investment tax credits and off-state agreements enable us to secure the credit facilities. Hence our investment decision is dependent on securing such an off-state contract during the next few months.

We're very excited to enter the battery material market. A market where the supply is limited and mainly located in Asia. We have seen several public announcements of new battery projects in Canada also, which will bring a lot of new opportunities for NanoXplore. Adding to that, our battery research and laboratory located in the vicinity of NanoXplore headquarters is now fully operational. This laboratory is key for our performance additive products and will allow NanoXplore to remain at the forefront of research and development on badly advanced materials.

Another aspect of our five-year plan is our investment in advanced composite parts where we leverage revenue performance in light-weight [indiscernible] transportation. We recently acquired a press support recently awarded program from large commercial vehicle OEM which will be detailed to our shareholders shortly. We're also receiving strong interest from passenger vehicle OEMs for our sheet molding compound products that are currently evaluating potential opportunities to capitalize on.

Sports car and electric cars are looking to reduce the weight and our graphene solution is appealing to them. This is a very good sign for us and for the graphene market as a whole. As the transportation industry is becoming one of the largest early adopters of graphene, both for batteries and composite light-weighting.

Moving to the key developments that happened during this quarter with our graphene-related activity. Overall, we are satisfied with our graphene commercialization activity. Testing and validation processes are continuing at an increasing pace in our focused market and sales from existing customers increasing each quarter, a clear demonstration that added value coming from incorporation of graphene are being accepted by our customers. For instance, in the plastic and recycled plastic market, the presence of additives containing graphene can increase several products, including stiffness, impact resistance, thermal and electrical conductivity, and resistance to degradation. Graphene-enhanced plastics such as nylon and polyethylene are selling better to external customers. And the commercial work is advancing on the recycled plastic side with a few customers are already purchasing graphene and are expecting to add more.

We're also continuing with the drilling fluid, foam and concrete application. Drilling fluid is an important opportunity for us as it requires large volumes of graphene in powder form. We are developing our solution with a few global oil and gas companies, one of which is one of the largest in the world. If our solution enters the market, we can expect several tons of graphene to be consumed for every drilling well. As a reminder, graphene enhances lubricity, lowers the coefficients of friction, which leads to process efficiency, increasing drilling speed, and lowering downtime.

Switching to foam, it was proven that graphene increases thermal insulation by more than 10%, improves plant retardancy, and provides a more sustainable solution. During discussions with several reputable chemical companies during different stages of validation of our graphene. Results have been consistently promising and we are confident that we will win business in the insulation foam market. For instance, our discussion with a well-known chemical companies is progressing, and we're waiting for official dates for product rollout. We're also in product validation steps with another leader in the foam market. We are expecting this development to continue in the next year.

Another market of interest for us is the concrete market. We are seeing success, mainly in the specialty concrete market at this time. We anticipate sales volume to increase further following this modification of the related ASTM certification to include graphene. Having said that, larger and more tangible graphene sales volume will come from commodity concrete markets. It's an extremely cost-sensitive market, and even though we are the lowest cost supplier of the graphene in the world, performance improvement and cost reduction coming from additional graphene is not yet sufficient for adoption. The other words, for us to enter this market and maintain our target growth margin, we have to produce graphene at lower costs, which will be the case only after commissioning of our 16,000 ton per year graphene and anode material production facility.

Switching gears to VoltaXplore. A lot of progress has been made during the last quarter. We signed a deal with the well-known heavy commercial based OEM for supply of lithium-ion battery cells for a duration of 10 years starting from 2026. This was a key milestone for us and for VoltaXplore and investors and I'm happy that this is done now. Adding to that, we recently announced the appointment of Nicolas Veilleux as the new Director of Automation and Construction of VoltaXplore. Nicola was previously working as Senior Manager of Cells Control Engineering at Tesla and was involved in building Tesla's Gigafactories. The appointment of Nicola, together with the conclusion of our first commercial deal, considerably reduced the risk of associated with the construction of VoltaXplore Gigafactory.

Moreover, the resuming process of VoltaXplore pilot plant to move from 18650 to 21700 cell format is now complete and the first cells have been produced. As a reminder, VoltaXplore Gigafactory only produce 21700 cells. Finally, we are progressing well on the financing of VoltaXplore and are getting closer to creating the financing package that will be the most beneficial to our shareholders and the future of our business. We are targeting to conclude the financing this year and start the construction during 2024.

With that, I will now give the floor to Pedro, who will discuss the financial and our outlook.

[Pedro Azevedo, CFO]

[Foreign Language]

Good morning, everyone. Today, I will begin with a review of our Q4 financial results, followed by some commentary about our full-year performance, and conclude with an update on financing for our five-year plan. Before discussing the results, as you may have seen in the press release, NanoXplore is now reporting financial results in two segments, advanced materials, plastics and composite products segments, and the battery cells segment. This was necessary so that the financial performance of the VoltaXplore initiative and the historic NanoXplore graphene business [Technical Difficulty] independently for our shareholders to see and because this is how we manage these two main product groups of NanoXplore.

Now, jumping to our Q4 performance. Total revenues in Q4 grew 18% versus Q4 2022 to $33.3 million. The increase in revenue continues to be driven by a positive product mix including graphene-enhanced product, higher volume, mainly in the transportation products, and positive foreign exchange impact. These items were partially offset by lower tooling revenues. If we exclude our lower tooling, which can fluctuate from quarter to quarter as customers launch new programs, our total revenues grew 21%.

Q4 gross margin, excluding depreciation and amortization, was $6.8 million, an increase of $2.4 million compared to last year. This represented a gross margin percentage of sales of 21%, an improvement of 400 basis points year-over-year, and was driven by improved productivity, resulting in part from manufacturing cost benefits of producing graphene-enhanced products, higher margin product mix, and better cost control. Our adjusted EBITDA was positive $526,000, which in itself is another record adjusted EBITDA for NanoXplore. But this amount includes a negative $604,000 related to the VoltaXplore initiatives, which in the past has been excluded from adjusted EBITDA and now comprises the totality of the battery cell segment.

If we only look at advanced materials, plastics, and composite product segments, we achieved a $1.1 million adjusted EBITDA, which is a gain of $1 million versus last year, and also a record level for NanoXplore. This is our third quarter in a row and our fourth in the last five quarters of positive and increasing adjusted EBITDA. The improvement in our Q4 adjusted EBITDA was a direct result of our higher gross margin, but partly offset by higher SG&A.

In Q4, the battery cell segment adjusted EBITDA loss, which as I mentioned is exclusively the VoltaXplore initiative, was in line with expectations and represents the current operating costs of VoltaXplore as we work to secure off-stake agreements and secure the full financing for the project. With regards to our balance sheet, we ended the year with $36.2 million in cash and cash equivalent, and $10.3 million of the available space on our line of credit for a total liquidity of $46.5 million. In addition, for our third quarter in a row, we generated positive operating cash flows. Despite now consolidating VoltaXplore’s operations, which had negative $450,000 of operating cash flows, our overall operating cash flows came in at a positive $1.7 million. Our total bank debt now stands at $9.4 million and was comprised of $7.9 million of long-term and $1.5 million of short-term debt.

Turning now to the full year 2023 notable achievements. During our 2023 fiscal year, we grew total revenues by 31% from $94 million to $124 million. We improved gross margins as a percentage of sales from 10.2% in 2022 to 17.3% in 2023. We improved the adjusted EBITDA from negative $9.2 million in 2022 to nearly break-even this year at minus $240,000 if we exclude the battery cell segments to be comparable. In addition to the significant improvement to the P&L, we also lowered our working capital by nearly $4 million despite growing revenues by $30 million, as well as completed the acquisition of XG Sciences, which was an important acquisition for our battery materials initiative.

In addition to the achievements in our financial performance, during the year we converted one of our OEMs clients to fully graphene-enhanced parts, increased our overall volume of graphene-enhanced products, put in place a pilot manufacturing facility for anode material initiative, made significant progress in making the VoltaXplore Gigafactory a reality, and have begun investments in the SMC material initiative.

Moving now to the financing of our five-year strategic plan. As a reminder, this does not cover the battery gigafactory initiative, which is being done separately and through different financing. As mentioned during the Q3 investors call, we are in discussions with our current and potential new lenders on an increased credit facility and the discussions are progressing. We remain confident to finalize an expansion of the current credit level facility before the current year ends. Given the confidence we have in this -- that's being achieved, we have already placed POs for long lead time equipment and began the engineering work for the construction work needed in our new North Carolina facility, also related to the SMC expansion strategic initiative. We currently expect the SMC initiative to be producing returns before calendar year ends 2024.

In closing, I'm very pleased with our financial performance and our various achievements during the 2023 fiscal year. I will use this stage to thank all the employees of NanoXplore and each of our operating companies for their hard work and for having helped us achieve these results in this past year. I would also wish to thank our shareholders for their confidence in NanoXplore. We expect during our 2024 fiscal year to see the continued adoption by our customers of graphene and graphene enhanced products, continued improvements in our financial results, and to have made great progress on the initiatives from our five-year strategic plan.

With that, I will pass it back to Sophie.

[Sophie Rossignol, General Counsel and Corporate Secretary]

[Foreign Language]

Operator, we can now open the line for questions.

[Operator]

[Operator Instructions] And our first question coming from the line of Michael Glen with Raymond James. Your line is open.

[Michael Glen, Raymond James]

Hey, good morning. Soroush, just circling back to the commercial agreement with VoltaXplore, can you just discuss, like, was this a customer that was using some of the output from the pilot facility? Were they working with the 18650 or 21700 cells? And can you speak to how the -- like the testing that they were doing, how rigorous it was, and maybe describe some of the steps and process that were undertaken prior to reaching this offtake agreement?

[Operator]

Speakers, you are still on mute. Please unmute.

[Soroush Nazarpour, President and CEO]

Hello.

[Operator]

We can hear you now. Go ahead, speakers.

[Soroush Nazarpour, President and CEO]

Michael, can you hear me now, all right?

[Michael Glen, Raymond James]

I can hear you, Soroush. Did you hear my question?

[Soroush Nazarpour, President and CEO]

Yeah. Yeah. Just repeating the question so everyone can follow. Question was, the 18650 and 21700 and the testing that has been done by the clients on those types of values. So first, initially the VoltaXplore plant was doing 18650, now it's converted to 21700. So the validation is done on 18650, but the conversion of 18650 to 21700 is well known in the market. So normally 21700 are seeing about 50% improved numbers in terms of capacity and everything. So right now the testing is happening on 21700, but all the testing that's needed for the customer was done in 18650.

[Michael Glen, Raymond James]

Okay. And can you just -- is there any way to describe this sort of testing that they're working through or speak to some of the results that they've seen from the battery -- from the testing that they're doing? What are they looking for exactly?

[Soroush Nazarpour, President and CEO]

Well, customers, they always have a spec for the batteries that they need. So the spec that we receive to be matched the performance of the batteries we [doze with] (ph). So it's not the other way around. It's not like we have certain batteries and they take it and no, because we're not the only supplier of the battery for them. So it's the job of the battery suppliers to match the required spec of the customer with their product.

[Michael Glen, Raymond James]

Okay. And then if we circle back to the Battery Day from the early 2022 -- April of 2022. I'm just wondering, is there any updates as to how we should think about CapEx, top line, gross margin? Is there any changes with respect to your initial expectations for the size of the plant, the 2 gigawatts, is that still the part of the plant?

[Soroush Nazarpour, President and CEO]

Yeah, the plant is still 2 gigawatt hour. In terms of top line, the pricing model for us is the material cost plus a lump sum, and the lump sum covers production cost and gross margin -- and gross profit. So there is some level of fluctuation on the top line depending on the variation of the raw material prices, but the gross margin is very stable. So we in the Battery Day, we assumed general numbers and very flat numbers in terms of price per kilowatt hour. That fluctuates a little bit on the top line, but very similar in terms of the bottom line. It doesn't really change much. So you can correlate the same numbers that have been set in the Battery Day with this contract is also now.

[Michael Glen, Raymond James]

Okay and that was the 25% gross margin that was outlined during that day.

[Soroush Nazarpour, President and CEO]

Yes.

[Michael Glen, Raymond James]

Okay, thanks. I'll get back in queue.

[Operator]

Thank you. [Operator Instructions] And our next question coming from the line of Rupert Merer with National Bank. Your line is open.

[Rupert Merer, National Bank]

Hi, good morning, everyone.

[Soroush Nazarpour, President and CEO]

Good morning, Rupert.

[Rupert Merer, National Bank]

Following up on the battery plant, what are the hurdles to closing financing and if you're closing this year, what are the remaining milestones that we should be looking out for?

[Soroush Nazarpour, President and CEO]

We're just not going to comment too much about the financing and what's happening at this stage. I can tell you that when you're building any plant, you want to make sure that you de-risk the construction by having experts and skillful employees. So we hired Nicolas to de-risk that, and also you want to make sure that your output is allocated to the customers and that's what we announced as well. So these two were the main two requirements for us to look at the next step. At this point I don't see any specific hurdles in the process. Having said that, we want to make sure that the financing package, when it comes to the cost of capital, is the best that we can get in the market in these [states] (ph). So, we're trying to optimize more than just doing this.

[Rupert Merer, National Bank]

Okay. Thank you. And you had some comments on the fact that your graphene production wasn’t increasing. Can you give us some color on how much graphene you're producing today, your 4,000 ton plant, and where is it going, if you can give maybe a little color on which customers or which customer groups you're selling to, how much is in powder form versus the finished products, and any changes quarter-over-quarter?

[Soroush Nazarpour, President and CEO]

Yeah, so when you look at the target market, still transportation is the main target market for us and still graphene-enhanced master batch pellet and also graphene-enhanced mud or SMC materials are the main customers or main formats of the graphene that's being sold. So graphene powder direct sales are still low and we are mixing it with different types of medium. And these two form factors are still the best sellers and transportation is still the main segment for the graphene itself. Having said that [indiscernible] having said that, we're seeing growth in both agriculture and industrial and construction that's happening right now.

[Rupert Merer, National Bank]

Any chance to give us some color on how much of your capacity you're utilizing today?

[Soroush Nazarpour, President and CEO]

We're not commenting as before about the volumes produced, sold, and anything about that for the 4,000 ton facility. But as I said before, we're expecting that we get out of the remaining capacity and we'll be fully allocated very soon.

[Rupert Merer, National Bank]

All right, thank you. And then maybe just one final follow up there. On the drilling fluids, so, looking at that market, you mentioned that the drilling market would use a few tons and I missed what the reference point was, if it was a time frame or an application. Maybe you could just repeat the timing and opportunity for drilling fluids, please.

[Soroush Nazarpour, President and CEO]

Well, it's a couple of tons, a few tons every drilling well. That's what we mentioned. So you can imagine in North America, I think it's about 30,000 to 40,000 wells are being drilled every year. So you can just correlate the numbers and get to a potential accessible market to the total market on that. sBut it's a few tons every drilling well that we mentioned.

[Rupert Merer, National Bank]

And the timing on that market? What would be the hurdles to moving forward with commercialization there?

[Soroush Nazarpour, President and CEO]

Well, we're still in -- these three markets, foam, concrete, and drilling fluid, is more of the market that we're working to expand. It's hard to say when or how much we're working now. We are toward the end of the validation step with one large oil and gas company. And again, these type of new products, it's not just getting the product done, you have to roll it out and you have to see how the market is responding to those products. And if their customers are happy with what they're seeing, the volume can grow. So it's difficult to put a number around the future growth on that market.

[Rupert Merer, National Bank]

Okay, thank you. I'll get back in the queue.

[Operator]

Thank you. And I see we have a follow-up question from Michael Glen with Raymond James. Your line is open.

[Michael Glen, Raymond James]

Soroush, on the anode material, this was the 8,000 tons per year of anode material, can you just remind us how the graphene fits into the anode material and what the benefits of the graphene using the graphene and the anode material are?

[Soroush Nazarpour, President and CEO]

Yeah. So the way we are looking at the anode material production, there is a traditional way of turning graphite to spherical graphite and converting it and putting a coating around it and make it a material called CSPG or coated spherical purified graphite. And there's a way also that we have developed which is from the path of converting graphite first to graphene and then wrapping the graphene particles together to make a round particle. So this facility is addressing anode material from both angles, producing anode material from the traditional route and also producing that from the path of graphene. In reality, anode production, we call it either top-down or bottom-up method. Bottom-up method is a graphene path and top-down method is a graphite path that you go through micronization and [indiscernible] and you produce CSPG on a typical path. So this facility will produce both materials.

[Michael Glen, Raymond James]

Okay. And is there any -- between both materials, the advantages for the bottom-up approach over the traditional approach are, can you describe those?

[Soroush Nazarpour, President and CEO]

Yeah, because if the source of the graphene is the bottom-up approach, you have a slight increase in terms of capacity or let's say energy density that the battery will experience. And also you have a little bit better charging speed that comes from the conductivity of the graphene. So there's a slight improvement versus the typical material that's out there.

[Michael Glen, Raymond James]

Okay. And just to circle back to the drilling fluids, I'm just trying to remember exactly, like, the primary advantages from using the graphene in the drilling fluid application, what -- can you describe that? Again, I might have missed it.

[Soroush Nazarpour, President and CEO]

Yeah. So we look at adding graphene to two types of drilling fluids. One is the geothermal drilling fluid and one is the normal. So in the geothermal fluid, which is a much smaller market, this improves the depth of the drilling that you can achieve. So that's good for deeper well application. And on the normal drilling fluid, it's pretty much a lubricating additive. So you can reduce the friction, you can improve the lifetime of your drilling bit and also reduce the downtime of drilling.

[Michael Glen, Raymond James]

Okay. Thank you.

[Operator]

Thank you. And next follow-up question coming from the line of Rupert Merer. Your line is open.

[Rupert Merer, National Bank]

Hello again. Just following up on some of the questions from Michael. So if we look at your battery materials, you have the ability to produce a range of different specs for those battery materials. Can you talk about where you're going to hone in on your initial 1gigawatt hour customer? I imagine you're not going to be throwing in too much silicon into the mix there given the life requirements for that target market but can you just talk about what that first battery will look like and maybe how much graphene it might use and how it might compare to competing technologies?

[Soroush Nazarpour, President and CEO]

All right, so on our battery material, we have different products coming out. One, of course, is the conductive additive products, which is some sort of a conductive [complex] (ph) replacement by the graphene. That's one set of product. There's graphene enhanced silicon compounds and there's also anode active material which is the anode material produced either through a traditional way or through the graphene path. So these are the type of products that we are focusing on the battery material side. Now, looking at VoltaXplore, VoltaXplore, when we're looking at the transportation, we have a tendency to limit the amount of silicon that we put in the battery. So when it comes to application with really long cycle life, like transportation, or it's called energy cells, we're looking at, you know, maximum 3% to 4% of silicon additives in the anode. We're looking at normally 2% of graphene as conductive materials in both anodes and cathode side of it, and we're also looking at the typical, the anode active material, which is about 95% of the anode of the battery is coming from those active materials, which you put them together, well, I think close to, I would say, 500 tons of the graphene will be used in that batteries, but again, I have to get back to you with the exact numbers on that.

[Michael Glen, Raymond James]

That was helpful. Thank you. And you mentioned with your 16,000 ton plant that your investment decision was going to depend on the outcome of certain contracts. I'm wondering if you can give us some color on that and any initial feedback you might be getting on your materials from your initial customers?

[Soroush Nazarpour, President and CEO]

Yeah, so they're testing -- couple of these potential customers are testing this material. The cell cycle is much faster in there. First, battery market has a strong pull. Battery material supply is limited and battery producers are all looking for mass material. So we have a strong pool there that helps the sales cycle. And second, even though we produce from different paths, the final product is pretty clear in terms of the spec that they should have. So the spec of the anode material is, it comes from the customer to us, and we try to adjust our supply to the specs that came from the customer. So again, this is a lot more clear when we look at the graphene sales, the graphene doesn't exist in different customer products. We go through a much longer sales cycle with them and validation takes time. We have standards that we have to pass. When it comes to battery material, it's not like that. So in that dynamic, we should be able to secure contracts for our material before really deciding to put $120 million or so on the battery material and graphene facility. So our focus is to secure the contracts first before we decide on allocating capital.

[Rupert Merer, National Bank]

Okay. Do you have any sense of what the timing on that could look like, how long the process is for material validation?

[Soroush Nazarpour, President and CEO]

Well, we're hoping to conclude something the next couple of months, but I think we're a little bit more flexible when it comes to the battery material, which we cannot start producing or spending capital on those programs before having 2024 started because of the ITC program. So there is some flexibility that we have until that time. But I would say in the next few months we should have this secured and move to the construction stuff.

[Rupert Merer, National Bank]

Okay, thank you. And then just one final one for me. With the FMC plant, gave us some color on how that is ramping up and how you're looking for financing solutions. What does the ramp-up look like for that plant? I believe you're adding five presses at 2 million pounds each. Does this come on gradually or is it really a step change in your production [indiscernible]?

[Pedro Azevedo, CFO]

Well -- so, it’s Pedro, so the lead times are about a year and the focus right now is about buying some of the equipment. Yes, some of the presses are going to be ordered. There's other equipment that are needing to be ordered. But right now the focus is on the construction, the build out of our current facility in Newton, North Carolina, to be ready to accept those equipment. So right now, the focus over the next six months is really the physical establishment, the construction of the facility so that it's able to receive the equipment in about nine months now.

[Rupert Merer, National Bank]

And is the market there, the customer demand there, so that when you install these plans that you see a step change in volume or is there more of a gradual ramp up in production from that plan?

[Pedro Azevedo, CFO]

It'll definitely be a gradual ramp up, but the customers are there. We already have orders for 2026, ‘25 and ‘26 that we see additional volumes that are needed, so we're putting in place the capacity for that.

[Rupert Merer, National Bank]

All right, very good. I'll leave it there. Thank you.

[Operator]

Thank you. And I see no further questions in the Q&A queue at this time. I'll turn the call back over to Sophie for any closing remarks.

[Sophie Rossignol, General Counsel and Corporate Secretary]

[Foreign Language]

We would like to thank everyone for attending this call and we wish everyone a great day. Thank you.

[Operator]

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.