Hello, ladies and gentlemen. Welcome, welcome to the McEwen Mining Inc.'s Q1 2022 operating and financial results conference call. Present from the company today are Rob McEwen, Chairman and Chief Owner, Anna Ladd-Kruger, Chief Financial Officer, Rory Grey vensteyn, Director of Operations, Canada, Adrian Blanco, Director of Operations, USA and Mexico, Stephen McGibbon, Executive Vice President of Exploration, Michael Meding, Vice President & General Manager, McEwen Copper. After the speakers' presentation, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. I'll now turn the call over to Mr. Rob McEwen, Chief Owner. Please go ahead, sir.
Thank you, operator. Hello, ladies and gentlemen. Welcome to our first quarter 2022 conference call. Last year, we saw signs of our turnaround and progress. The trend looked good as we closed on 2021, with higher gold production and lower production cost per ounce relative to 2020. This year, our results have been mixed. The Fox Complex started strong and then was slowed down by manpower shortages induced by COVID, and that was followed by an equipment failure in the mill. Despite these issues, Fox produced more gold at a lower cost than it did in the first quarter of 2020. An important development in Q1 was our preliminary economic assessment that outlined the future growth prospects of the Fox Complex.
It details a bright future for Fox with a nine-year mine life, significantly longer than what we have right now, and attractive mining costs. We are confident that our exploration will result in a shortening of the payback period and an improvement in the economics. Our Director of Canadian Operations, Rory Greyvensteyn, will be expanding on the activities later on this call. Mining at Gold Bar, the costs were very high, and we expected that because we are in a transitory stage of our mining cycle, where there is an extensive period of stripping to remove overburden in order to reach the ore zone. Adrian Blanco, our Director of Operations for USA and Mexico, will elaborate on both these operations.
At the San José Mine, which is operated by our joint venture partner, Hochschild Mining, COVID-induced manpower absences resulted in a temporary mine shutdown that adversely impacted gold and silver production and the costs associated with that production. Looking ahead, our partner believes that they'll be able to make up what was lost in the first quarter over the balance of the year and deliver on guidance. At our Los Azules project, we have made much progress that I believe is significantly increasing the value of, for McEwen Mining of this large asset. Michael Meding, our Vice President, McEwen Copper, will provide you with an update. We encountered a cash squeeze during Q1 as a result of our revenue shortfall.
However, I feel confident enough that the future value of the company to personally step up and provide the company with $15 million. We own a portfolio of assets, the majority of which are located in well-known prolific gold-producing districts, in areas considered exploration-rich real estate. That is why we continue to invest in exploration with the belief that we will be able to extend the life and size of our mines. We also own a huge copper project that is looking increasingly more valuable as a result of our investment, as a result of the surging demand for copper, as a result of the higher copper price, and the changing geopolitical environment in the largest copper-producing area in the world.
At this point, I would like to ask Anna Ladd-Kruger, our Chief Financial Officer, to provide an overview of McEwen Mining's financial results for the first quarter of this year.
Thank you, Rob, and good day, everyone. The COVID-19 pandemic continued to impact our operations in Q1 in areas of supply chain, labor shortages, and inflationary pressures. We continue to monitor the impact of these factors on our financial condition, liquidity, operations, suppliers, and our workforce. Our consolidated net loss in Q1 was $19.3 million or $0.04 loss per share. It relates primarily to $14.4 million invested in exploration and advancing our Los Azules project.
Our operations had a total gross loss of $6 million. Contributing to this was $4.1 million loss from our Mexico operations as we wind down the residual heap leaching. We expect to make strategic decisions on our Mexican business units in the second half of this year. We benefited from higher average realized gold price of $1,895 per gold equivalent ounce in Q1, versus $1,763 per gold equivalent ounce in the same quarter of last year. Consolidated production in Q1 was 25,100 gold equivalent ounces. This included 14,400 gold equivalent ounces from our 100% owned operations, which was 4% higher than the same period last year. Average cost per gold equivalent ounces sold in Q1 from our 100% owned mines were $1,696 for cash cost and $2,146 for all-in sustaining costs.
These were expected to be higher this quarter. However, they did come in lower than we guided to the market in March. Liquid assets at the end of the first quarter, which includes cash equivalents and restricted cash, was $70.4 million, of which $35.6 million is attributable to McEwen Copper to advance the Los Azules project. A few transactions this quarter to bolster our treasury included a bought deal raise of $15.1 million at $4 per share and an unsecured promissory note of $15 million. We also amended repayment terms on our senior debt facility, deferring principal payments to August 2023 and the ultimate maturity to March 2025, giving us further liquidity this year.
We also ended the quarter with a stockpile of 36,000 tons of ore at an average gold grade of 2.6 g per ton ahead of the mill at our Fox Complex operation. We are continuing to manage our operating margins by reviewing capital expenditures, production costs, material contracts, management systems and procurement synergy between operations. Lastly, as most of you know, I suffered from a brain aneurysm in December and, through all odds and a lot of support from family, friends and McEwen Mining and the mining community in general, I'm thankful to be here speaking and just about 100% recovered. On the back of this health scare, I've decided to retire from executive role and focus my time, with my family, board roles and nonprofit work as well. Thank you. I will now turn the call to Rory for operations review at the Fox Complex.
Thank you, Anna. The Fox Complex produced 7,700 gold equivalent ounces in Q1, with total cash cost and all-in sustaining costs of $1,193 and $1,729 per gold equivalent ounce sold, respectively. The Froome mine had a solid performance in Q1 in line with our budget. Challenges at the mill reduced our gold production in Q1, but as a consequence, we now have a considerable stockpile ahead of the mill that provides operational flexibility and to reduce costs in future quarters. Our team is implementing needed upgrades to the mill to ensure it is capable of processing higher ore production rates from the Froome mine. Moving forward in the remainder of 2022, installation of additional screening at the mill will reduce crushing requirements. This would ensure that Fox Complex meets its guidance for 2022. Thank you. Adrian will further speak about operations at Gold Bar.
Thank you, Rory. Gold Bar achieved the production target for gold in Q1 at 6,300 ounces. The heap leach recovery was higher as compared to the 2021 feasibility study, and the gold grade at the mine was also 8% better than expected. On the other hand, we anticipated to have a high cash cost in Q1 as we began mining the phase II of the Pick pit this year. This transition involved a high stripping ratio of almost 6 to 1 in the first quarter as compared to the 4 to 1 expected for the full year. In addition, we anticipated to lose a few days of production due to weather conditions in the early months of the year. We are finding a presence of carbonaceous ore since we began mining the phase II of Pick. Preg-robbing carbon is not suitable for heap leaching.
However, we have been successful to isolate such ore in order not to affect the gold recovery. In addition, the environmental permit approval for the Gold Bar South deposit was received in April, and we are planning to begin the haul road construction this quarter and be ready for mining in the second half of 2022. We are anticipating a negative impact to production in Q2 from the ore losses to carbon, but we are planning to maintain our gold recovery high as seen in Q1, and we are also defining potential new sources of ore for the 2022 mine plan from the Atlas pit and old waste dumps, as well as advancing the readiness of the Gold Bar South deposit to begin mining in Q3. In addition, Gold Bar is implementing many actions to reduce cost and CapEx.
For instance, the CapEx for the whole road construction and the heap leach expansion will be less than anticipated, and our mining contractor is improving the productivity of drilling and blasting since two months ago, which will certainly improve our cash cost per ounce going forward. I will now turn the presentation to Steve, who will talk about our exploration program.
Thank you, Adrian. Our Q1 exploration investments in Ontario and Nevada totaled $3.2 million. The goal at each is to extend the life of our mines. At the Fox Complex near Timmins, our Stock property covers 8 km of the Destor-Porcupine Fault Zone and includes three gold deposits that occur within a 3-km length that are open for expansion. For 2022, we have four key target areas near our Stock Mill with excellent potential to materially grow mineral resources based on poorly tested vertical and lateral trends. At Stock, we targeted near-surface delineation of mineralization during the first quarter, believing a successful outcome could shorten the payback period for the Fox PEA delivered earlier this year. The remaining 5 km at Stock is underexplored both to the east and west of the Stock mine.
Another target is based on historic drilling that intercepted multiple mineralized zoned structures with grades of up to 16.5 g per ton, located 1.5 km west of the Stock West deposit. At Gray Fox, host to our largest and highest grade mineral resources, attractive exploration targets include multiple intersections drilled west of Whiskey Jack that we reported on in our April 25th press release that included 7.29 g per ton gold over 15.35 m and 4.75 g per ton gold over 25.2 m. At Gold Bar in Nevada, Q1 exploration activities focused on several areas. In the mine on southwest Pick extension and Cabin North, testing for extensions of the mineralization continued. The best of these oxide assays included 1.93 g per ton gold over 38.6 m.
Drilling is continuing at Pick. At the Atlas pit, located 3 mi west of the Gold Bar mine, we are following up on a hole that contained 3.1 g per ton gold over 27 m of oxide mineralization down dip to the east below the pit bottom. At our San José joint venture in Argentina, $1.7 million were spent in Q1 on a 100% basis of a $7 million exploration program for 2022. Typical intercepts of high-grade gold and silver were encountered in multiple holes at the Celina and Celina Piso veins and include 8.3 g per ton gold and 561 g per ton silver over 1.2 m. A further 2,000 m of resource delineation drilling will be conducted in Q2.
The San José property surrounds Newmont's Cerro Negro mine and is host to high-grade epithermal gold and silver deposits. At Los Azules in San Juan Province, Argentina, our exploration program has completed 11,500 m year to date. Weather permitting, the drill program will continue until mid-June and then resume again in early October. This drilling is confirming the mineralization of historic intercepts used for the 2017 PEA mineral resource estimate. In many instances, persistent copper mineralogy encountered encouraged us to continue drilling beyond the planned hole depth and is often still apparent when the hole is stopped.
Hole AZ22-142 intersected 419.1 m of 0.79% copper and included an interval comprising 104 m of 1% copper in the supergene enriched zone and 46 m of 1.59% copper in the hypogene primary copper zone. Importantly, our updated geological model will reflect those vertical structures and rock types that are key features controlling the distribution of mineralization. New to our program this year, geologic modeling is being augmented with a hyperspectral scanning program of all current and available historic core, allowing for a level of refinement not captured in previous work. I will now turn the presentation to Michael, who will tell you more about our developments at Los Azules.
Thank you, Stephen. The Los Azules copper project is located in the San Juan Province of Argentina, a mining province ranked highest for investment attractiveness in Latin America by the Fraser Institute. According to Mining Intelligence, Los Azules is one of the top 10 largest undeveloped copper projects by resource, with 10.2 billion pounds in the indicated category and 19.3 billion pounds in the inferred category, as estimated by the 2017 PEA. Since that time, extensive enterprise optimization work has been completed on potential larger scale, lower cost, and lower carbon footprint options revealing opportunities to guide the drilling and technical workflows. In Q1 2022, McEwen Copper spent $9.8 million to advance the Los Azules copper project, actively progressing drilling, road construction, technical studies, and community engagement.
Year to date, 11,500 m of drilling has been completed and approximately 13,000 m of drilling is targeted to be completed by the end of June. The critical issue of road access to the site has been resolved. Los Azules is no longer remote and cut off from the world for six to seven months of the year. We have developed a second road that will allow us year-round access to the site. This is a significant advance because it will allow us to advance and complete our field work faster and at lower cost. Another exciting development is the completion of the enterprise optimization study conducted by Whittle Consulting of Australia, who specialize in optimizing mine designs by generating and evaluating a large number of different operating scenarios.
Their work focuses on the following objectives, improve value, optimize scale, minimize risk, and enable fast trade-off analysis of environmentally friendly, green, regenerative solutions. Their analysis indicated that there's potential to significantly increase the project value. The results of their work will be included in the updated PEA to be completed in Q1 of 2023. I will now turn it over to Rob. Thank you.
Thank you, Mike. We have two executive searches underway as a result of some departures, and I wanted to note that we're saying goodbye and thank you to two senior members of our team. As you heard, Anna is retiring and Peter Mah, our Chief Operating Officer, is stepping down to concentrate on family issues and other opportunities. In the interim, we have engaged the services of Perry Ing, who is a former CFO of the company, to step in during this period, as we search for a new CFO. To cover off on our chief operating officer, we have the very good fortune of having a Director, Bill Shaver, who has said that he would serve in that interim capacity. When I say we're fortunate, Bill has had 50 years in the mining industry.
He was co-founder of Dynatec, a very successful mine contracting firm. We have that covered off as we're searching for a new CFO or COO. Sorry. There's a lot of changes going on here. We feel very comfortable with that setup. This concludes our presentation, but before that, I'd like to ask Bill to make a comment or two about the operation.
Yeah. Thanks very much, Rob, and good morning, everyone. Yeah, for many of you on the call, you've probably heard about me at some point in your, in your career, and I'm happy to step in and help out over this interim period. You know, most of my background is in the mine construction business and in, you know, running operations of the size that that McEwen has. I'm really looking forward to, you know, being part of the process of engaging a new COO and also for helping the rest of the operations in any way I can.
I've now made a visit to Timmins a couple of times, also to Los Azules, and I've actually just before the end of the year made a trip down to Gold Bar. There'll be some visits to Gold Bar and Los Azules in the next month or so. Anyway, I'm looking forward to doing what I can to help out. Thank you.
Thank you very much, Bill. Happy to have you on board. Operator, could we now go into the question and answer period? Thank you.
Certainly. Thank you. As a reminder, to ask a question, you will need to press star one on your telephone keypad. To withdraw your question, press the pound key. Again, to ask a question, simply press star one on your telephone keypad. Your first question comes from the line of Jake Sekelsky from Roth Capital Partners. Your line is open. Please go ahead.
Hey, Rob and team. Thanks for taking the questions.
Happy to, Jake.
First thing, on Los Azules, obviously, you know, it's a big part of the future value of the company, especially from your perspective. But what's the spending gonna be like? There for the rest of the year. It was pretty decent sized number in Q1. I'm just trying to, you know, model out the rest of 2022.
We're entering the winter season in Argentina right now, so a lot of that expenditure we've done to date has been associated with drilling and maintaining a large camp up there. I would expect that to be less than the money that we have in the treasury to take us through this year.
Okay.
Drilling will resume, expected in October.
Okay, a little later, the middle two quarters, and a little heavier at the end of the year.
That's correct.
Okay. At Gold Bar, with this carbon issue you encountered, do you have an idea of what, you know, what percentage of the Pick deposit might have this carbon in it so far?
It's early. Adrian, do you want to jump in there?
Yes, thank you, Rob. It's early to determine that number. Certainly, the presence of carbonaceous ore represents a concern to achieve the production for the second quarter. However, we are looking at ways to bring new sources of ore to the mine plan in 2022 from the Atlas deposit and old waste dumps, so should be able to partially overcome this carbon issue.
Okay. Well, thanks for the color on those things, guys. I'll turn it over.
Thank you.
Thank you. Your next question comes from John Moran from South. Your line's open. Please go ahead.
Hello, John.
Hello, Mr. McEwen. Yeah. Hi, Mr. McEwen. I've been a shareholder for about 10 years. I have 400,000 shares. Average basis is about $1.60-$1.70. I have a series of questions I'd like to ask, short, one at a time. First is, are there any institutional investors buying or selling recently? I'm asking that because I'm wondering if they're taking advantage of the low stock price to get a larger position.
It's a good question. I don't have an answer for you. I can put it, there hasn't been conversations with institutional investors recently that are saying they're buying. You raise a good point. It's an attractive price to come in.
In a prior conference, you mentioned that you thought McEwen Copper might be worth about $3, and I know there's a 69% that McEwen Mining has in it. Why do you think that's not factored into the stock price now?
There are a couple of reasons. One, we just completed the second access to it. The drilling, there's been some information coming out, but not a lot. I guess more recently, there's some nervousness in the marketplace. It has been obscured by some of the operating issues that we have in the gold and silver production area.
Okay.
The copper price is going up. Los Azules is getting a higher profile. It's growing a bit larger. It's Mining Intelligence. As you heard from Michael, it's viewed as the ninth largest undeveloped copper project in the world, not owned by a major. Argentina, they're changing their tone and encouraging mining while their neighbors in Chile and Peru, the governments there are making it more difficult to want to invest there. Higher taxes, more regulations. It's emerging. I can't explain why it's not trading where you want it to.
Right. Next one. Now that the price has dropped precipitously, how will the delisting affect the company?
Never having gone through a delisting, I don't know. I'd only be able to speculate. There are many exchanges that it could be traded on and have the volume it currently has on New York. We'll have to see. It'll depend on, you know, what the state of the equity markets are.
Right. Next one. Not that you are, but if the company was sold today to someone, another company, what do you think it would, you know, approximately sell for? I'm asking that because I'm wondering whether, since my average basis is like $1.60-$1.70, if it would be worth, you know, buying more.
An excellent question. I wish I could see into the future. I don't have an answer for you. I'm sorry, John. Not that you could relate.
Okay. The last one is there any chance that the company, you know, might become insolvent or go into bankruptcy?
I guess it's always a possibility, but at the moment, our liquidity is strong enough. We have assets that have value. I don't see that as a real possibility. Otherwise, I wouldn't have put in another $15 million.
Right. Okay. All right. Thank you so much. I really appreciate you trying to answer these. I wish you all the best.
Thank you very much. Thank you for your question.
Thank you. Your next question comes from the line of Heiko Ihle. Your line is open. Please go ahead.
Hello, Michael.
Hi. I think that I was supposed to be Heiko, but this is Marcus.
Oh, Heiko.
Yeah. Thanks for taking my questions. First one, you're expecting a meaningful exploration spend at Fox for this year, given that you've spent $1.7 million in Q1. Can you break out the remaining $8.3 million by quarter for the remainder of the year? Since we're halfway through Q2, you know, what is the spend year to date, if possible?
All right. I'll ask, Stephen McGibbon, our Executive VP of Exploration.
I'll answer that question with fairly broad strokes. The $1.7 million spent in the first quarter is generally consistent with what would have been anticipated or what is anticipated based on our 2022 budget, which more or less had increasing spending throughout the year. With the flow through financing that was completed in March, we're now reviewing our program with the view of our plans through to the end of 2023, and that may impact planned spending in 2022 versus the original budget. We're working through that process now. We should have a clear answer on that before the end of the second quarter.
I would anticipate likely looking to accelerate to some level our planned spending in 2022 versus the original budget.
Okay. For 2023, the $15 million is. Should we just sort of break that out in terms of divide it by four for a quarterly spend?
At this point, I think that's probably the most reasonable view to take.
Okay.
Clearly spending is, you know, results dependent. We'll try to be nimble and be in a position to adjust and accelerate if the opportunity presents itself. For now, I think that's accurate.
Okay. Yeah.
Thank you.
Last question. Oh, sorry. Go ahead, Rob.
No, no. Please, I didn't mean to interrupt your question.
Okay. Yeah, one more. Just sort of speaking about exploration spending and given all the talk around inflation, how are your drilling costs doing? Have you seen, you know, any sort of price movements given recent fuel increases? How is that reflected in these drilling expenditures?
Drilling contracts were entered into in the fall of 2021. Our overall costs in Q1 on a unit basis were in line with that. Just to throw a number out, it would have impacted our costs less than 10% versus what we experienced in 2021. I think the greater challenge has been in our contractors being able to secure experienced personnel and manpower-related, materials-related issues that possibly represent a risk. From a cost standpoint, they've been very much in line with our expectations.
Okay, fantastic. That's it for me. Thanks for taking my questions, guys.
Thank you.
Thank you. My apologies for Heiko's name. Your next question is from Bill Powers, a private investor. Your line's open. Please go ahead.
Yes.
Bill.
Hi, Rob. Thanks for taking my call today. This is very informative today. A few questions. I guess as far as the closing of the second tranche of the financing for Los Azules, I know you had previously mentioned that you were fairly close with, I guess, either one or more parties, and I was wondering what your where that stands and what your thoughts are towards, you know, getting that closed or, I guess, opening it up at a later date.
We may get to a point where we close it soon and open it up at a later date. Based on what we've done going forward, we've had a number of conversations. They seemed very serious, and it looked like they were about to close, but there was always another question and another question. Your suggestion or comment about closing it and saying, well, the next time we come back to the market, given the money we have, will take us around to next year, that we've advanced the project significantly, so the price of entry will be higher.
Yeah. I mean, I just, as a, you know, as a, you know, an observer of this, it seems as though if you put out a, you know, substantially more drilling results between now and it's a little unfair to, you know, I don't know, you know, to get, you know, to lock in the same price as what was previously offered when, you know, before the spend was done. Anyway, that's. I hope you can move that forward. You know, it sounds like, given the results of some of your neighbors, it sounds like there should be sufficient interest in that, I would think.
I agree. There've been some big drill results coming out of the province we're in.
Yes. Speaking of that, as far as I saw Filo put out some results today that were, you know, off the charts as far as grade goes. When you are, I mean, not that you know, you could read into the future, but are there you know, how similar is what you're doing compared to what you know, they have done? Or are you guys you know, that familiar with what the comparison goes as far as that goes?
We're probably about 200 Km away from them. We're along the spine. In terms of what they're hitting, Steve, do you have knowledge of Filo?
Not of the press release today, but in general terms, higher elevation, lower grade. Certainly they've been pulling significant deep results from their drilling this year. I can't speak to in detail.
Okay. That's great. Thank you for that. The second question I had is, I know you recently put out some results as far as at Stock goes, and it seems as though it's trending in a positive direction. I guess, how much more drilling is going to be needed before you could decide that, you know, these are going to be, you know, where your drilling is going to be economic? Is that, you know, I guess another six months or sometime next year or sooner?
Our PEA was for Stock, the Stock West deposit. It was 144,000 ounces indicated, and I believe another 111,000 inferred. We do need to do drilling, which is part of our plan for this year to upgrade and to further just de-risk the resource. We want to try to move many of those inferred ounces into indicated. Outside of that, the deposits are still open. The nature of these deposits are that you typically expect there to be vertical continuation or continuity to the mineralization that we haven't fully tested.
As I alluded to, there are a significant number of Kilometers on the Stock property that are what I characterize as quite underexplored. To me, this is just my personal feeling, is that the PEA is the first step in a journey that I believe is going to ultimately realize a long-term and meaningful material opportunity for the company at the Stock property. We've got three deposits, all of them open to depth. I believe there's a very good opportunity for a fourth to potentially be identified in drilling this year. You know, for now, the drilling that we plan for the Stock West deposit in 2022 should significantly de-risk that opportunity, put us in a position to make decisions about its future.
Oh, okay. That's very helpful. One last question. As far as I'm noticing the press release that Gold Bar South has been permitted, and it sounds like you're moving forward with the access or with the haul road. Is the plan to have Gold Bar South produce along with Pick and some of the other pits that are already in production and or is it going to be for production to solely come from Gold Bar South once it's up and running?
It would be for all of the areas for mining, Bill. Gold Bar South would be working in combination with the others.
Okay. Would that be additive to your current rate of production, or would those be depleted down, the others be depleted down as Gold Bar South comes up?
It's as you said. It's just compensating for as the other ones are going down, Gold Bar's coming up.
Okay. That was all I had today. Thank you.
On your comments about Filo, I mean, I just saw their results. They're quite exceptional. High gold values and copper and long intercepts. I don't know. Steve, could you just comment on some of the intercepts we've been getting at? They've been more copper than gold in that, but.
Yeah. As mentioned in the presentation and in our press release last week, the majority of the holes that we're drilling, and I'll characterize it as in the core of the deposit, we've been drilling those holes 500-600 m length. Typically we're making a decision to stop the hole not on the absence of mineralization, but more on the kind of progress of the drilling productivity of the driller, that progress slows too much and we decide we'll stop the hole for now and move on to another hole. The nature of how these deposits are formed, that we expect mineralization will likely go much deeper, and we will have exploration programs in the future to test that.
We've had drill intercepts of 400 m-500 m, approaching 1 g per ton, at least in one of our holes, or I'm sorry, 1% copper. I think it was 0.79% copper. With intervals within those intercepts that are double that kind of grade, 1.5% copper or more. The drill program we've conducted so far this year has demonstrated to us, not just that the results from the past are being validated with the current drill program, but also that our understanding and expectations for the resource in time to be able to grow much more are supported by our understanding and the work we've been doing on refining our geological model.
There are some big differences between the locations between Filo and ourselves, and starting with elevation. We're probably 800 m lower. We're not impacting glaciers and easier to get into than some of the other copper deposits in the area, including Filo. Okay. Any other questions, Bill?
Thank you. That concludes our Q&A session for today. I'll turn the call over to Mr. Rob McEwen for any closing remarks.
Thank you, operator. Thank you, ladies and gentlemen. Wishing you well. Goodbye.
Thank you, presenters. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.