Lundin Mining Corp
TSX:LUN
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Good morning, ladies and gentlemen, and welcome to the Lundin Mining Second Quarter 2023 Results Call and Webcast. [Operator Instructions]. This call is being recorded on Thursday, August 3, 2023. I would now like to turn the conference over to CEO, Peter Rockandel. Please go ahead, sir.
Thank you, operator, and thank you, everyone, for joining today. I will draw your attention to the cautionary statements on Slide 2 as we will be making several forward-looking statements during the prepared remarks and likely during the Q&A as well.
On the call to assist with the presentation and answer questions, are Teiter Poulsen, our SVP and CFO; and Juan Morel, our SVP and COO.
Beginning with the key highlights for the second quarter on Slide 4. We delivered solid operating results across the portfolio producing nearly 95,000 tons of copper-equivalent metal. As planned, production continues to be modestly weighted to the second half of the year, and we are tracking at or above the midpoint of guidance for copper, gold and nickel and at the lower end for zinc. We completed the Caserones acquisition early in the third quarter.
The operation had a strong first half of the year, producing 70,000 tons of copper on a 100% basis and generating approximately $120 million in cash. Caserones is off to a solid start for Q3. The winter season in Chile usually runs from late May to late August. And so far, Caserones has yet to experience any seasonal or winter weather impacts. With the second quarter results, we have improved cash cost guidance for Chapada and Zinkgruvan from realized savings, lower consumable pricing and byproduct credits.
We generated attributable net earnings for our shareholders of nearly $60 million and adjusted EBITDA of over $160 million. These results were achieved considering lower metal prices during the quarter and impacts of adjusted realized pricing. Adjusted operating cash flow was over $110 million, including the release of working capital, operating cash flow totaled nearly $195 million. Our balance sheet remains very strong with approximately $1.6 billion of liquidity today. As Teitur will speak to, we continue to realize the benefits from our foreign exchange hedging program with approximately $14 million of gains realized in the second quarter. In addition, the marked-to-market value of the remaining hedges has a current value of over $70 million.
In April, we also initiated diesel hedging program to protect the operating cost structure at Candelaria. With yesterday's financial results, our Board of Directors maintained our peer-leading regular dividend of CAD 0.09 per share for the quarter or CAD 0.36 on an annualized basis, which is roughly a 3.1% yield.
As announced, we are very excited to close the Caserones acquisition early in the third quarter. Immediately after announcement in March, we established an integration team, which has been extremely effective and has allowed us to have a very smooth transition during closing. The same team has also been outlining the numerous synergies, which we believe we will start to capture this year. It is clear that many opportunities exist for synergies especially with our current operation at Candelaria and in the future with Josemaria. We continue to advance our Josemaria copper gold project with much of the focus in the second quarter on several optimization and trade-off studies while on-site also upgrading roads and completing the camp facilities.
Discussions with a number of priorities to continue with respect to potential future partnerships. At Candelaria, study work evaluating the expansion of the underground mine to add roughly 20,000 tonnes of copper per year has been completed. We do require approval of our 2040 EIA to proceed, at which time will ensure the economic study is reflective of any changes. In short, we delivered a solid operating quarter and are pleased with the improved operational stability of our assets. We have been able to lower our cash cost guidance in a number of assets and are extremely focused on bringing down our cost at our remaining assets. I will now turn the call over to Juan Andres to speak to a summary of our production results.
Thank you, Peter. As planned, our production continues to be slightly weighted to the second half of the year. Copper production was essentially flat from the first quarter and going forward will include our recent acquisition of Caserones. Overall, we produced approximately 95,000 tonnes of copper equivalent in the second quarter.
Let's now look at copper. Copper production was 60,056 tonnes, which is essentially flat compared to the first quarter of the year. Candelaria had a good quarter, processing 6.9 million tonnes of ore, slightly better grade and softer ore from Page 11 contributed to the production. We expect the second half of the year to maintain these slightly better grades from lower benches in the pit. Unscheduled downtime of the ball mill at Chapada limited throughput during the month of April. These issues have been resolved, and we should see a stronger second half of the year. We expect higher grade material as we will reduce the use of stockpile and prioritize the feed of fresh ore. Copper production is tracking well to annual guidance of 296,000 to 325,000 tonnes, and this is including Caserones production.
Let's now look at zinc. Zinc production was lower quarter-over-quarter at 36,115 tonnes. Additional downtime of 11 days at Zinkgruvan will taking to the tie-in of the new sequential flotation circuit. Commissioning is progressing well, and we expect full ramp-up this year. Zinc recoveries are improving from the upper 80s into the lower 90s. At Neves-Corvo, after a strong first quarter during Q2 and planned downtime at the SAG mill, together with higher grade variability impacted zinc production.
Ramp-up of Zinc expansion project at Neves-Corvo progressed in line with plants. Production is expected to increase over the course of the year with initiatives to enable ZEP to consistently achieve nameplate capacity that will result in throughput and metal recovery improvements. For now, we see zinc production tracking to the lower end of the annual guidance of 180,000 to 195,000 tonnes.
Let's now move to nickel. Nickel production of over 4,686 tonnes, was 25% higher quarter-over-quarter from higher throughputs and grade profile at Eagle. Both copper and nickel production at Eagle were impacted in the first quarter by rehabilitation works at the main ramp, mechanical issues in one of the ball mills and weather events. With a slower-than-planned start in Q1, but a strong second quarter, nickel production is tracking well to our annual guidance of 13,000 to 16,000 tonnes.
Finally, gold. Production was approximately 34,000 ounces from the second quarter. As mentioned earlier, Chapada had additional maintenance downtime that impacted throughput. We continue to track well to our annual guidance for gold of 140,000 to 150,000 ounces.
All in all, a good first half of the year, as Peter mentioned before. Production will be modestly weighted to the second half as we are tracking well to meet guidance on all metals. Thank you. I will now turn the call to Teitur, who will provide summary of financial results.
Okay. Thank you, Andres. So if you move to Slide 6, starting with the top line. We generated close to $590 million in revenue. Our sales remains leveraged to copper generating 65% of the quarter's revenue. Nickel and gold contributed 14% and 9%, respectively, while zinc contributed 6%. And lower realized pricing of metals during the quarter impacted overall financial performance compared to last quarter. The realized copper price was $3.37 per pound versus last quarter of $4.49 per pound, a reduction of roughly 25%. With the price of copper and several of the other metals we produce decreasing during the quarter, revenue was negatively impacted by $75 million of prior period pricing adjustments. A summary of realized copper, zinc and nickel prices for the quarter are presented in the charts on this slide.
Ultimately, we realized prices of $3.37 as I said, per pound of copper, $0.83 per pound of zinc and $9.47 per pound of nickel and $1,842 per ounce of gold for the second quarter, including the adjustments. At the end of the second quarter, approximately 82,000 tonnes of copper were provisionally priced at $3.77 per pound and remained open for final pricing adjustments as did over 28,000 tonnes of zinc at $1.08 per pound and over 1,700 tonnes of nickel at $9.25 per pound.
On Slide 7, production costs totaled $405 million in the second quarter, which is in line with the previous quarter. The bottom right chart on this slide presents the relative impact of key drivers on the total operating cost and capital cost by operation for the quarter and demonstrates the material drop-off of costs for diesel and electricity compared to Q4 last year, particularly at Candelaria and Neves-Corvo. Whilst Candelaria's diesel and electricity costs have improved compared to last year, the total production costs during the quarter were negatively impacted by higher maintenance and contracting costs. However, both of these cost increases are likely to be temporary in nature, and we retained the full year cost guidance for Candelaria.
At Chapada, production costs improved from new transportation contracts which saw ocean freight prices drop around 47% to around $50 per dry metric ton. Here, we also are seeing the benefit from lower fuel and explosive pricing and somewhat offset by a slightly stronger local currency. Chapada's cash cost guidance was lower from $2.55 to $2.75 per pound of copper to $2.35 to $2.55 per pound of copper. Neves-Corvo cash costs increased during the quarter primarily due to lower production volumes and byproduct credits. Consumable pricing has been mixed with saving on diesel and electricity, offset by cement explosives and the strengthening Euro. Cash cost guidance at Neves-Corvo remains unchanged for the year at $2.10 to $2.30 per pound of copper.
Eagle's production costs were in line with expectations. However, cash costs were impacted by lower by-product credits. Cash cost guidance has been revised upward to $2.30 to $2.45 per pound of nickel in 2023 and is primarily the result of the lower byproduct credits from lower realized pricing. Increments production costs were lower than those of the first quarter, primarily as a result of inventory movements. Cash cost guidance has been revised down to between $0.45 to $0.50 per pound of zinc in 2023 as we realized higher byproduct credits, which has offset lower production.
The capital expenditure guidance for the year has been reduced by $75 million on a like-for-like basis with $25 million relating to lower sustaining CapEx spend at Candelaria and $50 million lower spend relating to the phasing of activity at Josemaria.
As previously announced, the second half capital expenditure guidance for Caserones is $110 million on a 100% basis. The capital spend during the first half of the year amounted to approximately $525 million, of which $345 million related to sustaining capital wise $180 million related to the Josemaria project.
And lastly, on this slide, we continue to realize the benefits of our foreign exchange hedging program intended to provide better visibility on our U.S. dollar requirements of future operating costs and CapEx. In the second quarter, we realized an FX hedging gain of $14 million. In addition, the marked-to-market value of our remaining unsettled foreign exchange contracts amounted to over $70 million at the end of the quarter.
Moving on to key financial metrics on Slide 8. During the second quarter, revenue, as I said, was just below $590 million, which was impacted by the lower commodity prices and the pricing adjustment in the quarter. We generated adjusted EBITDA of $162 million and adjusted operating cash flow of $111 million, along with free cash flow from operations of $21 million. Details of all these adjustments are broken down in our MD&A. We remain in a strong financial position. We finished the quarter in a net debt position of $230 million. And today, we have a net debt position of approximately $930 million factoring in the closing of the Caserone acquisition.
Slide 9 presents greater detail as to the sources and uses of cash in the second quarter. Before changes in working capital, our operations, as I said, generated $110 million, net of $33 million of cash taxes paid during the second quarter. After working capital adjustments and sustaining capital expenditure, the operations generated $21 million of free cash flow during the second quarter.
With 2 quarterly dividend payments during the second quarter amounting to in total $104 million, in addition to spending $92 million on the Josemaria growth project, the company generated a negative free cash flow of $84 million in the second quarter. With the recent closing of the Caserones transaction, combined with the closing of a new $800 million term loan, the company continues to have significant liquidity headroom of $1.6 billion with our current net debt of approximately $930 million on 100% consolidated basis. So that wraps up the financial section, and I will now turn the call back to Peter.
Thank you, Teitur. Slide 11 highlights the meaningful scale and material growth of our copper portfolio. As mentioned, we are very excited about the Caserones acquisition. Caserones complements our existing portfolio with large-scale and long-life copper-molybdenum production in a jurisdiction which we already operate. Caserones proximity at Candelaria will allow us to leverage our knowledge, experience, relationships, supply chains and potential infrastructure in the region to unlock further synergies. Along with the continued integration, synergies will be a focus for us during the second half of the year. We continue to make good progress advancing our Josemaria copper gold project and are continuing in a deliberate manner to minimize the risks and we'll work towards a construction decision at the appropriate time.
Candelaria's life of mine has been extended to 2046 with the mineral reserve estimate announced in February. The base case plan of the corresponding technical report does not include the Candelaria underground project, which has the potential to add roughly 20,000 tonnes of copper production per year. And lastly, on this slide, in February, we announced the made and indicated resource estimate for the Sauva discovery and view it as the first of many iterations of increasing mineral estimates to come. We are very excited about this discovery, and we'll continue to evaluate potential expansion opportunities to best exploit the significant mineral resource base and the growing cellular deposit.
I also want to take this opportunity to highlight a significant exploration potential within the emerging Vicuña District and specifically some on our existing land package.
Slide 12 illustrates the extensive land package of more than 58,000 hectares in Chile that we acquired with the Caserones transaction. We have identified multiple priority exploration targets, which we will be pursuing this fall. These include higher-grade [indiscernible] targets near and below the existing pit and targets adjacent to the lots of other property where they've had some of their highest grade intercepts.
The light green and pink shading the map indicates our Josemaria land packaging claims. Also illustrated is the planned Josemaria infrastructure, including the process plant, tailings facility and Batidero Camp. We believe Josemaria is well positioned to be the center of future development and expansion of this emerging Vicuña district. The Josemaria land packages also present promising exploration prospects, notably the Lunahuasi target which is formerly Potro Cliffs. In April, NGEx Minerals reported some of the highest grades in the district from this area, and it is on trend with the high sulfurization system observed at FILO Mining.
Our plan in 2023 is to drop 800 meters on the Lunahuasi target. Additionally, the Portones target and deeper holes beneath the Josemaria or [indiscernible] clear district level resource potential. We have approximately 2,400 meters of drilling planned for this year and 5,000 meters in 2024.
On Slide 13, to summarize, [indiscernible] attractive portfolio of high-quality mines and are steadily advancing growth projects in a disciplined manner. The first half of the year showed solid operational performance and supported our strong financial standing, which serves as the foundation for our future growth. We are currently positioned to meet our full year production guidance and have been able to lower our costs at several of our operations. Going forward, we will remain focused on driving costs down further.
While maintaining focus on growth, we continue to exercise a prudent allocation of shareholders' capital, ensuring a balanced and disciplined approach. As previously mentioned, our Board of Directors continues to support our commitment to providing a leading regular dividend to our shareholders. We remain well positioned both operationally and financially to execute on our strategy. In addition to our European and U.S. operations, we've assembled a very strategic package of assets in Chile and into the emerging Vicuña district, which we believe puts us in the driver's seat of one of the most prolific emerging copper districts. And with that, operator, I would like to open the lines for questions.
[Operator Instructions]. Your first question comes from the line of Orest Wowkodaw from Scotiabank.
I wanted to find out how you're thinking about the Caserones acquisition with respect to impacting Josemaria. Obviously, there's some potential there to share infrastructure. And I'm wondering how long you think it might take to get a handle on what those opportunities look like and then how that will impact your thinking on the Jose technical report and how that project moves forward?
It's a good question. I may give you a bit of a long-winded answer. Obviously, the first one focus, if you will, in Caserones is, the integration of the asset. And the team has done an amazing job. They started right away. It was very, very seamless. But after the integration, the next focus will be on synergies, but it will be more targeted towards Candelaria initially. We prioritize, I guess, you would call it the low-hanging fruit. It's probably about 30 different items that we're going after on a bit of a contract-by-contract basis. .
It's quite a detailed process that's going to be starting as we speak. And then there's a bit of a further out concentric circle that we're looking at it, if you will. And that starts getting more involved with things like the concentrate shipping and things of that nature and then more of an organizational structure that we're looking to create. Once we get through that, then we start talking about the Josemaria. Some of the discussions on Josemaria will arguably be a bit time sensitive in the sense that there are elections going on in Argentina. And some of the things that you're going to want to have discussions on would arguably involve the government. And so they got through the provincial election, but you do have the federal one still coming up on October 22.
So any kind of work in that area whether be involved with desalinated water going from one side to the other, concentrate shipping, things of that nature, they'll probably take a little bit further. We're doing the study work as we speak but those are going to require engagement from government officials as well.
So Peter, does that -- when we think about that time line, does that maybe suggest that the Jose technical report is now more likely a H1 '24 type of event?
Yes. I think that will be one of the reasons the report gets pushed out a little bit. But on the same note, we're kind of finishing off the on-site work right now. It's basically almost done completing Phase 1 of the camp and some road upgrades, but we're spending a lot of time doing trade-off studies right now and optimization studies in areas of focus would be like plant throughput of recoveries. But also, as I mentioned, the concentrate transport is one optimization we're doing and then some conceptual work on supplemental ore study. So all that is going to feed into it. We are getting good results pretty much across the Board on this work. But to your point, it probably does push the time line out a little bit so that will affect the release of that information and perhaps is also part of the explanation for the reduction in the CapEx.
Okay. And just one final one, if I could. The tehnical report on Caserones, the cost profile there, I assume, reflects more of the status quo. How much improvement do you -- potential do you see with respect to some of these synergies with Candelaria and also, say, reducing some of the SG&A costs, which seemed elevated on a stand-alone basis?
Yes. I think all 3 of us are going to tackle that question because it kind of goes into different areas. But on the SG&A, there's probably 50 people positioned in Santiago, which without getting to specific on this call, is arguably a higher number than necessary. So we've already come up with an operating model that is going to put the 2 companies together and then there's going to be key roles that feed into that. So you would reduce that duplication pretty quickly. And perhaps you'll see an area where it's leads in certain specific departments, again, probably not to get into on this specific call. Other areas -- sorry.
I mean, Teitur here, like the C1 cost we are guiding have been peaked slightly versus how Caserones used to classify their C1 cost. So our C1 costs are now entirely consistent with how we guide C1 costs on other sites. And essentially, the way we have approached this is to look at the historicals at Caserones for now sort of extrapolated on that basis going forward. And again, as we've said previously, with all our C1 cost guidance, we took a relatively conservative approach on cost estimation from last year, which was sort of a high point on many of the consumer bills. That's also what you're seeing coming through now with certain cost reductions on some of the sites.
Yes. I would add that we have just taken operatorship of the site. So they were in our learning curve beyond what we learned during the due diligence, of course. So we will be working with the team in optimizations and applying our operational excellence technique that we use at our other sites. So we -- in the short term, we'll probably have a good plan with initiatives to continually improve our costs.
Your next question comes from the line of Ioannis Masvoulas from Morgan Stanley.
The first is, again, on the synergies topic. I think you spoke in the past around potential to use some of the excess desalinated water capacity at Candelaria with Caserones, what's the time frame for you to be able to provide more visibility on that? And then on the other aspects you talk around SG&A, operational excellence, et cetera, on the more near-term synergy prospects, do we -- should we expect an update before the end of this year? Or is it 2024 update from you?
No. Thanks for the question. I think you'll get it this year because we're well advanced on a lot of it. I mean we're talking about a very thorough review on contracts that could range from fuel, lubricants, tires, line, all sorts of things where we've identified, who maybe has the better contract to buying. And then we're going to get the economies of scale by consolidating those and we're going with whichever team had the better approach but that started pretty quickly into the integration process. So we're kind of well advanced on it. And I think in our next quarter, we're going to be able to provide a lot more clarity. We're going to be at site both Candelaria and Caserones with our entire Board in September. And part of that presentation will be a very fulsome review of the potential synergies.
Perfect. And just one more question for me. On the MD&A, you talked about discussions on infrastructure for Josemaria around taxes, roads and the power line and possibility to have a royalty offset on some of these investments. Can you perhaps elaborate a bit here on what you're looking to achieve? And what's the potential net benefit in CapEx?
Well, I think -- I mean, I think both Teitur and I will answer that. But the one thing I'll say is I think these discussions are -- will be -- from a timing perspective, will be a little bit challenging because I mentioned earlier in the call, on July 2nd, you just had a new governor going into San Juan. They're very pro mining, but it is a party that's been in our position for 20 years. So while they're very supportive, I think we're going to anticipate the process for sectoral permits and different commercial agreements will probably take a little time to get through just being realistic. And then as I also mentioned, you have the federal elections which are taking place on October 22nd.
Yes. I guess what I can add, I mean, economically, what it boils down to is that whichever infrastructure investments we are making within the province, we can offset that against the provincial royalty that we are paying. So that is the mechanics of financially how that offsetting would work.
Yes. As I said, I think towards the end of the year, we're hopefully going to be able to give you better clarity on that once the government is all in place.
Your next question comes from the line of Greg Barnes from TD Securities.
My question is very much along the same lines. My understanding is that Caserones technical report you just put out was really just the base case. And obviously, ours talked about the cost, but I'm also talking about the production side of things. What opportunities do you see at Caserones itself without even Josemaria or Candelaria coming into picture to improve the production profile?
Well, I think the -- Greg, thanks for the question. We're very excited about the acquisition. And I think with Candelaria, the focus is probably more on synergies for the cost side than necessarily the production side. But as mentioned, Caserones did 70,000 tonnes in the first half, which is a pretty impressive number. We've used a lot of costs in the technical report and in the guidance, the high end of the guidance is basically that number. So again, relatively cautious. And I just think being a new asset, we wanted to take a cautionary approach out of the chute, but we're very comfortable with the numbers. I would add a couple of other items, which is in the last 2 years, they've had some pretty difficult winters, of course, prior to that, you had COVID. You look at the 5-year average, it was 129,000 tonnes and the winter in Chile, runs from late May to late August approximately. We've had absolutely no winter weather interruptions so far, which we've factored into our numbers to some degree.
In addition to that, they did have a record July for throughput, which is quite interesting. So needless to say July is starting extremely strong. And I think that puts us in a great position for 2023. And as we get more comfort with the asset, if we feel in the third quarter that there's any type of revision that needs to be made, I think we'll make it at that time.
Okay. Just thinking about the pit itself and you had record throughput in July, is there areas of softer ore or hard ore or anything like that, that would impact that throughput rate on an intermittent basis or is it regularly consistent?
No, it's pretty consistent. But one of the things -- there are limitations, there have been limitations on how much water they're getting. And they've done some rehabilitation and put some new wells in since we got involved with the process, and they're now getting significantly more water than they had before. And I think that is the biggest impact on why they had record throughput in July.
Your next question comes from the line of Ralph Profiti from Eight Capital.
Peter, you mentioned Caserones is off to a pretty good start in the first half, right, 70,000 tonnes of copper production. Just wondering where cash costs came in, in the first half, if you have that figure? Just trying to get a sense of tracking first half versus second half and the new technical report. That would be very helpful.
Yes. We haven't given our C1 cash cost as such for the first half, just to remind people, the premise of the deal is a lockbox from 1st of January. So we have taken economic interest from January this year. And in that context, we have announced that the asset generated free cash flow, I mean, the production we've announced 70,000 tonnes for the first half. So we generated free cash flow of around about just over $100 million. And then within the balance sheet of the lock box from the beginning, there was a positive working capital of another $20 million.
So that's how we got to a total cash position of $120 million at half year. It looks like when we talk about CapEx, I know you asked about the OpEx. But on CapEx, we've guided $110 million for the second half and the CapEx phasing is back end loaded for the year due to the mining sequence and the stripping that will take place in the second half versus first half. But as I said, essentially, that phasing doesn't really matter for us because the deal is effective 1st of January. So whether we spend more or less in first or second half, it doesn't really impact the full year outcome for this asset for us.
Yes, yes. All understood. Okay, yes. And Peter, total exploration guidance for '23 was unchanged at $45 million, yet I believe some of the commentary talked about some Caserones drilling in the fall. Just wondering how those to reconcile? Were you tracking to grow and now you're coming towards an unchanged category? Or can we expect another update on exploration spend later?
No. I mean right now, I think part of it is -- there's a little bit of a cutback at one or 2 other sites, but I think in the presentation materials, I thought -- since it is the overall number. So I mean, I can follow up with you, Ralph and go through it on a bit of a side-by-side basis. But really, the money that would have been being spent at Josemaria and Caserones, it is coming from a small pullback at some other sites.
Your next question comes from the line of Gordon Lawson from Paradigm.
Back to Caserones, just curious how much of the recent fine was anticipated and how much of this issue is expected to persist?
Okay. So that -- it's actually -- thanks for the question, but it was in our technical report. So this was very much anticipated and the timing came in, I would say, bang on when we expect it as did the dollar value. So it's going back to some items that were in between 2015 and '18. We have 100% indemnity coverage on that. And so I think it's -- the fact that it came up early for us is in a way a positive, and it will be dealt with this week and we move forward. On a going forward basis, we are going to be flying Lending Mining standards, even though they do have high standards at Caserones. And given our footprint in the Atacama region, we will ensure that we are deemed to be a partner of choice in the region.
Okay. Okay. So I guess there isn't really much more extra scrutiny from the government doesn't -- some people may have interpreted. But do you expect any impact on expansion plans at either project in the country?
No, not at all. Again, we're going to be down there in September. We have very good support from a number of different government officials. This was a historical issue. And the fact that we're able to resolve pretty quickly here and move forward, I think, is a positive. And we've done a lot of work at site to show what our intentions are on a going-forward basis, and that seems to be well endorsed by the government officials. So I don't see that as an issue whatsoever.
[Operator Instructions]. Your next question comes from the line of Stefan Ioannou from Cormark Securities.
Just curious on the exploration front in Vicuña. In terms of on that map on Slide 12, the pink area, Las Pailas. When do you think you might actually have the permit to go ahead and start drilling there?
Our goal will be to start drilling this fall, actually. And so I think I went through some of the targets start on during -- the earlier part of the call. We can sit down with you and go through the maps, but we've got it pretty well figured out, as I said on the Lunahuasi target, it's going to be -- and I know you know it well, how it's sandwiched between the other 2 projects. We've got some interesting things to go after at Caserones below the existing pit, where they've had some encouraging results but given that they're not our drill holes, we want to follow up on them, but that's going to be a focus as well.
Sure. Okay. Great. And you said you're looking to drill 800 meters at Lunahuasi proper this fall then?
Yes.
Okay. And then sorry, just sorry, housekeeping. You mentioned 5,000 meters next year. Is that over -- is that Lunahuasi over the greater sort of area?
That would be the greater area in that region, but not that -- so you're getting into the Portones as well as underneath the Jose.
There are no further questions at this time. I'd now like to turn the call back over to CEO, Mr. Rockandel, for any closing remarks.
Thank you, operator, and thank you, everyone, for joining us today. I think as discussed over the call, we've had a very strong operational quarter, and we're well positioned to achieve our guidance for 2023 and perhaps even more important, I think we're setting the company up for success in 2024. So look forward to giving everyone a further update coming fall. Thank you for joining.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.