Earnings Call: Q2 2021

Aug 5, 2021

Earnings release

Thank you for standing by. This is the conference operator. Welcome to the Arrow Copper Second Quarter Results Conference Call. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. I would now like to turn the conference over to Noel Dunn, Executive Chairman of Copper, for opening remarks. Please go ahead. Thank you, and good morning, everyone. The news release announcing Eero's second quarter twenty twenty one financial results is available on our website as our financial statements and MD and A for the three and six months ended 06/30/2021. As usual, we will be making forward looking statements on this call that involve risks and uncertainties concerning the businesses, operations and financial performance of the company. We would refer you to our most recent AIF available on our website on SEDAR and EDGAR for a discussion of the risk factors of our business and their potential impact on future performance. Unless otherwise stated, all amounts are in U. S. Dollars. Joining me on the call today are David Strang, Iro's Co Founder and Chief Executive Officer Blaine Dreyer, Chief Financial Officer Marco DiFilippo, President and Courtney Lynn, Vice President, Corporate Development and Investor Relations. Whilst uncertainty surrounding the path of the COVID-nineteen delta variant clearly still exists in Brazil, we are seeing encouraging signs relative to the case count peaks of mid-twenty twenty and early two thousand twenty one. We're also seeing increased rates of vaccination across our operations, and fewer people are away from work due to suspected exposure. All our company measures remain in place and for reasons of prudence, we have no intention of lifting them in the near term. We are pleased with our operational and financial results in the second quarter and the first half of the year as well as the progress we've made in advancing several strategic objectives. At the end of the quarter, we announced $110,000,000 gold senior transaction with Royal Gold on our NX Gold mine. The transaction, which we expect to close in the very near term, unlocks some of the value we have long identified in the NX Gold mine, whilst forming a strategic partnership highly aligned with our plans to further develop and organically grow the NX Gold business. The proceeds from the transaction, combined with our record cash balance of $138,000,000 will be used to support our organic growth objectives there at MCSA and in the development of the Boa Esperanza project. Once the next Goldstream transaction closes, our pro form a cash balance will be approximately $240,000,000 We will be in a net cash position of approximately $80,000,000 giving us excellent balance sheet strength and liquidity to continue to execute on our strategy. In June, we completed the dual listing of the New York Stock Exchange, which believe over time will broaden our shareholder base and enhance trading liquidity. We also published our 2020 sustainability report during the quarter highlighting our ESG performance as well as our goals and initiatives related to responsible and sustainable mining. This year, we highlighted the formation of a climate change steering committee comprised of a multidisciplinary team at both executive and operational levels. Over the coming years, we expect this group to contribute greatly to further advancing our sustainability strategy such as setting emission reduction targets and other performance goals. As we look ahead, we are bullish on the outlook for copper prices as the need to address climate change accelerates globally. Renewable energy initiatives, global electric infrastructure spending and the post pandemic economic recovery are all copper intensive activities. Furthermore, a realistic analysis of the supply side of copper shows it to be as challenged today as we anticipated it would be when we acquired MCC in 2016. And increased environmental awareness amongst governments and stakeholders only compounds these challenges in our view. I am as excited as ever for what the future holds for our company. I am grateful to our colleagues for the fantastic work they do to support our production and organic growth while continuing to manage the evolving challenges associated with the COVID-nineteen pandemic. I will now pass the call over to David to provide a brief review and update of our operations, after which Wayne will provide a summary of the company's financial performance. As usual, our team will be available for questions immediately following the call. Thank you, Noel. I would like to reiterate Noel's sentiment as our team and especially our colleagues in Brazil have worked incredibly hard to advance our strategic objectives while continuing to deliver strong operating and financial results despite the dynamic operating environment. During the second quarter, we reported record cash flow from operations of $85,100,000 driven by strong performance across each of our operations aided by copper and gold price tailwinds. At the MCSA Mining Complex, we processed over 550,000 tonnes of ore at an average grade of 2.13% copper and achieved the second consecutive quarter of record metallurgical recoveries averaging 92.5% during the quarter. As expected, mill throughput volumes decreased relative to the first quarter due to the first phase of scheduled mill maintenance, which was successfully completed shortly after quarter end. The impact of more maintenance of copper production was offset by higher than forecasted grades due to a continuation of favorable grade reconciliations in planned stopes as well as supplementary mined tons from the value engineering project that seeks to identify and mine high grade areas within the upper levels of the Pilar mine previously believed to be sterilized. This program is yet another data point highlighting the ingenuity and commitment to creating value by our operations team in Brazil, supported by our newly created technical services team here in Canada. We also achieved quarter on quarter increases in both metallurgical recoveries and concentrate grades, demonstrating ongoing benefits from the Hig mill we successfully installed last year. Enhanced milling capacity generated by the Hig mill helped to mitigate the impact of mill maintenance on throughput volumes during the quarter and allowed us to fully evaluate the true performance potential of the HIG mill that will go a long way in helping us in the detailed design of returning the overall mill to its original capacity. The strong operating performance across MCSA Mining Complex contributed to quarterly copper production of 10,898 tonnes of copper and quarterly C1 cash cost of $0.72 per pound of copper produced, bringing copper production for the first half of the year to 23,536 tonnes at an average C1 cash cost of $0.60 a pound. We recently started Phase two of pine mill maintenance at MCSA and anticipate mill throughput volumes in the third quarter to be similar to those achieved in the second quarter. While we expect our ongoing value engineering program to continue to provide some supplementary production from the upper levels of the Pula mine, on balance, we expect that grades will normalize to within our guidance range for the balance of the year. As a result of our strong first half production performance, we are well positioned to achieve our unchanged full year copper production guidance, albeit towards the higher end of our 42,000 to 45,000 ton range. Similarly, we are also tracking towards the lower end of our full year C1 cash cost guidance range, which remains unchanged at $0.75 to $0.80 per pound of copper produced. The Amex Gold mine delivered a strong quarter as well, producing 10,377 ounces of gold at C1 cash cost of $499 per ounce and all in sustaining cost of $660 per ounce. The 10% quarter on quarter increase in gold production was driven by higher tonnes milled and strong metallurgical performance, which more than offset lower grades mined and processed during the quarter. While we are tracking ahead of our full year production guidance range with approximately 19,800 ounces of gold produced in the first half of the year at all in sustaining costs of $650 per ounce, we anticipate modestly lower grades in the second half of the year due to planned mine sequencing and a normalization of recovery rates. As a result, we are well positioned to achieve the high end of our reaffirmed production guidance range of 34,500 to 37,500 ounces and the low end of our unchanged all in sustaining cost range of $875 to $975 per ounce of gold produced. Our exploration programs generated exceptional results during the quarter that continue to validate our exploration driven organic growth strategy. In the Curacao Valley, we drilled the best intercept on a grade meter basis in the history of our company within the deepening extension of the Pilar Mine. The 67 meter intercept grading over 9% copper was located beneath the current inferred mineral resource shell and highlights the sheer size of the super pod star mineralization at depth. As drilling within Deepin, particularly at depth, has continued to highlight better than expected results, we have initiated a design review of the project, including our shaft and development parameters to review value enhancing opportunities and ensure we are maximizing the value of this incredible deposit. We are also continuing to make good progress in our regional exploration program and are evaluating a number of opportunities that we hope to share in our next quarterly exploration update. Our exploration results from the Annex Gold Mine was also exceptional, including the best hole drilled in the history of the mine, located beyond the limit of the current inferred mineral resource. The results highlight the intrinsic value of the mine that we have orders recognized and more broadly speak to the potential of the NX Gold land package, which remains largely unexplored. In the weeks ahead, we look forward to releasing the results of our optimization study for the Borax Esperanza project feasibility study as well as our third quarter exploration results. I will now turn the call over to Wayne to discuss our financial performance for the quarter. Thank you, David, and good morning, everyone. As David mentioned, our strong operational performance, combined with elevated copper and gold prices drove record quarterly cash flow from operations of 85,100,000 during the quarter. Our copper sales volumes were down quarter on quarter due to lower production volumes and a higher finished goods inventory at the end of the quarter, cash flow from operations did benefit from the higher metal prices and an 11,600,000 reduction in our accounts receivable. Despite the lower copper production as well as a stronger Brazilian real that drove higher unit costs compared to the first quarter, MCSA delivered C1 cash costs of $0.72 per pound of copper produced during the second quarter resulting in average C1 cash costs of $0.60 per pound for the first half of the year, well ahead of our full year guidance range of $0.75 to $0.85 per pound of copper produced. Gold sales were flat quarter on quarter despite the higher gold production due to an increase in finished goods inventory at the end of the quarter. Gold C1 cash costs and all in sustaining costs per ounce produced was up slightly compared to the first quarter due to the strengthening of the real, but was still ahead of our full year cost guidance. Adjusted EBITDA for the quarter was $85,500,000 bringing adjusted EBITDA for the first half of the year to a record $172,200,000 The strengthening of the Brazilian real during the quarter allowed us to opportunistically settle a portion of our forward dated foreign exchange derivative contracts, resulting in a realized loss of approximately $6,000,000 We continue to expect foreign exchange settlements to amount to somewhere between 4,000,000 and $6,000,000 per quarter provided the Brazilian real stays relatively range bound at these levels. Our headline net income for the second quarter was $84,000,000 or $0.90 per fully diluted share. After adjusting for non cash components, including unrealized foreign exchange gains, our adjusted net income was $53,700,000 or $0.58 per fully diluted share. Our balance sheet is the strongest it has ever been with cash and equivalents of $138,000,000 resulting in less than $20,000,000 of net debt at the end of the quarter. As Noel mentioned, upon closing of the NX Goldstream, our pro form a cash balance will be approximately $240,000,000 with a net cash position of approximately $80,000,000 While we intend to maintain strong available liquidity to support our growth projects, we do expect to pay down a meaningful portion of the revolver during the third quarter to reduce ongoing interest payments in the near term. I'll now hand the call back to Noel to share some final comments. Thank you, Wayne, and everyone who joined the call today. Before we open it up to Q and A, I'd like again to congratulate the Euro team and our colleagues in Bismarck for delivering another strong quarter. In running our business, we remain focused on return on invested capital. I am pleased to note that at the end of this six month period, our ROIC, as calculated by Bloomberg, has averaged approximately 40, which positions us well versus any other company in our industry worldwide. And why is this important? Simply because a company that consistently delivers high returns on shareholders' capital can afford to finance growth without diluting those very same shareholders with repeated capital calls and or creating undue risk by taking on higher levels of leverage in its capital structure. This to us absolutely paramount in how we run our business. We are well positioned to deliver on our full year guidance and look forward to building further momentum with the release of our BOA Esperanza optimization study. Thank you for joining the call. We will turn it back to the operator to open the line for questions. Thank you. We will now begin the question and answer session. The first question comes from Jackie Przybylowski with BMO Capital Markets. Please go ahead. Thank you very much and congrats on the really strong quarter. Your cash balance is growing and especially, I guess, after this Royal Goldstream transaction closes. Can you talk a little bit about what your plans are for that cash in terms of the growth projects? Should we see more investment, whether it's at NCSA? I don't know if that's going to be in the mill or in the exploration program? Or should we expect some of that to be going to Boa Esperanza in that it's our near to medium term? Thanks, Jackie. With respect to the cash balance, everybody knows, it's a very happy place for us to be. And I think through the smart financial engineering we've done with the MX Goldstream, we're well placed now to fund not only our growth aspirations within Itau Valley, which primarily revolves around right now the deepening project and the sinking of the shaft, but we're also well positioned now to take on Bolo Esperanza in terms of building that mine in and of itself. As Noel reiterated, we are extremely highly focused on return on invested capital. And that means with respect to that, how do we add the best and highest value to our shareholders while maintaining a capital structure that's in their best interests. And so with the cash that we have now, and we believe we'll continue to grow in the quarters to come, Anthea and her team will have the ability to move the deepening project forward aggressively while at the same time starting to take on and looking to build BOA. Now on the lower head of the place, we have not had Board approval for BOA nor has the market seen the results of the BOA study. But we are anticipating that the project will come in and a robust nature and that we are now going to be in a strong position to be able to fund it. And maybe just a quick follow-up on that. When do you expect that board approval would be decided? Is that shortly after the study? I think the study is kind of due late August, early September, if I remember correctly. So should we expect an announcement on that, so next month's time frame? Jackie, we will be releasing it to the marketplace over the course, I believe, of the next month, month and a half. The board will have reviewed that study at that particular time. We do know there is some optimization work that we want to do already in terms of the study, in terms of looking to finalize that early in the New Year. I don't have a crystal ball in front of me right now. So it's difficult for me to be able to, number one, also preempt what our Board is going to say. But certainly, as a management team, we're looking if everything moves forward in the appropriate manner, to start looking to break ground on BOA in the first half of next year. Probably in the That's latter half of the first helpful. Just to understand what the time line is on that. Thanks, David. Maybe if I can ask one more question and then I'll let somebody else have a chance. You've recently put an exploration update out and it sounds like you've got a lot of really strong results around your existing mines. Can I ask on the regional program? So farther out from your existing known deposits or known mines, can you give us a little bit of a color in terms of maybe how aggressively you're looking regionally at this point or what you're seeing there just broadly? Well, you know, don't like orange jumpsuits, so I can't get too far down that road in terms of giving any any that type of feedback. I'm not asking you to. No. With respect to I mean, we this this last quarterly update did not have a lot on the regional program. We are at full capacity in our lab with regards to running drill results through. Obviously, with regards to the discoveries we made in the deepening, they go a long way to enhancing near term value to us. So they took priority through the lab during the quarter and hence the release that we did there. We are encouraged and I would say excited about what we're doing on the regional program. The regional program still I think we have it moves around five to seven drill rigs, I think maybe even more than that on it. And I think be on the lookout towards the September, October for exploration update. I think we'll have more fulsome information with regards to continuing progress with regards to the regional program. Okay. That's great. No. That's helpful. I was looking really broadly for some clarity on whether that was still something you guys were pursuing. So that's really helpful. I will leave it for somebody else. Thank you very much. Let just give a the fact that we don't put out necessarily information on a quarterly basis on the regional program does not take away from how important the regional program is to this company. And Mike and the team continue to do fantastic work. As I've said in the past, with regards to the work that we're doing in the region, it's not that we're not filling. We are. It's making sure that we're continuing to get the best return in the drill bit in our regional program. Regional program still remains a priority to this company, a significant priority to this company. And so we continue to spend significant amount of time and effort on our regional exploration program in the Curacao Valley. So there are no bones about it, and I can't emphasize it enough that the regional program is important to us, and we're not moving away from that at all. The next question comes from Orest Wowkodaw with Scotiabank. I'm interested in your comments about sort of looking at the shaft extension project at Pilar. And I'm just wondering whether that could include a scope up of throughput, I. E, are you considering making up a bigger capacity shaft at this point? You're really good at reading through the lines there, Orest. Yes. I mean, look, when when you're now hitting the numbers that we're hitting in the business process, you know, when we released and talked to the market last year, we've talked about what the size of the project was. We had seen that we've improved some inferred mineralization. We've gone a long way to converting a lot of that inferred mineralization already into measured and indicated. And I don't think any of us anticipated that we have not now seen the ore body getting larger and higher grade to depth. And so fortunately for us as a team, what we are able to do this sooner rather than later to give Anthea and her team enough time to evaluate the opportunity set now to prior to starting to think the shaft of how we can optimize that shaft. And certainly, there are significant. We see value opportunities in looking at a potentially wider and deeper shaft than previously thought. Can you remind us what the daily throughput capacity was in the existing plan and perhaps an idea of how much that you're thinking that could go bigger? Is it The existing plan was between about 800,001,200,000 tonnes. Right now, Orest, I can't give you the exact capacity of where we think it could go to. But there are other intrinsic value adds that the shaft can bring in, both with regards to the movement of people and the movement of waste that previously were thought to have to go through the ramp. And so while we do anticipate potentially some increase in production, there are other value enhancing opportunities that we're seeing now with the shaft that the previous shaft limited us on in terms of transportation of materials, people and waste that previously have been looked at being brought up the ramp. So I think you can look to somewhat of an increase in production. But I think where we see big opportunities is a decrease in operating costs as well. I see. And do you have an expected time line on when you expect to sort of complete that analysis to firm up the plans? Yes. We'll we'll have it done later this year. Okay. And then looking to break look. We're looking to break ground on on the shaft in September well, starting work in September in terms of some of the soils and the groundwork that needs to be done with shaft sinking starting early next year. So as we're moving forward with that, as you can imagine, there's a lot of optimization work going on right now. Okay. Perfect. And then just final question. I realize the study is not released yet on BOA. But could you at least potentially give us an idea of scale in terms of where sort of what you're thinking ballpark from, say, a tons per day type of of number? Well, as I as I I will reiterate again, I do not like I do not look good in orange. I look pretty good today. And so orange jumpsuit's not my favorite. So it would be it would be a significant forward looking statement to be able to give you that. I think what what we can say at the moment is as the work is coming together, we are pleasantly surprised with changes in resource, changes in the reserve and those types of things. So unfortunately, I cannot get into that just yet. The next question comes from Stefan Ioannou with Cormark Securities. Thanks very much guys. Great quarter and Boris kind of got my question in the shaft, but just maybe just take it one step further. Just given what you're seeing in the deepening extension zone, mean, you mentioned sort of reconsidering the size of it. Do you think are pretty comfortable with the anticipated location? If you made that change to, like, I'm just again, in terms of how long it's gonna take to nail down exactly what you wanna do with it? You you must have been at the board meeting yesterday. We are very comfortable with the location of the shaft. The shaft in its current location is on the side of the ore body. And so yes, we're still very, very happy that the location of the shaft helps us with regards to accessing the ore body in the most efficient way possible. So there's no we don't have any issues with regards to moving our shaft around or anything like that. In fact, we've just completed the drill test with regards to the shaft layout. That hole went down to over 1,400, 1,500 meters. The feedback we received is excellent rock conditions. So everybody is geared up now to start the surface civil works in order to start looking at erecting the headgear so that we can start moving forward with the shaft sinking. Okay. Okay, great. And then the issue I have here, just can you just maybe give us maybe an update on some of the ore sorting efforts that you were working on pretty hard previously? Like is that still just sort of chugging along in the background? Or where are you at with some of that work? Good question. We are We have been doing some test work with regards to the N8 deposit through that system, and we are encouraged by the results that we've seen there. That was one of the last oil bodies that we hadn't tested with regards to it. So now as we continue to move forward, we're looking at ways what is the best way to optimize the usage of ore sorting as and this is something that we have to continue to reiterate to the marketplace. A company like ours, where we continue to see opportunities in a number of different areas, utilization of, for instance, all sorting within that is all related to what is the highest return on invested capital for our shareholders. Now that sounds a little bit cryptic. But as we continue to develop, particularly the Vimeo's district, and as you know, between the Suriyama, the N8N9 deposits, Vimeo's itself, the self extension that is now starting north into what we call UG3, we are seeing significant opportunities in terms of how we stage or how we bring in each deposit into production and utilize that all sorting technology. So we continue to work on it. We continue to optimize it. And as we continue to do that, our production plans with regards to how we optimize the changes around. Because for us, as you know, the best thing to do going forward is to get the highest upgrade that we can at the lowest losses. And so the different deposits have several differences between them depending on the variability of ore and grade. And so we continue to work through that in terms of that. But on an overall basis, all sorting technology will be implemented into our company over the course of the next twelve to eighteen months, and it will be installed up in the Demeos District initially, and we will grow that operation in order to optimize the maximum amount of material we can from the various deposits that we have available to us up there. The next question comes from Bryce Adams with CIBC. I have two. First, on the BOA update in a few weeks or in the next month. Will that include the results of the updated feasibility? Or it's an update with discussions around the trade offs and the progress made so far? I just wanted to be crystal clear on that. I got a little confused by the press release. Yes. No worries, Bryce. So what it is, is and just a bit of background. When we look to update a feasibility study on BOA, we saw a number of areas that we could optimize the study. And so those are being run through, and they have had, in terms of optimization, some significant changes in terms of how that operation looks, in terms of its production, etcetera. So with regards to what we've released initially in the press release, will be related to all of that new information. And then obviously, forty five days after that, we will be releasing the updated technical report reflecting those changes. So with respect to what you're seeking in terms of a comparison, we'll try and provide as much of that as we can compared to the previous study, but it will be a full release as you would normally expect in terms of news of providing as much detail as we can on the results of the study. Okay. That is crystal clear now. Second question is another clarifying one, and it's around the grades at NCSA. There's a comment in there saying we should expect lower grades in the second half and that those grades would revert to the guidance of 1.75%. Is that the full year? You're saying that the full year grade should average out to 1.75 or the second half would be 1.75? I think the second half will be close to 1.75%. As you know, we have had positive grade reconciliation during the year from some of the steps we've been mining. The grades the mining sequence was moved around due to some development issues that we had. And so we mined some stopes that were going to be mined in the latter part of the year first before that, and we've got positive reconciliation due to grade. As we continue to move forward, though, as we highlighted, we have this engineering optimization study. We have availability and starting to identify areas in the upper levels of the mine that we previously thought to be sterilized that have significant grade, and we'll bring those in as and when the team feel comfortable to continue to mine them. I think the best thing we can tell you right now is the second half year grades will be closer to what we mined at the beginning of the year or what we guided at the beginning of the year. Okay. Perfect. That's it for me. Thanks a lot. The next question comes from Dalton Baretto with Canaccord. Go ahead. Thanks. Good morning, guys. And, Dave, having seen you in a jump shoot at site, I'll try and stay away from those questions too. Thank you. My first question, just very simply, do you still expect to put out a forty three one zero one this year? No. Do you need anything more? Okay. So let's let's let's let's let's talk let's talk about forty three one zero one. So forty three one zero one and the requirements of forty three one zero one are twofold. Number one, when you are a new publicly listed company on the main board of Tronix Stock Exchange, you are required, I believe, and Macca can confirm this over the first three to four years to put out a new technical report or 40 three-one 101 technical report on an annualized basis. Thereafter, you are required to put out a technical report or an update if you have a material change to your operations. So if you look at our company right now and as we have continued to progress here, we do anticipate being required to put out a new 40 three-one 101 on the Curacao Valley project at the end of this year. We will be putting out a new technical report, obviously, on BOA, and we do not anticipate having to put out a new technical report on NX Gold. So what we will be doing is, like our peers in the industry, we will be moving to guidance. And right now, we're evaluating what sort of guidance we will be providing, anticipating right now something in the order of a three year forward guidance process. Ideally, we'd like to be able to provide the market with more detailed guidance and longer guidance, but we need to continue to work to make sure that any guidance we do beyond the three year period is achievable and is workable. As you know, we are a fairly dynamic company in terms of how we continue to move towards fully utilizing the plant at MCSA. And so obviously, we want to make sure that we are being realistic with regards to any guidance that we can provide to the marketplace. Understood. And so would you put that out then early next year? Or are you still looking at the same time frame, kind of late November ish? I think right now, the best I can give you is early next year. But we reserve the right to adjust that to later this year. Got it. Okay. Second one is just on your balance sheet and kind of where it stands right now. It's in a great position, as you said. When you look at the copy going forward and you look at your internal ROIC calculation, is there an optimal debt level that's assumed that you'd like to see? I'm gonna give it over to Wayne Brown because he's smarter than me. Hey, Dalton. I think Noel and I and David would have made it pretty clear that we run the business we've been in this business a long time and we're all quite allergic to leverage. And so I think when we look at it, you're never going to see us take on a significant amount of debt. I think we would look to be more creative and I think the NxStream is an example of that creativity in creating liquidity for growth projects in a very effective manner. But as regards to an ideal debt level, I mean, there's so many factors that come into that, right? I mean, I think you have to look at the market and the outlook for the medium to long term outlook for the commodities at that point in time and decide what we feel is a comfortable number. I I think it's fair to say we are very underleveraged right now. But having said that, are cognizant that we've got some significant growth projects here on the horizon. And as soon as we have a better understanding of what that profile is over the next two to three years, we'll look to put the appropriate capital structure to do that. But we'll always be very cautious as a team. Me answer that a little bit. Let me answer that. Obviously, as one of the lowest cost producers of copper in the world, we can carry a higher level of leverage than some of our peers who are high cost producers. And so when we think about the ROIC basis and we don't just use our internal rules, we're using Bloomberg. Are pretty our key shareholders follow this very closely. We think we're not afraid of issuing equity. We're not afraid of borrowing money, but you have to use it for projects to justify the ROIC. They can generate that high level of return. Our criticism in the mining industry in the past is people pursue projects for growth and nobody seems to do the math of how much equity you're pouring out or how much debt leverage you're putting on your company. And then when metal prices turn down, they're getting sales in deep trouble. So we know, given our cost structure, we could support a fair amount of debt. We know and and we'll be fine. But the issue is what are the range of opportunities in front of you and how can you exploit them and still maintain that ROIC discipline? Because over time, companies who have the ROIC discipline get rewarded by trading at higher multiples and having stronger shareholder support. That's great. Thanks, guys. And just maybe one last one for me. This one is on the PGMs in the FirstNet Valley. It doesn't look like they're associated with some of the higher grade top rate intercepts. Where where do we stand here in terms of our understanding? So, Dalton, it's not necessarily true. I think we're still at the learning stage with regards to that. There are certainly we do see mineralization. In the last news release, when we did put out some of those holes, there seemed to be some restyle mineralization associated in and around the deepening project and some of the lenses there. But we have also found PGMs on the edges that border these lenses. I think right now, we are still very much in a learning position with regards to the PGM potential of the district. Have, due to COVID, that program is behind schedule in terms of helping us, albeit that our own lab is now continuing to increase their ability to be able to do something internally. What is of interest to us is there have been some groups who buy concentrate, who have shown an interest in Alcon with respect to potentially PGM, and we will continue to evaluate that as we continue to move forward here. But I think right now, the way I would look at it, I would not be including PGMs in any valuation equation with respect to the company, but rather that it's a very, very interesting opportunity that we continue to try and get better clarity and learn about. The next question comes from Grant Morenting with Scotiabank. Please go ahead. Hi, thanks guys. Great quarter and thanks for taking my question. Love those high copper margins. That being said, think Dalton still kind of stole my question on the PGMs. But I was just wondering maybe going a step further if there's you as you said, you're still in the learning process there, but maybe is there maybe also an even evolving nickel story going on the background in the Curacao Valley? Yep. Nickel still continues to be what I would term the elusive ferry. We do have some interesting things that we're seeing with respect to nickel. But again, I we can't put a finger in the dike, so to speak, to say, hey, we've got the Eureka moment on nickel. I think Mike and the team, it still forms part of the regional program. We've commented on this before that we have been evaluating a couple of nickel opportunities, and we continue to evaluate those opportunities in the valley. But nothing yet to be able to say, hey, we can start putting the nickel stream in the plant and start recovering nickel as much as Anthea wants to. We so that's the best I can do with that right now. No, no, no. That's fair. Okay, great. We look forward to those future results. This concludes the question and answer session. I would like to turn the conference back over to management for any closing remarks. Thanks, operator. And again, we can't thank you all enough to come on the call and listen to us, all the analysts who cover our story, all of our shareholders here on the call and all potential investors. We really appreciate all of your time and your efforts with regards to following our company. And we continue to look forward to a great second half of the year and continue to move forward in a very, very exciting copper market. Thanks again, everybody, and have a good day. Bye bye. This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.