Alamos Gold Inc. (NYSE:AGI) Q3 2020 Earnings Conference Call October 29, 2020 10:00 AM ET
Jamie Porter – Chief Financial Officer
John McCluskey – President & Chief Executive Officer
Peter MacPhail – Chief Operating Officer
Conference Call Participants
Fahad Tariq – Crédit Suisse
Mike Parkin – National Bank Financial
Cosmos Chiu – CIBC
Kerry Smith – Haywood Securities
Dalton Baretto – Canaccord
Good morning. I would now like to turn the meeting over to Mr. Jamie Porter, Chief Financial Officer. Please go ahead Mr. Porter.
Thank you operator and thanks everyone for attending Alamos’ Third Quarter 2020 Conference Call. In addition to myself, we have on the line today; John McCluskey President and CEO; and Peter MacPhail Chief Operating Officer. We will be referring to a presentation during the conference call that is available through the webcast and on our website. I would also like to remind everyone that our presentation will be followed by a Q&A session.
As we will be making forward-looking statements during the call please refer to the cautionary notes included in the presentation news release and MD&A as well as the risk factors set out in our annual information form. Technical information in this presentation has been reviewed and approved by Chris Bostwick our Vice President of Technical Services and a qualified person. Also please bear in mind that all the dollar amounts mentioned in this conference call are in U.S. dollars unless otherwise noted.
With that I’ll turn it over to John to provide you with an overview of the quarter.
Thank you very much Jamie and welcome everyone to our conference call. We’ve had an excellent third quarter operationally and financially and we’ve delivered on several key catalysts which have solidified our strong outlook. These include the completion of the lower mine expansion at Young-Davidson, the announcement of the Phase 3 expansion at Island Gold and the La Yaqui Grande construction decisions.
We produced 117000 ounces of gold at significantly lower costs with each of our operations performing very well in the third quarter. Consolidated total cash costs of $681 per ounce and all-in sustaining cost of $949 per ounce decreased sharply from the first half of the year and both were revised — below revised guidance.
This reflected a strong quarter at Mulatos another record quarter at Island Gold and Young-Davidson starting to demonstrate its full potential with underground mining rates increasing as planned. The strong operational performance and higher gold prices drove a number of financial records in the quarter, most notably record free cash flow of $76 million. We expect strong free cash flow to continue in the fourth quarter and remain on track to achieve our revised full year production guidance and cost guidance.
Moving to Slide 4. Our health and safety protocols continue to evolve as we look for the best ways to protect our employees their families and our communities from the COVID-19. In addition to the strict protocols already in place, we are now testing employees for COVID-19 before they start rotations within the camps at our Island Gold and Mulatos mines.
The picture on the left shows the laboratory at Island Gold where we’re now conducting more than 1300 tests per month. We’re performing a similar number of tests at Mulatos. These programs are extremely important to ensure we have the ability to identify and prevent the spread of the virus. Additionally we continue to support our local communities in area of need ranging from sponsoring meal services for our communities around the Island Gold operation, to supplying medical and safety equipments and supplies to the communities near Mulatos.
Slide 5 outlines our focus on operating a sustainable business model that can support growing returns to shareholders over the long term. The completion of the lower mine expansion at Young-Davidson marked the transition from our reinvestment phase to a period of strong free cash flow generation. We will take a balanced approach to deploying this free cash flow, paying higher dividends strengthening our balance sheet and reinvesting in high-return organic growth projects like the Island Gold three expansion and La Yaqui Grande.
At current gold prices Island Gold and Mulatos can more than self-finance their respective projects allowing us to continue generating strong free cash flow and support higher dividends. These projects will in turn drive additional free cash flow growth and further returns to shareholders that are sustainable over the long term.
Given our strong cash position and outlook, we repaid the $100 million drawn on our revolving credit facility in October and are once again debt-free. Aligned with our commitment to returning capital to shareholders, we’re also pleased to announce a 33% increase in our dividend to an annual rate of $0.08 per share starting in December 2020. We have now increased the dividend by 300% since 2018 and believe there is room for further dividend increases to come.
I will now turn the call over to our CFO, Jamie Porter to review our financial performance. Jamie?
Thank you, John. Moving on to Slide 6. We had the best quarter in the company’s history from a financial perspective with record operating cash flow, free cash flow and adjusted earnings in the third quarter. Higher margins at each of Young-Davidson, Island Gold and Mulatos contributed to record free cash flow of $76 million in the quarter.
Island Gold and Mulatos both performed extremely well generating mine-site free cash flow of $41 million and $31 million respectively. The $41 million of free cash flow at Island Gold set another quarterly record. In fact in the first three quarters of 2020 Island Gold generated $70 million in mine-site free cash flow already exceeding the previous annual record of $65 million generated in 2019.
Mulatos has been equally impressive, generating $64 million of mine-site free cash flow year-to-date. A significant portion of this has been driven by Cerro Pelon a project we built and brought into production late last year for $25 million in capital. This highlights the high returns and quick paybacks from these types of projects something we can look forward to with La Yaqui Grande.
On a consolidated basis, we sold 116,000 ounces of gold at a realized price of $1882 per ounce for revenues of $218 million in the quarter. Total cash cost of $681 per ounce and all-in sustaining cost of $949 per ounce, decreased 18% and 15% respectively from the first half of the year and were both below full year guidance.
Lower costs reflected the completion of the lower mine expansion at Young-Davidson as well as the resumption of normal operating levels at Island Gold and Mulatos following the COVID-19-related temporary suspensions in the second quarter. We remained very well positioned to achieve our revised full year cost guidance. We continue to enhance our health and safety protocols with respect to COVID-19 including active testing in Mulatos and Island Gold during the third quarter.
Looking forward, we expect COVID-19 testing and related costs to add approximately $25 per ounce to our cost structure in the fourth quarter and into 2021. Operating cash flow before changes in non-cash working capital improved 63% year-over-year to a record $130 million or $0.33 per share in the third quarter.
Our reported net earnings of $68 million or $0.17 per share included unrealized foreign exchange gains of $11 million recorded within deferred taxes and foreign exchange. Excluding these items, our adjusted net earnings were $57 million or $0.15 per share.
Capital spending totaled $55 million in the third quarter including $23 million of sustaining capital, $29 million of growth capital and $3 million of capitalized exploration.
As with the second quarter, growth capital spending was focused on completing the lower mine expansion at Young-Davidson, work on the tailings facilities at both Young-Davidson and Island Gold and other infrastructure projects primarily at Island Gold. We expect full year capital spending to be in line with guidance of between $205 million and $235 million.
Our next quarterly dividend of $0.08 will be paid in December a 33% increase from the previous quarter. This will bring our returns to shareholders of $31 million in 2020 through dividends and share buybacks double the amount returned in 2019. We ended the quarter with $274 million in cash up from $201 million at the end of June and $40 million of equity securities.
Given our strong free cash flow outlook, we repaid the $100 million drawn on our revolving credit facility in mid-October giving us $500 million of additional liquidity and no debt. We remain very well positioned to fund our internal growth projects while continuing to grow our cash position and grow returns to shareholders.
I will now turn the call over to our COO, Peter MacPhail to provide an overview of our operations.
Thank you, Jamie. Moving to Slide 7. Young-Davidson generated mine-site free cash flow of $11 million in the third quarter from the production of 36,400 ounces at total cash costs of $923 per ounce and mine-site all-in sustaining costs of $1196 per ounce. All were significant improvements from the first half of the year reflecting a partial quarter operating from the new lower mine infrastructure.
Following the completion of the lower mine expansion in July, underground mining rates increased in the quarter to average 6,700 tonnes per day. Mining rates are expected to continue to improve along with grades mined and milled driving production higher in the fourth quarter. Young-Davidson remains on track to achieve its revised annual production and cost guidance.
Over to Slide 8. We are already benefiting from the efficiencies of the new lower mine infrastructure with higher underground mining rates than the mine has ever achieved and at lower costs.
Mining rates increased throughout the quarter and averaged 8,000 tonnes per day in September with the operation benefiting from the significant inventory of broken ore built up during the tie in. This demonstrates the expanded capacity of the lower mine infrastructure with its increased skipping capacity and ore storage capacity as well as increased automation in addition to supporting higher mining rates increased automation, productivity and economies of scale and driving costs lower.
We expect mining rates to increase to a sustainable rate of 7,500 tonnes a day by the end of 2020, which will continue to drive production higher and costs lower. Combined with the lower capital spending, we expect this to drive significant free cash flow growth in the fourth quarter and into 2021.
Over to Slide 9. Island Gold set a number of new records in the quarter including record mine-site free cash flow of $41 million from record production of 39,600 ounces. Total cash costs of $394 per ounce and mine-site all-in sustaining costs of $575 per ounce were down 22% and 17% respectively compared to the same period last year. The lower costs reflect the higher grade mined and processed during the quarter as well as lower royalties following the repurchase of the 3% NSR royalty in March a year.
In the fourth quarter, we expect rates to return to approximately reserve rate. Island Gold remains well positioned to achieve its annual production and cost guidance. Work on the Phase three expansion is ramping up with higher capital spending expected in the fourth quarter. The current focus remains on advancing permitting, site clearing and detailed engineering of the shaft and associated infrastructure.
Moving to Slide 10. In September, we reported the best surface exploration hole to date at Island Gold, the drill hole MH25-04 intersecting 27 grams per tonne cut over nearly 22 meters to width. Another strong result was from drill hole MH25-03 intersecting 14 grams per tonne cut over 15 meters. These holes were 100 meters and 40 meters respectively down plunge from the high-grade Inferred Mineral resource block and of true width three to four times greater than the average width of this resource block. These drill results continue to demonstrate the potential for further reserve and resource additions and also support our decision to sink a shaft as part of the Phase 3 expansion.
Moving on to Slide 11. Mulatos had another strong quarter, producing 41,100 ounces at total cash cost of $746 per ounce and mine-site all-in sustaining costs of $928 per ounce. Year-over-year production was up 26% and total cash costs were down 14%, reflecting the contribution of higher-grade ore from Cerro Pelon. While we expect grades and production to decrease somewhat in the fourth quarter Mulatos is on track to achieve its full year production and cost guidance given its strong year-to-date performance.
Over to Slide 12. As you can see in the photo development of La Yaqui Grande is well underway with activities in the third quarter focused on initial camp construction and clearing of the pit area. Construction activities are expected to ramp-up in the fourth quarter with a focus on haul roads construction and the start of stripping activities.
The bulk of La Yaqui Grande’s initial capital budget of $137 million is expected to be spent in 2021 with initial production starting in the second half of 2022. La Yaqui Grande is another low-cost high-return project. We expect a quick payback on this investment much like we’re seeing this year with Cerro Pelon.
With that I’ll turn the call back to John.
Thank you, Peter. Much appreciate it. I’ll now – that concludes the formal part of our presentation. I’ll now turn the call back to the operator and open the line for your questions.
Thank you. We will now take questions from the telephone lines. [Operator Instructions] The first question is from Fahad Tariq from Crédit Suisse. Please go ahead. Your line is now open.
Hi, good morning. Thanks for taking my two questions. The first on capital allocation, you mentioned that you’d like to allocate a third of the free cash flow towards strengthening the balance sheet. But right now there’s no debt. The cash balance is just shy of $300 million. What is the goal for the cash balance before you maybe consider redirecting the free cash flow to the other two buckets? Thanks.
Yes. Thanks for the question. It’s Jamie here. Alamos has always been I’d say more conservative than many of our peers from a balance sheet perspective and I think it’s served us well. It’s positioned us to be active in terms of M&A when other market participants can’t. So we’d be targeting a cash balance of – upwards of $400 million to $500 million. Once we hit that target we’d start certainly increasing the allocation to the other buckets.
If you look at those priorities, a third going to growth and exploration spending a third to dividends and other shareholder returns and a third to the balance sheet. So those are kind of long-term targets that we anticipate realizing over the next 10 years. So if you look at the current allocation for the next three to four years, the majority of our free cash flow is going to our high-return growth projects to the Phase 3 expansion at Island Gold to building La Yaqui Grande and then eventually the construction of Lynn Lake.
I think beyond that, beyond 2025, that’s when you see the free cash flow generation really start to increase. And at that time you’d see a real significant potential increase in the dividend.
Got it. That’s very clear. Okay. And then the only other question I had was on Young-Davidson, can you give some color why the Q3 milling, Q4 was lagging the mining rates. I know you said that it’s going to pick up in Q4 and kind of match the mining rate. But just curious why it lagged in the quarter.
Yes. Thanks for the questions. It’s, Peter here. The skipping from the mine in Q3 was back half loaded to a certain extent. So we really – the mine was really able to put a lot of tonnes up to skip the shaft during kind of the latter part of August and into September. So the mill – it ended up being the mill created a bit of stockpile in front of the mill. The mill has no problem milling at 8,000 tonne a day rate. In – for instance in October, we’re well above that. So that’s why it lagged the mine in the quarter.
Okay. Great. That’s it for me. Thanks.
Thank you. The next question is from Mike Parkin from National Bank Financial. Please go ahead. Your line is now open.
Hey, guys. Congrats on a good quarter. A couple of questions from me. The power line at Mulatos, will you be carrying that over to La Yaqui? And when would that connection – like will that be over there in time for production?
Yes. Absolutely, Mike. It’s – production doesn’t start there until 2021. And we’ll have plenty of time to – in its plan to bring that over early on.
I’m talking about production.
Is the CapEx budget factor that in, or would that be incremental to that?
No that’s factored in.
It’s not that far. It’s about – just about stope five kilometers of power line to bring it over.
Okay. And then the cost estimates you’ve provided then, I guess, already assume that power line connection?
Okay. And then you’ve always had kind of a strong discipline of buy when prices are low with respect to gold. What about the thought of in this environment selling any assets? Is there anything within the portfolio that you maybe would look to release, or is that something that you guys are considering?
This is John McCluskey. I’ll answer that Mike. There are a couple of projects in our portfolio that are clearly far smaller for us now than when they were initially acquired. They’re decent projects. We continue to work on them and move them along. But in this market environment as you can well imagine we have interest — inbound interest coming on those projects and we’re in discussions. So — it wouldn’t be inconceivable if we sold some of those non-core assets.
Okay. Super. That’s it from me. Thanks, guys and congrats again.
Thank you. The next question is from Cosmos Chiu from CIBC. Please go ahead. Your line is now open.
Thank you, John, Jamie and Peter and congrats on a very strong third quarter here. Maybe my first question is on Young-Davidson. You talked about the throughput — underground throughput of 8,000 tonnes per day but then you also talked about getting to a sustainable rate of 7,500 tonnes per day by year end 2020. Can you help me bridge that sort of gap? Like what do you need to do still to kind of get to that consistent rate? Because it sounds like you’re already kind of there.
Yes. Thanks, Cosmos. Clearly, the underground infrastructure, the ore and waste movement infrastructure is well capable of 8,000 tonnes a day and we’ve demonstrate that now. Our stope sequencing and opening up of areas we budgeted to get to 7,500 tonnes a day by the end of this year with that ramp-up. And while we were down through the tie-in period that — we’ve set ourselves up to do that. And we will continue to ramp that up to 8,000 tonnes a day by mid-ish next year. So we were able to demonstrate 8,000 tonnes a day in September by drawing down on a bit of inventory that we would have built up through the tie-in. So that’s the bridge.
For sure. And then, I guess, again on YD. As we talked about the throughput at the mill was slightly lower in Q3 due to there’s no more stockpiles. I know you’ve talked about matching milling and mining rates into the future. But as kind of mining rates go up and if it exceeds your expectations is there any chance that you might want to build up a kind of stockpile once again, or is that on the cards?
I would suggest that it’s rare — it’s rare that you see a stockpile in front of a mill in a underground mining situation. It can happen. We had one at the end of Q3. The mill has demonstrated in the past 8,000 tonnes a day. It has no problem doing 8,000 tonnes a day. And I think we’re sitting at close to 9,000 tonnes a day in — through the first three — four three weeks of October. So there’s no problem with the mill if anybody is concerned about that. It demonstrated 8,000 tonnes a day before we put in a pebble crusher. So we now have a pebble crusher in there. So it’s not going to have any challenge doing those kinds of tonnes. But this mine is a 8,000 tonne a day or maybe better yet to think of about it as a 200,000 ounce a year plus producer and that’s what it will do going forward.
Okay. And then maybe the last question on YD here. Certainly, the last several years was focused on the tying up — or the underground infrastructure the operations and more recently tying up the lower mine. But now that everything is sort of in place and I know in the past in the recent past exploration has not really been a focus area at least for YD. Is that going to change now?
Yes. Go ahead.
Cosmos, John here. I would say we’re clearly interested in seeing what the further extension potential is at depth to YD. We don’t have anywhere near the same sort of needs, let’s say, to build reserves at YD as we do say at Island or Mulatos where reserve growth is driven by very specific production requirements. YD has 13 years of reserves the way it sits right now. It’s – you’re only adding marginal value when you’re adding reserves that go out beyond 15 years. But having said that, we have started drilling at YD again. As we – into the second half of this year, we do have drilling taking place – exploration drilling taking place there right now. And we’re going to allocate a reasonably good budget for it for 2021. So, I would say going into 2021, we’ll probably not success, you’ll probably see additional reserve growth at Young-Davidson based on that drilling.
Thanks great to hear. And those are the question I have. Thanks John and team, and congrats again on a very strong Q3 and stay safe everyone.
The next question is from Kerry Smith from Haywood Securities. Please go ahead. Your line is now open.
Thanks, Operator. Peter, just on why the – if I can just kind of maybe ask the question in a different way. You averaged 8,000 tonnes a day in September. What was the best week you had let’s say on an average like I’m just curious, how much this mill can do?
The mill, I mean, we put out 9000 tonne days all the time.
How you do?
Okay. Okay. Okay. So that’s great. So you’ve got all kinds of capacity there. And probably just assume it’s going to do 8,000 tonnes a day no problem.
The miners get one chance to bury the mill and they took advantage of it with some tremendous performance in the latter part of the quarter. You’ll never see it again.
Yeah. Yeah. Okay. And then John just on the portfolio optimization on the noncore stuff I’m assuming that, maybe Esperanza and some of those projects fall into that bucket. Would you consider today that Turkey is a core asset there, I mean, just given the delays you’ve had, or are you kind of thinking that maybe that’s something that you maybe would optimize out of the portfolio?
It’s certainly not – it’s not core. For example, when we acquire it remember in 2010, when they were exploration projects. And we are very successful in that exploration and we built up a fairly substantial reserve there roughly three million ounces. That made it quite interesting. And then, when we completed the economic studies they demonstrated very, very strong economics. And so they were very attractive projects. But between the time that we fleshed out those economics and where we are today we’ve since acquired Young-Davidson. We have acquired Island Gold. We’ve built our production up over a run rate of 500,000 ounces a year normalized.
And so from that perspective Turkey clearly, isn’t as core as it was. And questions have come up over the course of the last few quarters on these calls and at conferences and in investor meetings and so forth. And we’ve been very candid about the fact that we’re disappointed with the delays that we’ve experienced. And I don’t see things getting any easier in Turkey. We may very well benefit from taking on a Turkish partner. It’s no secret that we get all kinds of inbound interest on these assets, and particularly from Turkish mining entities.
And so from that point of view, we’re going to look as best we can to surface value for those assets. And it’s not satisfying at all to us to just be in a sit-and-wait mode when we’ve got a project that’s effectively fully permitted and construction was underway. We were four months into construction, when we were effectively stopped. So the current situation is certainly not acceptable. We’re going to do something about it one way or the other. And one of the alternatives we’re looking at is taking a party who would – a third-party would come in at the project level to partner with us.
Got you. Okay. That’s great. I appreciate that. Thank you.
Thank you. [Operator Instructions] The next question is from Dalton Baretto from Canaccord. Please go ahead. Your line is now open.
Thank you. John, I’d like to continue on the segue Kerry made at Turkey there. Has anything changed on the ground regionally in Canakkale either for better or worse?
Well, things are continually changing in Turkey from the – I mean, probably the most stark change over the last year is the lira has gone from approximately 5.9 to the dollar to 8.2 to the dollar. The economy of the Canakkale region is in really desperate shape. It’s a region that relies very heavily on tourism. Particularly the capital of Canakkale itself relies very heavily on tourism. And tourism was down drastically this year.
So yeah the economy is taking a real hit. The economy of this region is taking a real hit. So there’s quite a — how should I put it, a very vocal discussion going on there between those that would like to see the project develop and who would benefit from the jobs and supplying a substantial business of that kind in the region and those who effectively oppose it.
The people that support it by and large are those people that are located closest to it. And those that oppose it are those from outside. And it’s an old story. And we’ve seen similar things in Canada, as we’re seeing here in Turkey. So we’re, having to navigate a very sort of tricky waters here. And we’re doing everything we can to, to put ourselves in the best position, to take advantage of the change in sentiment that I think we’re starting to observe.
When I refer to that, I mean there’s becoming a lot more interest in seeing this kind of economic activity, in a badly hit region. We’re hoping that that is ultimately going to lead the government to reinstating our mining licenses and allowing us to get back to work. But right now the best thing that we can do is be patient.
That’s what the government has been asking us to do. I guess there’s a certain point in time coming when we will no longer be patient. And at that point, we’re going to have to look at what our alternatives are. It’s not a good position to be in. They’re great projects.
But unfortunately we found ourselves just over a year ago put into a pretty tough position, where we effectively can’t do any work. And it’s not something we anticipated. And it’s not something, we’re happy with. But I think we’re going to see a change one way or the other coming up over the next six months.
Thank you. That’s helpful. John, when you talk to investors, does this situation — or do you feel that the situation impairs you at all, from an ESG perspective?
I would say no. Anyone who has looked at, what happened there closely, understands that effectively we were somewhat railroaded. It was a social media campaign based on, a whole slew of false allegations. And that is very well understood right by our investors and certainly by everyone inside of Turkey.
Even the people, who did it, know very well what they did. And that’s probably why it just doesn’t have the power to stick, as otherwise would, if we were actually guilty of something, in terms of violating our permits or doing something that would be harmful to the environment.
I mean the primary criticism that the project development received was the, cutting down of trees in region. And of course, all those trees were cut down by the Ministry of Forests and weren’t cut down by the company at all. No company has a right to cut down trees. The government themselves cut those trees.
They harvested those trees. They sold the trees. They kept all the revenue from those trees. We had nothing to do, with that. And this is a very — this is an actively forested region. And our particular site represented less than 2% of the area of Canakkale that was forested in that year.
So it’s really a political situation that we’re in the middle of there. It’s the way of the opposition to attack the government, through attacking their environmental policies. And they’ve tried to make much more of this than it actually was. And they’ve managed to initially gain a tremendous amount of support. But all based on false set of allegations.
Because this is so well understood, I would say that we are not facing a great deal of difficulty from an ESG perspective. If you don’t look at the situation carefully, if you were to just go online and take your ESG policymaking or decision-making from what you’re reading on Twitter or something like that, yeah maybe you’re going to be misled. But if anyone who looks into the details of what happened, wouldn’t make a mistake.
That’s great context. Thank you. And maybe if I can just switch gears for one more question, Lynn Lake, I understand the sanction is still a couple of years away and you’re going through permitting. But could you give us a sense for, what you would want to see from this project, in order to sanction it? And when we as analysts will see an update on the project?
Do you want to take that, Peter?
Yeah. Maybe I’d put it over to Jamie actually.
Yeah. No. I think we’re — I mean you’ll recall the feasibility study that we put out back in December of 2017 and the project had about a 12.5% IRR at $1250 gold price. We’ve been working away at it from an exploration perspective finding additional ounces to put into that resource, and I think we’ve had some success.
Our goal ultimately is to get us to about a 15% IRR at a $1,300 gold price and I think we’re pretty close to there. We do have — we’re spending $6 million, $7 million a year on exploration. We have a massive land package there. We’ve had some very encouraging results. So we do anticipate being able to expand resources there and make the project better.
But even at a $1,500 gold price, right now, it’s got a 22% after tax IRR and at anywhere close to a spot, it’s closer to 32%, 33%. So, we like the project. It gives us the potential to get to 600,000 ounces of Canadian production in 2025, when you add Lynn Lake to what we’ll be producing in Island Gold and the 200,000 ounces a year we’ll get from Young-Davidson.
So, we do like it. We’d be in a position to make a construction decision in the middle of 2022 once permitting is complete. And obviously, we’d evaluate the gold price, the Canadian dollar FX rate and all the other factors at that time before moving forward.
Thanks, and do you anticipate putting out a study ahead of that?
We may update the study. I mean the capital that’s in our 2017 feasibility study is fully baked. There hasn’t been a lot in the way of changes to that. So we’ve continued with engineering and further studying those costs. So, I don’t think there’s been a material change on the CapEx side. If we’re able to add materially to the resource, and by materially, I’m talking like 200,000 to 300,000 ounces, then we’d consider updating the study certainly.
Okay. Thanks, guys. That’s all for me.
Thank you. The next question is from Steven Grotko from Pershing’s Global Financial Solutions. Please go ahead. Your line is now open. Mr. Grotko, your line is open. Please proceed with your question. If you are un-mute, un-mute your line is please.
I think you might have lost him operator. Why don’t we proceed to the next caller?
So we have no further question registered at this time. So this concludes today’s morning call. If you have any further questions, that not have been answered, please feel free to contact Mr. Scott Parsons at 416-368-9932, extension 5439. So the conference has now ended. Please disconnect at this time, and we thank you for your participation.