Earnings Call: Q2 2020

Jul 24, 2020

Earnings release

Hello, and welcome to MMG's 2020 second quarter production report teleconference. This report and today's discussion cover the operational performance of MMG's assets for the June quarter. We will also provide an update on MMG's ongoing response to the COVID-19 outbreak. Joining us today are Geoffrey Gao, Chief Executive Officer, Ross Carroll, MMG's Chief Financial Officer, and Mr. Wei Jianxian, Executive General Manager, Americas. Other members of the MMG executive team are also on the line together with Mr. Sam Rodda in his capacity of overseeing MMG's Australian operations during the second quarter. In compliance with local regulations, we are hosting this call from multiple locations, so please bear with us should there be any technical difficulties. Thank you for joining us. I'll now hand over to Geoffrey, who will discuss the highlights in the report, after which there'll be an opportunity to ask questions. Thank you, Blake, and hello to everyone who has dialed in. As everyone on the line today would be aware, at MMG, our first value is safety. In the second quarter, our operations recorded a total recordable injury frequency rate of 2.34 per million hours worked. This result is slightly higher than we would typically expect, but one that is consistent with MMG's position as a global leader in the industry when it comes to safety. Before I discuss the operational performance of our mining assets, I would like to provide update on MMG's response to the COVID-19 outbreak. Heeding the early lessons of our major shareholder regarding COVID-19, MMG was proactive from early in 2020, establishing procedures to address the operational risk and safeguard our people. The steps we have taken are tailored to the unique challenges in each region. In addition to minimizing risk for our operations, we have also supported local authorities in their efforts to limit the spread of the virus and assisted host communities. As a result of this action, I am pleased to confirm that to date, we are yet to have any COVID-19 cases identified at an MMG operation. All of our sites have been able to operate continuously over the course of the pandemic. This is not to say that the broad MMG community has not been impacted by this virus. Our extensive pre-screening measures have identified several cases in employees and contractors in the DRC and, in particular, in Peru. For Las Bambas, the most significant consequences of this has been on workforce availability, reliability of logistics, and inevitably, the level of activity at site. We continue to effectively work within constraints, maximizing efficiency at site and working to achieve an effective ramp-up and the resumption of normal operations as circumstances allow. Despite the challenges presented by COVID-19, MMG produced around 77,000 tons of copper and 60,000 tons of zinc across its operations over the second quarter. Other than Las Bambas, we maintain existing production and cost guidance for all of our sites. Las Bambas continued to contributed over 58,000 tons of copper to this quarter's result. This was 26% below the prior period, with the impact of COVID-19 being the key factor. The team at Las Bambas was able to maintain mining and processing activity at site on a continuous basis over the quarter. However, production levels were directly impacted by the availability of our workforce. Average shift availability and mine activity for the quarter was approximately 65% and 75%, respectively. With this reduced availability, mining activities focused on accessible ore, with some planned waste movement being deferred. Workforce availability improved significantly over June, and we expect 85% to be achieved over the third quarter, with near 100% mine operation. Concentrate transport was also impacted by COVID-19 restrictions over the period, in particular during April. A steady ramp-up over May and June has assisted us in reducing the balance of concentrate stock at site. However, we remain conscious of the potential for ongoing impacts to both road and rail logistics due to the high number of cases of COVID-19 across South America. Finally, on concentrate transport. Unfortunately, earlier this week, a number of concentrate transport trucks were set on fire on the southern road corridor, 1 kilometer from the city of Espinar in the Cusco region. While the protest was not related to Las Bambas, we have worked closely with the government and law enforcement to ensure the safe passage of concentrate convoys. While active dialogue with community is an essential part of operating Las Bambas, we deplore this kind of violence, particularly against our people and contractors. On a more positive note, we recently completed a de-bottlenecking project of the molybdenum plant. A gradual ramp-up is ongoing, and we anticipate increased molybdenum production levels over coming periods. COVID-19 will continue to impact production at Las Bambas during the second half. While we are effectively managing this challenge, we are not yet able to provide revised guidance. We will, of course, do so once there is greater clarity and operational certainty from a return to full-scale mining and production activity. At Kinsevere, copper cathode production of over 18,000 tons was recorded in the second quarter. As the site continues to demonstrate improved operational performance in 2020, following a shift away from the Mashi pit. The second quarter results for this period were slightly above the prior period, with the wet season having subsided. This also allowed the site team to achieve an increase in mining volume. At a corporate level, the company continues work to progress the assessment of a new phase in the Kinsevere project. Seeing the processing of sulfide ores and the addition of a cobalt circuit to the operation, I anticipate that we will reach a decision on this project during the second half of the year. Turning now to our zinc operations. Dugald River delivered over 43,600 tons of zinc during the quarter, which was 22% above both the prior year comparative and the first quarter 2020 period. This pleasing result was underpinned by increased ore mining, with results emerging from a focus on opening new mining fronts, which led to a record month for stope ore during the period. The resulting steady flow of ore to the mill, together with a sustained improvement in recovery levels, also supported the production outcome. This work will be of great importance for future metal production, with current grade levels anticipated to continue over coming periods. At Rosebery, zinc production of over 16,400 tons was slightly below levels achieved in the first quarter, and 22% below the results for the prior year comparative period. As previously advised, this decline in production compared to prior years reflects the anticipated decline in ore grade as mining activity moves into deeper areas. Seismic events in 2019 have also continued to constrain mining activity, indirectly impacting on production. We anticipate regaining access to impacted areas shortly. In the interim, the team on site has developed lower-risk mining areas that will enhance mine flexibility and our response to future seismic events. Regarding the longer-term future of Rosebery, we remain committed to extending the operating life of this site and continue a resource extension drilling program. I am now happy to take your questions. I would ask that all questions to be directed to me in the first instance. I will then call on members of the executive team to respond as appropriate. Please, can all questions be asked in English, and we will arrange for translation for Mr. Wei to be able to address Las Bambas-related matters. I will hand over to the moderator. Thank you. If you wish to ask a question, please press star, then 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star and then 2. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Lawrence Lau from BOCI. Please go ahead. Hi. Thank you. I have a couple of questions. First of all, I would like to know more about the current status of the operation in Las Bambas. You mentioned about road blocking, is the road clear now? What kind of productivity at the current status compared with the normal level? Secondly, you mentioned in the last time, we have seen that you have done an interest rate swap. I would like to know at what level you have fixed the interest rate on those loans concerned. Finally, what is your latest guidance on the CapEx, given the likely delay of the project in Las Bambas? Thank you. Okay. Thank you. I will ask Mr. Wei to answer the first question, and then our CFO, Ross, will address the following two questions. Please make the translation of the first question to Mr. Wei. Oh, okay. Sorry. Mr. Lau, in answering your Las Bambas related question. Las Bambas has been able to maintain the continuous operation during the COVID-19 pandemic. Activity levels have fluctuated. However, during the second quarter, were driven directly by the availability of Las Bambas workforce. The workforce rate fluctuated on a shift change base of 65% of the average, and the average level of mining capacity for the quarter was at 75% of normal levels. Currently, Las Bambas is operating at 95% with an average of 75% of the workforce available. The expectation for next quarter is to operate at 100% with an average of 85% workforce levels on site. Thank you. Thank you. Thank you. It's Ross Carroll here, and I'll answer the two finance related questions. Firstly, with the interest rate swap, we've effectively hedged the LIBOR rate for half our exposure for the next five years, and we've locked in an interest rate of 0.43%. That is well below what it has been over the last couple of years. At different times over the last couple of years, we've been looking at a rate of nearly 2%. So it's quite a significant saving, and we're happy to lock in that rate, as I said, at 0.43%. In the second question in relation to the CapEx, our CapEx guidance was $600 million-$700 million initially. We'd probably be in a better position to give an updated revision on that at our half year accounts, which will be released next month. But certainly, you could expect it to come in, so at the low end of the $600 million-$700 million, if not even lower again, because obviously with the COVID-19 virus, we've had to curtail some activities so that we can maximize production. So that has meant that some CapEx projects have been delayed slightly. But as I said, we'll give an update on that at the half year results in late August. Thank you. Thank you, Ross. Thank you. Your next question comes from Han Fu from JP Morgan. Please go ahead. Hi, thank you Geoffrey and management for the update. Actually the first asker has already bring up some of the questions. The remaining one from my side is that, can you give us an idea of how the Las Bambas location is versus the epidemic center of current outbreak in Peru? And is that neighboring communities are also heavily impacted or is that Las Bambas is remotely located and less affected? And the second one is that, could you give us a bit more context on the convoy truck incident? Whereas has the road been cleared so far? And what's their demand behind the protest? A bit context on that would be great. And the third one is just a clarification for the briefing part. I didn't hear quite clearly, did you say that in the Ucayali River the ore grade decline will continue or the current ore grade level will continue into foreseeable future? So yeah, that will be questions from my side, thanks. 富含，你好，我是Maggie。不好意思，刚刚的第一个问题我没有听很清楚。我听到了第二个关于车队卡车事件的背景以及其背后的诉求。第三个与乌卡亚利河有关。我可以请你重复第一个问题吗？这样我就可以清楚地解释。 Yeah, the first question. Sure. The first question is, can you comment a bit about the COVID-19 situation surrounding the Las Bambas area? Is Las Bambas remotely located so that area is less affected? Or is it also like the pandemic is very prevalent in the surrounding regions? Thank you. 魏总您好，刚刚打电话问问题的是来自JP Morgan的富含。他的问题有三个，其中两个是和Las Bambas相关的。第一个就是在整个秘鲁的新冠疫情爆发期间，我们知道邦巴斯是处于一个比较偏远的地区，那是不是就是邦巴斯地区受到新冠疫情爆发的影响稍微较少，还是和其他地区爆发的情况比较类似。第二个问题就是在Espinar发生的对车队的一些袭击。富含希望知道一些更多的背景，以及当地社区进行堵路，他们提出的具体诉求是什么。谢谢。关于第一个问题，我问一下Maggie，那个是指秘鲁的邦巴斯周边的疫情吗？对，这是指，因为咱们邦巴斯不是处于比较偏远的安第斯山区吗？就是说它受到疫情的冲击，会不会比利马或者其他一些地区要稍微好，因为它比较偏远。就是疫情没有那么严重。目前来看，邦巴斯所在的区域，就是阿普里马克山区，目前的疫情比周边的Cusco和阿雷基帕感染的情况要轻。但是从目前这个经济冲击以后，随着矿业走廊那边的经济活动的冲击，可能也会带来社区的疫情的一些增加。明白。这是关于疫情的情况。明白。富含, Mr. Wei just mentioned, because Las Bambas is remotely located in the Apurímac region, so the impact of the COVID-19 is less impacted compared with Cusco and the other city areas. However, because of the economic interactions that we do see a little bit increase in few communities around the Las Bambas area. 关于Las Bambas这个，Maggie你好，关于堵路的情况，我再报告一下。在上周一的7月20号，Las Bambas的承包商车队在距离库斯科地区Espinar市101处的南部公路走廊上的一辆空挂的卡车和一辆四轮车被点火焚烧。这两辆车是承包商车队的一部分。抗议者截停了车辆后，向汽车喷洒了汽油，并纵火焚烧了车辆。两辆车的驾驶员受到抗议者的一些威胁，并受伤。目前这两名驾驶员现在已安全并受到了照顾。目前的社区的抗议者正在进行阻路。Antamina和政府的官员也都发表了声明，对暴力感到遗憾，并请求恢复谈判。过去几天中，一些社区成员采取了进一步的行动，反对Antamina的矿山运营，包括项目建设。目前道路仍被封锁。社区的要求，秘鲁总理和总统的内阁部长会面来解决这个问题。魏总，另外Fu Han还问到社区的一些需求相关的问题。需求的问题，主要是Antamina这个社区有一个补偿的问题，对每个人古以前所有的一个补偿的问题。这样的一个诉求，对Antamina矿山的一个提出的诉求。这个诉求没有得到社区的满意，他们就开始启动了这次的阻路的抗议活动。明白. Fu Han, this happened on the 20th of July on Monday. One concentrate truck and a four-wheel drive were set on fire on the southern road corridor, which is one kilometer from the city of Espinar in the Cusco region. These two vehicles are part of the convoy, and these two cars were stopping by the protesters, and they sprayed the gasoline and set fire to the vehicles. The drivers of both vehicles who were threatened by the protesters suffered injuries and now are safe and receiving care. The blockade is still in place by community protesters. Antamina and the government officials have released a statement both regretting the violence and imploring for a return to negotiation. There have been further acts taken by some community members in the past few days against the Antamina operation, and the road remains blocked. The community is demanding the presence of Peruvian Prime Minister and other cabinet ministers to resolve this issue. The demand related to the roadblock is again related to the compensation, but this issue does not involve Las Bambas. Thank you. Fu Han, your third question related to Dugald River. In my briefing, in fact, the key message about Dugald River in the second quarter is we got higher mining volume, we got better recovery, but we said the grade level was lower than our anticipation. You can see from our production report the average grade of ore mined in the second quarter is 10.28%. We are expecting this ore grade level will continue over coming period. I think that's a very fine message. Okay, got you. Maggie, thanks. Thank you. Your next question comes from Jack Shang from Citi Research. Please go ahead. Hey, morning Geoffrey, Ross and Maggie. Thanks for the presentation. Two questions. First one regarding the nature of the community issue. It seems that over the past few quarters, there has been more frequent roadblocks, and it seems that the local communities will just demand for money, and maybe probably as long as they spend them all, they will block the road again. So are there any solutions that you can foresee at this moment to solve this issue more permanently? Otherwise, it becomes more of a normal disruption every year to your Las Bambas operation. So the overall nature and how do you see the solutions potentially to get out of this over the medium term? That's my first question. And the second one is regarding Las Bambas operation sales. I recall that due to the last year's roadblock, you already built up, I think, over 50,000 tons of copper containing inventory at Las Bambas. What is the inventory level now? Was it the case that your sales volume were also affected during the second quarter? I imagine so, but I want to understand it a little bit better. Have you been building more inventory on site over the second quarter? Another question following up on this is, with the operation level utilization affected by over 20% quarter-on-quarter down in the second quarter, how was the cost-levels, how did you manage to maintain the production cost as Las Bambas? Thank you very much. They are all related to Las Bambas. I will ask the translation being made to Mr. Wei. Regarding the cost performance, maybe our CFO Ross can also add some comments after Mr. Wei. Thanks Jeffrey。魏总您好，刚刚这个问题是来自花旗银行的尚游，他其中提到的两个问题都是和Las Bambas相关的。第一个问题就是尚游希望了解更多有关Las Bambas社区问题的一些具体的特性，因为过去几个季度我们看到社区的抗议活动其实是越来越频繁的了。Las Bambas在解决社区抗议方面，是否有一些长期以及比较永久的解决方案，就是总体来说中长期的解决方案。第二个就是有关Las Bambas的运营方面，因为去年咱们Las Bambas矿山其实是在矿上有五万多的库存的。目前这个Las Bambas的库存的水平是多少？另外就是由于堵路以及COVID疫情呢，咱们在第二季度的销售量是否受到影响？另外还有一个问题就是有关这个Las Bambas在成本管理上，因为生产其实是受到大概25%左右的影响，那Las Bambas在成本管理上是否有一些举措，还是有一些具体的情况希望了解一下。另外，魏总您回答完了以后，Ross就成本管理方面也会提一些意见和回答，谢谢。谢谢。我下面回答第一个问题，就是Las Bambas路和提高矿山运输的替代方案，长期这样的一个方案。为了Las Bambas建立一个更加安全可靠的一个运输方案，目前是一个Las Bambas稳定运营的一个关键，也能够支持未来的长期发展。我们考虑通过公路的一个升级，加强扬尘及震动管理，持续改善目前的现有道路和铁路运输，同时继续研究替代运输线路和绕路方案。尽管如此，公路沿途有很多偏远的社区，他们的简单动作都将对我们的运输造成一些影响。越来越多地发现外部的一些煽动者迅速奔向社区赔偿，并从中牟争。2019年逮捕了数名的煽动分子。我们继续努力培养社区的关系，提供发展和商业的机会，并及时回复社区投诉，以保持道路的畅通。我们将会不断地努力保持与各方的积极对话。总体来看，我们继续与政府、社区和第三方紧密合作，研究运输方案，包括替代公路、线路、管道、铁路等方案，以及多种结合的方案。这些解决方案对Las Bambas的未来发展至关重要。我们已经开始了管道运输方案的可行性研究，当然仍处在最早期的一个阶段。这是关于道路的问题。我把情况进行一块说了吗？ [Foreign language] Jack, Mr. Wei just answer some answers around the logistic, the concentrate transport, I think that's related to the sales as well. We try to build a safe and reliable logistic solution for the founders, which is critical to the current operation and supporting the future expansion. The road and rail option continues to be improved with road upgrades, better management of dust and vibration, and the investigation of alternate routes or bypass options. Regardless, however, the road is very exposed to simple actions by the many remote communities through which the road travels. Increasingly the actions of external agitators seeking a share of community compensation is playing a negative role, with a number of arrests related to the extortion carried out in 2019. We continue to work very closely and hard to build relationships, provide the development and the business opportunities, and deal quickly with the grievance to maintain road access. We remain constructive dialogue with the key stakeholders. From the medium term, we continue to work together with governments, community and third parties on transport options, including alternate road routes, pipeline and rail options, and a combination of all these. There are longer term solutions, but it is critical to the future of Las Bambas. We also have begun a study in relation to a pipeline option, but this remains in the very early stage of the development. 好，thank you, Maggie。Just follow up。魏总，谢谢你的回复。我们都希望这个问题尽早解决。因为我们没去过，没跟当地的居民，这些社区的情况了解过，就是它这个事情的背后是不是说其实他们就是要时不时地来要点钱，或者说当地的居民是要点好处，那如果是那样的话，你就算绕开了，他也会堵你嘛，对不对？因为他的目的不是因为你那个车队给他的噪音或环境影响，对吧？那不是你绕开就能绕得开的，就算你做一个pipeline，那也有可能他也会来搞事情，他会把你pipeline给堵掉，或者是破坏掉。因为他的目的其实不是为了不让你打扰他，他的目的其实就是为了要钱。就是这个事情的本质是不是这样的一个情况，那就比较难搞嘛，如果是这样的话你会怎么办呢？谢谢。谢谢。那魏总，我把刚刚—— 是的。 Jack 的那个问题再用英文问一下，这样我们其他的同事也知道。谢谢。魏总，刚刚我把Jack的问题用英文也说了一下，现在请您回答他的问题。从邦马思的运输情况来看，因为它比较远，大概有700多公里的运输线路，主要有400多公里是公路运输，300公里是公路和铁路运输。这是邦马思区别于其他矿山特有的一个运输方式。从目前整个运输南部矿业的运输走廊的设计情况来看，大概有800多个社区。随着地主社会的贫困的这个情况呢，大多数都是更多地向矿业公司提出更多的利益诉求。尽管邦马思在这方面都做了大量的社区工作、援助工作，解决了很多问题，但是他们的欲望、利益的诉求越来越多，越来越突变。从目前我们所说的几个方案情况来看，更多的是化解风险、减少风险，为我们的运输提供一个稳定的运输环境。明白。好，谢谢。 Thank you. 我说一下库存的情况吗？ Hello, can you hear me? Hello. Yep。 Yes。 I have some on Las Bambas. I want to know about the current situation. Currently, what is your condition for logistics for Las Bambas? Currently, Las Bambas is not able to transport copper concentrate or have secured another route. I did not get the answer for the questions from the previous analyst. What is your inventory level of the copper concentrate in Las Bambas? I believe there will be quite considerable inventories for the copper concentrate. I am just wondering if the company is able to sell and ship this concentrate to the customers in the second half. I understand that you are making an announcement for an earning warning for the first quarter. I read that comment, but I just want the specific reason for this earning, the making quite considerable losses for the first quarter. That is all the question from me. Okay。 Las Bambas, Maggie. Thank you. I just clarify your question please. The first one is you would like to know the current logistic of Las Bambas and the current inventory level, right? Are we able to reduce the stock in the second half? The second question is on the profit warning. 魏总，您好，在吧。魏总，刚刚是DBS银行的分析师的问题。第一个是他想了解一下目前Las Bambas的运输情况，就是铜精矿运输的一个情况。另外，咱们是否有一些其他的路线或者其他的方案？第二个问题就是有关矿山目前的库存状况是什么样的？另外我们是否有可能在下半年将矿山的库存进行一个运输？第二个问题，有关盈利预警的问题，会由CFO进行回答。好的。目前这个Las Bambas矿山的库存是11.68万，是湿吨的铜精矿库存，占矿山库存总重量的36%。我们已经按照计划，我们在四季度来减少库存。但是在这个整个运输这一块子，还要根据新冠疫情的情况，包括我们运输的卡车司机，包括火车的一些员工的到岗情况来决定我们整个运输的总量。好的，谢谢。Sorry, currently the site stock level is 116,000 wet metric tons, which represents 36% of the total site storage capacity used. Inventories are planned to be reduced in September, but this is subject to the availability of truck operators and the train crew affected by COVID-19. Thanks. Ross, on the profit warning. Sorry, I didn't quite understand what the question was about the profit warning. Yeah. My question is, what is the major reason for the profit warning? Is it from the operating losses from Las Bambas, or if there are any other reasons? What would be the cost level of the Las Bambas in the first half, how much is increased compared to the last year? Yep. Is there any specific other, like provision losses, something is affected to the losses in the first half? I'll start with the profit warning question. The reason for the profit warning is twofold. Firstly, with the COVID, we saw a significant drop in prices, particularly in the month of February, so that copper price dropped from $2.70 down to hit a low of about $2.10. The zinc price dropped from around about $1 down to below $0.80. The price has a big impact on us, and I think if you look at our previous materials, you'll see how much it is. But roughly like a $0.10 drop in the copper price is about a $90 million drop in profits. That was one impact. The other impact was operations, primarily at Las Bambas, because you would have seen that the three other operations have had strong quarters, then strong half. At Las Bambas, we had the issues with the conveyor belt earlier in the year, and then we've been effectively impacted by COVID since about the middle of March, when the state of emergency was declared. So it's a combination of price, the initial production problems at Las Bambas, plus the impact of the COVID. Now, with the cost, we will disclose the cost at Las Bambas when we release our half year results. But as Geoffrey said earlier, we're not giving revised guidance on Las Bambas until the whole COVID situation becomes clearer, particularly in Peru, where it's quite a significant issue there at the moment. But as far as cost management, obviously we're very focused on that. We've reduced maintenance cost, not necessarily because we wanted to, but because we can't get enough people on site. We've also reduced our community spend because we're actually physically not able to get into the communities and spend that money. Then there's just really deferral of other discretionary costs. People aren't traveling and all sorts of things. But obviously, given the tough economic conditions, we are trying to limit our expenditure as much as we could. OK。 Thank you, Ross. Yeah. Also, just to clarify one thing, that the stock level, because we gave the number of wet metric tons before, and Mr. Wei just mentioned that is the physical tons of stock level, that's 111,800 tons. That is consistent to the number we disclosed in the production report, that is equivalent to 38,000 metal tons. Just to clarify that. Thanks. Thank you, Gray. Thank you. Thank you. Your next question comes from Jack Shang from Citi Research. Please go ahead. Hey, sorry, it is me again. Just want to follow up. Just know that Geoffrey mentioned that was a physical ton, and in terms of metal ton, apple to apple. I would just want to clarify, it is 38,000 metal contained, and if that is apple to apple, it means that over the first half, Las Bambas has managed to sell more than its production. As a result, the inventory outside declines, because I recall that at the end of last year, it has been over 50,000 tons, right? This is just the first point I want to clarify. The second one was regarding to cost and management downsides. Ross mentioned that you are actually cutting the expenditures, of course, on site. How does that work in a situation where your utilization has been significantly affected over the second quarter? Thanks. Thank you. The first one, yeah. You are right. In the first half, we shipped more copper concentrate than we produced. So we got reduced stock level, concentrate stock level. As we said in the recent report, we expect we can ship all the concentrate stocks in the second half. About- the cost, our managers try to control the cost or reduce the cost. I would like Ross to comment on this. Yeah. Thanks, Jack. With the cost, because of the manpower shortages on site, and because of the COVID restrictions, we haven't been able to get as many people on site. So now, even in the mine, for instance, we focused on ore mining, somewhat at the expense of waste stripping, because obviously we're trying to keep production going as high as we can initially. We will have had lower waste mining costs. We've also had to defer some maintenance, whether it be to the fixed plant or the mobile plant, again, because we just can't get enough people on site. I think Mr. Wei mentioned earlier, we're roughly around 75%-80% of manning on site. Obviously, having less people on site means we'll be spending less money. That's a bit of a way of deferral. As I also mentioned in the previous question, we're tightening our belts as much as we can because we have reported a loss, and we've got to do everything we can to mitigate that during the year. Anywhere where we had discretionary spend, we've stopped that where we could. I think when the half-year results come out, I think you'll see that the cash production costs have reduced significantly. It's not just at Las Bambas, but at the other sites as well. Thank you very much. Thank you. That does conclude our question and answer session. I'll now hand back to Mr. Gao for closing remarks. Okay. Okay. Thank you. In closing, let me reaffirm that my management team and I remain committed to safely guiding MMG, its employees, and members of our host community through this volatile period. Despite the challenges faced, we remain positive about the future of not only the company, but the regions in which we operate and the fundamental strength of our key commodity. I look forward to speaking with you in further detail at our interim results presentation in August. Thanks for joining us today. If you have any further questions, please follow up with our invest relations or corporate affairs teams. Goodbye.