Ladies and gentlemen, welcome to the Lundin Mining to acquire majority ownership of Caserones Copper Mine in Chile conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded today, Tuesday, March 28th, 2023. I would now like to turn the conference over to Peter Rockandel, CEO of Lundin Mining. Please go ahead, sir.
Thank you, operator, thank you everyone for joining us today. Before we get started, for those that may have missed it, we did announce the appointment of a new director last week, Maria Olivia Recart. Maria Olivia was Vice President of Corporate Affairs at BHP for eight years and responsible for government relations and community engagement.
Prior to BHP, Maria Olivia was the Vice Minister of Finance for four years in Chile. Maria Olivia's wealth of experience and knowledge will be a positive addition to our board as we continue to grow in Chile. On to today's transaction announcement. We are very excited to announce the acquisition of a majority interest in the Caserones copper-molybdenum mine located in the Atacama region of Chile near our Candelaria operations and the formation of a new partnership with JX Nippon Corporation.
Before we begin, I will draw your attention to the cautionary statements on Slide 2. With me on the call today are Teitur Poulsen, our SVP and CFO, Juan Andrés Morel, our SVP and COO, and Quinn Yong, our VP Corporate Development. The acquisition of a majority interest in the Caserones mine is in line with our growth strategy of increasing our copper production profile and exposure to long-life base metal mines.
We are very constructive on the outlook for copper. This opportunity on these attractive terms is immediately accretive to our portfolio of high-quality mines. On our 2022 financial results that were recently reported, pro forma revenue increases by over $1 billion on a 100% basis, with copper contributing nearly 70% of the total revenues.
Caserones complements our existing operations in the areas illustrated on the map, which we believe will unlock synergies in the future as we integrate our teams and resources. We have followed the development of Caserones for quite some time, and we've been encouraged and impressed by the progress achieved with the owner's efforts that have resulted in meaningful cash flow generation, which we believe will be sustainable for the foreseeable future.
I've been to site and was impressed by their team, their knowledge and lessons learned since the commencement of operations. Our due diligence team has worked hard to understand all the intricacies of the operation, potential risks, and the potential upside opportunities, which we believe will be significant.
We view Chile as a tier-one mining jurisdiction in which we have made considerable investments over the years and have established strong relationships with the communities and governing authorities. We continue to view the surrounding Candelaria district and more broadly, the Coquimbo Valley, extending over to the Vicuña District in Argentina as central to our long-term growth plan and believe it will ultimately prove to be a meaningful supplier of copper to the global markets at a crucial time in the energy transition.
We're very pleased to be forming a new partnership with JX Nippon and believe the arrangement will be beneficial to both parties. We look forward to working with them to realize the full potential of Caserones. Turning to the next slide, we believe this arrangement has strong industrial logic for Lundin Mining. We are adding another long-life, large-scale producing operation to our base metal portfolio in a region which we have considerable experience and knowledge.
When considering our 2022 production, the addition of production from Caserones would have shown an increase to copper production by approximately 50% on a 100% consolidated basis. The proximity of Caserones in relation to Candelaria will allow us to leverage our knowledge, experience, relationships, supply chains, and potentially existing infrastructure in the region and country.
The transaction is immediately accretive on key cash flow and other financial metrics. We will continue to maintain low financial leverage post the acquisition, given the growth in EBITDA versus the expected debt drawn to fulfill the purchase obligations. Exploration opportunities will be significant as drilling to date has been limited on the property with several nearby targets untested.
We're also purchasing a call option, which gives us the right to increase our exposure in future years and that will allow us to acquire even more copper production and the associated cash flows. We already have a great relationship with Sumitomo at our Candelaria operations and welcome the addition of a JX-- excuse me, of JX as another well-respected Japanese partner. I will now turn it over to Quinn to provide highlights of the transaction agreement.
Thanks, Peter. Moving to the next slide summarizing the transaction, Lundin Mining is to acquire 51% of the issued and outstanding equity of SCM Minera Lumina Copper Chile, a wholly owned subsidiary of JX, which operates the Caserones mine. JX will receive upfront cash consideration of $800 million.
In addition, $150 million in deferred cash consideration payable in installments over the following 6 years. Lundin will also retain a call option whereby it may acquire from JX additional shares in SCM constituting up to 19% of the equity over the next 5 years. We will be able to exercise the call option once every quarter and able to incrementally increase our ownership level.
Both JX and Lundin will be entitled to pro rata offtake from the Caserones mine. Based on our extensive due diligence completed to date, we believe our purchase of a majority stake in Caserones, the purchase terms, and the option right are beneficial to our shareholders. I'd like to now pass the call back to Peter.
Thank you, Quinn. Our Candelaria mine is a good comparable to Caserones. Since our acquisition of Candelaria in 2014, we have gained significant knowledge and experience operating in the region. We have significantly extended the mine life and have materially increased our mineral resource utilizing our proven exploration strategy, as illustrated on this slide.
We are very pleased with our success at Candelaria and are excited about applying these learned strategies to Caserones. The acquisition of the Caserones mine will meaningfully add to our base metals production, increasing copper but also contributing molybdenum as a byproduct. Based on our 2022 reported figures, copper production would increase 50% on a fully consolidated basis. On a copper equivalent basis, we would exceed half a million tons.
This positions Lundin Mining favorably in the list of publicly traded copper producers globally, and with our project pipeline, we'll even add more scale in the future. Caserones is an open pit mine and a significant porphyry copper-moly deposit in the highly prospective Atacama region.
The operation utilizes conventional mining and processing methods suitable with our current operational experience. It is located 160 km southeast of Copiapó at an altitude of approximately 4,500 meters and is situated between the Maricunga and El Indio belts in the emerging Vicuña District. Construction began in March 2010, and first copper cathode was produced in 2013, followed by copper and moly concentrates in 2014.
Looking historically, the mine produced an average of nearly 130,000 tons of copper over the past 5 years, hitting a peak of over 145,000 tons in 2019. However, Caserones was not immune to the challenges and setbacks in 2020 and 2021 with the COVID pandemic and to a limited extent, a brief period of labor action in 2021. 2022, however, was a great year with solid production and free cash flow generation.
Sustaining capital requirements have been minimal and will continue to be the case going forward with moderate waste stripping required, as demonstrated by the small spread between 2022 C1 and all in sustaining costs. An overview of the mining complex is shown on this slide.
Caserones includes an open pit mine as seen in the top left, a heap leach dump seen on the right side with a solvent extraction and electrowinning SXEW plant below. The concentrator is centrally located and downhill from the pit with a moly recovery plant located just to the right in this photo. The concentrate plant has a design capacity of 105,000 tons per day, and the cathode production capacity is 34.5 thousand tons per annum.
The site is well supported by established infrastructure and concentrate is transported to ports north of our Caldera port. Power supply is reliable with a 220 KV reinforced line connected to the site and sources 100% renewable power. Our renewable power contract at Candelaria is a minimum 80% renewable, so our overall power supply is now 90% renewable in Chile.
85% of the water is recycled and make up fresh water is sourced from a series of groundwater wells. Caserones and Lundin Mining both consider ESG to be a priority and aim to achieve the highest standards with regards to the pillars shown.
Health and safety are very much a core corporate value for us. We aim to mine responsibly with careful consideration given to environmental factors and the communities that surround our areas of operation. Recently, Lundin Mining's Candelaria operation was awarded The Copper Mark, which is a voluntary program that recognizes copper producers for their demonstrated commitment to responsible operating practices across the entire value chain.
We look to carry these best practices forward to all our operations. Slide 12 shows the prospective land package of Caserones. We will aim to achieve similar exploration success at Caserones that we have achieved at Candelaria.
Caserones comprises almost 60,000 ha land area in a highly prospective region and with several near mine targets ripe for exploration programs. To put this in perspective, our land package at Candelaria is 23,000 hectares. I will now turn the call to Teitur to take you some of our key pro forma metrics.
Thank you, Peter. One of the levers that position us well to land this transaction is the strength of our balance sheets and our funding capacity. Upon closing of the acquisition, our leverage will remain conservative given our overall net debt ratio and the additional contribution of EBITDA from Caserones.
We remain well on site with our covenants, target ratios, and with significant liquidity. Based on our latest disclosed net debt position of $15 million as of February this year, and coupled with a further drawing of $800 million upon closing of this transaction, would leave us with a net debt position of $815 million. The transaction structure is centered on the locked box principle, with the locked box date being 31st of December 2022, with a zero debt and zero cash position as of that date.
This means that by the time the transaction closes later this year, the company that we are acquiring a 51% stake in is likely to have accumulated a net cash position at the point of the transaction closing. We anticipate closing to occur in Q3 or Q4 this year.
Moving to the next slide. Again, as can be seen on this slide, on the 2022 reported basis, Caserones accreted to our key financial metrics, contributing meaningful revenue and cash flow. Consolidated adjusted EBITDA in 2022 increases over 35% to nearly $1.8 billion. Adjusted operating cash flow nearly 40% to almost $1.4 billion. Free cash flow from operations in 2022 to over $480 million or over 25% increase. I'll now turn the call back to Peter for some concluding remarks.
Thank you, Teitur. We're pleased to be partnering with JX on this exciting opportunity to acquire a majority stake in Caserones, with the potential to increase our position in the coming years at our option to add even more high-quality copper exposure to our portfolio. I would like to thank everyone at Lundin Mining for all their efforts, and I am very much looking forward to having the Caserones team join us in our success going forward. With that operator, I would like to open the line for questions.
Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. If your question has been answered and you would like to withdraw from the queue, please press star two. If you are using a speakerphone, please lift your handset before pressing any keys. One moment please, while we compile the roster. Your first question will come from Daniel Major at UBS. Please go ahead.
Hi there. Can you hear me okay?
Yeah, no problem.
Great. Thanks. Just a few questions from my side. Firstly, on the production, can you give us a steer on the outlook for the next two or profitable years on the basis of the current mine plan? I see the cathode plant is running at below capacity. Is that due to grade feed or what should we be thinking in terms of outlook for the next few years? That's the first question.
Yeah. Daniel, unfortunately, we can't do any forward-looking statements. We have to get out our own NI 43-101, which we're already working on. We'll hopefully get that out pretty quickly, and then that'll provide all the clarity in a going forward basis.
Okay, no worries. Next one, if I could, just on the water side, I mean, looks like you've got plenty of headroom on drawing from the aquifers. Water availability is clearly pretty challenging in the region, you know, regardless of current allocations for aquifers. Do you have a strategy going forward to move away from continental water? Is it possible to utilize some of the Candelaria infrastructure going forward, in terms of moving away from continental water?
Yeah, I think I'd start off by answering that. We've done a lot of work in that area. That was probably one of the key areas. We're comfortable with the amount of water they have. If for some reason there was a change in the future with any type of legislation matters, we've done the homework to determine we could supplement water from some of our, we'll just say, existing operations. We've looked into the pipeline, our desalination capacity, et cetera. We don't believe that this will be any kind of challenge on a going forward basis.
Okay, thanks. Just one more, if I could, from a strategic standpoint, can you make any comments on what this acquisition means for the development of Josemaria in particular or the expansion of Chapada? Is there a higher probability that you will sell greater than the 50% stake in Josemaria given, you know, the balance sheet position has shifted post on this acquisition?
Sure. Maybe I'll break that down into two different answers. With respect to Chapada, I don't think there's any connection there. We'll continue to look at the studies that we're doing there, so we'll keep that as a separate one. More towards Josemaria, I would say, you know, the acquisition does immediately enhance our cash flow, which is quite positive.
You know, I think it's beneficial as we continue to evaluate what the optimal plan will be at Josemaria. Right now, we're moving forward with further engineering, and we'll continue with some of the discussions we're doing from a partnership perspective. I have mentioned in the past that, you know, we've looked at three different types of possible partnerships, some of which are with larger mining entities.
You know, in those cases, it is probably a higher likelihood that they would want to be in a control position. You know, we'll continue to review all those options. There's still discussions going on, and we're heading down to CESCO in a couple of weeks.
I would say this acquisition does give us, you know, the immediate growth, which is great, and provides further flexibility to ensure that when we make the appropriate decision for partnerships and timing at Josemaria, it'll be nice to have this cash flow to support it. I'm not sure if that answers it well enough.
Yeah, great. That's a useful color. Thanks. I'll let someone else have a go. Thanks for your answers.
You bet.
Your next question comes from Ioannis Masvoulas at Morgan Stanley. Please go ahead.
Good morning, Peter and team. Thanks very much for taking my questions, and congrats on the planned transaction. Just a couple of questions from my side. The first, going back to Dan's point around the strategic rationale here. Beyond Josemaria, how does this acquisition fit into your vision of developing the broader Vicuña District?
I think the way I'd answer that is, you know, clearly we now have a path all the way from Caldera up to Caserones, where we control the port, the desal, the pipeline, up to Candelaria, and now up all the way to Caserones. We're in a very strong position. you know, I think the fact that between Josemaria on one side of the border and Caserones on the other, puts us in an extremely strong strategic position. How it unfolds over time, I think we'll have to wait and see.
Okay, fair enough. Thank you. Second question. This asset, I believe, has been up for sale for a number of years. Why now? Why are you announcing the transaction now? More broadly, has there been a competitive bidding process here? If so, are you seeing competing parties beyond the typical suspects that you've seen in the past?
Yeah, I think a coup le different answers. When it first came to market, it was actually a minority interest, which I didn't think was attractive to us. That's probably why there wasn't a lot of movement originally. You know, once they consolidated it and we were able to get control of the asset, that was more intriguing to us.
Also, you know, we believe that once the seller's expectations came in line to where we saw value, that was one of the reasons we also decided to move forward. When you look at the possible pipeline right now of opportunities, and I'm sure a lot of people on the call know what they are, to get a mine of this scale, cost structure, mine life, that's really right in our own backyard, is extremely rare opportunity.
It's one of those few times where you can actually purchase something that has industrial logic and potential synergies. I think a number of the other companies that were looking at this asset, and there were other people looking at the asset, they knew that we were the logical buyer because of our footprint in the area.
You know, why now? You know, it's difficult to predict the headlines. Obviously, there's a lot of stuff going on in the banking industry, but regardless of some of this short-term volatility, we haven't changed whatsoever in our long-term view on copper. I think it's only gonna get stronger in the future. The price to purchase an asset of this quality is only gonna go higher. I think it's a great opportunity for us, and the timing's perfect.
Great. Very clear. Maybe if I can squeeze one last question on the track record of the mine. I mean, it's a fairly high cost operation. It's had some environmental and ramp-up challenges in the past. Are there any lingering issues that you have to address early on, and any obvious levers that you can pull to bring down unit costs over the next couple of years?
Yeah. If you look at, you know, the C1 cost, the one year where they did pop up, that was 2021. You know, similar challenges we faced at Candelaria with COVID. That didn't really help the cost profile, and they also did have a labor disruption of about 25 days. You know, if you back that out, the C1 costs are a little bit lower.
I would also say that you keep your eye on the all-in sustaining cost. A lot of people focus on C1, but then don't really generate any free cash flow. The all-in sustaining cost here, over the last five years has been about $2.46. It does generate good free cash flow, in particular quite a bit over the last five years. I'm sorry, the second part.
Yeah, we did extensive due diligence. We had our entire environmental team down there. I think we're very cognizant of any of the historical challenges, and I think that the site has done a very good job of addressing those. No concerns on a going forward basis.
Perfect. Thanks very much.
Your next question comes from Dalton Baretto at Canaccord. Please go ahead.
Thanks. Good morning, Peter and team, and congratulations. I wanted to start by asking whether this transaction is restricted to Caserones only, or do you get any preemptive rights into the Japanese stake in Los Helados?
This is purely a transaction on Caserones.
Okay, great. Then my second question, your press release mentions potential synergies with Candelaria, 160 kilometers away. Are there any synergies with Josemaria, which is much closer, or is the border an issue?
I think on the Josemaria, I think there's a few obvious synergies, but one of the things, the bigger synergies will probably require some progress from a bilateral position, if you will. Sorry. Binational agreement is what I meant to say. There definitely are some potential synergies going forward, but there's some things that would need to be ironed out there.
Beyond that, I think one of the areas where there would be synergies is actually on the transfer of operational skills and knowledge, 'cause they're similar projects, similar altitudes. I think we can definitely learn some lessons from how they've been successful at Caserones and apply that to Josemaria.
Great. Thanks. I guess one more on deal structure. I mean, this deal seems like a bit of a no-brainer to me. Why the staggered ramp up to 70%? Was 51% all that was on the table right now?
When we first discussed, you know, the original number was 51%. I think both sides were comfortable that we started to move that number up. You know, when we were kind of getting near the finish line was also when there were some pretty big challenges going on in the, in the global markets, and we felt that this gave us the flexibility, to make sure, you know, we didn't stress the balance sheet in any way, shape, or form.
We thought it was the best of both worlds, quite frankly, where we can pull the trigger to get it up to 70%, and if for some reason the world was going a different direction, we'll keep our balance sheet rock solid.
Thanks, Peter. I'll jump back in queue.
Your next question comes from Ralph Profiti at Eight Capital. Please go ahead.
Thanks, operator. Peter, I just wanna maybe follow up on some previous questions and maybe get a little bit more clarity. This 19% call option, you know, you just talked about it being mostly, you know, balance sheet related. Are there any operational dependents, milestones that you'd look to achieve that extra step up, or is this strictly a balance sheet consideration?
Yeah. It's, I mean, I wouldn't just say it's only a balance sheet. It just also gives us flexibility for other things that the company may be doing. No, nothing operationally that would've impeded us from going for 70% right of this year.
Okay. That also was on the table, and you would have executed on that had that been part of an upfront transaction structure?
Sorry, can you reword the question?
I guess my question is, was the 19% an option to have it on the upfront capital or, sorry, on the upfront take up? Was that on the table?
That was our proposal to add that in.
Okay, great. Okay. You talk about upside opportunity. I'm just wondering from a technical perspective on operational improvements as you attack sort of the C1 and the ASIC cost structure. Is there anything particularly incremental that hasn't already been done that potentially you're looking at from a technical perspective?
I'm gonna see if Juan Andrés, who's in Santiago, is wants to take a shot at this one.
Yeah. Thanks, Peter. Absolutely. I think, we have mentioned the proximity to Candelaria, and it's at a very short driving distance, so there's some obvious opportunity to leverage the capabilities that both companies have. We will be looking at potential synergies and economies of scale in the district. This is something that we'll do once the closing happens. So.
Mm-hmm.
We'll probably mention that later in our technical report.
Got it. Okay. Thanks, Peter. Looking forward to that.
Thanks, Ralph.
Your next question comes from Gordon Lawson at Paradigm Capital. Please go ahead.
Hey, good morning, congratulations again on the acquisition. You've talked about this already, in terms of the synergies with Josemaria, do you expect that to have more clarity in the feasibility with the Josemaria feasibility later this year, or will that be discussed in the technical report for this asset?
No. I mean, the Josemaria technical report will be a complete standalone report.
Okay. Okay. Just, yeah, an easy one. When do you expect to have the report out for this asset?
Sorry, when you say this asset, are you talking Caserones now or are you talking Josemaria?
Yes. Sorry, Caserones.
We haven't put a timeline on it, but working pretty hard. I think it's gonna be approximately 45 days, maybe a hair over that, but around that timeline.
Okay. In the near term. That's great.
Absolutely.
Okay. Thank you very much. That's it for me.
You're welcome.
Your next question comes from Stefan Ioannou at Cormark Securities. Please go ahead.
Thanks very much, and congratulations again, guys. Just, I'm not sure if you can answer this, just thinking ahead, when we think about Caserones and the purchase, is it really driven off of sort of what you see is what you get right now with some modest, you know, improvements to cash costs and all that sort of thing? You know, can we anticipate in time maybe a scope change even given, you know, Los Helados next door and those types of considerations? Did that factor into your thinking here?
No. We bought this as a standalone opportunity, thinking it's a great asset. We think there's huge, huge upside just with Caserones, in particular on the exploration side. You know, operationally, we think there's some things that we're gonna be reviewing to potentially tweak and obviously the synergies with Candelaria. I mean, clearly, to have this at the gateway, if you will, of the Vicuña District.
Mm-hmm.
is also very, very strategic. This was, you know, primarily focused on the merits of this asset.
Okay. Okay, great. Thanks very much, guys.
Your next question comes from Jackie Przybylowski at BMO Capital Markets. Please go ahead.
Thank you very much. I was first gonna ask just a really, just a really quick modeling question, if you don't mind. I know you've given us a little bit of info on costs, including all in sustaining costs. Can you just maybe talk about what the, what the run rate is for development capital at Caserones? Do you guys have any sense of that?
Well, we can give you the historical lens 'cause.
Yes.
-earlier call, I said we can't do forward looking, but it's been pretty consistent.
Yeah, it's Quinn here. It's about, it's been about $150 million last year and the year before, similar. Earlier years, lower, closer to $100.
Okay. Thank you. That's helpful. Thanks, Quinn. In terms of your overall balance sheet, so I know this is being funded from the revolving credit facility that you have and it's a good sized revolver. You do have the CapEx for Josemaria coming up in the next few years, assuming you choose to go ahead with building that.
Can you talk about how you're looking at financing options overall? Do you need additional borrowing capability to do the Josemaria project at this point and sort of how you're thinking about solving that gap?
Hi, good morning, it's Teitur here. I mean, the premise of this deal, of course, is that we started off with a balance sheet with zero debt on it. You know, we are leveraging up against a producing asset at a very attractive acquisition cost as we see.
As Peter said, this is gonna be immediately accretive on all our key financials and importantly, our free cash flow outlook is gonna improve materially with this addition. In that sense, it improves our look-forward outlook on financing capacity, whether it's Josemaria or any other opportunities we're looking at. On Josemaria, you know, we were always gonna assess whatever joint venture partnership we enter into, and that will dictate the funding requirement that comes on the back of developing Josemaria.
That assessment will have to take place later this year as it would have done with or without this deal.
Got it. Sorry if I can. Thanks for that, Teitur. If I can just sneak in one last question. Does this transaction change your thinking in terms of a partner for Josemaria? Meaning, I think previously, Peter, you had said that, you know, you're looking sort of equally at a joint venture partners for Josemaria that would be either strategic investor or an operator, you know, mining company. Is that still the way you're approaching Josemaria, or does this inform your thinking any differently?
I think, you know, at the end of the day, we'll make the right choice that is the most beneficial for Lundin Mining, and I don't think we're in a challenging situation to change that. There are actually some other entities that have been coming forward as well with interesting proposals.
You know, we just have to wait till we get through that engineering, as I mentioned earlier, and we'll make the appropriate decisions at the appropriate time. Sorry to be so vague.
That's helpful. Thanks, Peter.
Yeah.
Thanks, guys.
Not helpful. Sorry.
Your next question comes from Daniel Major at UBS. Please go ahead.
Hi. Thanks. Just two small follow-up questions from my side. Is the asset covered by any stability agreement, or will it incur any changes in the mining royalty, that will most likely start in 2024?
Yeah, it's Quinn here. There's a tax stability agreement till 2027, and there's also net operating losses, which will minimize taxes.
Okay. Thank you. Very useful. Then, just one other follow-up. What's the balance sheet position of the asset or will it be at the time of acquisition? Should we assume that the free cash flow will be evenly distributed based on the ownership structure in terms of dividends to minorities?
Yeah. I mean, the dividend will be according to respective ownership, so 51% to us. The company we're buying into will be recapitalized ahead of closing. As I said, the basis of the deal is that we are entering into a zero cash, zero debt vehicle from first of January this year.
Very clear. Thanks a lot.
Your next question comes from Dalton Baretto at Canaccord. Please go ahead.
Thanks, Peter. Most of my questions have been answered, but just maybe one for me on Candelaria. I recall from the site visit a few years ago that one of the restrictions to a meaningful expansion there was the cost of the water pipeline. I'm just wondering, with this acquisition now, is there an opportunity to unlock that?
Juan, I guess, do you wanna speak to that one? If not, I can.
Sure. I can take that, Peter. Thanks, Dalton. Definitely looking at the district opportunity and the synergies and the potential for growth of both assets, we will reassess the potential for a new pipeline or increasing the capacity of the desal plant in Candelaria. That is definitely one option that we'll be studying right after we close the deal.
Okay, great. Just maybe one follow-up. I know you guys are working on the NI 43-101. I'm wondering if you can comment, is there going to be a meaningful adjustment to the reserves as you mark to market on the operating costs?
Just, yeah, I'm not sure if we should speak to anything forward-looking, so.
Yeah. Probably prudent not to.
Yeah. It's just at quarter round, we can't really say much on forward-looking numbers. I think the answer, the short answer is no.
Great. That's all for me, guys. Thank you.
Okay.
Ladies and gentlemen, once again, if you would like to ask a question, please press star one at this time. Your next question will come from Ioannis Masvoulas at Morgan Stanley. Please go ahead.
Great. Thank you. Just a quick follow-up on the operating cash flow to free cash flow bridge from 2022. I see that there is about $300 million difference between operating and free cash flow. I think you mentioned CapEx about $150 million. You also mentioned that taxes are minimal. I'm just trying to figure out what's the split of this $300 million, if you could provide that.
You know what, to give you the exact number, can we give you a buzz right after this call?
Okay. That's good.
I don't wanna give you one that's off by a little bit. We'll call you right after this.
Thank you.
There are no further questions at this time, so I will turn the conference back to Peter Rockandel for any closing remarks.
Thank you, operator. As everyone can see, we're very excited about this acquisition. I think as I mentioned earlier in the presentation, it has extremely strong industrial logic. I think it's pretty transformational for us with respect to our production growth, and we can see that there's certainly synergies to be unlocked here on a going-forward basis.
We look forward to updating everyone as we get through the NI 43-101. Also, as we close the deal, we'll be giving further updates. Thank you for everyone's participation.
Ladies and gentlemen, this does conclude your conference call for this morning. We would like to thank you all for participating and ask you to please disconnect your lines.