Earnings Call: Q2 2021

Jan 28, 2021

Earnings release

Good morning, everyone, and thanks for your time. I have Ian Poole, Peter Trout and Adam MacKinnon on line with me. I'll make some overall comments on the performance of the company and some follow-up closing comments, with Peter covering our operations, Adam, our exploration effort and Ian covering off on the financials. For the quarter, we're on track for the year, with the December quarter outcome in line with our expectations, resulting in a solid half one for the company. Metal production run rates on a year to date basis put production well within or if not at the upper end of any guidance given. The same can also be said for mill throughputs at Peak and Hera, both resulting in quarterly production records for lead and zinc at either mine. Asset performance was strong, resulting in guidance for the group, excluding DOGS, being revised down to $12.50 to $14.50 an ounce from the previously stated $1500 to $17.50 I've spoken to reliability and predictability of the business a lot. Throughputs and cost per ton for the quarter and the half reflect that work being on or better than target and also underpinned by a year to date 26% reduction in our total recordable injury frequency rate. Although with that performance, COVID-nineteen complications, labor market tightness and the peak shaft had provided some headwinds to that improvement trajectory. The acquisition of DOGS was completed early and the integration well progressed. Individual asset guidance of 20,000 to 23,000 ounces at an all in sustaining cost of $18.50 to $2,050 for the remainder of the year is given. I want to specifically note that the operation is in ramp up in terms of grade and ore production with half two run rates tracking well towards the long ranges provided in the investment presentation. This occurs as the underground volumes come up to mill capacity and grade improves with depth. Exploration has been both very active and very successful through and is also now extended to the DOGS asset. And Federation continues through exploration and the internal studies to get more and more exciting with the scoping study due to the company and the Board during this quarter. The balance sheet remains healthy, post acquisition and dividend driven by the operational performance. Peter, can you now run us through that operational performance, please? Thank you, Dan. I'll first provide an overview of the group level and then more information for each of our operations. I'd like to highlight in the December quarter those very strong base metal results as shown in segment 2 of the ASX announcement. These delivered record group zinc and lead metal production. The associated byproduct revenues maintain the group's all in sustaining cost of circa $1,000 per ounce for the 3rd consecutive quarter. This performance reflects our strategy of delivering value through the processing of higher margin ores based on their net smelter return value and operating reliability leading to consistent underlying production and unit cost outcomes. Our gold production halved relative to the September quarter due to a corresponding reduction in ore grades. The lower gold grades were consistent with our mining plans and they're a function of the stoping positions and the inherent grade variability in our polymetallic ore bodies. O'Reilly continues to actively manage the risk of COVID-nineteen with no COVID cases reported in the Khobar region nor at our sites. We have experienced attendance impacts from both New South Wales and cross border travel restrictions, and these were exacerbated by tightening of the labor market, which is most noticeable in our underground operations. Moving to each operation. At peak, we again saw the benefit of the expanded process plant, which is able to treat the higher lead zinc grades, particularly from the Kronos zone and produced separate lead and zinc concentrates that realized revenue benefits. This delivered the record lead and zinc production out of the peak operation. The lower quarter on quarter gold production was a function of the gold grade as we progressed through zones of higher base metals and NSR value, and this can be seen in Figure 5, with the focus for us being that margin between our NSR and our site unit costs. Our underground mining activities were focused around the preparation of the Kairos lode for ore production. Notably, this involves an extensive infill drilling campaign to upgrade the mineral resource and inform the mine design, development of the upper and lower ore drives along the strike of the ore body in the first stoping area. And these development rates were restricted by squeezing ground conditions and some localized talc zones we encountered. We're also in the midst of raised boring a large diameter exhaust raise and putting preparations in place for an escape by installation, and both of these required before stope production can commence. The 1st Kairos development ore was processed in January and given the current development phase positions and conditions, we now expect 1st stope ore to be delivered early in the June quarter. Our site expenditure increased above the September quarter, mainly due to the higher underground mining activity levels and costs associated with the hoisting shaft rectification works. At Herrung, the mine is transitioning towards ores with a lower average gold grade and higher base metal grades, and this is consistent with the ore reserve. This transition was evident in the December quarter as underground stoping progressed out of higher grade gold zones into slightly better case metal grades. We're operating the Hera site to maximize the processed ore volumes and to reduce the unit costs as an offset to the lower gold revenue. It is therefore pleasing to report improved quarterly processing performance with an uplift in throughput contributing to record quarterly lead and zinc metal production. A number of low cost initiatives have also enabled incremental improvements that delivered better metallurgical recovery outcomes and benefited our operating margin at Hera. At DAGS, we completed the acquisition in mid December and welcomed a new asset to our group. The quarterly results reported from the DAGS mine are based on a half month's ownership and are not at all representative of steady state operations. The underground mine is in a ramp up mode, so our initial focus has been to smoothly transition the operation to our ownership and set up the mine to deliver 30,000 tonnes of oil per month to utilize the available processing capacity. Figure 8 in the quarterly results announcement charts the ramp up in underground oil production that we expect to achieve by mid-twenty 21. It also highlights the difference between the ore mined and processed in half 1 when underground ore was supplemented by the drawdown of low grade surface stockpiles. Figure 9 in the announcement shows the higher gold grades and corresponding gold production that is forecast for half 2, reflecting the improved gold grade at depth and more confident ground conditions, leading to less dilution in our stoping areas. It's a very busy time for us in December at DAGS, and we focused on onboarding approximately 40 full time personnel to Aurelio's employment. We've implemented the alliance agreement with Paibar for underground mining activities. We're busy applying Oralia's safety and business systems to the operation, and we've embarked on resource infill and geotechnical drilling to support mine planning. Another key focus for us has been the operation of the cemented hydraulics fill plant, as this will allow us to backfill our underground stope voids to support a predictable stope cycling and sequencing to enable the ramp up in ore production. We've also applied a robust maintenance regime in the process plant and are establishing an appropriate level of spare parts inventory for that asset. Moving to growth projects, the Federation scoping study has progressed well with the technical and economic assessments largely completed and report preparation is now commenced. Encouragingly, the metallurgical test work conducted during the quarter supports a process flow sheet that recovers gravity gold followed by sequential copper, lead and zinc flotation into separate concentrates to realize the greatest economic value from the Federation mineralization. The scoping study is on track to completion in the coming months and it will present a subset of project configurations ahead of a decision to gate the project to a pre feasibility study. We also expect to lodge permitting applications to allow the development of an exploration decline and expansion of the existing Hera accommodation village. I'd like now to hand over to Adam MacKinnon, who will discuss our exploration activities across the group. Thanks, Peter. So this last quarter, once again, saw a strong investment in exploration and resource development with a total of 9 surface and underground drill rigs operating across our sites. The Company's Federation discovery located along strike to the south of Hera has continued to go from strength to strength. The company released 3 updates on Federation during the period with the emerging high grade gold potential being the standout feature. Exceptional incepts from the period include 12.9 meters at 33.4 grams per tonne gold and 37 percent lead zinc and 25.5 meters at 11.4 grams per tonne gold and 37 percent lead zinc. Drilling has also pushed high grade base metal mineralization further to the Northeast and new high grade gold mineralization was identified as close as 50 meters from the surface. In the last 6 months, Drilling and Federation has focused on upgrading confidence in the estimates following the release of the maiden resource in June last year. As previously indicated to the market, the release of an updated mineral resource estimate for Federation is imminent with the estimation in the final stages of review. Ongoing resource definition drilling will continue at Federation, although the company is now also testing targets near Federation, particularly a long strike to the Northeast. Moving up to peak, the December quarter saw the 1st Kairos infill results returned following the establishment of the underground drill platform from the lower decline. A number of very strong results were received, including 11.5 meters at 38.4 grams per tonne gold and 10% lead zinc and 18 meters at 14.3 grams per tonne gold and 23% lead zinc. Drilling was initially focused on the 1st planned stoping levels at the base of the current reserves. Encouragingly, a number of the infill holes extended, gold and base metal mineralization along strike to the north, with high grade mineralization still completely open at depth. The December quarter also saw ongoing surface drilling at Great CohBar with 6 holes completed. These holes were designed to provide further confidence to the grade and tonnage of the copper gold dominant mineralization in this deposit, with full results still pending. Ongoing drilling in the current quarter is set to target extensions to the mineralization up and down plunge. And finally to our new D'Args gold mine site. In December, O'Reilly's Board approved $3,500,000 for an intensive surface and underground drilling program. The program will target mineral resource growth in high potential areas along strike and at depth as well as providing additional confidence to the existing mineral resource estimates. Extensional and infill drilling from underground has already commenced with drilling from surface to commence in the coming weeks, pending the receipt of necessary regulatory approvals. The full program is expected to be completed around mid-twenty 21. Thanks. And over to you, Iain. Thanks very much, Adam. The company maintained its cash balance for the quarter at 106,000,000 dollars The movements in the quarter were cash flow from operations after sustaining capital of $33,500,000 continued investment in growth, capital of $11,200,000 return to shareholders with the payment of the FY 2020 dividend of $8,700,000 outflow of cash costs for the Diodes acquisition of $167,600,000 and Aurelia is still to pay stamp duty of $30,000,000 which is due this quarter and some other transactional costs of $3,000,000 which is due for payment this month. We also had the net proceeds from the equity raise of $125,000,000 and net proceeds from term debt of $45,000,000 Iberia refinanced during the quarter for the Dags acquisition with Investec, ANZ and BNP. Following the Dags acquisition, Iberia now have a fully drawn $45,000,000 term debt facility, which is scheduled to be fully repaid by September 2023, a $50,000,000 bonding facility, of which $48,000,000 is utilized and an undrawn $20,000,000 working capital facility. During the quarter, Aribilio also initiated a 55,000 ounce gold hedging program with the company's finances for 12 months at an average forward price of AUD 2,441 an ounce. As outlined in the investor presentation in November, I really will be holding a general meeting for the shareholders to approve the whitewash provisions for the financial security arrangements for DAGS. The notice for the general meeting will be filled out sent out early next week for a meeting, which is planned for the 5th March. I'd like to hand over back to Dan. Thanks, Ian. I think it's appropriate to go to Q and A from participants in the call now. Harmony, if you could open up, please. Thank you. Thank you. Your next question comes from Dylan Kelly from Ord Minett. Please go ahead. Good morning, Dan and team. Two questions from me. Just firstly, on the hoist outage and the impact on the business. Like last year, when this happens, it was quite a big setback. But this year, you've somehow come out ahead. Could you just walk us through the moving parts with what happened? How you managed to achieve it? And how much of this was how much of the base metals sort of increase was part of the plan and more built into that reliability equation that you've spoken about before? Yes. I'll take that one, Dylan. I think the I mean, the key learning for us from the shaft out is, if you remember, we're dealing here with, what, 35 year old infrastructure. It's a pretty complex piece of gear. We had some issues with it in the prior financial year. Since then, there's been a real emphasis on not only that hoist capacity, but also at our trucking capacity as well as stockpiles. So as we were gaining control of peak, emphasis has gone to risk management and having surface stockpiles or stockpiles is a key part of that risk management. So in essence, we didn't see whilst it was a headwind, it wasn't a material impact on the business in the end, and we continued saving the plant via trucking. I think that's the first I think that was the first question. The second one being, yes, the base metal increases. Well, I'm going to answer that question and start with gold first. I think you're well aware, as I hope most of our investors are, that we're dealing with polymetallic gold grades move as we move between stoping areas and we drive towards NSR. That's the primary focus and prioritization. The September performance was strong in gold. It was probably a couple of 1,000 ounces better than we were anticipating at that point. December was, as you can see, roughly 50% of that. It was probably 1,002 ounces below we're expecting, but that's a plus or minus roughly 5% on an annual basis. So it's really we're well on track for our guidance. The base metal performance was expected for us. We did do some minor shuffling with all fees as a result of the hoist outage in a year, any of those deviations wash through easily. Okay. That's clear. Just moving, if we can, to DOGS and the ramp up there. Can you just walk us through I appreciate some of the charts that you put in there on was it figure 9 in terms of ounces and grade. What are the key deliverables here towards moving second half number towards that life of mine average target in terms of developments and overall production rates? Could you just walk us through the different moving parts of that? Hi, Dylan. It's Peter Traut here. I'll take your question. A number of different moving parts. We flagged several of these in the announcement in November. So firstly, the mill has reached its nominal 30,000 tonnes a month capacity. It's a matter of the mine ramping up to be able to deliver that ore feed sustainably. So to do that, we're focused on the infill drilling to give us the confidence in stoping locations, development layouts, etcetera, that inform the mine plan. We're actively pushing hard on development and tracking well there at the moment to get our new stoping areas accessed and the decline extended. Importantly, we have to get the cemented hydraulic fill system working reliably because that backfills the stope boards allows us to take the next stope in the sequence. And that's probably the biggest lever that we're working on at the moment. We've also put the alliance in place with our mining contractor, Paivar, and that has key drivers focused on our whole business performance, not just individual elements of the underground operation. So I think we're in a good shape there to be working together towards the big game, which is getting up to 30,000 tonnes per month out of the mine. And you'll see those other metrics in the quarterly report around the 400 meters a month development, for example, that we need to achieve. Okay. That's clear. I'll pass it along and circle back. Thanks. Thank you. Your next question comes from Roy Gillespie, Private Investor. Please go ahead. Good morning, all. Roy? Yes. I just want to ask about Dax. Initially, you estimated that all in sustained costs would be $13.50 or thereabouts. I'd say now in the quarterly report, you're estimating it to be $18.50 to 2,000 something. Can you explain the reason why? Yes. I'll take that one, Roy. It's Dan. Just noting the ranges provided in the investor presentation, 11.50 to 13.50 were long averages across a 5 year mine life. The cost guidance that we've given for the remaining 6 months of this financial year after that, exactly 6 months, representing pretty much year 1 of the life of that asset. So it is clearly in ramp up. The fundamental driver of the all in sustaining cost, particularly for DOGS, unlike our other operations, There is no byproduct credits for DOGS, and it's purely related to gold being a denominator in that cost structure. The what is ramping up is not only the mine volumes to the mill, but also the head grade or the mine grade as we go to depth. And that is an expected trajectory for the asset and not too dissimilar to where we expected it to be roughly this time of the year, give or take, probably $150 an ounce. So we're confident that as gold grade comes up, mining rates match the commissioned mill rates. Gold production will come up, reducing that all in sustaining cost as we go into FY 2022, and we'll save that guidance for that year early in FY 2022. Thanks for that. Can I just have another quick question? Can you comment on the efficiency that you see in modifying the mill and maybe mining processes at that? Hi, Roy. It's Peter here. The greatest leverage we have at the moment is through, firstly, the underground mine, getting it up to nameplate. That technically is pretty straightforward. It's a matter of execution. In terms of the mill, it already outstrips the mine in terms of its production rate. We've got a number of initiatives identified there, and we'll move through those in a staged manner as we can identify the value that each one of those will unlock. The third one, and this is a really important one underlying the investment, is the potential to extend the resource at DOGS. And as Adam has alluded to before, we've already commenced that work and we'll have more activities over the coming half year to give us the information we need to reach decision around that. And when you take the mine life of 5 years and use our expanded resource base to extend it out by a couple of years, there's a tremendous leverage for us in the business. So they're really the key areas we're following through. Get the efficiencies and the productivity from the underground mine, demonstrate the improvements we think we can achieve through the process plant and execute those and then build that resource base that underpins the mine life extension. Okay. Thanks very much. Thank you. Your next question comes from Jeff Archer, Private Investor. Please go ahead. At the height of the drought, there was an announcement that there was going to be an extra cost relating to water, which I seem to recollect was around an impact on the AIC of about $50 an ounce. I'm just wondering with the improved rainfall, what the situation is with respect to that in terms of what was it in the first half of the year and what's the likely future outcome likely to be? It's Dan. I'll take that one. There's well, obviously, we've got 3 operations now, the 2 in particular that were impacted during the drought being Heron Peak. You're correct, it was flagged for FY 'twenty at about $50 an ounce across the 2 existing operations at that point. We during that period, we developed and commissioned the dewatering from Great CohBar. That is in place and operational if and when we need. In fact, we are using it, but not extensively. We have an RO facility within the group as well. So we're well positioned to handle any ongoing drought issues in terms of water self sufficiency. At this point in time, we are not focused on that. And therefore, some of those, the costs associated or part of those $50 an ounce aren't really being incurred certainly at peak. The Barindong Dam, which is the high security main water supply, is currently at about 41%. At the height of the drought, it was at 1.5% to 2%. And we're very concerned about water security, particularly for the Cobar community. So in essence, that $50 an ounce isn't being fully incurred as we go through the course of this year. At Hera though, we are bringing some water onto the asset as our bores are being cycled through, cleaned, recommissioned and rerunning. But in essence, we think we are in a good position in terms of self sufficiency or water security. Thank you. You now have a follow-up question from Dylan Kelly from Ord Sorry, Dylan here again guys. Just following up on Federation and the scoping study in the resource. Could you just walk us through some of the comments around the different production scenarios that you're looking at? Are they going to be formed part of the release? Can you tell us about the breakdown of or sorry, if you've done any more analysis around the open cut scenario? Or are you targeting just a larger increase in terms of the underground or sorry, just focused purely on the underground at this point? And just as an aside, in terms of the amount of detail that you're going to be able to release, I understand that ASX can get quite finicky around what you release in terms of how much materials inferred that you can discuss as part of the scoping study. Can you just give us an understanding about or sorry, a rough order of magnitude of what would you say the inferred part of the resource that you can that you're going to be able to talk to? Dylan, it's Peter here. And I'll answer your questions and I'll try and do that in reverse order as I probably up to my memory. So in terms of what we released on the scoping study, I can't comment on that at this point in time. And I certainly can't give you an indication at the moment of the relative resource classifications that will be underpinning that. In the coming days weeks, you'll see the updated mineral resource estimate. And it's fair to say, for the purpose of the scoping study, we've been intensely focused on the upper portion of the deposit to get more drilling and hence more definition around that area, given it'll be the 1st area likely to be mined, and we want to put ourselves in the best position to convert across to an ore reserve in due course. In terms of the production scenarios we've looked at, we've essentially taken a range of scenarios looking at using the existing Hera plant and then taken the upside as what a mining constrained mill number might be. In conjunction with that, we've looked at various flow sheet options as the metallurgical test works come in. And the purpose of the scoping study is to assess those options and identify which subset of options gives us the best go forward plan. And that's really where we're up to at the moment, and I can't disclose too much more until we finalize all that work and report it internally. You asked about open pit mining, have we gone back and looked at that? We have had calls to reconsider based on the gold grades near surface that Adam has mentioned, but it's fair to say that when you put the volume of an open pit around that mineralization, it probably won't stack up in terms of strip ratio and economics. So our thinking is currently still with an underground operation, trucking the ore to a processing plant and making use of the multiple flotation streams and gravity circuit to get the best value out of that mineralization. Okay, understood. That's quite clear. Thanks, Peter. Thank you. Your next question comes from Roy Gillespie, a Private Investor. Please go ahead. Back again. Just with regards to byproduct income, I see the all in sustaining costs for Aero and Peaker come down because of that. Can you sort of just indicate how much of an impact that has had over the last 12 months? And then where do you see it going in the future? You see metal prices going up and what sort of impact will that have on income and profit? It's Dan Royce. I'll take that one. Look, I think byproduct credits are a combination of controllable and uncontrollable. And when I say uncontrollable, that is the metal prices. For the purposes of restating or revising our all in sustaining cost guidance for the existing assets or the or Pete and Herrah, I should say, we have taken a look at what we're expecting for the next 6 months of pricing. Beyond that though, what we are focused on is what we see as the highest value material and throughput rates. And it would be being able to predict or forecast what the metal prices are going through into next year is probably a move we wouldn't want to be taking right now. I think that one of the net benefits of this is being in a polymetallic is that we also get a natural hedge against the gold here as well in that we can we'll see them move counter to each other. But what we're focused on is that highest NSR in priority and sweating of our mills to drive that profitability. Okay, fair enough. Yes, thanks. Thank you. Your next question comes from Russell Fountain from Curius Capital. Please go ahead. Hi, guys. I was just wondering how does your remaining hero resource blend with Federation and what are the timing issues from going from 1 to the other? Thanks. Hi, Russell. It's Peter here. I'll take your question. We're working through our life of mine planning process now, and it's an annual exercise we do, and that'll give us an updated line of sight on the Hera mine life. Clearly, though, we see federation coming in quickly after the depletion of the Harrah deposit. Exact timing is to be determined as we go through further evaluation and permitting. But from our point of view, we want to try and maintain continuity through that processing hub, and that's certainly the focus of our efforts. Okay, thanks. I might just add a little bit there, if I can. It's Dan again. With the stage that Federation is up to in terms of drilling and studies, particularly regulatory consent or stat development consent is pretty much the critical path for bringing on of that ore feed to a mill or to the mill in that area. That's not a 6 or 12 month proposition. That is several years, so 2 to 3 years from where we are now, if not perhaps a little bit less. That's the sort of time frames we're talking just to try and quantify there a little bit of Peter's comments. What we can see happening though is with and you'll note that the HERA performance in the first half of the year has been strong. It's if you look at its half year rates on throughput, it's well it's ahead of any guidance we've provided on that particular physical KPI, and that's good. And what that does is have an impact on costs, and we're also seeing through plant reliability efforts, we're also seeing gold recovery improvements on the asset compared to FY 2020 performance. All those go to heart to margin and longevity of the operation to support that continuity that Peter talked about between the oil feeds. Okay. Thanks for that. Thank you. Thank you. Your next question comes from Stephen Hess, Private Investor. Please go ahead. Thanks very much, guys. I just want to know despite taking on debt, will you be maintaining the $0.01 or so dividend this year? I'll take that. It's Dan again. Look, at the end of the day, that's the dividend decision is a pending decision for the Board. We will take that view through the course of this year and with the full year results. I think back to what the strategy of the company is, we're definitely a company focused on returns. There's no doubting that. But the dividend decision, balance sheet robustness is a decision pending through the course of this year for the end of the year. Thanks very much. Thank you. Your next question comes from Glenn Riffon, Private Investor. Yes. My question is to take us on your cash flow. I know basically the cash on hand is the same at the end of the quarter compared to the beginning of the quarter. And that seems to be a fairly large cushion. I'm just wondering any particular plans or timing on that? It's Dan Glynn. I'll take that one. Look, one thing I'd like to point out with that, whilst it has been maintained at over $100,000,000 Dan's point is pertinent in this discussion is that there is still $13,000,000 in stamp duty that is paid and some other associated fees. Look, Glenn, you might need to put your phone on mute. I'm getting a lot of feedback there, if that's convenient for you. So we will assess the use of cash, but most importantly for us for the course of this financial year is the integration and trajectory for DOGS and the running of the both hair and peak as hard as we can. So at this point in time, we are comfortable with the level of cash on the balance sheet. Post these payments, we will be below $100,000,000 And for the size of business in terms of revenue and business footprint now with 3 fully operational cash flow assets, at this stage in time, that cash will remain on the balance sheet. Thank you. Your next question comes from Anthony Wallace, Private Investor. Please go ahead. Harmony, we're not getting any voice through from Anthony. Not a problem. Thank you. There are no further questions at this time. I'll now hand back to Mr. Clifford for closing remarks. Thanks, Harmony. In closing, I just want to point out clearly, again, we're on track to guidance. In fact, have improved our cost guidance on Hera and Peep as a group, and we remain firmly focused on the DAS integration, but really importantly, the operational performance KPI trajectory to bring that asset into the long ranges provided in the investor briefing on that acquisition. From a strategy perspective, we are very much focused on what we call the value levers. And I've stated the strategy a couple of times. And in summary, why I'd like to close this session is to really point out what those value levers are and how we're executing those. Firstly, it's sweat and extend with a prioritization of the highest NSR to the mills. I think the quarterly performance will clearly show the work that has gone into both Hera and Pete to get to that point. Investment with tension between exploration and other investments aimed at increased reserves and reducing our group all in sustaining cost is the 2nd key lever for the business. We've executed on the DAGS acquisition. We are, as I mentioned earlier, focused on bringing that in that the improvement trajectory of that asset into our group. That does do both improve our reserve base and reduce our group all in sustaining costs with those LOM run rates. And then thirdly, creating that long term value and returns growth importantly returns growth for an asset portfolio approach and a commodity mix. These are in summary what we are focused on as a company and that execution of that strategy is unfolding in front of us. And we're looking forward to particularly the upcoming news flow of our activities on the ground over the next 6 months. Imminently is the resource update for Federation, and that will be followed by the half one interim results during February. The various marketing pushes within the business commencing in earnest during the March quarter this year. And group exploration update is there is becoming pending, obviously, disclosure around the exploration as we get critical mass in that news flow group exploration update during the course of the quarter and ahead of the March quarterly production report due in mid April. So again, thank you for your time this morning. We're on track for our guidance and very much focused on the delivery of the company's performance through the course of the year. Thank you very much.