Lundin Mining Corp
TSX:LUN
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Lundin Mining Corp
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Ladies and gentlemen, thank you for standing by. And welcome to the Lundin Mining fourth quarter results call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]I would now like to turn the call over to your speaker for today, Marie Inkster, President and CEO. Please go ahead.
Thank you, operator. And thank you, everyone, for joining Lundin Mining's Fourth Quarter and Full Year 2019 Results Call.I would like to draw your attention to the cautionary statements on Slide 2 as we will be making several forward-looking statements throughout the course of this presentation.On the call to assist me with the presentation and answering questions are Jinhee Magie, our Senior Vice President and Chief Financial Officer; and Peter Richardson, our Senior Vice President and Chief Operating Officer.2019 was a successful year for Lundin Mining on several fronts. Operationally, our safety performance improved over 2018 as measured by the total injury frequency rate, which is why we remain in the top quartile of the Western world miners. This was achieved while successfully integrating Chapada and managing a large increase in exposure hours as we progress projects at Candelaria, Eagle and Neves-Corvo. Our asset base has grown to 5 operations with the successful acquisition and integration of the Chapada copper-gold mine in Brazil last year. We have had an excellent first 6 months with copper and gold production achieving guidance and copper cash costs better than expected. In fact, all operations achieved or exceeded the company's most recent annual metal production guidance with cash costs in line or better than guidance at most operations.At Candelaria, we are beginning to see the benefits of the reinvestment initiatives in our operating and financial results. We began sourcing higher grades from Phase 10 of the open pit in mid-2019 and mined first ore from the Candelaria South Sector underground mine in the third quarter. The Mill Optimization Project is also nearing completion, on track for later this quarter.We continue to make meaningful progress on those up at Neves-Corvo both underground and on surface. The project is advancing for stage commissioning during the year with phased ramp-up to full production by the end of 2020. Eagle East achieved an important milestone with first ore extracted at the end of September and processed early in the fourth quarter. The team successfully achieved this ahead of budget and schedule.Finally, we remain focused on value creation through disciplined allocation of our shareholders' capital. While our focus in 2019 was actionable M&A and the eventual Chapada acquisition, we also executed on our normal course issuer bid, and we will look to continue opportunistically with this program throughout 2020.Additionally, we received $100 million from Freeport Cobalt following the successful sale of the noncore Kokkola cobalt refinery and the associated cathode precursor business.With that, I will turn the call over to Jinhee to highlight the full year 2019 financial results. Jinhee?
Thank you, Marie. Looking at the summary of our results on Slide 5, our operations in aggregate produced over 433,000 tonnes of base metals in 2019. In addition, we produced 142,000 ounces of gold in 2019, an increase of 82% year-over-year as a result of the acquisition and integration of Chapada mid-year. We sold over 291,000 tonnes of payable base metals for the year and generated revenue of approximately $1.9 billion.Fourth quarter revenue totaled $568 million, which includes modest provisional pricing adjustments for prior period sales of $9 million or $0.01 per share. A detailed breakdown is included in our MD&A.For 2019, 66% of our revenues were generated from copper sales, marginally up from 64% in 2018. With the contribution of unencumbered gold production from Chapada and the increasing gold price, gold contributed 9% to our revenue, an increase of 4% in the prior year.Zinc, nickel and lead contributed a combined 23% of total revenue, down from 29% the prior year, largely a result of the Chapada acquisition. We remain predominantly leveraged to copper and well diversified geographically.Slide 6 presents the summary of the fourth quarter and full year financial results. The details of both are in our financial statements and MD&A issued last night.2019 revenue was 10% higher than last year, mainly attributable to the acquisition of the Chapada mine. Gross profit was slightly higher, reflecting the Chapada acquisition, offset by higher depreciation, lower realized metal prices and higher treatment and refining charges.You will note that we have introduced certain non-GAAP adjusted financial metrics. These measures are presented to provide additional information that we believe investors and other stakeholders use to assess the company's underlying financial performance.Attributable net earnings from operations were $0.23 per share for the year. Fourth quarter net earnings were positively impacted by higher gross profit and additional income from the equity investment in Freeport Cobalt, partially offset by higher income tax expense.Adjusted earnings were $0.22 per share for the year and $0.13 per share for the fourth quarter. Details of the adjusted earnings are in our MD&A issued last night.We generated EBITDA of over $700 million in 2019. 2019 cash flow from operations were $565 million, and adjusted operating cash, well before changes in nonworking capital, was $551 million or $0.75 per share.Fourth quarter capital expenditures on a cash basis were $140 million, bringing the total for 2019 to $665 million, marginally below the most recent guidance of $695 million. We ended the year with $250 million in cash and cash equivalents and $60 million in net debt. This is an increase in the net debt position compared to the net cash position last year, mainly reflecting Chapada's net purchase price of $757 million funded from cash on hand and a drawdown on the company's revolving credit facility.Our Board of Directors declared a regular quarterly dividend of CAD 0.03 per share totaling CAD 0.12 per share in 2019. Yesterday, our Board of Directors approved an increase in the next quarterly dividend to CAD 0.04 per share or CAD 0.16 per share on an annualized basis, an increase of 33%. We remain in a strong financial position.I will now turn the call back to Marie to discuss our operations and projects.
Thank you, Jinhee. Moving on to Slide 7. Candelaria had an excellent year. It remained our safest operation, achieving excellent safety performance as it continues. Importantly, we commenced mining and processing the higher-grade ore from Phase 10 of the open pit in mid-year and made excellent progress advancing our reinvestment initiatives. Copper cash costs of $1.54 per pound of copper were better than annual guidance and an 8% improvement over the prior year. Pre-production development of the Candelaria South Sector underground mine was successfully completed, and the project was transferred to operations ahead of schedule.Mine production from Candelaria's North and South Sector underground mines ramped up to an average of 13,500 tonnes per day during the fourth quarter. Our targets are generally to produce up to 11,000 tonnes per day from the North Sector and up to 4,000 tonnes per day from the South Sector so that, in aggregate, we will meet the permit limit of 14,000 tonnes per day from both mines. Our mine fleet reinvestment initiative is essentially complete. 83 of 85 pieces of equipment are delivered and available on site, with the remaining 2 pieces of ancillary equipment to be delivered in 2021 and 2022, respectively.The Mill Optimization Project is progressing well. Installation continues to correspond with expected mill maintenance stops as to minimize the disruption to our production. Overall, construction was approximately 83% complete at the end of the year. 2020 CapEx guidance for Candelaria increased approximately $15 million to complete the Mill Optimization Project.Candelaria is positioned to deliver over 30% production growth by 2021, with improving cash costs. Medium-term annual production is forecast to average over 180,000 tonnes per annum over the next 10 years, including 190,000 tonnes in the years 2022 through 2025.Moving on to Chapada on Slide 8. Our results demonstrate that we have had a very successful first 6 months. The integration progressed better than expected, and we remain excited about the exploration and expansion opportunities. Copper production for the year exceeded guidance, and gold production was in line with expectations. Copper cash costs were better than guidance with higher precious metal credits, lower operating costs and favorable foreign exchange effects.In early October, we filed a technical report for Chapada to support the mineral reserve and resource estimates we announced in September as well as make clear our near-term operating capital expectation for the mine. We followed that up with a successful analyst site visit in early November.Similar to the incremental and iterative improvements we've been able to achieve at Candelaria, we believe there are significant opportunities to create value at Chapada with aggressive copper-focused exploration leading to improved mine plans and production improvements. We are continuing to optimize the production schedule at the current 24 million tonnes per annum throughput rate while evaluating options for mine and plant expansion as well as working on prioritizing exploration programs and understanding the potential for resource expansion. A significant increase in exploration efforts are underway, largely focused on near-mine targets, with results to be incorporated in any expansionary plans. Operationally, Neves-Corvo had an excellent year, achieving the most recent copper and zinc production guidance. 2019 saw a record ore hoisted, record tonnes processed in the zinc plant and the best copper recovery rate since 2015. Copper cash cost of $1.59 for the year were in line with the most recent guidance.The Zinc Expansion Project advanced well during the quarter, in accordance with the revised schedule and budget for the phased start-up production during 2020. Total preproduction project cost estimates are unchanged from our last update, as is the 2020 guidance that was released with our operational outlook in late November. 2020 CapEx guidance includes $115 million to complete the Zinc Expansion Project.I'll now turn the call over to Peter to walk through the project progress in a little more detail. Peter?
Thank you, Marie. We continue to make good progress advancing the underground aspects of the ZEP project since earlier in 2019. Slide 10 shows some of the progress achieved in the quarter. Materials handling, civil works progress well and are nearing completion. As seen in the photograph on the left, civil works in the crusher chamber is complete and mechanical installation of the jaw crusher and supporting equipment is nearing completion.In the middle photograph, construction of transfer tower #3 of the conveying system is nearing completion. The first phase of the hoist shaft upgrade was completed in December 2019 with installation of new higher-capacity skips and ropes. Not shown in these pictures, installation of the 3.5 kilometer of underground conveyor systems are well advanced. And mine development of the lower stopes is continuing. Development of the first 2 sub-level accesses are undergoing in the lower Lombador ore body.On Slide 11, surface construction continued to advance during the quarter with work focused on mechanical and electrical installation of the surface material handling system, installation of the SAG mill, flotation circuits, tailings and water supply piping systems. The picture on the left shows the SAG mill, including the grinding cyclone stations. The center photo shows advanced progress made with the flotation circuit piping installation. And the photo on the right shows the new zinc concentrate filtration building. Overall, ZEP is advancing on track for commissioning to complete this year under a phased approach ramp-up to full production by the end of 2020.I will now turn it back to Marie to go through our remaining operations. Marie?
Thank you, Peter. On Slide 12, Eagle performed well in 2019. The mine achieved full year nickel and copper production guidance. Production trended lower throughout the year, reflecting planned lower grades due to the mine sequencing ahead of Eagle East coming online. Cash costs for the year were higher than guidance, primarily on lower sales volumes. Development of Eagle East reached a significant milestone, with the first ore extracted at the end of September, ahead of budget and schedule. First ore was successfully processed at the Humboldt Mill on October 1. Mine development continued in the fourth quarter, allowing for full access to higher-grade ores in 2020. As a result, 2020 nickel production is set to increase more than 3,000 tonnes or 22% over 2019 at reduced cash costs as higher-grade Eagle East ore contributes to the mill feed. Eagle remains well positioned to generate significant free cash flow in the coming years.And finally, at Zinkgruvan, on Slide 13. Zinc and copper production achieved annual guidance ranges. The fourth quarter was the best quarter for production since 2018 second quarter. Zinc, lead and copper production were higher year-on-year in 2019 as a result of sustained improvement in metal recovery and zinc ore head grades, following the continuation of our focused planning and execution efforts to improve our dilution in ore losses. Production is expected to be consistent with prior years going forward. Exploration efforts continue on existing ore bodies as well as targeting Dalby and Flaxen deposits, which remain high priorities. Exploration drifting progressed ahead of schedule. The Dalby mining session was granted in July and conceptual mine design work is ongoing. We have another active exploration program planned for 2020. Following the successful 2019, which saw 60,000 meters drilled, we expect to drill the same amount, 60,000 meters, at Zinkgruvan this year as part of our $15 million exploration program.On Slide 14, as previously mentioned, 2019 CapEx of $665 million on a cash basis was modestly below our most recent guidance of $695 million. The difference is due to slightly less spending at our European operations. The 2020 capital expenditures, excluding capitalized interest, are unchanged from our previous guidance of $620 million. Our reinvestment initiatives at Candelaria are heading towards successful conclusion. The operations 2020 CapEx is to decrease compared to the 2 previous reinvestment years and be $265 million as our initiatives to increase value of the operation are completed. Expenditures at Eagle to bring Eagle East online are now fully behind us, and we anticipate sustaining capital throughout the remainder of its life to be very low. Neves-Corvo's 2020 CapEx is estimated to total $230 million in 2020, of which $155 million is remaining preproduction capital for the zinc expansion. Planned exploration expenditures are expected to be $55 million in 2020, $10 million lower than our previous guidance. The majority of the decrease is due to a reduction in the planned activities on regional exploration stage projects in South America.Turning to Slide 15, a familiar slide. From our current assets, we have an excellent growing production profile. We are guiding over 30% growth copper production from our current assets from 2019 to 2021. The growth is primarily attributed to realizing the benefits of the low-risk investments we've been making at Candelaria over the past 2 years in addition to the Chapada acquisition. We saw improvement during the second half of 2019, and we expect to build on that momentum through 2020. A greater than 50% increase in total zinc production is forecast over the same period as the zinc expansion at Neves-Corvo is commissioned this year and fully ramped up, doubling zinc production from that asset. And lastly, nickel production is set to increase as the higher-grade ores of Eagle East are brought online.Before opening the line for questions, I would like to reiterate that the investments we made over the last 2 years has set the company up for multiple years of production growth, decreasing cash costs and free cash flow generation. We started to see the results of these efforts reflected in our operating and financial results in the second half of 2019, and we expect to build on that momentum through 2020 as we complete and ramp up the zinc expansion. We look forward to updating you on our continuing efforts in coming months. And with that, operator, I would like to open the lines for questions.
[Operator Instructions] Our first question this morning comes from Orest Wowkodaw from Scotiabank.
The performance at Chapada continues to outperform, I guess, expectations. I'm curious if you can give us an update on where your head's at with respect to the expansion at Chapada, whether we're leaning more likely towards a slow phased expansion or whether it will be more of a larger onetime expansion and timing on when you think you might be in a position to give us an update on that?
Orest, our thinking really hasn't changed on the expansion. I mean we are studying the various scenarios. And right now, we're in the study stage, so we haven't concluded on what exactly the optimal expansion will look like. And so for the next 12 months, we're going to be drilling, drilling, drilling to understand as much as we can about the ore body and in which ways its trending and at the same time advance the studies. So it will probably be 12 to 18 months before we will have a definitive answer on where the optimal expansion will be.
Our next question comes from Ralph Profiti from Eight Capital.
Marie, when I look at the cash cost guidance for 2020 at Chapada, we're seeing $1.15 a pound. And the technical report has gold coming down a little bit in 2020. Maybe that accounts for the large impact relative to where you came in at 2019. I'm just wondering how is the gold reconciliation looking -- how does it look in 2019 on the gold side of Chapada? And also, does that lower gold production account for the rise in cash costs relative to 2019?
I don't think there's any magic in the gold. I think there's no big change in recovery rates or anything like that. It's just according to the grades and the throughput in the plant. If you look at -- it might be related to the by-product credit that we use. We use gold at $1,350. This year, of course, for the 6 months that we owned the operation, gold's trended much above that $1,350, so that will have an impact. Also, the currency, we use the real at BRL 3.75 in order to run our models for the costing. Whereas this year, it's been over BRL 4. So the currency has been in our favor as well. Peter, I don't know if you have anything to add on it?
No, no.
Yes. And then you touched on the copper-focused exploration at Chapada. Is this distinct from targets that are copper-gold focused? And is this sort of Lundin being selective? And could that change with either a more positive gold environment or just a strategy on the exploration side?
We say copper-focused because there are some holes that we followed up on that hadn't been followed up on the past that had good copper results but didn't have that great of gold grades, so just changing the strategy a little in terms of really prioritizing the copper. But also in terms of trending, we really need to understand where the ore body is trending and when we're looking at where to move infrastructure and things like that. So we're doing exploration aggressively. And as with all of our sites, we do our cutoffs and look at the -- optimizing on an NSR basis. So we're agnostic as to whether it's copper, gold, but we will be prioritizing copper in those drill holes that we follow up.
Our next question comes from Jackie Przybylowski from BMO Capital.
Congrats on a good quarter, guys. I have a couple of quick ones for you. First of all, I guess, in July, I think it was on your Q2 earnings, you guys were talking about running an airborne geophysics survey at Candelaria later this -- later last year. I was wondering if you guys could maybe give us an update if that started and how it's been going so far.
Yes. We did complete that. Peter, did you want to talk to that?
It's completed. So it's evaluated. We're -- it's being evaluated.
Yes. So we're generating targets, and we're following them up in this year's drilling program.
Okay. So we won't hear anything more on that. It will just sort of flow into the drill program. Okay. And I mean, maybe just a follow-up on Orest's question about Chapada. You kind of -- on C1 cost for 2019, you really exceeded the guidance and even your revised guidance. You guys did very, very well there. Is there a similar buffer or conservatism built into the 2020 guidance in your view? Or how are you guys seeing the performance there, given how well you did in 2019?
Well, I think, Jackie, again, coming back to the assumptions that we used when we ran it -- and we put our assumptions there for everyone to run different ones, but the gold price running really had a big impact on that in the by-product credit. So when we run at $1,350 gold and then it's coming in at $1,550, that has a big difference on the cash cost. And similarly, with the currency, if we're running it at BRL 3.75 and we come in at -- what was it, Jinhee, BRL 4.28, something like that? Then that's going to have a considerable difference. So I think, in terms of the operating productivity, the tonnes and grades and things, we're fairly accurate on that, and where we were able to see the benefits there on the currency and the gold prices were the differences in our estimates. So we try to be as accurate as we can with our estimates.
Our next question comes from [ Yonas Masbus ] from Morgan Stanley.
A few questions on my side around the spending. First, in terms of, again, Chapada, if I think about -- if I look at how much you're spending in exploration at Zinkgruvan versus Chapada, it's striking that you're not really willing to spend more than $10 million in the new asset, which seems to have a lot of growth optionality. Can you explain the logic there? And could we see a potential of further spending later in the year? And also, the...
The spending is quite different at the 2 locations. At Chapada, you're drilling from surface to drill holes that are fairly shallow, going maybe 300 meters. Whereas at Zinkgruvan, your drilling is going down, like 1 hole you're going 1,500 meters. Also in the Zinkgruvan program, we'll have exploration drifting in there, which is quite a bit -- that's costly as well. So the cost per meter is quite different when you're talking about the Zinkgruvan and other area of exploration. And Chapada's cost per meter of drilling is the lowest in the company and half of what it would be in Chile. So even though we're spending more at Zinkgruvan, the meterage is pretty much the same. And if we can do more meaningful spend at Chapada, we will do that. I do note that, that $10 million is the biggest exploration budget they've had in the history of the mine. So it's not that we're not wanting to spend there. It's that we want to spend the dollars in a very methodical and thoughtful way in order to get the best results and really find out what we need to find out about the ore body. So if we can spend more and get meaningful information, we'll do that. And we think that right now it's a good program that the team has established there.
That's very clear. And a follow-up around CapEx. So you have a lot of growth coming online in the next 2 to 3 years. How should we think about sustaining CapEx level once you hit the full run rate, let's say, by 2022 or so across all operations?
Yes. So in terms of the CapEx, when you look at the profile right now, you can take out the expansionary CapEx for the zinc expansion, it would come off. I think Candelaria's CapEx this year is a fairly good number. It will probably trend within plus or minus $50 million of what we have now. Chapada will have some expansionary scenarios that will change that profile quite considerably, but that -- we'll have to give the answers on that at a later time when we have more clarity. Eagle CapEx will be very low for the remaining mine life, so I don't anticipate that it would be much more -- probably less than it is this year. At Neves-Corvo, we'll probably see an incremental $20 million, $21 million, $22 million, maybe a little higher than current. And then as you come back down to, say, a $60 million to $70 million range, just because we'll be doing additional development post commissioning, post commercial start-up of the ZEP on the lower Lombador ore bodies. And then Zinkgruvan typically is between $45 million to $55 million, and it may vary from that $5 million to $10 million, but that's it. So we do have a fairly stable sustaining CapEx after this year. And it's just whether we bring new areas into Zinkgruvan's mine plants, such as Dalby, and whether we decide to do underground development at Candelaria, I guess. So the sustaining CapEx should be fairly stable. So that was a long-winded answer, but I hope it answered the questions.
That's very clear. And maybe just the last question on my side. Just in terms of the 2019 CapEx, you spent a bit less than you were guiding for, mainly come from the European operations. Can you provide a bit of color around that? And is there a similar sort of buffer in 2020?
Yes, well, there's not a buffer, per se, in 2020. It was mainly -- Jinhee, I think it was the leases at Neves-Corvo that we didn't spend on?
Yes. They'll underspend on the equipment. And they'll underspend some project deferrals at Zinkgruvan.
Yes. So nothing too exciting there. Just some leased equipment that got deferred into this year.
Our next question comes from Oscar Cabrera from CIBC.
So Marie, if I may just start with a larger-picture question. You focused on M&A that you mentioned in your opening remarks in 2019. How are you looking at the market now? And are you still -- your balance sheet is very strong. So are you still looking to add another Chapada-like asset in 2020? What kind of opportunities are you looking for in the current environment?
Yes, Oscar. And I think it would be great if we could add another Chapada-like asset if we could find one. That's the challenge, and we'll continue to be active. Our team has continued even after execution on Candelaria. The corporate development team here is very active in getting out there and trying to turn over those stones and look for new opportunities. So we're still looking. But again, we'll be patient and make sure that we -- that if we do transact, that it would be something that makes sense for Lundin and our strategy and our shareholders.
Great. And then after the social inquest in Chile at the end of last year, have you seen any more blockades or things that make you concerned with operations in Candelaria?
Well, it's been very quiet over the last couple of months. So Oscar, I think the Christmas season and the holiday season has been a bit of a quiet time for this. Now we do expect that there could be an increase in demonstrations and activism that will take place from March onwards leading up to the elections in April. So we are quite cautious at the moment that we may see a resurgence of some of the activity that we saw in October and November. So we're monitoring that.
Yes. No, great. And then lastly for me. On Española, could you remind me when are you looking to move this deposit into your Candelaria mine plan? And what are the requirements vis-à -vis permits and CapEx?
Yes, it's in the plan. So it's in our -- it's in the highlight of the technical report. The plan is -- right now, we're preparing -- actually, we should be submitting, if not this week, then imminently, our EIA 2040. And so that incorporates the -- bringing La Española into the mine plan. And so the plan is for the EIA to take 24 to 36 months, say, and then we could start the pre-strip, and it comes in. I think we start the pre-strip in 2024?
Yes.
And it comes in about 12 months after that, Peter?
Yes. It's shallow, so yes.
Yes, and then the stripping would be incorporated in our technical report mine plan. I don't have the exact details of the stripping for La Española at my fingertips, but it should be there. Mark can follow up with you after, if you need that.
Our next question comes from Gordon Lawson from Paradigm Capital.
Just one left for me. Could you talk about your tax assets at Eagle and Neves-Corvo and what rates we should expect over the next year or 2?
Sure. I will pass it over to Jinhee, who's done a lot of work on the tax over the last few months.
So our tax rate at Eagle in the U.S. is 21%. And in Portugal, it's 29.5%. But generally, we guide people to use the statutory rates. I don't think there's anything that's particularly unusual. We do get some tax credits from time to time. So in Q4, in Portugal, we did recognize about $10 million in tax credits that we received, but those aren't things that we can necessarily plan out or model out. Those we will record as we get those tax credits. So therefore, you would have seen big Q4 taxes were lower and that incorporated a $10 million tax credit from Portugal. We also have some other foreign tax credits that we received. And then also the Chilean tax rate for withholding taxes went down from 15% to 10%. And therefore, you would have seen some recovery there.As far as these taxes on Eagle assets, there's nothing unusual there. We do have significant losses that we're going to be using. So cash taxes in the near term, we don't expect to have to pay out significantly in the last couple of years. So we do expect some cash tax payouts. I don't know if that answers your question.
No, that's very helpful.
Our next question comes from Stefan Ioannou from Cormark Securities.
Great to see the sort of the production trajectory growth going forward here. Just wondering on the exploration, you mentioned on the regional front, you sort of -- you cut out $10 million of previous planned efforts in South America. Just kind of curious, was that sort of project-specific or more sort of country-specific? Or what kind of drove that decision? And I don't know if you could just provide maybe a bit more color on that.
Yes, it was -- we have an active program down in Peru. And based on our drilling of this year, we didn't feel it warranted additional budget for next year. So our original budget would have been reduced by the amount of the program in Peru.
Okay. Okay. And then just looking sort of in Michigan with, obviously, Eagle East sort of winds down in a few years, it doesn't look like you have any sort of significant exploration earmarked for Michigan. Lundin, as a company, do you guys feel sort of compelled to look for additional nickel versus other base metals? Or are you sort of still base metals-agnostic or even copper-focused going forward?
Well, for our exploration, we're doing mostly near mine and in country where we have active exploration programs and at the moment copper-focused.
[Operator Instructions] Our next question comes from Dalton Baretto from Canaccord.
I just wanted to ask very quickly about the feasibility study you've commenced on the Candelaria underground. So when we were on site a couple of years ago, we talked a little about potential sizing and infrastructure constraints and so on. Well, what's the current thinking in terms of how big the expansion could be, what the infrastructure needs are and so on? And when can we actually see the feasibility study?
Yes, we're working on the study now. Peter, do you want to talk about the progress and...
Well, it commenced a couple of weeks ago. So we're basing it off on the pre-feasibility study. So it's looking into 26,000 tonnes a day increase or up to 26,000 tonnes. That's the progress, and we hope to finalize the feasibility study during the year.
Okay. And what about kind of incremental infrastructure needs in terms of conveyors, trucks, water, that sort of stuff to get to that level?
Can you repeat the question?
Sure. I was just wondering in terms of incremental infrastructure need, I mean, can you do that with trucks? Do you need a conveyor?
The feasibility study is looking at putting in a conveyor system.
Yes, that will also be useful for dust reduction and other initiatives environmentally, carbon reduction, all of those things.
I have no further questions in queue at this time. I'm turning the call back to Marie Inkster for closing remarks.
Great. So thank you, everyone, and we look forward to updating everyone on our progress with our first quarter results call in April.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. And you may now disconnect.