Good morning. It's so good to see so many friendly faces again, back here, back in London. It's been a while. But great to see you all. I'm sorry I had to put my glasses on. Time goes by, and that goes for everybody, right? Well, good morning. I'm Eduardo Hochschild, Chairman of Hochschild Mining, which is 110 years old. And although I'm getting older, I'm not 110 years old yet. I'm not sure I'm ever going to reach that, but Hochschild Mining has. I'm delighted to welcome you to our capital markets event, and as I say, seeing you again, it's after so many difficult times, it's great. With me today is our management team, that Eduardo Landín, our new CEO, is going to present. And all of them are here.
I know Eduardo Landín for almost 20 years by now. He claims he's been with me for more than 20 years. He's only been with us for 17.5 years. That that sound like 20, but anyhow, congratulations, Eduardo. Good to have you with us. Also with me is my son, Nicolas, and to surprise, his name is not Eduardo. The name of every CEO and of course, VP, is Eduardo, but Nicolas is my son. He's sitting right, right here. He is in charge of business development. Can I just say that 2023 draws to a close? I believe that we are now in a very, very strong position, and that comment will be proven by Eduardo and Eduardo Landín, of course, and the team in the next minutes, half an hour, hour-and-a-half.
I don't know how long it's going to take, but... Please feel free to ask every question you might want. We have recently been boosted by a new 20-year permit for our flagship Inmaculada mine. 20 years as a miner is difficult, very difficult, you all know, but at least it gives us a long-term view for the Inmaculada mine, with a lot of ore reserves, and that the geologists will show. Our low-cost mine, which is coming on stream, which is coming on production, Mara Rosa, which is on time, on budget. Yes, it is on time, on budget. So we'll be pouring the first gold by the beginning of next year for sure. We also have exciting brownfield exploration program, and in particular, in the recent discovery of the Royropata deposit close to our Pallancata mine.
So I hope today will emphasize that we clearly have a clear path to growing production while reducing cost, and that our geologist and the mine COO will prove that. Success is underpinned by doing things properly, and that we are. We are doing things the right way, with the right people, and committed for a long term in the right direction. I can keep on going, but I don't think you're here to listen to me. You're here to listen to the new CEO, Eduardo Landín, who will be with you for the next hour. Welcome, Eduardo.
Thank you very much. Let me bring my stuff. Here we go. Good morning, everyone, and welcome to the Capital Market Day. We have been working for this presentation for the past three months, together with the budget 2024, and we are very, very happy to finalize this new strategy. That basically what we are looking at is to focus on the core business, on the core assets, to increase production and also to lowering cost. Let me start presenting myself. As I, Eduardo said, I am Eduardo Landin. I am a mechanical engineer by training. I've been with the company almost 18 years, and I am in this new role as CEO since August 2023. Today also, we have our team here. Let me start presenting them. We have Eduardo Noriega.
Eduardo is our Chief Financial Officer and been with the company for 16 years. Then we have Rodrigo Nunes. He's the Chief Operating Officer. He's Brazilian. He has been with the company for three years, and he has a robust experience in the mining sector. Then we have Oscar Garcia. Oscar is the Vice President of geology, of exploration, and been with the company 17 years. We start together in San Jose back in 2006. Then we have José Augusto Palma. José Augusto is the Vice President, legal and corporate affairs, and been with the company 17 years also. And finally, but not least, we have Eduardo Villar, the Vice President of Human Resources, and he has been with the company 25 years.
Here we go, a fantastic team, you know, to develop the new strategy that we will present during this presentation. First of all, today we are going to see the strategy. It's a simplified focus. Then we will talk about Peru. Peru is our country, is where we learn how to do mining. Then we'll go to Brazil, very exciting country, with a new investment. Argentina is an old friend, very high-grade mine, and good expectations now with the new elections. Then we'll see the financial framework. We want to implement a disciplined capital allocation. And finally, the ESG. How do we live ESG at Hochschild Mining? The question here is: Why Hoch offer a compelling investment case?
Well, first of all, we have our flagship mine, Inmaculada, is permitted for the next 20 years, and this is a great opportunity for us to increment high resources - I mean, high-grade resources. We can now say that based on this permit, we can produce 200,000 oz per annum in the next few years. The cost of Inmaculada is set to fall down from Q4 2024 once we spend CapEx that were not spent on year 2022 and 2023. We have an exploration upside, great new mining property now permitted, and the Peruvian government is today with a fully pro-mining attitude. If we go to Mara Rosa in Brazil, here we go. Mara Rosa is a new mine that we have developed in the last two to three years, and we are looking to have the first pour in Q1 2024.
And as we said, it's a very low-cost mine, so happy to have this new asset with us. And Royropata, next to Inmaculada, let me say that Royropata is a deposit that is close by to Pallancata. It's really next door, yeah? So this is a new resource that we will use the actual Pallancata infrastructure, the plant, and all the infrastructure related to this, to this mine. And all these opportunities with capital discipline. All this has to be with a very strong capital discipline to make sure that we repay debt, we finance the growth, and we gave to investors, I mean, to shareholders, capital return. Let me tell you what happened in the last three years. This is really important because people has been worried about Peru and what happened to Hochschild in the last three years. First of all, we have external headwinds.
We had COVID, and the mines were closed for several months. Castillo became president, and the Prime Minister announced that she would close two of our sites in Ayacucho. The Congress removed Castillo, and then there were a lot of protests in Peru that interrupt production. On top of that, Argentina, with 100% inflation. The unofficial peso was three times, or is three times today, to the official one, so that create a very difficult situation at the time that you negotiate with the unions. What we have been doing enabled to transform the business during these headwinds. Well, first of all, we acquired Amarillo, and we put it in production. We start construction, now it's very close to production. Also, we discovered Royropata.
Royropata is a 51 million oz of silver equivalent deposit with very high resource that we will present later to you. We demerge Aclara, and we retain 20% of that asset. We got the environmental permit at Inmaculada, and we restart mine developments and exploration. And finally, we have the Hochschild leadership transition, where today we have a new CEO, me, we have a new COO, Rodrigo, and we have, Eduardo Noriega as a new CFO. He has been a little bit longer than us, a year and a half. But I have to say, we are new on the role, but we have a lot of experience in this company. We have all the history, and we have a very, very solid experience. What we want to do in the future? Well, first of all, Inmaculada is permitted.
Mara Rosa, first production in Q 2024. Royropata, we need to get the permit, and the process is ongoing. Brownfield program now is in place and is restarted. We have exploration potential across all the sites. The disciplined capital allocation in place and an exit strategy for non-core assets. So our strategy is to focus on core assets. But let me tell you, what are we going to do with those non-core assets? And you have here on the right-hand side, Aclara, as I said, we demerge, and we retain 20% of the assets. Snip, we terminate the option in April 2023. Volcan Chile, we are looking at strategic alternatives, and we have Canaccord working on them. And we have already designated, Crespo, Azuca, and Arcata as our non-core assets. What are we going to focus from now on?
We want to focus on Inmaculada, our flagship mine, 20 years permit. Again, I have to say we are too happy with that. Mara Rosa is a mine with 10 years production ahead, very low all-in sustaining cash costs. Royropata, this new high-grade in Pallancata, where we have all the infrastructure. And San Jose, that is keeping a very high-grade mine, is keeping being a very high-grade mine. And there is still potential to look for new resources, and today, with the new elections, the possibility to lower down costs if there is a devaluation greater than inflation. We believe that that is possible. Our new strategy will focus in four key drivers, very simple ones. It's a simple strategy. Brownfield, generating long-term value, extending life of mine, and bringing minable resources. ESG, driving responsibility and respect. World-class safety, we need to continue working on safety.
Today, we are one of the best miners, underground miners, on safety. We have established the 2030 ESG KPIs in line with the global goals, and we have established the net zero carbon emissions for 2050. Going to operational efficiencies, we want to implement a lean philosophy across the company. We want to do process optimization, bringing some consultants to the sites and analyzing mining cycles and everything that could reduce costs. And also, as we demonstrate in the past, we have a proven record of development projects on time, on budget. Finally, as I said, disciplined capital allocation to repay debt, funding growth, capital return, and of course, if there is the opportunity, value accretive M&A. I mean, the market has been asking us for many, many years that we should present projections on production and cost.
That's something that we have been working in the past three to four months based on our life of mine. Let me show you what it will be, our production for the next three years, considering 2024, 2025, and 2026. We will have an increment of 25% in production. That figure doesn't take into account Royropata. Royropata will bring 100,000 oz at a very low all-in sustaining cash cost. And in terms of all-in sustaining cash costs, we will be lowering down cost by 20%. And these figures does not include the exploration upside, because, as you know, when we work life of mine, we work with only existing resources. Let me tell you what is our one of our most or one of the best competitive advantages that we have at Hochschild.
We have built five mines between 2006 and 2023, on time, on budget. I would say that this is unique in the mining sector. Also, we operate underground mines, any underground mines with different mining methods. I mean, we know all of them. But also, we have demonstrate in this time that we are able to operate open-pit mines. We did it in Moris, in Mexico, and now we are doing in Mara Rosa. And also, we have proven that we are able to replace resources on these epithermal deposits, you know, that start with one life of mine. We produce for five years or six years, and then we end up with the same level of resources. That that's the proven track record that we have on exploration. But also, we have been recognized as a leading operator.
We have a solid reputation for the past 50 years, operating mines in Peru. Safety has been a top priority. Today, we have Level 7 DNV frequency rate today about at 1, which is very, very low. We have an excellent technical services team, yeah, that of course is working on the different mining methods and different flow sheets in metallurgic. We have this strong track record on delivering sustaining capital projects. Innovation is part of our core, and we normally bring, as soon as they are available, innovation we bring into the company. Today, we are using telemetry, ventilation on demand, and pumping systems. Something really important for the mining sector is that your planning, because at the end of the day, mine is quite easy, yeah, but you need to plan.
Today, we are using a state-of-the-art software that let us plan the mines in the short terms and in the long term. Go to Brownfield. I would like to show you the history of resource replacement. Let me go to Inmaculada. In 2015, when we start Inmaculada, we used to have 2 million oz of gold. After seven years, we have been able to bring 2.4 million oz of gold of new resources. We have produced 1.7 million oz to the market, and today, seven years after, we have 2.7 million oz on resources. In Pallancata and San Jose, we have continued operation for 16 years with a very low initial life of mine.
The new discovery at Royropata confirmed that even though that we have been working in Pallancata for many, many years, we have the ability to bring new resources at Royropata. Going to the future... At $44 resource cost, I mean, bringing resource to infer resources, it costs us $44 per oz. Between 2016 and 2022, we brought 3.5 million oz of gold. When we think about what is our plans between , 2023 and 2030, we can take three scenarios. The lowest scenario, it will bring us 3.9 million oz of gold, and the upside scenario, we are thinking about 5.2.
In Inmaculada, exactly the same, 2.4 between 2016 and 2022, and a possible upside of 2.9 million oz of gold. This is only near mine, but as you know, we have a huge land package that is already permitted, so it doesn't include the exploration upside, you know, of the regional exploration upside, as we say. Now, let's go to the Peruvian business. Let me talk about the country. Today, Peru is a different country. It's a different country that is willing to receive investment from all over the world. We have Mr. Otárola there. He is the Prime Minister, and in the past few months, he has been at PDAC, he has been at Perumin, promoting mining.
They have strengthened the delivery unit through the Ministry of Economic and Finance in order to push, you know, all these new projects to the country. They have demonstrated that they are willing to bring permits to the table with Zafranal, Inmaculada, our permit, and also Toromocho for Chinalco. On top of that, they have launched several initiatives in order to speed up permits. They have today a high-level commission led by the Prime Minister to facilitate investment. They have a single window for all the mining permits, and also they are bringing new measures to simplify environmental permits and the consultation to communities. In addition to this government situation, I have to talk about the social context. I have to say that the social context has also improved.
Today, the social situation in Ayacucho, where we are, this part of the country, we have a governor that is pro-mining, pro-investment. And also, we are implementing a complete new strategy at the social team at Hochschild. We have brought a new senior manager for community relations, and I expect that she will bring a very solid team to the company in order to review the whole strategy and to try to have a very smooth situation with communities that they are our stakeholders. In sum, talking about Peru, I would say that political stability and I mean, today, Peru, it has the political stability, and it's open to business. There is a pro-mining investment environment, and also the social has improved dramatically from years, like two years ago.
Now, I would like to go to Inmaculada, and I'm going to show you a very nice video of the site. Let me go. What can I say? I feel very, very proud of this state-of-the-art unit. Inmaculada is our flagship mine. As you know, it's located in Ayacucho. It's an underground operation that we commenced back in 2015. Has beaten the guidance ever since we start production. We got now the MEIA permit for the next 20 years, and it has a huge land package to still explore and bring new resources. Let me show you our projections on Inmaculada. Basically, as you can see on production, we will establish that we will maintain a production of around 200,000 oz of gold.
On cost, you can see that, apart from 2024, we will keep a cost of around between $1,300 and $1,400. What happened in 2024, let me explain to you. During the MEIA process in 2022 and 2023, we didn't did many developments and many raises and many facilities. So this year, in 2024, we have budget to do a TSF expansion. We have also budget to expand the waste rock facility. We have also decided to implement a narrow plan, that it will dewater the actual TSF, and it will give us the possibility not to increase capacity in the near future, and also the mine developments that were not done in the two years before. But on top of that, we want to implement different measures, you know, on cost reduction.
We want to increase extraction. Today, we have some spare capacity at the plant, so we want to work on that. We want to increase the mechanized mining methods in order to increase throughput. And of course, we want to increase productivity with a sorting that is coming next year and also with all the innovation that we want to implement, like telemetry, ventilation on demand, and pump automation. Let me tell you, what is the main advantages of these new permits. Let's have a look at the original area of the EIA. The EIA is the initial environmental permit, that area. You can see in red, the veins where we have been produced from year 2015 until year 2023.
Then we go to the new permitted area. You can see the green lines, and all this area is the new permitted area. The new permitted area is 262 hectares. It will include, or it includes, yeah, 558 km of underground development, 152 raise borings, and 5 new mining portals. There is high-grade resources across the life of mine that now is permitted. Also, it will let us construct a new waste rock facility, and all the TSF expansions, and access to a large land package on brownfield. So this will let us, you know, do the exploration and bring the resources in order to maintain these 200,000 oz in the next future....
Now I would like to give the presentation to Oscar Garcia, because I would like him to tell you about the brownfield exploration and all the potentials that we have at Inmaculada. Thank you, Oscar.
Good morning for all of you. It's a pleasure to be here to talking about brownfield exploration. Inmaculada is a fantastic place to explore epithermal and intermediate sulfidation deposit with high gold grade and silver, too. This area, when we're talking about Inmaculada area, we're talking about 44,000 hectares. We divided the exploration into two sides. One is around Angela vein. This is we call near mine exploration, covered by the new MEIA, and the other one is the rest of the property. Now, talking about this area, we divided this area in different places. One is the north of Angela, Eduardo Belt, Angela West, Angela South, and Angela East. Now, our focus is add more resources at Eduardo Belt, in this area. Next year, we move toward to the south to explore a new area at the south side of Angela Belt.
At the same time, we explore around the property. Why? Because in 2030, we expect to add, at Inmaculada area, another 2.5 million oz of gold. And after 2013, we move toward upside to drilling new areas. This year, we start to work in this place, and next year we have a program to develop a detailed geology and geophysics program and San Salvador vein, because the previous mapping show a new area there with new veins. Now, we're talking about detail. Why we explore at Eduardo Belt? It's a very good question. I do this question in a long time, and I studied this place only three years to arrive to this place. We study all of the geology details, temperature of the mineral formation, rocks, lithology, intrusive, all of you could imagine.
And finally, we arrived to Eduardo Belt. I show you now a cross-section. You can see, AA, a cross-section for Eduardo Belt. Then this is a cross-section. When we start the exploration program in 2015, we start with Vilet, Divina. And after this, we moved to Talia, Betty, Susana, Beatriz, Salvador, and in 2021, fantastic discovery, Angela Northeast. This is the reason we think if this area is an area with high gold grade. Look at this, the holes, 6 m with 69 g per ton of gold, 1,000 g per ton of silver. Look at this, this other one, 8.9 m with 96 g per ton of gold, 3,000 g per ton of silver. That is fantastic place. This discovery coming from different geological reason.
But now, what we are doing, we explore the rest of the belt with this long-hole drilling. We use super horizontal long holes with 1,800 m long to explore all of the opportunity in this belt. With this hole, we generate the future, because when we get a new structure, we're coming from surface and start to doing resources. That's all. Thank you, Eduardo.
Thank you. Okay, let me, let me go to Pallancata now. But first of all, as you know, Pallancata is also in Ayacucho, very close by to Inmaculada. It has been an underground operation that commenced back in 2007, and today we have this major brownfield discovery called Royropata. We, we like to call that a new mine, but again, I have to say that it's a new mine that has all the infrastructure of Pallancata in terms of roads, electricity, plant, et cetera. Pallancata is going to go on care and maintenance for the next three years. It will cost us $6.7 million per year until we get the permit in 2027, and we have to add one-off employee termination cost of $8 million on 2023.
But let me tell you why Royropata is such a fantastic discovery. We have a very strong existing resource of 700,000 oz of gold. We have the geological potential to double that, you know, once we start drilling in the continuation that Oscar will tell you later. And we have already studied all the permits, studies, engineering studies, and environmental permits are ongoing. Some figures around Royropata. We have 3 million tons, we have 1.9 g of gold, more than 500 g of silver, 700,000 oz of gold in total equivalent, and the most important thing, average width of this mineralization, 5 m.
So with these 5 m, we can apply massive mining methods, long holes, for example, and that will let us get a lowest cost of $1,000-$1,100. It will be producing from 2027, 100,000 oz equivalent per year. The CapEx is between $55 million-$65 million, you know, to start up this, this, this new deposit. And the internal return, it will be between 45% and 55%. So therefore, it's a fantastic opportunity for Hochschild to have a new mine producing 100,000 oz with very, very low cost and only with a CapEx of around $60 million. But why I believe that it will be much easier to get the Royropata permit than the Inmaculada permit?
Well, first of all, the current political situation in Peru is, as I told you, much better: social and political. Second, thank goodness we don't have COVID anymore. Second, we have a reduced scope. If we compare the scope of Royropata versus Inmaculada, today we have the Royropata is, I would say, less than half. And we can see some figures there, but for example, years, 20 for Inmaculada, 10 for Royropata. The amount of underground developments, 500 km versus 200 km. I'm not going to go through all of them, but at the end of the day, I mean, the smallest scope will let the SENACE, which is the authority, to analyze this document quicker. And also, there is something important, which is Royropata is not in a protected area. So that mean that it will be easier.
On top of that, we have learned a lot from the MEIA process at Inmaculada, and we have already implement all the lesson learns from that process. Today, we have a steering committee in place. We have a PMO structure, with someone who is totally responsible for the process. We have select a single firm, engineering firm, to do the environmental part and also the engineering part. And we have a QAQC company going in parallel with engineering to make sure that at the end of the day, when they give us the document, it will be a state-of-the-art document, you know, in order to present to the government and make sure that the amount of questions coming back, it will be just a few. Now, let Oscar again to tell you about the Royropata, the Royropata geology.
I need my finger because it's not working. Okay, this is Pallancata map. In this area, you can see this is all Pallancata vein there, Royropata area there, and the other side to explore is Pacapausa. Now, we are focused in Royropata there. Royropata is a place. The last vein discovery there is Marco vein. When we're talking about 15 million oz of equivalent silver, we're talking about Marco veins. Okay, the next one, please. Marco veins is not only one vein. It's a system of multiple veins. We know this because we do geology interpretation, geology mapping, et cetera. We think Marco is still open for another 900 m. That gave you the chance to add another 15 million oz. Yes. The next one, please. This is the résumé of what is Marco vein. You can see there, in this place is many veins.
The last discovery was Marco. Marco vein is still open. Look at the last hole, 70 m with 8 g per ton of gold, 2,500 g per ton of silver. That is high-grade deposit. Next year, we start to drilling the extension of Marco vein. But geology is difficult. I know many time the people talking, "What these geology do to find resources?" If you... One of you have been here in 2018, in the capital market day, I put a red circle, this one, and said to all of you, "This is the next vein in this deposit." And what happened five years ago? The vein is there, and this is Marco. And this is have a choice to increase, increase resources at this place. That's okay. Thank you, Eduardo.
Thank you very much, Oscar. Okay, after this wonderful news about the Royropata, is the time to go to Brazil. And I'm going to show you a video of the progress in Mara Rosa, first of all. Okay, what has been our experience in Brazil? Our experience in Brazil has been really good. Let me tell you about the economic stability. First of all, with the new Lula government, we feel that that stability continues. We have a very, very strong federal support for mining. The state of Goiás is the one that is permitting and regulating the mining activity, and also is the one that give us the permits. And we—I mean, all the permits for Mara Rosa has already been granted.
In terms of local infrastructure, Mara Rosa is a city that is totally connected to the main roads, to the main highways, and also we are connected already to the national grid, so we have electricity. And in terms of people, which is very important for us, today we have in place a very senior management team, very well qualified. The workforce is also very well qualified, and available very close to the project. We have regional contractors with huge experience. I mean, Goiás is a state of mining, and we have a lot of contractors. And the better thing is that the community is extremely happy with our presence and with the fact that the mining project is going to be a benefit for them. Okay, let me call now Rodrigo Nunes. He's going to present us Mara Rosa. As I said to the...
At the beginning of the presentation, he's Brazilian, and he's the best one that he can present this opportunity. Go ahead, Rodrigo. Thank you.
Thank you very much, Eduardo. Good morning, everyone. It's a pleasure to be here and to present the update on our very exciting Mara Rosa project. To give a magnitude of Mara Rosa, Mara Rosa is a conventional truck and shovel open-pit mine that has currently over 10 years of mine life based on the proven and probable reserves. A very interesting exploration upside that I'm going to mention afterwards. We are expecting to produce about 95,000 oz a year, starting from 2024 for next three years, as you can see from the projections, with a very competitive all-in sustaining cash cost of about $1,000 an oz. Mara Rosa is a 7,000 tons per day processing plant, regular CIL. Here it shows the importance of Mara Rosa for Hochschild business.
With the addition of Mara Rosa, we have increased our reserves in about 75%. The production, once Mara Rosa starts, will increase in 34% on a pro forma basis in comparison to 2023. But more importantly, with a very strong all-in sustaining cash cost of $1,000 an oz, which we will decrease significantly our all-in sustaining cash cost going forward. As you could see from the video, we're bringing very exciting news on the construction for Mara Rosa. The project is slightly ahead of time and on budget. Right now, we are at 99% overall progress. We can say that the dry stack for construction, which was showing 98%, is now fully completed; it was completed this week. The project is fully connected to the national grid now.
The 138 kV power line, as well as the main substation, was fully built, fully commissioned, and is now operational, which would allow us to start commissioning of the main infrastructure. The dry circuit, meaning the three-stage crushing and screening, are now fully commissioned and also operational. We have seen the video, the crushed material already in the stockpile. We are working hard now on completing the electrical mechanical assembling of the wet circuiting, meaning the ball mill CIL tanks, as well as elution and regeneration in refinery circuit. We are very proud to say that the project has completed now over 4.2 million hours without lost time accident.
And it's a very amazing achievement in a construction project, and just reinforce how safety is our top priority in the company. We applied for the operational permits. In Brazil, you have a three-stage permits. The LP, which is the previous license to the IA, which we already had, the installation license that we have for all the components, which we are building now. And once all these components are built, we then get the operational permits. Because we are now pretty much completing the construction, we have applied for the operational permits, and we expect to receive that very, very soon, before year-end. The ESG programs are advancing well. Right now, we have over 1,000 visitors to our Knowledge Trail, which is an ESG program that we have close to site.
Most of them from the students, our future operators in the region. Purchases from local suppliers has been over $9 million to date. We have over 300 people from nearby communities, mainly the Marajoara City and the Amarali na City, working there, in the project currently. This is the timeline for the construction. Lots of that milestones has been already fulfilled. The work hard now is on the electrical mechanical assembling of the wet circuit that we expect to complete by year-end. Commissioning of some of the circuits, as I've mentioned, has already started, and we are expecting to complete commission the first quarter of next year, and during that commissioning, we will have the good news on the first pour of gold.
Mara Rosa is not only about construction operation, but also we have bought that project in 2022 because of the very interesting exploration upside that the property has. If you look at the right side of the picture, we can see the current reserves outlined in this yellow form. That's the Posse. That's the main area of the open pit, and all the 900,000 oz is there. But that Posse, it's a shear zone, and along with that shear zone, we have identified additional targets. They are the Estrela, Pastinho North, Posse South, that we are intending starting drilling for them for next year. We have put a very interesting exploration budget associated to that. But beyond the Posse main shear, we have also identified two other shear zones.
Those are Martinho and Caxias, which our exploration team also intend on drilling. This, what we're calling, this is just the near mine portion of it, our first focus, because it's very close to the mine. This represents, on the left side here, the dashed black box. But Mara Rosa is 67,000 hectares of exploration regional land with soil anomalies already identified. And our exploration team is very excited that by 2030, we're gonna have another 1 million oz of resources in our pipeline, doubling the current life of mine. Thank you very much.
Thank you. Now it's time to go to south, to Argentina and Patagonia, where we have a San Jose site. As you know, it's located in Santa Cruz. It's an underground mine that we commenced in 2007, and we believe that we have additional resources and potential drilling that are planned in the San Jose district. So we can still. We feel that we have the possibility to add new resources. Let me show you the projections for San Jose in terms of production and cost. And as you can see, we will have a reduction in production in 2024, and that's in line with our life of mine projections. It's a great decline in the mine resources.
And then, after 2024, we will increase again production up to 130- between 130,000 and 140,000 oz of silver. In terms of cost, taking into account that this exercise has not considered any devaluation at the moment, and it will be more inflation, we have established that 2023 and 2024, it will have the same cost. Even though taking into account those measures, we believe that we can implement several measures in San Jose, for example, to increase the underground production by change in shifts. We have some open pits opportunities close to the site that we can mine and bring that production to the plant.
We are, at the moment, evaluating a possibility of increase the plant capacity by 15%, and with this, we could lower down costs in order to pass through more tons. We have in place a program to increase the skills of the local people in order not to bring people from the north and reduce costs also. I mean, the big opportunity in Argentina today with the elections is Milei. Milei is coming with a different view, and we believe that it will—I mean, we will have an important evaluation in Argentina. If this devaluation is not coming with a huge inflation, the difference between these two variables, it will go direct to reduce our costs. So we believe that that is a possible scenario, and that's today what we consider the upside in Argentina.
Otherwise, I mean, the projections are like these ones. Now that we have presented all our opportunities, Inmaculada, let me recap it. Inmaculada, Mara Rosa, Royropata. I would like to invite Eduardo Noriega to the stand to present our capital discipline for the next few years. Go ahead, Eduardo.
Thank you very much, Eduardo, and good morning, everybody. At Hochschild, we are committed to disciplined capital allocation, and we believe it is key for our growth. As Eduardo pointed out earlier on, we have been working on the strategy of the company, including an exercise on lessons learned. Two very relevant takeaways from that exercise consider that, first, brownfield and near-to-production projects have been the most profitable sources of growth of the company. And second, that disciplined debt levels throughout the mine cycle of the company have given us the flexibility to grow, to achieve a healthy growth of the company. With this taken into consideration, and also with the strength that we have as operators, these are the main principles of our capital allocation strategy.
First, we focused on accretive growth, mainly, brownfield and near-to-production projects. We manage the embedded risks of, of our assets, mainly by focusing on, on high-quality assets, with strong geological potential. We also limit the, permitting social and political risks at our, at our projects. Third, we manage price volatility actively, mainly through cost optimization programs that we have in place in, in all our operations. But we also, use hedges, have had used hedges, on specific circumstances to maintain cash generation and reduce indebtedness. We're optimizing our capital structure, and, and in this case, we have set a range of indebtedness levels, Net debt- to- EBITDA, of between 0.5x and 1.5x, and in the short term, we're focused on getting to the lower end to that range.
Finally, we maximize value of our investments, and we have set a minimum long-term return rate of 50%. We're also aiming to ensure dividends throughout the investment cycle of the company, and we're progressing on non-core divestments, as we're showing in the slide. So what are the priorities, the short-term priorities for us? We're showing that in the next slide. Thank you, Eduardo. First, we're going to complete the investments that we have in our portfolio in Mara Rosa first, and then we're going to ensure the permit for Royropata in Peru. Second, we'll focus on brownfield exploration, which have proven to be an investment that provides short-term returns and strong cash generation. We're going to reduce indebtedness. We're aiming to return capital to our shareholders through dividends.
And finally, we continue evaluating M&A opportunities with clear parameters and a very rigorous process that I will, I will refer to later on in the presentation briefly. Here, I would like to focus on the chart on the upper right-hand side of the slide to show you how we have been able to reduce our indebtedness levels right after we put Inmaculada into production back in 2015. We have maintained very low ratios, and then we have used our balance sheet again to buy and build our fantastic project in Brazil, Mara Rosa. Once we have Mara Rosa into production, we're going to use the cash generated by our business, including, of course, our new business in Brazil, to drive down indebtedness levels. As I said, to target the lower range of the indebtedness ratio that we set.
In the case of dividends, we're also showing the dividends we have paid throughout the investment cycle of Inmaculada. We put a pause on dividends due to the investments that we did in Mara Rosa, but as I said, we aim to continue to pay dividends again once we have Mara Rosa into production, and we'll discuss that with the board, of course. Finally, our M&A framework, as I said, it has clear parameters on what we're looking for, and we have built a rigorous evaluation process of each of the opportunities that we are looking for. The evaluation parameters are based on the strength of the company.
Now, you should remember that we have built five new mines since the IPO, and we are very good at locking a geological value or potential in our properties. So in summary, we're looking for assets that have more production of more than 80,000 oz per year in the first all-in sustaining cost curve with a return of above 15%, more than 1 million oz in resources with exploration upside, projects where we can mitigate the permitting and social risks. And more importantly, we're gonna focus in Latin America, which is the geographic area where we have the expertise.
In terms of the methodology and the process that we have to evaluate projects, we have developed, as I said, a strong process where we monitor more than 25 parameters, which are grouped in four key pillars of our evaluation process, and those are financial returns, resource quality and life of mine, entry requirements, and finally, operational complexity. Thank you, Eduardo.
Thank you very much.
Now, is coming the most important topic, and that's ESG. I would like to call José Augusto Palma to tell us about this.
Thank you, Eduardo. Good morning, everyone. Very happy to be here to share with you how we live ESG at Hochschild Mining. First of all, as Eduardo has already mentioned, ESG is at the core of everything we do at Hochschild, and it's fundamental to our purpose as an organization. Our strategy, our ESG strategy, is based on five pillars. One, protecting the environment. Serving our communities. Guaranteeing that we always operate as an ethical and responsible business. Ensuring the safety and health of our employees. And empowering our people. This strategy has been validated both internally and with external stakeholders, with the help of external consultants, and it is fully aligned with and contributes to the achievement of the U.N. Sustainable Development Goals.
In addition, the board has approved, and we have disclosed to the market, specific ESG KPIs that set targets on four of these pillars that we aim to complete and reach by 2030. In terms of the environment, our goal is to operate and produce precious metals with the smallest environmental footprint possible. We're doing this through a series of activities, but I'd like to focus on three work streams that are key to us and that where we're making very good progress. Number one, GHG. As Eduardo mentioned earlier, we have committed to be net zero by 2050, but we have also already committed to reducing our GHG emissions by 30% by 2030.
In the meantime, we continue to report on our GHG emissions from scopes one, two, and three in accordance with the TCFD standards. But that's not all. We're also taking steps to continue to reduce our already competitive GHG footprint. For example, 81% of our energy is currently sourced from renewable sources. However, starting in 2025, Mara Rosa, our new project in Brazil, will be fully sourced from solar energy, therefore increasing this percentage of use of renewable sources. The second work stream I'd like to talk to you about is our environmental performance and our strong emphasis on strengthening our environmental culture at the organization.
In that front, we use what we call the EcoScore, which is a in-house tool that we developed in 2015, which has been recognized by the market as being quite innovative and has received a series of awards. And what we do is we track a series of indicators that really help us measure how we are progressing in terms of our environmental performance. We measure things such as percentage of recycled waste, how much waste we generate per person, and then a whole suite and series of indicators that form part of our environmental management system. We track this on a monthly basis, we report it to the market on a quarterly basis, and at the end of the year, EY helps us validate the results of the EcoScore.
I'm very pleased to share with you that to date, as of November 2023, we are in line to have the best EcoScore yet in our history since 2015 when we started. And then the third work stream, which is very important, is water. As you know, water is critical for mining, but it is even more critical to the communities where we operate. And therefore, we have made this a strong priority of the organization to try to reduce the amount of fresh water that we use in our processing systems. To date, we have 84.3% of all the water that we use is actually comes from recycled water.
However, this will also increase the recycled once we put the reverse osmosis plant into operation in Inmaculada, which, as Eduardo mentioned, will allow us to treat the water that is currently in the tailings dam and use it for industrial purposes. In addition, at Inmaculada, we're also using treated domestic water for different industrial uses. So all these are measures that we're taking currently to make sure that we use the least amount of fresh water possible. Serving our communities. Our social engagement strategy is focused on achieving one objective, which is to generate a positive impact in the communities where we operate. It's a four-pronged strategy, pretty simple, but difficult to implement sometimes. It's focused on local employment.
Currently, we have about 61% of our workforce is local. This is at the corporate level. Local procurement of goods and services. Last year in 2022, we purchased over $100 million from local providers in the three countries where we are. We also focus on social investment, how much money we actually invest in the communities, in programs, in infrastructure, in education, et cetera. Then finally, a very active social engagement strategy. And this social engagement strategy, we implemented either through the programs that we have, focusing primarily on education, health, and connectivity, but also on our work with local and regional governments.
All this is designed to generate confidence, build trust, and try to anticipate any grievances that may arise as we operate in the communities where we, where we are. Finally, as I said earlier, acting honestly and ethically is central to our core business. As you know, as a premium-listed entity, we have been following and are subject to the most stringent corporate governance standards since we listed in 2006 through our IPO. In addition to that, we have a very robust framework of policies and procedures that span from our code of conduct, human rights policy, a sustainability policy, and I can go on and on about all the policies that we have.
But the idea of this is to create a very robust framework that applies not only to our employees, but also to our contractors and our suppliers, to ensure that they are always acting ethically and responsibly. And this is complemented by an anti-bribery and compliance system that it has been recognized in Peru, at least, and we're working to do the same in Brazil by external parties, in the case of Peru, by a very prestigious NGO. And finally, we have our whistleblowing policy and online portal, which allows us to immediately address any concerns that may arise as a result of any potential violation of our policies and procedure, obviously, on an anonymous basis. Thank you very much, and happy to answer any questions later.
Thank you very much, José Augusto. And finally, we will talk about people, and I invite Eduardo Villar to tell us about that.
Thank you. Can you hear me? Okay. Let's talk about the DNA of our organization, the our people. And let me start with safety. Safety has been and will continue being a top priority for our organization, and we have achieved great results, no? As you can see. This stands with a very strong management system, which is DNV. We have reached Level 7 in all our operations recently, and we have the first mine or a company that have achieved that Level 7. And now we are committed to Level 8 on DNV. So this is a huge effort, but we really believe that it is important for the company. We are also continuing strengthening our safety culture.
That's an effort we started in 2018, and you can see the results. Now, we have been outperforming ICMM average on lost time accidents since 2014. This year, we have our lowest rate. It's one in lost time accidents. That's the best ever result that we have had in the company for safety with a very low severity rate of 35. That is really low. It's a world-class results, and the most important is with zero fatalities in the last couple of years. So we're very proud of our results that we are having. And Rodrigo mentioned before that we have reached more than 4 million hours of free of accidents in Brazil, no?
Then, considering this, this is a project, and projects usually have a less powerful culture. This is a great result as well, and we have reached also 2 million hours in Pallancata, and you know the condition of the mine. This has been a very tough year for that operation, and reaching 2 million hours is also a great result. So we're very proud of our results in safety, but excellence is a never-ending road. So we need to continue putting effort and time and mindset in this, and we will do for sure in the next years. But safety is not the only one related to people, no? We have some...
We have many KPIs that we can show, but we are very focused on diversity, no? We have 9% of women in our workforce right now. I think I believe that we have plenty of room to improve here. And we have 33% of women in our board. Of course, we can improve that as well. We have a very low voluntary turnover across our operations, and we are planning to keep that track in the future. And some two important KPIs is that we haven't faced any strikes or lockouts in the past couple of years as well.
This tells us about the good relations that we have with our unions across the company and the countries. Just to show one of the programs, because there are many, you know, we have completed more than 1,500 people on anti-discrimination training across the company, and we have plenty programs on many things. But we wanted to show you these KPIs and the goals for 2030 as well. Thank you.
Thank you very much, Eduardo. Okay. Well, let me, let me finish the presentation. Well, first of all, I would like to say to you that, the management team and myself are fully committed to the future of this company, and we would like to bring you as much value as possible in the next few years. Why I believe that Hochschild Mining is such a good opportunity, investment opportunity? First of all, because we'll be focused, totally focused on the core assets. Being focused on the core assets, we want to increase production and lowering cost. And how are we going to do this? First of all, we have a new management in place, but as I said at the beginning of the presentation, this management has all the history and all the experience to be able to implement this strategy.
Second, we have our flagship mine, Inmaculada. Today, with a 20-year approval, environmental permit, but on top of that, we have the Peruvian, the Peruvian government totally pro-mining, which is very, very good news. Now, from Q1 2024, we will have this new Brazilian mine, a low cost, producing 100,000 oz that is coming to the portfolio. Royropata, the recent discovery in Pallancata, using the infrastructure of Pallancata, the plant and all the infrastructure, a new mine bringing another 100,000 oz with a very low cost, and we know that we can get that permit. We will continue with the brownfield. We have demonstrate that we are able to bring new resources to these epithermal deposits, and we have demonstrate that in the history of the whole company, the last 50 years.
But today, we decide to go with a very strict capital discipline, so that will round up, you know, this strategy. And finally, but not least, ESG will remain the core of our strategy. Thank you very much. And now, we'll be very welcome, you know, for any question you might have. Please, you-- I think they will receive a microphone if they want to make. I will answer some questions, and I will pass some questions to the management. Thank you.
Thank you. Tim Huff from Canaccord. I just had two questions. One on Peru, one on Brazil.
Yep.
And you mentioned just at the end something that's pretty important, which is obviously the Peruvian government being so much more pro-mining than it was just a couple of years back. Royropata is gonna play a pretty important role in transforming Pallancata going forward. But in there, you've also mentioned that the permit you're expecting in 2027, which is a little bit more than three years away. So it still is gonna take time. You've learned a lot via the MEIA at Inmaculada, but it's still gonna be taking some time. So I was wondering if you could give us a little bit of background on the permitting process and why you expect that to take so long?
Mm-hmm.
And then the second question on Brazil, you also mentioned the strong investment framework that they have there, the support at the federal and state level. I mean, it's fantastic. Do you see yourselves doing a lot more exploration in that region going forward? And could you see that taking maybe another role in the growth of the company going forward?
Okay, let me start with the MEIA, Pallancata MEIA. We said that we will be producing from Royropata on 2027. That mean that we should get the permit on 2026. So it will be really three years. And let me tell you why. I mean, first of all, to get an environmental permit, you have to do engineering studies and also environmental studies. These environmental studies has to be in a dry season and in a rainy season. So that at least is a year. Yeah. Plus, the preparation of the whole document, plus the negotiation with the communities, plus the time that the government is taking to evaluate the whole document. To give you an idea, the document of Inmaculada was 15,000 pages.
So it's a huge document that the authority has to review in detail, and of course, they are coming with questions back and forward. And so we believe that today, with the current attitude from the government, it could take us three years. It's something that we have already started, and I think, feasibility studies are up to 85%. So, we believe that in 2027, we could have this, this production from Royropata. Also, the mineralization is 300 m from the current place, and we are going to maintain on current maintenance and pumping all the water from underground mine to make sure that we can get through very quickly to this new area. In the Brazil situation... What was the question, please?
Just, you talked a bit about the investment framework that you found in Brazil-
Yeah.
how solid it is at the federal and the state level.
Oh, yes. Yeah. I mean, totally, totally agree with you. I mean, Brazil, since we have today a very solid management team, and with experience that we received from authorities, people, communities, et cetera, it looks like a perfect place, you know, to continue investment. I mean, we have a lot of properties, you know, to do exploration. I mean, in order to make Mara Rosa bigger, but also we are looking at any possible brownfield options, you know? Because it's a country that we feel very comfortable.
Good to hear. Thank you.
Yeah, thank you.
Morning, it's Ian Rossouw from Barclays. Just a couple of questions on Inmaculada. You talk about sort of opportunities to improve productivity. I think historically, you'd mentioned ore sorting and capacity expansions there, but there's no mention of that in the presentation today. Could you maybe just talk about that specifically and other opportunities-
Yes.
- to increase production?
Okay. Today, the bottleneck of the of Inmaculada is the mine, because we have an important delays on development from 2022 and 2023. So the actual plant capacity, I think we will fulfill during 2024, something like 3,000+ tons, and we have a spare capacity to fill. So there is no need, you know, to increment capacity at the moment. And the ore sorting is something that, we believe that at this point in time, it will not be necessary to implement, seeing all the areas that Oscar is finding is high grade. So ore sorting could be applied if we found low-grade areas, you know, at the end, and we can pass through that material through ore sorting in order to increase the grade. So for the moment, it's not a priority.
Okay. And then just you mentioned a few times to maintain Inmaculada at 200,000 oz at least. Post this period, what is the grade decline that we can expect to be, unless you find more high-grade resources? I mean, what's the decline in grades we can expect at Inmaculada?
I don't think we will decline grades in Inmaculada. I think we will maintain the same grade as the current ones, you know, because we see-- I mean, we have a lot of places with very high grade, but I think we shouldn't go to pass through all these high grades, and we should maintain the average reserve grade, if possible, you know, but the idea is to maintain these 200,000 oz.
Okay. Thank you very much.
You're very welcome.
... morning, Richard Hatch from Berenberg. A few questions. Just on the costs, you talk about optimization measures in the costs. Have you left a little bit of fat there that you can potentially beat those cost guidance numbers and bring them down a bit more? And, you know, particularly on Inmaculada, $1,300-$1,400 an oz, you know-
Yeah.
Is that, is there something you can do on that into the sort of medium term, longer term, bring it down a little bit more?
I think there is plenty of opportunities. First of all, I think we could increase the capacity of the leaching capacity. That will give us a extra recovery, and that mean that you will reduce cost because you will have more ounces. That's the first. I think we have a another project on oxygen that could also increase recoveries. Then, we are thinking on 2024 to bring a sort team, an internal team, together with a list of specialists, in order to analyze our mining methods and the mining cycles and see if we can optimize them. I want to implement a lean philosophy across the company, and that will start on 2024, January 2024, at the corporate level and also at the sites. And I think any...
For example, telemetry that we have been working with telemetry that will give us some opportunities. The automated, automation, I mean, it's not that we can automate the mining process totally because our veins are going like this, and it's not like Codelco, that they have huge bodies that they going in a straight line. But we can take some measures, you know. For example, telemetry will give us a lot of information in order to optimize the mining cycles.
So, the bottom end of that guidance, $1,300, do you think you can beat it over time or not?
I'll try.
Okay. Okay, good luck. Okay, cool. And then on Royropata, just this for $55 million-$65 million for spend to bring it back online in 2027, when should we start thinking about how that capital gets spent?
I think it, I mean, as soon as we get the permit, we'll start doing developments. Basically, that CapEx is mine developments, raise borings, electrical installation in the underground mine, and also ventilation.
Okay, so more like a 2026-
We expect, I would say, that no earlier than Q3, Q4 2026.
Okay, cool. Thanks. And then, just on Inmaculada again, slide 21 on exploration, I just noticed, Oscar, just on the eastern side of Inmaculada, you bounce up against your, your license areas, I think, on Brownfield license areas. I'm just wondering if, if there's any exploration activities going on to the east of, of that vein system there, or you're just focusing towards the west?
To the west.
Okay. No, because we believe, the focus of exploration is in the north, is in the south. At the west side, we explore, but in the southeast side, we're planning to drill long holes there because we, with the mapping, sampling, and geophysics program, we evaluate another three structure parallel to Angela vein. Yes, we have a plan. When I start to talking about exploration, I said, we're moving toward to the south to drilling long holes. We evaluate this area too. We have choice to find new veins at the south side, southeast side of Angela vein. Yes.
Okay.
It's a-
Okay, thanks. Then, sorry, last one is just on San Jose. I hear you on the devaluation of the Argentine peso, but what kind of... Are you able to give us sort of a few, you know, flavor on numbers, thoughts, what sensitivity analysis you've run on it? Because you sort of as we-
Oh.
We look at it.
I can give you some figures.
Sure.
Let's take into account that in pesos, we have more than 80% of our cost. So if we pass from 350 to 1,000, I mean, that would mean that we will reduce our cost by a third. I don't know that... I, I mean, I'm not saying that it will happen, because I don't know what Milei is going to do, but, I mean, the opportunity is huge.
Thank you.
Yeah.
Hi, Marina Calero from RBC Capital Markets. I have a follow-up question on San Jose. You have highlighted the opportunity to increase the plant capacity by 15%. When do you expect to make that decision, and how much CapEx do you think it will require?
At the moment, we are doing a feasibility study, you know, and trade-off study on options, because it could be a vertical mill, or it could be a screen. And we will be not talking more than $10 million. So I increase capacity of 15% for around $10 million, it will be something really, really profitable.
When do you think you will be-
2024.
2024.
I mean, the engineering is already on, yeah, and I don't think it will take very long to implement that, you know? Six months.
Is it something that we could see coming in 2025, let's say?
I hope so. I hope so, and probably at the end of 2024, you know. That's the idea.
Thank you.
You're welcome.
... Hi, Patrick Jones, JP Morgan. Just a quick one on Mara Rosa. I think the guidance is up for another $10 million of CapEx to complete the project from here. I was just wondering if you could talk a little bit about, is there much working capital bill that's needed into early next year, and how much that could be?
No. I mean, our projections at the moment is to spend $190 million at the end of this year, and just to have only $10 million to spend on 2024 to finalize the project.
Okay, great. And then just to follow up on that, you also just talked a little bit about, you know, strategy wanting to restart the dividend and a bit more work that you want to be doing in Brazil. Could you talk a little bit, just talk a little bit about, you know, what's the timeline do you think that could be? Could you think a dividend could be for year-end 2024 is realistic and early 2025? And alternatively, now that you've, you know, you've brought on Mara Rosa or will be doing so in Q1-
Mm-hmm
... quite successfully, is it possible to think of, you know, recycling capital to bring down the net debt at some point and restarting that dividend sooner rather than later?
Well, I think, first of all, we need to finish Mara Rosa and see the cash flows start flowing. Yeah? And then we'll go, we'll go back to the board of directors meeting and probably see if it's possible to bring... I mean, to, to have some dividends in 2024.
Okay, thank you.
Because we have, we have been giving dividends every single year apart from the 2023 situation.
Thank you.
Just a follow-up question on your brownfields expenditure. Could you give a sense, I mean, what you've shown in the presentation today about target to increase reserves and resources, what that would be typically a year for exploration budgets?
CapEx?
Yes.
Yeah, we are going to spend $33 million on CapEx on 2024.
Over the medium term, is that a sensible level going forward?
Well, I mean, I would like to invest as much as possible, you know, but it really depends on the results. You know, if we find-- I mean, the idea is to bring resources, is the cheapest way to bring resources, and is the most profitable way to bring resources. So at the end of the day, if we have the opportunity, we'll bring them, you know? Of course, we are not going to have a 20 years life of mine. It's nonsense to have that because you will put money... But we need to make sure that we have a life of mine that will let us implement all the capital projects and all the operational efficiencies, you know, with that life of mine.
How much of that 33 goes into the all-in sustaining cost?
Could you, could you help me, Eduardo? I'm not sure.
All of it, or most of it, is going into the all-in sustaining cost because it's money invested in our operations.
Yep. Yep.
Can I just push you a bit on San Jose? I mean, if you don't get a devaluation of the currency and who knows what the central bank's gonna do, I mean, looking at the costs, looking at the way the group's cost is going to progress over the next few years, and then I'll stand corrected, but I seem to remember that the reserve grade and the resource grade on this is way higher than what the mine grade's been, and it seems to constantly sort of come in a bit below. So the question is: Is this really a Hochschild asset into the long term if you don't get that devaluation, or, you know, is it time to start thinking about it?
Then, sorry, just on the less than $10 million to increase the capacity by 15%, is that your share or 100% share?
Which one? The-
The $10 million.
No, the-
Is that your share as partner, or is that the 100% you and McEwen together?
No, it's this production is the total production.
No, you said, you said less than $10 million to increase plant capacity by 15%.
Yes, total.
That's total.
Oh, it's total, total.
Right.
Okay, thanks.
Total, yes. Yeah, sure. It's a difficult question, but I believe that if prices stay at current level, you know, we have demonstrated in Argentina that we are able to operate, and we are getting between $20 million and $30 million benefit from Argentina. So I don't see a... I mean, if we replace, you know, if we do exploration, brownfield exploration, and we replace resources, I don't see why not we could, you know, continue producing at these levels, you know, and getting that kind of margin, $200-$300 per oz.
Are you able to extract the cash from out of Argentina?
Well, I believe, I believe that with Milei, we will be. We will be. I mean, that's part of his proposals from the beginning, and I think it will be. Today, there is certain flexible measures that they have already taken. For example, we have a new exchange rate, you know, for bringing the money from the sales to the country of around 450. So we can see that there is some measures from the government that they are trying to give some flexibility to us.
Is there much cash sitting at the, in the JV at the moment that, that is-
We have, we have a lot of pesos, yeah. I mean, we have... I don't know how much money, but,
We have pesos in Argentina, Richard, but we have taken the decision during these difficult situations to invest most of the excess of cash we have in the project on mine developments. No, so it's not a material amount that will be affected by a large devaluation.
Thank you.
Thanks.
Thank you.
Any more question?
I have a quick one. Thank you. On Mara Rosa, thinking a little bit about costs, given like the appreciation of the Brazilian Real, how are you thinking about the impact of that? I don't know if the AISC that you were showing to us is already considering like current effects or any strategy, I guess, to manage that.
No, it's considering the current exchange rate of 495, I think. So, we don't see a huge devaluation in the future-
Okay
... you know, in Brazil.
What percentage of total cost is in local currency there?
It's in local currency, yes.
I mean, what percentage?
It's, it's 70%, around 70%.
Okay.
Thanks. Alfredo.
Okay. Thanks.
Well, if there is no more questions, I would like to thank you again for your presence today. We have finished on time, on budget. Thank you so much, for being here. It's been a pleasure. Thank you.