Earnings Transcript for SBM.AX - Q3 Fiscal Year 2021

Craig Jetson: Good morning everyone and thank you for joining us at St Barbara's March 2021 Quarterly Briefing. On the call with me today is the Executive Team from St Barbara, along with Lucas Welsh, Chief Transformation Officer; and David Cotterell, Manager Investor Relations. At this point I'd like to draw your attention to Page 2, and it carries a wording by standard disclaimer. As always, at this point on Slide 3, I would like to begin by recognizing our Traditional Owners and few people on the lands in which St Barbara operate in Australia, Canada, Papua New Guinea, and pay my respects to elders in the past, present and emerging. Now turning to Slide 5. Slide 5 outlines our five core commitments relay that St Barbara operating safely and sustainably. Of note St Barbara became a signatory of the United Nation Women's Empowerment Principles. We also realized and released our modern statements. With the ongoing global challenge of COVID-19, it was pleasing to learn that 93% of our employees believe that COVID-19 is being managed well by the company. On Slide 6, we have had five recordable injuries for this quarter, most of low severity. Importantly, we record a zero injuries in March, which was a high production month for us in the quarter. This demonstrates our goal of zero harm is possible. Priority areas of focus during the March quarter were whole of business focus on CARE, which stands for control, action, respect and engage. Safely transitioning to a new underground mining contractor at Gwalia has also been a key focus of ours. Although in comparison to our peers, we are certainly doing well, we still have a journey to travel and reach zero harm or zero life changing injuries. In terms of COVID-19 on Slide 7, the COVID-19 situation in PNG deteriorated in the quarter with a significant increase in community transmissions across the country. By the end of March, a number of Simberi employees and community members tested positive for COVID-19. The employees were isolated in an onsite quarantine camp and containment measures in place to protect other employees. While specialist medical care and support has ensured the recovery of the majority of cases, two of our employees sadly passed away in the medical complications while were positive for COVID 19. St Barbara is extending due care and support for their families. Whilst Simberi operations have been unaffected by COVID until recent escalation, it remains a dynamic situation with increasing pressure on resources and people. St Barbara continues to work closely with the government and non-government agencies, together with local community to manage the situation except. On Slide 8, quarter three March key achievements in particular. I'm pleased to report the performance of the much of March was strong in delivering 50% of the total production for the quarter. This was a result of our company-wide transformation and implementation of Building Brilliance initiative over the recent months. The cash contribution from the operations for the quarter was A$41 million. Of note, we have to grow the growth options to unlock inherent value in our business. This is the Uplift 2 of our strategy, which is to grow the production from the Leonora Province and deliver Brownfield projects in Simberi and Atlantic. First, we have reviewed a number of our aspects of the Leonora Province Plan relating to geological models, resource models and pit optimizations. We are planning to release the details of these works plus in the Leonora mill options during the June quarter. Secondly, we yesterday released the Simberi sulfide results which demonstrate we have a very robust and financially viable project. The board has approved US$13 in pre-investment work. This includes metallurgical tesler, engineering work on the wharf and infrastructure design. Deposits are placed upon long lead items and complete purchases. We have submitted the SEIS decipher for the project and expecting a modification approval to the process to take somewhere between nine and 12 months. Third, we have submitted the Environmental Impact Statement for Fifteen Mile Stream in February and we expect to submit thw EIS for Beaver Dam in May. All of these are significant milestones for the Atlantic and Australian PNG operations. Most importantly, we continue to operate safely despite the COVID-19 headwinds, particularly in Canada and PNG. Now moving to Slide 9. We first published Slide 9 in the December Investor Briefing. It shows two near term uplifts that looking to achieve over the next two to three years across our operations, which are progressing as planned. As I outlined during the December quarter briefing and the half year briefings executing to plan with Building Brilliance initiatives underpinning the performance in March in particular, delivery of the sulfide feasibility study and in the coming weeks, we will provide an update on Leonora Province Plan. On Slide 10, Slide 10 shows the contribution from each side an annualized cash contribution amounts we outlined in the December Investor Briefing, that company-wide transformation is well underway and more since December 2020 for those results. At the end of March, we achieved 50% of the FY2021 targets driven primarily by Atlantic and Gwalia operations. I'm pleased with our progress and I look forward to continue to unlock value in our business through our program. Slide 11 is a deeper dive into some of the initiatives driving performance at Atlantic and Gwalia in particular. The mill throughput and availability of recovery rates at Atlantic continue to edge upwards, with 8% increase in mill availability. At Leonora, the team has balanced development and production with a 14% uplift in development meters and a 24% increase in total material move compared to FY2020. These are key performance indicators and value unlocks as outlined in the December investor briefing at each of our operations. Moving on to Slide 12, highlights of quarter three. Consolidate production for the quarter was 83,000 ounces all-in sustaining cost of A$1,640 per ounce. March was an excellent month clearly demonstrating performance potential across all operations which I’ll talked about in more detail in the operational sections. As I mentioned earlier, operational cash flow in the quarter was A$41 million. It's, however, worth noting that we sold less ounces than we produced which will come through on the balance sheet in the next quarter. Cash at the end of March was A$100 million, and with debt of A$102 million. The key items impacting cash flow were A$23 million of dividend payments, A$9 million of income tax payments, A$7 million of growth CapEx and A$6 million of exploration expenditure. Slide 13 shows consolidated quarterly production and all-in sustaining costs. The March quarter result was driven by lower production in January and February, and significantly stronger performance in March, particularly from Gwalia. Strong performance in March is expected to continue into and through quarter four. On Slide 14 Atlantic Q3 results, production was 20,606 ounces. All-in sustaining costs of A$1,128 grams. The operations were impacted by weather events and winter operating conditions. The production lower than the previous quarter. The lower grade results, is attributed to the use of stockpiles of supplementary mill feed as which are affected the mining rights. Despite this mill performance in March was a new record. Throughput was up 5% on FY’20, with availability at 98% and the average recovery for the month was 94.5%. As we move into the final quarter of the financial year, we’ve adjusted FY’21 guidance to production between 100,000 and 110,000 ounces; all-in sustaining cost between A$958 and A$1,050 per ounce. At Leonora, Gwalia’s production was 42,716 ounces and all-in sustaining costs of A$1,555 per ounce. While the numbers for Gwalia look almost identical to the December quarter, in reality January and February were development focused months, with 50% of the production for the quarter achieved in March. Mill throughput increased of Gwalia to nameplate capacity of 1.2 million tonnes per annum for the second half of the month. The development rates substantially improved with both February and March achieving advance of have over 400 meters. Those themselves are records. With mine commences as an underground mining contractor Gwalia in early May, this change of underground operator is expected to reduce the mining costs from around 8% to 10% and support our productivity improvements. FY2021 guidance is adjusted to the lower end of the previous range 175,000 and 190,000 ounces. This could include 5000 to 7000 ounces of production from all purchases from Second Fortune, which would replace lower grade Leonora Province ore if required. All-in sustaining costs between A$1,590 and A$1,630, all-in sustaining per ounce. On to the Slide 16 on Simberi results. Simberi recorded a weaker quarter with production 18,981 ounces, and all-in sustaining cost of A$2,426 per ounce. The reporting period was impacted by lower grade – lower oxide grades in particular with the transition role resulting in lower recoveries. Production in March improved with a higher oxide grades in Samat pit in particular. This result in production in March is equating also to about 50% of the total quarter production. The remainder the original rate con builders replaced during the quarter resulted in higher mill throughput, which will continue into quarter four. FY’21 guidance adjusted to the lower end of the previous range about 95,000 to 105,000 ounces, and all-in sustaining costs between A$1,720 and A$1,810 per ounce. On to Slide 17. At Gwalia, new areas in our mining lease and current footprint have been identified for inclusion in overall Mineral Resources. As part of the debottlenecking Gwalia production rate and the number of areas of current Gwalia data mining front have been identified and incorporated into the mine plan, including intermediates and the shallows. Slide 17 presents a long section of the upper part of the mine showing the Gwalia shallows target. During the quarter the additional size of underground diamond drilling consisting of 11 holes was completed. Four hangingwall lodes have been identified. And the team is commencing resource estimation working in weeks. The team has also a conducted review of the upper part of the mine. This has identified a number of attractive targets for infill drilling including Old South Gwalia, Old West Lode and targets in south end of the mine above 585 meters below the surface. We will drill these areas over the next six to 12 months. On to the Leonora Province on Slide 18. Shows – Slide 18 shows the deposits of the areas in the far close to Gwalia and further to the north. Workers progressed in Leonora Province Plan has involved reviewing of the geological models, existing resource models and building new resource models, completing a pit optimization and considering mill expansions. We are planning a more detailed update on the Province Plan for Gwalia and Leonora in the June quarter. Slide 19, in terms of Leonora Province Plan, the timeline incorporating information from the two previous slides, which includes the expected increase of mineral resources and plans to launch a pre-feasibility study covering Tower Hill, Harbour Lights and considering a mill expansion. The indicative timeline for assessment, development and production for each of the major areas within the Leonora Province Plan ensures we will deliver building brand strategy as outlined and announced in our December announcements. Yesterday we released the results of the Simberi Sulphide feasibility study, which highlighted a robust project with a strong financial return. The Board has approved a pre-investment for it of $13 million and final investment decision targeted for March 2022 or sooner. The next steps include completing the supporting trials on waste rock management and tailings footprint with submission in FY2022. We’re working to update the mineral reserves for the end of the financial year reporting. Over the next three to six months, we will complete the reserve definition drilling program. Importantly, we will continue to build on stakeholder engagement to ensure appropriate consultation supported by legislative assurity for the program. In terms of oxide drilling targets and exploration at Simberi is targeting additional oxide mineralization within corridor. Six oxide targets were drilled tested with the aim of defining additional insert and indicated resources. Results highlight that Pigibo North and Cell Tower contain oxide mineralization. In addition, resource definition drilling is planned to be completed and converted to unclassified and inferred mineralization in the very near future. We expect to release a certain results in the June quarter. 22, as we delivered a promise. In conclusion, we’ve had a solid quarter and a very strong month of March across all of our operations. We expect to continue in quarter four and as billions and billions comes the way we deliver. The progress with unlocking value in our business expected to provide a detailed update in Leonora Province Plan in June quarter, the balance sheet remained strong position with $100 million in cash and A$102 million in debt. Building Brilliance initiatives are starting to deliver with FY2021 annualized cash contribution target already 50% achieved since launching in December. We have continued to implement COVID-19 protocols across our business and keep our people safe and maintain stable operations. With cost reduction starting to realized and progress made with regards to Brownfield Project pipeline in particular, quarter four has been set up to finish the financial year. And with that now, I’d like to hand back – hand over for any questions that people might have. Thank you very much.

Operator: Thank you. [Operator Instructions] Your first question comes from Alex Barkley from Morgan Stanley. Please go ahead.

Alex Barkley: Hi, Craig and team. At Gwalia you stated you’re trying to get the 12 mining funds by the end of next quarter. When are we likely to see the benefit of that increasing towards the 1.1 million tonne per annum you wanted FY2023? And also for Q4 this year more specifically, you’d be expecting a better mix of the tonnes and/or grade to reach guidance. So how do you see that quarter developing?

Craig Jetson: Yes. Alex, I think clearly quarter four is certainly going to be a challenge. But it’s something that we believe we have the strategy in the mining front and I guess the production profile to be able to achieve it. If I look at the last few weeks, in particular with Gwalia, the development work that we’ve – I guess, did late last year and more so in January and February starting to pay dividends and the mine is potentially starting to unleash itself and do bottleneck itself. The results that we’re seeing at the moment are exceptional they will continue into quarter four. Now, of course, we don’t want any more headwinds like fall of ground or any issues with the middle, we’re really going to be – going hard to finish the quarter strong. But we only have to repeat what we’ve done in March to continue on such a performance. To answer your question in the last couple of weeks, in particular, in the last month of March, we’ve actually been milling at around the 1.2 million tonne mill run rate. So that has been unlocked and we certainly have enough material to feed that mill. So we're quite confident that those rates will continue on. As you said, we've developed some open headings. We've got mining plans that we can go to now. We've started to debottleneck the mine quite well. The team has done a great job removing waste from underground and setting ourselves up, particularly for FY 2022, as we finish up it by 2021. But I think now we're starting to see the benefits of the development work, the building branch program, debottlenecking the mine, short-term mill control, management operating systems and cost of goods, reliability with the mill. So I think all the production quatrefoil will be strong. We don't really want any more headwinds. But further growth of opportunity to kick that mill top that, I'm looking forward to coming out later this year in the June quarter in particular talking about the province plan, a lot more data that's starting to unfold for us.

Alex Barkley: Okay, jumping to Atlantic, the mine grades sell big quarter-on-quarter. Will you be expecting them to rebound towards reserve and where do you see Touquoy over the next, say 12 months plus, how long should we expect to see that bump you've been getting from mine to mill grades roughly 0.3 grams per ton. Is that likely to continue?

Craig Jetson: Well, I think the mine to mill grade will balance out, particularly, moments it’s tough in January, February, March, mainly because we all know that we done master harsh up there. And we certainly, get affected in the mine, an awful lot – a little bit in the processing plant as well. And I'll talk about that in a bit more detail later. But we've been certainly moving low grade stockpiles into the mill to take that the mill fade, while the mine has been affected by the winter, in particular. So that's really the issue with grade at this point in time. If I look at how the team have gone with the debottlenecking. The reliability is world class. So the availability is updated with the best the throughput is increased by 5% in the month of March as well. So doing burnish programs and unlocking the value there, it's going quite well. So I say, Touquoy had been very solid operation over the next 12 months very strong cash position. So very optimistic about what's happening there.

Alex Barkley: And with the mind grow up to sort of 0.7 grams per ton. It's been the lowest for quite a while. Was that a down quarter for any particular reason? Are you expecting that to rebound?

Craig Jetson: I suspect that's a timing issue more than something that will continue on. So as we transition and develop the mine, we're certainly going through some low grade areas. And I think this is more of a timing problem than what will continue into next year.

Alex Barkley: Okay. And lastly, on Simberi sulfide project, what sort of regulatory outcome and certainty you're looking for in the next 12 months? And could the project be approved, even if you don't get mining certainty beyond your current license in 2028? Thanks.

Craig Jetson: Yes, Alex. Absolutely, I think – so there's a bit of work to do yet. So we've submitted the ASIS. And there are two pieces of work that are outstanding for that to be approved, and we'll get that in during the next quarter. So I think, we're saying somewhere between nine and 12 months for approval, I believe we can get that approved that little bit sooner, provided we work very closely with the regulators. And part of submitting the ASIS for the SEO is in advance of having two pieces of work not completed. As you appreciate, there's many sales and supplies involved in those documents and the government particular super the opportunity to review them technically, and prepare for the last to the hindrance that we were put in the next three months. So that's progressing really well. I don't believe there will be a regulatory issue. Moving forward, I think there's still a cloud over Mining Act and what that would mean, there's opportunity for us around I think as you said, area mill needs to be renegotiated in 2028. If I look at the programmers, we've got it now. And the software project itself, the – it's got about a 13 year life of mine extension, and about a 3 million ton run rate. So a 3 million ton, so I mean, it's certainly a robust project, the paybacks within about three years or less, if we look at and while we've got some time during the super approval process over the next, say, nine months, in particular, we'll look at variations to that mine plane and opportunity to be able to expand what we're currently intending to build up, to say, 3.5 or 3.7 million tons or whatever the number, economically turns out to be in the investment case. So there's a bit of work to do about that. So if we build the plan, and we always said, we're going to build it to be expandable. But now while we're in the size of engineering, and pretty much the process flow sheet itself, there's not a lot of extra money involved in making a tank bigger or making pumps or adding extra pumps to increase the throughput rate. So we're looking at that. So the opportunity would be to increase the mill throughput and the mining rates through extra equipment and mining float more than anything in larger size tanks. So, I guess what I’m saying is, we could increase report, which would decrease the risk around 2028. So, there’s a bit of work to be done on that. And I look forward to working with the government in making that happen.

Alex Barkley: Okay, that’s helpful. Thanks. I’ll pass it on.

Operator: Thank you. Your next question comes from David Radclyffe from Global Mining Research. Please go ahead.

David Radclyffe: Hi, good morning, Craig and team. I had a couple of questions may starting with the Simberi feasibility study. I see there that the loss of mine sustaining capital for the project looks through double, just wondering if you could sort of provide some more color there. I see the part of that Simberi into a power plant upgrade. So maybe is that a big chunk of that? And when would that actually be spent?

Craig Jetson: Yes, David, really the question. I think the issue with a power plant during this feasibility the study was estimated demand of power generation was made over the art should have done upticking capital costs in particular, is the extra pair that we would – that we’ve identified during the feasibility. So, I think that’s most of it, as the Board have approved, about $13 million on for long lead-items and deposits on places of equipment. We’re currently in commercial nations and searching for power plant opportunities in terms of building extra, whether it be extra modules, whatever we do there the final day. So, I think the long-lead items or the lead-items in that probably around 12 months to 14 months away from now. But there’s still a lot of work to do in that power generation side, which is causing some of the upticking in capture.

David Radclyffe: Okay, thanks. Then following on just maybe to help us better understand it sort of what are the sort of gold? What is the gold price you’re using now for evaluating projects? Because I see you’re doing this at $1,500. Does that mean that this is now across all those businesses? And then specifically to Simberi, I may be wrong, but I thought the reserves were cut at $1,300. So does that mean, they do some upsides reserves as they get rate cut of $1,500 or they sort of disconnected in the way you approach it?

Craig Jetson: No, no, they’re certainly not disconnected. I will pass over to Garth, to give you more detailed explanation on the investment hurdles. But, as we recap the different gold prices and realize the different opportunities it does change somewhat within the projects, and Simberi want change somewhat as well. Garth, have you got a comment?

Garth Campbell-Cowan: We review the gold price assumptions each year, obviously taking into account in the market and the outlook, et cetera. And we update our resources and reserves as at the end of June. So yes, that’s the process we go through and setting the gold price for the feasibility study. We’ve updated that gold price both based on the outlook to $1,500. And then we’ll we also set data an exchange rates if an Aussie dollar gold price have we reevaluate those exchange rate assumptions as well. So, that’s something we do annually. And then, of course, we have Simberi to that we’d have our investment hurdle rates, which we use as well, but then the gold prices into that.

David Radclyffe: Okay. So, when you recap, as it sounds like they might be cutting them at a higher price, but that’s always see what you’re doing midyear.

Garth Campbell-Cowan: Yes, I mean, sometimes, the reserves are not always that sensitive to gold price changes depends on the particular – in the past, Gwalia hasn’t been particularly sensitive to changes in gold price. So, yes, so you don’t always see a big lift in reserves, just because you change the gold price.

David Radclyffe: Okay, thanks. Maybe just moving to Gwalia, then you’ve the – half the growth capital gains here. Can you provide a bit more color on that? Does that actually potentially impact near term on what you’re targeting to deliver? And do we defer that that capital winter next year?

Craig Jetson: So in terms – Garth, I’ll let you talk about the capital as well. But in terms of deferring the capital, I don’t think that’s really part of that the changes and what you’re seeing there. Like the capital is changing significantly, over a period of time Gwalia as we do things around the mine plan and the mine production in particular. And, of course, the feasibility plans that would – that we have could also change that profile of capital. We’ve spent a lot of capital this year on development, in particular, not so much on the growth side of the business. But, Garth, any other comments?

Garth Campbell-Cowan: Yes, I think the questions you’re asking is around the growth capital, that we’ve adjusted down the guidance and that that is – there is some growth projects say that that probably will be deferred into FY 2022. I think some of the capital that was in the growth was around tailings dams. And some of the timing of that expenditure will not occur in FY 2021. And that's part of the reason for that down – revising down the growth capital range.

David Radclyffe: Okay. Thanks. And then maybe just one final one if you don't mind. Just the change over the mining contract for Gwalia, obviously that can cause disruption. So you think you're managing that and then just to expand again on that – the commentary before about how we should think about lifting the ore rates that are obviously delivered to surface and how they all sort of come together when you think about that FY 2022 target of 180,000 to 200,000 ounces.

Craig Jetson: Yes. We'll look at that the changing the mine contractor is certainly something that we're managing very, very closely and I am working with MacMahons and Byrnecut to make sure that the mine operation continuity is continued up. And first and foremost this is managed accordingly because of that huge distraction. But from a business perspective to actually pull the lever on that transition now is the right thing to do, particularly as we set ourselves up for successful for next year. Now, having said that, as you can see that the March rates have been exceptionally good. So the performance of the people on site has been exceptional during these challenging times. So that's one, the safety and the transition is something that we're working on as well, to make sure that people are not distracted and I'm going to get on and finish the year up very strongly. The other bit, I guess, was the early mobilization of MacMahons. So we have engagement mines to be at site, and some of the paper obviously at site now and underground, all their training, their inductions is unfolding as we speak ready for the transition to early next month. We also have a March gold mobilized underground that have been doing some drilling and some development work in the Intermediates and the Gwalia shallows and preparing for reserves and resources upgrade at the end of next quarter. Along with supporting Byrnecut in the transition, so people are being mobilized. So we certainly de-risking wherever we possibly can and planning with both organizations as a smooth transition. What will that do is given the development work, we have the open hands we have the early works that's going on. As we speak in the shallows will set us up for 2022 mining rates, as we said during a Building Brilliance program late last year. So the targets that we have set ourselves, what we're doing at the mine will enable us to reach those.

David Radclyffe: Thanks very much guys.

Operator: Thank you. Your next question comes from Reg Spencer from Canaccord. Please go ahead.

Reg Spencer: Thanks. Good morning, guys. First question for me is in relation to Leonora. I'm not that sure slightly revised guidance does imply 58%, at least in required production Q-on-Q. Assuming that 1.2 million ton per annum, right, can you remind me as to how much lower grade third party ore, as mill feed that might comprise of, I'm just trying to back out what kind of mining volumes and ore grade you would need to hit that guidance number?

Craig Jetson: Yes, Reg. I think the – we have been impacted by some grade issues in recent times, but we're still planning on reserve grade and the head grades from mill as we plan. I think, the confidence to get us to the production levels will be around reliability. Grade holding up to where it is and certainly continuing for the March run rates that we've been able to achieve. And of course, if I look forward, if you take the March results into the quarter, then we get across guidance quite well. And of course, these are the targets and the numbers which set ourselves for the future. So I think coming off the back of March into the quarter into quarter four to deliver guidance is the future sort of numbers that we will run the operation to. In terms of third party ore as you would known in different announcements that we are actually funding some development with Second Fortune and we’ve received some of the ore and that sitting at the processing plant as well, we’re bringing in some low grade stockpiles. And we may use the opportunity to use second quarter to replace some of our lower grade stockpile lower that site in the province. And we haven’t fully decided to do that at this stage, because of the mining rights and what we’ve been able to do to run the mill at the rate of about 1.2 million tons in the last few weeks. To continue that on with our own underground province or so there’s a few things in the mix of how we’re going to achieve guidance. But we don’t want to be more hidden as either. People do bottlenecked the mind, we’ve got enough mining function now. If great holds up, which we certainly believe it will, then we’ll come home with a very strong style. That’s fine as what we did in March.

Reg Spencer: Okay, thanks. Can we expect any disruption on the contracted change overall? Or does your guidance and budgets provide some a little bit of steady net for any potential disruption?

Craig Jetson: Yes. Look, we’re not certainly running with any set. Anyway, given the headwinds, in the first half of the year, we had full of ground and other issues. So they certainly any staff that we had was consumed back in those days. And this is really now showing us how we can have to operate the mine and move forward. I’d have to call out both contractors, so McMahons in particular, for the early mobilization of the people and equipment. Being ready and also planning as we speak, in some of the early works in the shallows, but also the performance and professionalism of a book, working with us through the transition period. And at the moment, both are working exceptionally well together underground. The –St Barbara team working very closely in support and the planning process as well. So, I like to call out everybody that’s working extremely hard at Gwalia to bring the quarter four as strong as possible.

Reg Spencer: Got it. Thanks. Last question from me at Simberi. Should we assume lower recoveries going forward? Given that your bill suite blend is likely to comprise a high proportion of that, that transitional ore, have – I guess, how should we be thinking about recoveries on the oxide prior to any commencement of production from the sulfides?

Craig Jetson: Yes, I think if you’d asked me a question, it’d be worried where I was getting some sleepless nights over recovery and the transition material and potentially the lack of orebody knowledge that we had. The drilling programs during the feasibility study have opened up a lot of oxide opportunity for us. And we’re currently putting them into our plan. So, what you saw in January and February was very ordinary recovery rates, and then we hit what’s throughput rates to not just recovery, but March, in particular, last half is a lot stronger in recovery. And we certainly have got more orebody knowledge now coming out of feasibility. Not only got some two very strong oxide targets, that we are currently drilling out and getting more information about that, that we will put into a 2022 and 2023 plan that will stabilize recovery vector recovery evolved more than the way we have been the first several months of this year.

Reg Spencer: Okay, so I guess in the near term, then, recoveries may end up being towards the lower end. But that should pick up again as some of these new cleaner oxide sources come into the plant?

Craig Jetson: Yes, that’s correct. It’s more orebody knowledge we can must over the next few weeks with the data we’re already compiling, the better off we’ll be, mining the oxides accordingly to improve.

Reg Spencer: Okay, excellent, thanks Craig. Yes, thanks, guys. I’ll pass it on.

Craig Jetson: Thanks, Rich.

Operator: Thank you. There are no further questions at this time. And that does conclude our conference for today. Thank you for participating. You may now disconnect.