Ivanhoe Mines Ltd

TSX:IVN

Earnings Call Transcript 2022-Q1

[Operator]

Good day, and welcome to the Ivanhoe Mines Q1 2022 Financial Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to the Manager of Investor Relations, Matthew Keevil. Please go ahead.

[Matthew Keevil;Manager, Investor Relations and Corporate Communication, executive]

Thank you, operator. Hello, everyone. My name is Matthew Keevil and I'm the manager of Investor Relations for Ivanhoe Mines, dialing from sunny Cape Town, South Africa. It is my pleasure to welcome you to Ivanhoe Mines' Q1 2022 financial results conference call.

We will finish today's event with a question and answer session. [Operator Instructions]

Given our time constraints, we will likely be unable to answer every question. Our apologies if we run low on time. Please follow up with our IR team with further questions. Before we begin, I'd like to remind everyone that today's event will contain forward-looking statements that involve risks and uncertainties that can cause actual results to differ materially from those in the forward-looking statements. Details of the forward-looking statements are contained in our May 10 press release as well as via CEDAR and our website at www.ivanhoemines.com.

It is now my pleasure to present our founder and Executive Co-Chairman Robert Friedland for some opening remarks. Robert.

[Robert Martin Friedland, executive]

Thank you very much to all of our listeners. Most of your management is sitting in Cape Town South Africa given the large Indaba conference where I'm going to be speaking tomorrow morning. We're very happy to present our first quarter 2022 financial results. A lot of the numbers speak for themselves, but I'd like to offer a few comments.

The best numbers associated with the copper production with Ivanhoe mines are associated with the fact that we produce less global warming gas per unit of copper produced than our competitors and that's the same reason why our cash costs are actually dropping. The genetic reason is simply that we have those big yellow trucks and we're moving larger and larger volumes of rock in those big yellow trucks.

We're addicted to hydrocarbons and when the hydrocarbon goes up due to war or any other eventuality, there's no way around it, your costs have to go up.

Kamoa-Kakula is a mine powered essentially by hydroelectricity and within 2 years with an all-electric fleet, there'll be no exposure to hydrocarbon at all, so we have a very, very good business at $4 a pound copper, lower than we're trading today and we'd have an extremely good business even at $3 a copper occupying the bottom of the world's cost curve.

We believe as our production continues to grow dramatically, we'll be amortizing an ever-larger productive base against fixed overheads and when our green smelter comes in production late in 2024, cash costs will drop even further.

So I want to thank the thousands of people that have worked so hard to make this a sustainable and different mining operation and given exogenous circumstances having nothing to do with us, there's a sale on now with artichokes, 5 for $1 at Safeway. So we're going to present our management team and our numbers.

We flip this over to questions on [e-mail], if anybody would like to email me directly. And with that, let's go on to the next stage of the call. Thank you.

[Martie Cloete, executive]

Thank you, Robert. Good afternoon, and good morning, everyone from Cape Town here at the Mining Indaba. If we can move to the next slide. We are very pleased to announce another excellent quarter in our trajectory to become one of the largest copper producers in the world. Kamoa-Kakula never fails to impress and in April this year, our Phase 2 plant achieved commercial production. Again, ahead of the original schedule and even more seamless than anticipated.

The combined annualized production from the first and second plant will be 450,000 tonnes after the completion of our debottlenecking project, which we announced earlier this year. And we anticipate to complete this in the third quarter of 2023. We are firmly on track to reach the upper end of our 2022 guidance of 340,000 tonnes of copper in concentrate. Our Phase 3 expansion will further increase copper production to 600,000 tonnes of copper with the addition of a 5 million tonne per annum plant adjacent to the 2 new mines which we will develop at Kamoa 1 and Kamoa 2.

This expansion will be funded from cash flow from Phase 3, our plant, the mines, and smelter and that's anticipated to be completed by the fourth quarter of 2024. I will now go to the next slide. And before we go through our financial results, let's just pause for a minute and reflect on our ESG credentials. On the 2nd of May this year, we published our fifth annual sustainability report highlighting the significant work we do from an environmental, social, and governance perspective.

As I mentioned in our previous earnings call, we are firm believers in stakeholder capitalism and to-date, our group has created and distributed more than $1.1 billion in national value. From 2020, as our activities ramp up at Kamoa-Kakula, this national value has increased to 43% and it will continue to do so as we develop and expand our tier 1 assets. We currently employ over 12,000 people of which 97% is local and we actively set out targets to increase that percentage even further and employ more women across our operations.

We have held in excess of 10,000 stakeholder meetings in the 2021 financial year keeping our communities and host governments informed and addressing queries they may have. As a company, we strive to be a net-zero carbon emitter and at Kamoa-Kakula, our high-grade, underground, hydro-powered mine is well placed to be an industry leader. I will now hand over to our CFO, David van Heerden to take you through our quarterly financial results.

[David Van Heerden, executive]

Thank you, Marna, and good day to everyone joining the call. As Robert and Marna mentioned, the first quarter of 2022 was another quarter of exceptional operational performance at Kamoa-Kakula and with commercial production of Phase 2 concentrator achieved on April 7 and the debottlenecking well underway, we are confident that the impressive trend will keep going forward but for now, I'm happy to summarize the financial results for the quarter.

This call is of course, just a high-level summary of our quarterly results and the presentation should be viewed in conjunction with our quarterly financial statements and MD&A for the period ended March 31, 2022.

Kamoa-Kakula sold almost 52,000 pounds of payable copper in concentrate during the quarter leading to a record quarterly revenue $520 million up from $489 million in the last quarter of 2021.

High average prices in the first quarter and a remeasurement of contract receivables as at March 31 resulted in the increased revenue for the quarter. C1 cash costs continued its downward trend and was $1.21 per pound of payable copper delivered to China for the first quarter of 2022, but more on cash costs on a later slide. Kamoa-Kakula's EBITDA for the first quarter was $399 million and increased by an impressive 12% when compared to Q4, 2021, driven by the increase in revenues and the decrease in cost of per pound.

If we move to the next slide. The slide illustrates how the just-mentioned highlights combined for the Kamoa Holding joint venture's profit, and how it'll ultimately translate into Ivanhoe's share of the profit attributable to the joint venture partners. A revenue of $520 million in Q1, 2022, includes the remeasurement of contract receivables of $52 million, which represent the effective mark-to-market of provisional sales at the period ending copper price.

Kamoa-Kakula's cost of sales for Q1 was $123 million in total and $1.08 per pound of payable copper sold, while cash cost per pound of payable copper produced totaled $1.21 per pound.

After deducting G&A, the operating profit for the first quarter of the year was $318 million and Kamoa-Kakula's EBITDA, as I mentioned, $391 million. Kamoa Holding recorded finance loss of $55 million in the first quarter, and which is principally the interest in the shareholder loans from Ivanhoe and Zijin, as well as interest on Kamoa-Kakula's equipment financing facilities.

Of the $130 million tax expense, $105 million was deferred tax and does not represent a cash outflow due to the ability to offset exploration and certain development expenditures incurred from inception against taxable income over the first 2 years via commercial production. The remainder represents the minimum income taxes payable equal to 1% of revenue.

The non-controlling interest of $45 million represents the profit attributable to the DRC government's 20% interest in Kamoa-Kakula mining complex, leaving profit of $176 million attributable to the joint venture involvements, Ivanhoe's share of which equaled $87 million for Q1 2022. If we move to the next slide which highlights Ivanhoe's consolidated Q1 financial highlight.

The chart on the back starts where the last slide ended effectively showing Ivanhoe's share of profit from the Kamoa Holding joint venture of $87 million.

Additionally, Ivanhoe earned interest income of $28 million from Kamoa Holding in the first quarter from shareholder loans advanced the joint venture. But during the quarter the company spent $9 million on the Kipushi project, $4 million on Western Forelands exploration, and $6 million on general administrative expenditure. Costs incurred at the Platreef Project are deemed necessary to bring the project into commercial production and are therefore capitalized this development in property, plant, and equipment.

Ivanhoe recognized finance costs of $7 million in the first quarter relating mainly to interest on the convertible notes at the effective end of venture shock. The $66 million loss on the fair evaluation of financial liability in the first quarter represents the change in the deemed fair value of the conversion feature attached to the $575 million 2.5% convertible senior notes which Ivanhoe closed in March 2021.

The conversion feature is an embedded derivative financial liability and the fair value change is pointedly due to the fluctuations on our share price. And the loss is, therefore, resulting from the increase in Ivanhoe's share price from end of December 2021 to the end of March 2022. The aforementioned items ultimately builds up to Ivanhoe's profit for the 3 months ending March 2022 of $23 million with a total profit before the loss of the fair value on the financial liability being $88 million for the first quarter.

The next slide just breaks down the cash cost of Kamoa-Kakula. The cash cost per pound of payable copper produced for delivery to China continued with its downward trend and was $1.21 per pound for the first quarter. And that's down from $1.28 from Q4, 2021 and $1.37 per pound in Q3, 2021. The decrease mainly resulted from the mine's fixed operating costs being spread over increased production and it's extremely encouraging to see Kamoa-Kakula already at the bottom our cash cost guidance for 2022 of between $1.20 and $1.40 per pound of payable copper produced.

As Phase 3s ramp up in the second quarter, we might see a cash cost slightly higher but only slightly, but that's expected. But I'm excited to see what is achieved in Q3 onwards with the possibility of breaking below the bottom range of our cash cost for the year.

We remain optimistic with what the year holds because of the increased copper production from the Phase 2 concentrator and giving the possibility decrease cash cost further.

Cash cost, is, of course, a non-GAAP measure, and the reconciliation from cash cost to cost of sales is provided on Page 14 of our MD&A.

Next slide, please. This slide just indicates where Kamoa-Kakula is on the cash cost curve to highlight how exceptional the project is. It's very encouraging to beat constantly first quarter while still having significant further improvements planned.

Next slide, please. We have a strong balance sheet and are well-positioned for the further development of our projects. We have $562 million in cash and cash equivalents on hand and consolidated working capital of $615 million.

Of our liabilities and $922 million, $752 million relates to the 2.5% convertible notes, with these only due in 2026 with possible earlier redemption.

Our forecast spend for 2022 is $286 million on Flatreef to pushing continued exploration and overheads and all operating capital expansion cost of Kamoa-Kakula expected to be funded from copper sold into [ some of these influx ] at the mine.

We also expect to receive the second prepayment on [ revenue ] streams later in the year. This will add $225 million to our cash position at that time.

I now handover to Alex Pickard, our Vice President Corporate Development, and Marna to provide a brief update on the development at our projects.

[Alex Pickard, executive]

Thanks a lot, David, and good day to everybody who is on the line. I will now take you through the key results in terms of operations and projects at Kamoa-Kakula, and then I'll pass back to Marna to take you through Platreef and Kipushi and our closing remarks prior to the Q&A.

Next slide, please. We're looking first at Kamoa-Kakula Phase 1. We achieved a record operating quarter during the first quarter with 1.08 million tonnes milled out of a 5.9% copper, which produced 55,600 tonnes of copper in concentrate. We also achieved a recovery of 87%, which beat 86% from the previous quarter, which is also our desired recovery.

The Phase 2 concentrator was commissioned towards the end of the quarter and it achieved commercial production on April 7, which is around 4 months ahead of the original schedule. Since then, the Phase 2 concentrator has been performing strongly and we expect that before the end of this quarter, we will have the same performance level of Phase 1 consistently, which is 10% to 15% above the design capacity in terms of throughput.

What this early commissioning and ramp-up means is that we are confident to point towards the upper end of our 2022 production guidance range at 290,000 tonnes to 340,000 tonnes of copper in concentrate. Finally, as Marna mentioned, we are well underway with our $50 million debottlenecking campaign, which takes advantage of a strong performance at the front-end of the plant and also the high grades that we're experiencing and it targets reaching an annualized production rates of 450,000 tonnes of copper by the second quarter of next year.

Next slide, please. Now we are firmly looking to the future with Phase 3 of the Kamoa-Kakula project underway. We recently announced that we will build an up-sized concentrator of 5 million tonnes per annum, which will be located close to the existing Kansoko mine and the larger Kamoa mining footprint, which is just over 10 km to the north of Kakula.

In order to supply this new concentrator, we are busy expanding our mining activities at Kansoko as well as preparing a new box cut, which will open up the Kamoa 1 and Kamoa 2 orebodies. We also placed contracts to break ground on the Kamoa-Kakula smelter, which will be the largest smelter in Africa with a capacity of 500,000 tonnes of blister copper. In order to provide power for this Phase 3 expansion and the smelter, we recently signed an EPC contract with Voith Hydro, which is a leading German hydro-power company.

It'll be upgrading the turbine 5 at the Inga 2 dam and works are now commencing which should be ready in time for our Phase 3 target production by the end of 2024.

It's worth adding that all of this work will be documented in a new pre-feasibility study for Kamoa 2 which will be published later on this year.

Next slide, please. This slide really just puts the Phase 1 and Phase 2 debottlenecking program, as well as the Phase 3 expansion into context. So, we're targeting to ramp up Kamoa-Kakula from approximately 400,000 tonnes of copper annualized today to around 600,000 tonnes of copper production by the end of 2024. This will rank Kamoa-Kakula as the third-largest copper producer in the world, but our target is to ultimately become the second-largest producer through our Phase 4 expansion.

Next slide, please. Finally, living next door to Kamoa-Kakula, we are advancing the work program at a vast 100%-owned Western Foreland exploration grounds. With the recent onset of the dry season in the DRC we are recommending in full our drill campaign to explore for high priority drill targets identified during the last year. We have an initial budget for this year of $25 million, which includes over 90 kilometers of drilling across the license package, which will be 4 to 5 drill rigs in operation. I'll now hand back to Marna to take you through our other activities. Thank you.

[Martie Cloete, executive]

Thanks, Alex. We also published an update on our efforts at Platreef yesterday, and you can read that press release on our website, but we completed the equipping of Shaft 1 and on 22 April, we initiated the first blast on the 950-meter level to commence lateral development toward the ore body. Shaft 1 will serve as Platreef's initial production shaft and is approximately 450 meters away from the first high-grade area of the ore body.

Ivanplats offered the delivery of its first battery electric mining fleet and plans for the initial 5-MW solar plant is well underway. The remainder of the spend for 2022 is approximately $150 million with groundbreaking for the initial 770,000-tonne plant expected within the next month. Phase 1 mine production is expected to commence in the third quarter of 2024.

And then over to our Kipushi project. The Kipushi project economics are extremely compelling at current zinc prices. Underground, early works have commenced, and we are the process of recruiting key personnel for the construction of the plant and the operation of the mine. Our financing and offtake discussions are advancing with a number of interested parties and we are targeting an accelerated return to production within the next 18 to 24 months.

And then some concluding remarks. In summary, we are confident in our team's ability to bring you the world's next diversified major mining company with our production success at Kamoa and our established track record in exploring for Tier 1 assets, we are sure to continue our story of growth and discovery.

That's our concluding remarks today. I will now hand back to Matt Keevil to facilitate the question and answer session for today. Thank you.

[Matthew Keevil;Manager, Investor Relations and Corporate Communication, executive]

Thank you, Marna. And we will now move on to the question and answer portion of the day. Operator, do we have any questions waiting on the line?

[Operator]

[Operator Instructions] And we'll go first to Andrew Mikitchook with BMO Capital Markets.

[Andrew Mikitchook, analyst]

Congratulations on a very strong start to the year and a good trajectory for Kamoa-Kakula.

I wanted to look forward to Phase 3, and in your release, you're guiding for something just over $480 million of a placeholder budget for Phase 3 for the balance of the year. I was wondering if we could get a few general comments on how that could possibly be spread out over the balance of the year, and what the general components of that expenditure for this year are?

[David Van Heerden, executive]

Thanks, Andrew. And it's David here, I'll take that one. The first part of your comment is I think important that this is, effectively, just a provisional amount, a placeholder, and budget for what is expected at this point in time to stage 3 during this year. And that'll obviously be re-looked at as the previous relative study is completed and expected in the first quarter.

The majority of that cash flow, we do expect to be -- to only flow in the latter parts of the year. And some of the expenditure are less than $100 million in Q2, with the remainder pretty weighted towards the end of 2022. But those funds are effectively being made available to the project team to ensure they can drive the time lines of Phase 3, and then it's split between the smelter continued work in the -- in the queue but with underground mining but then also some allocations to general infrastructure and very early works on the concentrator.

[Andrew Mikitchook, analyst]

Okay, I think that that's a fair answer, and I guess we're going to get a little bit more detail here, going forward and in the, I guess, Q3 or maybe a little later for the PFS.

Just one last conceptual question on Phase 3. A lot of the improvements that you guys are working or debottlenecking or optimizing that you're working on for Phase 1 and Phase 2, are those going to be directly reflected into Phase 3 PFS or, you know, should there be some concept of ability to exceed the 5 million tonnes that was headlined recently for the Phase 3 capacity?

[Alex Pickard, executive]

Maybe I'll take that one, Andrew. It's Alex here. So just in terms of what will be in the PFS, just to be clear. You'll see 9.2 million tonnes per year from Phase 1 and Phase 2. So that will be at the fully debottleneck rate and then there'll be an additional 5 million tonnes from Phase 3 bringing the total to 14.2 million tonnes.

In terms of maybe what you're asking about Phase 3 and can you expect some additional performance on top of that 5 million tonnes, look, it's a bit too soon to say.

I mean there is the potential there because some of the front-end components of that 5 million tonne mill already be able to operate at double the rate to accommodate a later Phase 4 expansion. So there is the ability to really push the front-end of the circuit and then figure out what else we need to do at the back-end of the circuit to produce more copper. And we obviously had a good experience on Phase 1 and Phase 2 but it's too soon to really give guidance on that.

[Andrew Mikitchook, analyst]

Okay. Well, it's good to hear that you'll have all kinds of capacity and then we'll wait to see what the team does.

[Operator]

[Operator Instructions] We'll go next to Greg Barnes with TD

Securities.

[Greg Barnes, analyst]

Alex, I'll jump ahead a little bit. I think you just said that you're going to potentially build enough infrastructure to double the capacity of Phase 3. Is that what Phase 4 is going to look like, 5 million tonnes a year at that location?

[Alex Pickard, executive]

Hi, Greg, it's basically the same as what we did with Phase 1 and Phase 2 where the crushing circuit, so the very front end is sized for 10 million tonnes per annum.

And then that's the point at which it splits in 2 parallel circuits and ultimately 5 million tonnes each. So that'll be Phase 3 and later on Phase 3. But it does mean that when Phase 3 is operating we have a greater capacity in terms of crushing.

[Greg Barnes, analyst]

Okay. So Phase 4 is going to effectively be mining from Kamoa then at a rate of 5 million tonnes a year or will you be bringing ore from other locations to that new mill or that parallel mill at Kamoa?

[Alex Pickard, executive]

It should be set primarily from the different orebodies that we're opening at the Kamoa. So just remembering this Kansoko where we're mining already, but then there will be 2 larger mines at Kamoa 1 and Kamoa 2 which are fed from the same twin decline system. And then later on, we'll figure out where to Kakula West fits into mix because we do have some slightly higher grades at Kakula West. So you'll have seen in the press release, there was a reference to the fact that later on we will start to develop declines into Kakula West to try and get a head start on that orebody as well. But Kakula West material will probably more naturally report to the Kakula mill.

[Greg Barnes, analyst]

And just turning to inflation, we've heard a lot of that back from other mining companies through earning season and obviously, you seem to be a bit insulated from that. But are you seeing cost pressures from various inputs, reagents, what have you feeding through?

[Alex Pickard, executive]

Do you want to take this one, David?

[David Van Heerden, executive]

Thanks. I might as well. Thank you, Alex. I think if you look at our continued decrease in our gas prices I think, we are handling it well but I mean, we're definitely not immune. And the processes are being put in place just to limit the effect specifically on fuel, et cetera.

And I think one thing that has helped us as well as just the fact that the hydropower, the price of the hydropower is fixed. So I think that's one additional benefit we did get from actually getting that power. But yes, we're definitely not immune but I think the performance has been really exciting and, yes, I think we look forward to I think good numbers for the remainder of the year.

[Greg Barnes, analyst]

Okay. But grinding media reagents, things like that if you have stores on hand or you have long-term contracts at fixed prices, things like that are helping you insulate a little bit from cost inflation out there.

[David Van Heerden, executive]

Yes, exactly. It's a bit of a mix in having the right amount of inventory onboard and then just de-risking possible future supply issues at certain processes has been helping us.

[Operator]

We'll go next to Dalton Baretto with Canaccord.

[Dalton Baretto, analyst]

Two questions from me. First question, given the recent flooding in Durban and it's obviously highlighted the lack of investment, more challenges there. As you guys go through the stage expansions at Kamoa-Kakula, how are you thinking about the egress part of the mission?

[Alex Pickard, executive]

Sorry, Dalton. I just missed the last part of your question there. How are you thinking about?

[Dalton Baretto, analyst]

About egress, getting product there.

[Alex Pickard, executive]

I'll take the question and then perhaps others can chime in. I mean the first thing to say about the recent issues with Durban [ pole ] was they didn't really have a material impact on our operations. And also remembering that our revenues are recognized when the material leaves the mine gates under the terms of our Phase 1 and now Phase 2 off-take agreement.

What it does mean is that you might be paying a little bit more at the margins to have material in a warehouse somewhere waiting for shipment.

But I'm not from -- we've also been doing a lot of work together with CITIC and Zijin and all of our logistics service provider partners in order to streamline the -- and promote Kakula concentrate logistics operation as a whole. So we're looking at things like warehousing capacity in Zambia and also trying to spread the load through different ports on the African continent. And longer term we are also still very keen supporters of the Western line projects to the Angolan port of Lobito, which will completely change the face of the whole logistics chain and the DRC and it will greatly reduce the bottleneck there.

And then I think the other thing to bear in mind is that's also one of the key advantages of the smelter, of course, is that instead of shipping 1.3 million tonnes of wet concentrate in bags, instead that becomes 500,000 tonnes of blister copper which is obviously less than half the volume but also much easier from a handling point of view.

[Dalton Baretto, analyst]

Makes sense but the Angola options is still very much on the table if I'm understanding correctly.

[Alex Pickard, executive]

Oh, absolutely. I mean, it's not something what is going to happen in the next year, but it's definitely still ongoing in the background.

[Dalton Baretto, analyst]

Okay, great. And then my second question is on Platreef. Just given the implications to PGM and ECOMARK and stuff and the fall of the Russian and Ukrainian situation, is there an opportunity for you guys to accelerate Shaft 2?

[Alex Pickard, executive]

I mean, look, I think in terms of the engineering that we put out in our feasibility study, we were sort of pointing towards Shaft 2 being a 2027 project which then allows you to phase the expansions of the 2 concentrators to get up to 5.2 million tonnes thereafter. What I can say is the team on the ground, now that we've moved from that kind of feasibility stage into really the detailed nitty gritty of the engineering. We're looking at everything we can in terms of whether we can accelerate that sinking.

Looking at different sinking methodologies like raise boring instead of blind sinking and we have that optionality in terms of having the access from the bottom of Shaft 2 and not just the top of Shaft 2. But it still takes time and I don't think that guiding it is going to be any quicker, but we're really working hard at this.

[Dalton Baretto, analyst]

Okay, but it sounds like the constraint is an engineering problem, not a capital question.

[Alex Pickard, executive]

No, I -- yes, exactly. You can move a certain amount of meters in a day when you're sinking a shaft and regardless of how much capital you throw at it that is 1 blast or 2 blasts a day.

[Operator]

And at this time there are no further questions.

[Matthew Keevil;Manager, Investor Relations and Corporate Communication, executive]

Thank you, operator. We will step over and take a look at our webcast questions and pick a couple of the most popular inquiries and answer a few of those before we wrap up. So first and foremost, I think we'll start off. One of the more popular questions is about the drilling program at Western Foreland and in terms of time lines, the number of drill rigs, and when results can be expected? So I'll turn that over to management and if anyone like to pick up some details on the Western Foreland drilling, that would be great.

[Alex Pickard, executive]

I'm happy to take that one, Matt. I can't add too much more beyond what we went through in the presentation. But really the first quarter, we weren't doing a whole lot in terms of drilling meters. It's always difficult to get out there during the wet season and we're also moving out to the, sort of, more remote parts of this huge land package remembering that it's almost 170 kilometers of strike along the entirety of the Western Foreland.

But now that the wet season is over and we're firmly moving into the dry season, that's where we're really going to accelerate our drilling activities through, I guess, the winter in the Southern Hemisphere. And as I mentioned, we're looking at 4 to 5 rigs as the sort of provisional budget, but obviously I think people are very familiar with our approach when it comes to exploration that we won't fail to stretch that budget if we start to explore a trend that we become very interested in and we'll certainly move in more rigs at the right point in time.

[Matthew Keevil;Manager, Investor Relations and Corporate Communication, executive]

That's great. Thanks, Alex.

[Technical Difficulty]

[Alex Pickard, executive]

Sorry, Matt, I don't hear you right now. You might be on mute.

[Operator]

Please stand by.

[Matthew Keevil;Manager, Investor Relations and Corporate Communication, executive]

Sorry about that, guys. A little bit of an interruption in the call. This one more of a broader macro question maybe for Robert. Talking of building the next large, diversified miner seems Ivanhoe's large portfolio, but what about outside acquisitions and the potential of looking at new exploration opportunities?

[Robert Martin Friedland, executive]

Wow. Well, Ivanhoe Mines is an already good with industry-leading exploration opportunities. So, we have literally hundreds of proposals coming to our attention monthly, and we keep our mind open about all manner of things. Certainly, the door is wide open, and if anybody has any great ideas, I'm [e-mail] and I'm the fourth stomach of the cow. If your great idea gets through the first 3 stomachs, I'll take a good look at it and we'll see if our board is interested in finding anything that's better than what we already have. But I rather doubt it, but we keep an open mind. Thank you.

[Matthew Keevil;Manager, Investor Relations and Corporate Communication, executive]

Thank you, Robert, and with that, we're wrapping up on the 45-minute mark, so Operator, I think we'll wrap the call up for today. Thank you very much, everybody, for attending, and we look forward to talking to you soon.

[Operator]

This does conclude today's conference. We thank you for your participation.