New Century Resources Ltd

ASX:NCZ

Earnings Call Transcript

[Patrick Walta, MD & Director]

Hello, ladies and gentlemen. Thank you for joining this New Century Resources March 2021 Quarterly Results Presentation. I appreciate everyone taking the time to listen in and get the detail on New Century's March quarter.I'll run through the presentation that has been released onto the ASX platform earlier today. With me, I also have our COO, Barry Harris, and so we'll go through some of the more finer details about operations on the site and plans for the June and September quarters as well with Barry.At the end, there'll be time for questions. I would ask people just to write their questions using the Q&A function, which should be at the bottom of your screen, and we'll look to cover off those questions as best we can.As always, we're always available for a call or an e-mail outside of the conference call as well, should you want to discuss anything else. We'll just dive into the quarter highlights, we're now on the overview for now.We can see that the company has generated some pretty decent highlights, albeit during what was a -- what we described as a big wet. So the March quarter was one of the biggest wet seasons in a fair while.We were still able to produce a good amount of tonnes and generate some relatively strong EBITDA. And importantly, as we go now into the June quarter, we'll discuss it in a sec, we're seeing some pretty decent gains across the board on all metrics.So despite those effects, we're still able to generate some pretty good cash. We've paid down a heap of debt as well. And with the change in the macro, albeit being the zinc price and TCs, we've actually got a fairly large amount of receivables in the business as well.Quickly touching on safety as well. The company continues to lead the industry in safety, TRIF of 1.5 versus an average industry of 10, and we hopefully will see that coming down over the course of the next quarter or 2 as well, which will be exciting.At the end of this presentation, we'll also talk a bit about exploration, Silver King and Millennium. There's some exciting things happening there. But let's first get into the production part of the operations as well.Looking at the results themselves, the overall production of 30,433 tonnes of metal. C1 cost of $0.89 per payable pound of zinc as well. So we're quite satisfied with that production level, considering the quarter that was. So it was quite a strong wet season, and we also had significantly less operating days with one of our shutdowns in that, and we were still able to produce -- use that to produce quite a healthy EBITDA margin.We do see that growing quite strongly into the June quarter, with the macro effects and also the effects of additional production coming on as well. I'll pass on to Barry. Maybe, Barry, it's appropriate time to talk about some of the specifics of the quarter that was in terms of production and heading into the June quarter as well.

[Barry Harris, COO & Site Senior Executive]

Yes. Thanks a lot, Pat. As you suggested, it was the wettest March quarter we've had in close to a decade. So with that, with the hydro mining operations, it does lead to a lot of interruptions and then also lower density events, where you actually get less tonnage through to the actual processing plant.Pete, Nicole and the teams have worked with the hydro mining groups to actually develop management strategies for all of that, and we had those in place. So we were able to still produce during a lot of those rain events, but it does reduce what you can actually put through the plant at the time.So we're very, very pleased with those management strategies and how they went in and how we're developing them, and a lot of lessons learned from the wet season and will be applied to next wet season.So we are getting much, much better in how we manage that with the teams on the ground. As Pat said, we also had our last shutdown, last major shutdown, which affected about 4 days worth of operations that Mike Reed and the teams execute on time without incident. And we've got a hell of a lot of work done during that shutdown, which has set us up for this quarter ahead and to run through into the end of the financial year very, very strongly.We also use that opportunity to do all the rest of the time works for the Jameson Cells project, which I'll talk to a bit later on in a little bit more detail. So it was a very, very effective shutdown. And we've got a lot of work done that set us up to run forward.So with all of those headwinds, I suppose, on what is always a shorter quarter. We're very happy coming out the back of the wet season. We had that in the -- towards the end of March. It was when we got our last major rain interruptions. And we've seen very strong results going forward from that to the back end of March and into April. Now that we don't have those interruptions to operations. So we're starting to see some very strong performances from the operation with that stability and the lack of interruption to the operations, as can be seen with the last scheduled week we had averaging 48 -- just above 48% recoveries for the week.

[Patrick Walta, MD & Director]

Thanks, Barry. And I'll quickly talk about some of the unit costs for the operations. The main benefit we've seen there is actually, what we call, a post-quarter benefit that was retrospectively applied, which is around the treatment charges side.Treatment charges have been reduced from what was effectively $300 a tonne as the benchmark rate in the -- for 2020, that's dropped significantly 47%, down to $159 a tonne. And that is our major cost. Our single largest cost. It was about 35% of our costs last year.So to get that to effectively half is a huge benefit for the company. You can see it there, and it's generated an $0.08 a pound drop from the December quarter through the March quarter. That will drop further as we go into the June quarter. We had a couple of legacy shipping contracts come from the December quarter into January itself.So we'll actually see all of our contracts in the June quarter are at the benchmark or spot contracts. So we'll see that drop even further. And for example, our month of April is looking to average -- a TC average in the 140s. So we're seeing a really good tailwind there.And the backdrop of that is zinc at $1.32 a pound, which is fantastic. It's over USD 2,900 a tonne as well. So we have that very strong macro to work into.Our focus is obviously on getting production up through recoveries, and ultimately, through a throughput as well. When we get that production up, we obviously can generate more revenue from that, but because we have a decent fixed cost base, about 75%, 80% of our costs on-site are fixed. Therefore, we were able to really reduce those unit costs and we generate bigger margins on those as well.So we're seeing that start to play out in April. The month of April is actually on track to be our best EBITDA month ever, which is great.And that's all leading into the Jameson Cells coming online, which will be the focus of the next performance uplift in itself. We'll talk about that in a sec.Moving on to cash management for the business, you'll see that the cash flow waterfall there on the left-hand side of the screen. Big event during the quarter was a significant pay down of our debt. So you recall in January last year, we had around USD 70 million worth of debt through Varde Partners. That's now reduced under $30 million. So we've significantly reduced that over the last 12 months or so.The repayment profile on that debt now is very much manageable. It's essentially paid down in increments through to the end of next calendar year. And so we have a very good control over that. Importantly, we're also reducing a number of our one-off costs going into the June quarter as well. So the contract to buyout is now complete.We're not -- at this stage, not planning on doing further cost-based commodity hedging. So put -- we've been buying puts. We bought puts out to the end of June. We see that as sufficient for now. So we've got a floor price of $1.20 on the zinc price.Also the growth projects, so the Jameson Cells, for example, are complete there. A number of those small one-off investing contacts to drop away in the June quarter. And as you'll see on the right-hand side, we'll have quite a big inflow that's already come in post the end of the March quarter or is coming in as well, majority of that is due to the TCs.So the TC -- the new benchmark TC was settled post-quarter end, but is retrospectively applied back to the 1st of January. So we'll see that cash inflow coming in the June quarter and also in line with additional revenue from production and price increases as well.So we certainly see some benefits coming through those avenues, including a reduction in our interest costs as well due to the reduction in -- or due to the repayment in borrowings also.We'll deep dive into the Jameson Cells project, which has been a focus of the business for several months now in terms of its implementation. Barry, want to go into some detail here about the work that's gone on since the tie-in that occurred in March and the plans going into May and June for the Jameson Cells?

[Barry Harris, COO & Site Senior Executive]

Yes. Thanks, Pat. As we said earlier, all the times and everything else that needed to be done were done during that last shut that we had in March, and the teams have been systematically working from then till now to get all the whole plant in an operable state. And we've actually started the commissioning, about 1.5 week ago, we started the commissioning. And we've gone through all the various stages that you do on that. And we've gone through the full system commissioning on water, running through all the sequences of the Jameson Cell and how to operate.And during the schedule week, we're going to be introducing slurry to the unit itself and going on with the commissioning process after that, a large part of which is just the fine-tuning of the unit to get the best performance out of it.The way that we're actually doing that is doing it in a measured, managed way, so that we don't disrupt production. And we've got it done in a method that we won't lose any of the metal we otherwise would have got when we're actually bringing that on and optimizing it and improving it.So with all that optionality, we should start to see upside in the next month and then work to optimize and improve that. The main aim when we bring Jameson Cell on for this quarter is all about the efficient use of the throughput that we're putting through. So it's really about optimizing the units and working on the recoveries that we're going to get with that uplift.So we'll be holding our throughput steady and just really working on getting those recoveries up from the tailings that we're putting through the plant as it currently is.The teams under Mike Reed, Brodie and [ Bischoy ] have done a great job getting it to this point. And they're working through its handover to operations, and we've got good support from Glencore Technologies, who actually make these units. And then do a lot of the commissioning work and handover and training of the teams on the ground.And we're also working with Mineralis to then further optimize the process flow and what we can actually get out of the new process flow that we do have as a result of introducing this unit.

[Patrick Walta, MD & Director]

Thanks, Barry. And as Barry said, it's really a 2-stage process for how we implement the use of the Jameson Cells in the circuit. First one is about improving efficiency and recovery. So we see that as being the target for the June quarter.Ultimately, that translates into increased metal make and lower unit costs. And then in the September quarter, we'll transition to a focus on using it to increase throughput through the plant, and again, with the ultimate purpose of increasing the overall metal make, which reduces unit costs and increases margin as well.So it would be great to have that online during the dry season without any shutdowns or wet season activity really drive that production rate up, which will ultimately leverage this great macro that we're currently in.Okay. So just looking quickly turning over to the macro. We talked briefly about the TCs already. As you can see here, we've had a really strong decrease in the spot TC. And spot TCs are essentially the bellwether for the zinc industry itself. So they are contracts that are settled on the day. So it really is a gauge for demand for zinc -- of the zinc concentrate, which ultimately translates to demand for the zinc metal.And we can see there really since the -- since COVID came on in the first quarter of last year, we've seen that springboard in demand. So supply was absolutely slashed as part of -- because of COVID restrictions and shutdowns. And that real supply hasn't come back online. But demand has gone through the roof there with the spot. You just can't deny the spot graph there, it's plummeting down as quickly as it went up.So we literally started operations here at the start of October 2018. It's been an uphill battle since then, but we're getting that tailwind, and we're getting that benefit.We've now locked in a discount to this annual benchmark for 80% of our contracts, and then about 20% of our contracts will take advantage of this spot market as well. And the more we produce, the more we'll fall into that spot contract basket for us, and we'll take more advantage of it.So certainly locked in some fantastic treatment charges, which is our main cost for the next 12 months. We see that averaging probably well below $150 a tonne for us, given we already get a discount to benchmark inside our contracts as an average. And then we double in the spot market as well, which discounts it further.This is a bit of a busy slide. Apologies for that, but it does tell a really interesting story about demand. So spot TCs are a very good gauge of supply and where that sits. But we see some really interesting data in the -- on the demand side as well.And you can see from the 3 pie charts at the top there, the takeaway is that zinc is predominantly used in galvanizing. So you're taking mild steel and you're coating it in zinc to rustproof it and then predominantly using the construction industry, and China is the big story.50% of world consumption is from China itself. So you sort of have a 2 markets here, China and ex China in terms of your comsumption drivers now.We all recall that China came through COVID probably 3 to 6 months earlier than every other nation. And we're seeing that effect come through in demand as well.So the Chinese market is absolutely booming. It's really been the single reason for the rebound in zinc. I'm sure the other base metals as well, but our focus is zinc. So the rebound in zinc has been due to that consumption and demand increase in China.And if anything, that consumption is only increasing. You can see that China is -- it's the import price for galvanized steel due to demand, obviously, is surging. And yet domestic galvanizing rates in China are at all-time highs as well. So a lot of production, a lot of imports, and yet it's being consumed.So that galvanized steel is being consumed, which naturally translates into a demand for zinc as well. On the other side of the consumption coin, so to speak, we're seeing the U.S. and Europe start to move, which is natural.They're coming out of COVID lockdowns. The case rates and death rates are dropping because of the vaccines. And we're starting to see the steel demand increase as well, which is a really good sign, given that we're already in a strong macro environment, and we haven't really had a strong effect of Europe and the U.S. on zinc demand. It's only just starting to come back to its previous operating level.So those stimulus packages that have been outlined in the U.S. and in Europe could really help in driving that steel demand, which ultimately mild steel gets coated in zinc. It has to, otherwise, it will rust out inside 12 months. So good for zinc demand.There's another graph here that most -- a lot of people will be fairly familiar with, but it really is a -- Europe and the U.S. manufacturing PMIs, which is a really good sign of economic activity. They're absolutely surging at the moment.So through that April period, they're getting up to their all-time highs as well. So good signs. And as I said, this -- the ex China demand is really the key driver we see to zinc demand. But we're doing that in a backdrop where the macro is already in a really good position.So -- and continued supply-constrained or challenged supply, mainly because here -- the world of zinc supply is a case to haves and the have nots. So a lot of developing nations will supply zinc concentrate, for example, Peru and Antamina is one of the biggest mines in the world.South America, where Peru is, is obviously having continued problems with vaccine rollouts and the availability of vaccines, which is forcing more social distancing. And it really stops the output from these nations, the producing output of these nations.So very hard to socially distance for underground mines, very hard to get transport logistics, whether you're bringing materials in or you're trying to get concentrate out. And the reality is that 75% of all zinc and lead is produced from underground mining sources.So we don't see supply rebounding or having any form of a V-shaped supplier rebound because of the lingering effects of COVID in developing nations, where a lot of zinc concentrate supply comes from.Conversely, we're seeing very strong V-shaped rebound in demand. So it's an exciting time to think that, that macro could progress even further than where it is right now.Moving on now to our exploration, our life-of-mine extension. There you'll see very spec drill core there in the background, that's all around our Silver King drilling.What I'll do is I'll pass it over to Barry as well in this to talk about how we're going to develop Silver King. You would have seen the announcement that came out about 1.5 weeks ago around some of these infill drilling results, absolutely spectacular, as expected.We have several more announcements. That was about 7 or 8 assays out of a 30 assay program -- 30-hole program, and we'll be releasing those assays as they come through on the remaining holes over the course of the June quarter there.But -- I mean, Silver King is shaping up as just simply as a beautiful ore body that clearly extends down plunge. We've now identified a potential repeat to the South, a potential splay to the Northwest. So we're seeing very, very strong potential for this resource to grow, or more importantly, the mine life to just continue to be maintained.So seeking to target having a 2- to 3-year mine life for the next 10 to 20 years, whatever it adds to be. But yes, there's clearly a lot of mineralization there, and it's 2 kilometers from our existing plant.I'll pass it over to Barry now. Barry, maybe you want to talk about the implementation of Silver King, how we plan to mine and process it and the timeline there as well.

[Barry Harris, COO & Site Senior Executive]

Yes. Thanks, Pat. It's been really, really great to have the capability to focus on bringing on some of the additional resources that we have within the lease into the mill feed and the life-of-mine operations.And a key difference between the way we're looking at it now to how it was previously contemplated in our other feasibility studies that were released previously is, previously, we were looking at doing a blend of tailings and in situ into the plant to try and get that uplift across the board.But the way that we're looking at this now with Silver King and with the East Fault block ore bodies is to actually utilize the last part of the plant that still isn't being used with tailings operations.So we're looking at a completely separate comminution circuit, smaller, more bespoke. And then reinvigorating what was part of the lead circuit in the plant to actually process what we put through that to pull off a lead con and a zinc con, post that. So we're looking at it in a different lens.And the other key part of this as well as a large portion of all the cost base is already covered by our tailings operations anyway as far as camp, flights and all the rest of that sort of stuff is largely all covered. So it does make deposits that would be really, really great as stand alone, very, very prospective when you take into account that a large part of the cost base is already covered by existing operations.So the team is effectively pulling together all the information that we need to and finalizing that feasibility study and getting it all together with the aim to have that where we can put it forward to the Board in the first quarter of FY '22. So the first quarter next year.As when we want to actually put it forward to the Board for a final investment decision, so that we can actually start through into the execution phase of bringing on Silver King and East Fault block.The other key part of this as well is this is additional metal tonnes to the tailings base level. But it also gives us the opportunity and the pathway to bring in all the other in situ resources on the mine lease. So at the same time as executing a detailed feasibility study for Silver King and East Fault block, we're also doing scoping study work on the Silver King deposit, which is larger than both Silver King and East Fault block combined. And we have numerous other opportunities on the mine lease to bring further in situ mineralization into the life-of-mine feed.So as Pat said, the main aim now that we've got our tailings baseline where it is, is to keep adding additional incremental tonnes through in situ resources addition to the processing plant and then looking to that long extension.Because it's a prolific mineral region, and there is a lot of opportunity for us to bring those in, especially when I looked at through the lens that we're looking at it now. So there's a lot of opportunity.First of all, we'll be bringing on Silver King and East Fault block with that study to get to a pit, and then we'll be turning our attention to the execution of those and looking at what else can be bought in later on.

[Patrick Walta, MD & Director]

Thanks, Barry. We'll also talk a little bit about the other -- next program that we flow straight into for exploration, which is more of a greenfield exploration, which is our Millennium prospect.So we've been talking about this one. We've been analyzing this one for a fair while. It's the first time really in about 3 years that we've had sufficient cash flow and a rig on site to be able to start this sort of greenfield exploration.And Millennium itself, we're looking for this conceptual third portion of the original ore body there, which is effectively a detached block of the original ore body in the northern face.So a lot of work done by our geological team over the last couple of years to enact this drilling program. We've got a 14-hole program underway. So the theory essentially goes, you can see the main pit there, which is north block, and a smaller pit to the South, which is South block.The northern face of that northern pit or the ore body that was in that was around 25 meters at 12% zinc and lead. You then have Nikkis Fault and you have nothing on the other side.So that northern face had no grade degradation, no thinning or anything like that. And so clearly, a portion of the original ore body has been displaced by faulting, which is a fairly common story around Australia for various discoveries in recent memory.So we've been applying various geological theories to that, and the team has developed this campaign, and we'll test that out going forward. So that news flyer will come through over the course of the June quarter, how that program is going.Really beyond that, there's a whole heap of applications for this sort of Millennium style prospect on the mining lease itself and within the broader exploration package. So we're excited.We do see that exploration will continue on the site. It will be both resource definition, if you think about Silver King style targets, for example, Watsons Lode is shaping up to be very similar to a Silver King, high-grade underground mine.And then we'll have this more conceptual exploration about larger bulk tonnage place, the Millennium style targets as well. So we do expect to continue that exploration.And ultimately, that exploration news flow will continue all the way up to the onset of the wet season. And given we have several areas on the mining lease, which are all-weather access, we can really start that drilling again up in sort of late January, early February. So even despite the fact that we had quite a significant wet season this year, Silver King, for example, has an all-weather haul road out to it.So we were drilling that in January despite the rain. So there are a number of areas in the mine site where we can do that as well.You'll see there, obviously -- it's just covering off the knowledge of what we already have. We do have these existing mineral resources in place as in situ mineral resources, and we will progressively bring these on.So initial targets for Silver King and East Fault block, as Barry said, bringing them through the main lead circuit, that's unutilized in the plant as well.Ultimately, we'll also bring South block on as well. So around 10 million tonnes or 10% zinc and lead from those resources. It's pretty handy to have up the sleeve. And the macro right now is just absolutely perfect to bring them on. And as we bring them on, you're significantly reducing your costs as well because your overall production from the site increases, yet you maintain the same fixed cost base or a similar fixed cost base for the site.So we can generate better margins from more production, and we do that in a good macro environment. That sets us up well. The base that we're coming off, right now, is still relatively strong and producing north of 30,000 tonnes of zinc metal.And so we see us about -- able to grow that through tailings and then ultimately in situ. And a lot of that detail, that feasibility study and life-of-mine planning will come out within the -- in the September quarter as well.That really concludes what we want to go through for the bulk of this presentation here.

[Patrick Walta, MD & Director]

I said we've got a number of Q&A questions, which I can open up to now. I'll flip back to probably some of the relevant data people would like to talk about here.And just opening up the Q&A, feel free to send through any more. I see Matthew Chen. He's got a few questions here for us, which would be good. So first one is around specifics of how the wet season conditions affected the hydro mining?So I might pass that one over to Barry, we'll go into some detail about that wet season, not only how it effects us, but also how we manage it as well because there's been some good developments there in -- over the course of 12 months.

[Barry Harris, COO & Site Senior Executive]

Yes. Thanks for your question, Matthew. It's sort of counterintuitive that additional water introduced the hydro mining operation actually badly affects it. But effectively, what happens is you get that rainfall coming down into your operations, and it actually dilutes out the product that you've got in your launder.We normally run at about 40% density in what we actually create when we're hydro mining without any additional water being added into the operations and into the launder.And effectively, as you get more rain coming in, the density of what you have in the launder and what's reporting through to your pumping station drops. And when you have a decent amount of rain, it gets to the point where you don't have any density that you're sending through to the plant because as the pontoon lifts up, you can drop the pumps as much as you want to down into that, but you're not getting down to where your actual density is sitting at the lower part of the actual -- the water column in that pumping station.So you end up just pumping water through. And whilst we have all the things in place to try and minimize that impact, you do have periods where you're running with this. You can't actually get enough density through to the plant. And it's detrimental to the operations.So what we've actually done to mitigate that is, we do actually have additional pumping infrastructure put into the launder to ex pit when that actually happens from the operation.The other thing that we've done is, we run half the pumping station at the top, taking the water off the top, and we dropped the rest of the pumps lower down into the actual -- the higher density material down the bottom and pump that out to try and keep density going through to the plant and keep the operations going.The other part of it, with all of this sort of stuff is when the tailings gets wet, your actual cannons themselves and the ability to move around on the damp surface becomes challenging as it becomes slippery. So all your canon moves and everything else that you've got to do becomes very, very challenging.So it really disrupts the continuity of operations. And the way that we have the operations is, you need that consistent feed through to the plant to actually get really good results from a recovery point of view and also get the tonnage through to actually process.When we start to get lower densities reporting through to the processing plant as well, what that effectively does is, it gets to a point where it's too low to go through the ball mill.Otherwise, you'll grind out the mill. So we actually have to then bypass the ball mill. Whilst that drops in your power costs and everything else that you're going to have, whilst you're operating in that manner, it also materially drops your recoveries because you're not grinding down the higher size fraction and not polishing up all those additional surfaces that would otherwise be going through.So wet season to wet season, we've got a hell of a lot better in managing those rain events. And the teams have come up with management strategies and how we operate the plants so that we do get the plant to operate continually, albeit at lower tonnage and lower densities and without the ball mill.But when you do get that, you get dips in throughput, obviously, dips in recovery and all that goes with that. So it does interrupt the operations. And what you have in that region as well is, you normally build up in the morning and then you have big showers in the afternoons.So when you have days in a row where that actually happens, you get back up to normal operations, then it happens again. So you do have that continual interruption to the operations.And as we discussed earlier on, it was the wettest March quarter we've had in close to a decade, which is great for the farmers and all the rest of you in the region, but it does hamper our operations.We have also learned a lot of lessons through this wet season, and we're going to be applying those into the next wet season to further mitigate those impacts, setting up satellites, slurry pontoons, so that we can actually put that in other areas of the dam that feed directly into our hopper, not into the launder and additional pumping capacity down in the launder itself and numerous other things that the teams are working on with better traction for the cannons being able to move under pressure and in the wet and all the rest of that side of things.So we're not sitting stagnant on the lessons learned. We're continually learning and adapting and improving for next wet season.

[Patrick Walta, MD & Director]

Yes. Thanks, Barry. It's also worth noting that as we bring on in situ material, you're bringing on a second feed source as well, which will effectively act as part of the capacity as well during those times because you're not sole sourcing from the tails dam. So developing multiple source points from the tails dam, as Barry alluded to, and also having in situ material, will ultimately buffer out those rain events as well. So that's good to see us getting progressively better at it.If we'd had this wet season, last year, for example, we would have had significantly more downtime because the management systems have just improved drastically. So I hope that answers your question.And a follow-up from Matt, just clarifying the debt payments for the rest of this calendar year. I assume we have no further payments this financial year. So we have one -- our last sort of material scale payment occurs at the start of September, which is $10 million.And then we only have one other payment of $4 million at the back end of October this year, which would have effectively halved our current debt position again, down to about $14 million. So we see that repayment profile is perfectly manageable now, particularly given cash positions and also the cash flow generation of the business that we're achieving at the moment.A follow-up question from that is restricted cash. So restricted cash is an important opportunity for us. Currently, a tick under $20 million. That's used as part of backing for some power contracts and also for environmental bonding as well.We do see a very strong opportunity to switch that from cash-backed bonds. So having -- needing restricted cash to just plain surety bonds for the business itself, which is -- becomes more and more available as our balance sheet continues to improve.So doing that, literally, that $20 million will just be freed up, become unrestricted, and we can use it as we see fit. So certainly, it's essentially cash that sits in our account. It's just restricted because it's applied against these cash-backed bonds as well.So we certainly see that as an opportunity for just our overall liquidity improvement and something we'll be targeting over the June and September quarters to release all of our restricted cash now and any restricted cash going forward as well. So that's a good opportunity there.Final one from Matt is talking about recovery. So do we have a recovery target for the September quarter and talk me through the profile over the next couple of quarters?The ultimate goal is really in line with the independent reports that have been generated and worked through with the Mineralis scrip as well. So bringing on the Jameson Cells, we do see this ability to get recoveries into a steady state mode of 50% to 54%. We'll obviously be targeting as high as humanly possible that we can.But not just peaks, we want it consistent. So consistently delivering quarterly results in that region. And as Barry said, the focus for the June quarter, with the Jameson Cells coming on, and there'll be slurry is literally coming on tomorrow. So for those, we're looking forward to sort of the progressive improvement over the month of May and really bedding it down in the month of June as well.So getting that step change in recoveries. And then ultimately, working on throughput, while maintaining those recoveries in the September quarter itself. But that's the real target for us.And if we're generating -- for a quarterly average is 45% recovery for the March quarter. If we're doing that 50% or 52%, you're talking sort of 10% to 15% uplift in actual metal production from recovery profile alone, which, given you're already coming off a base of 30,000 tonnes, it's fairly material output increase.And then you overlay that with a throughput increase as well. So if we can generate a similar increase by throughput, you've got quite a large overall uplift in production off a base, which is already generating circa $20 million EBITDA and that's offer, for example, $1.25 zinc and slightly elevated TCs in the March quarter compared to what we do in the June quarter, and zinc price is above $1.25 at the moment.So gives a really good potential for multiple points of ultimately EBITDA and cash increase by target -- getting those targets in there. So we've got a -- we've just go one more from Shreyas. And why do -- why 80% of the contracts benchmark TCs.So good question. So we -- when we started up the operation, as all operations do, you're effectively bringing a new product into the market. So you don't immediately get on long-term contracts with a smelter or with a trader for multiple years.You're typically in the spot market. You supply your material into the spot market and the spot will be what it will be. As you -- given the variability in spot, and you'll see that on that graph here, given that variability in spot, given it's your major cost, most minors, including ourselves, will look to reduce that risk and reduce that cost movement by getting on to benchmark contracts.So benchmark is effectively an annual sales agreement, a long-term sales agreement with a smelter or with a trade up, which gives you really that security of sales.So if you go back to sort of this time last year, April last year, spot TCs were $320 a tonne, that was absolutely brutal. But underlying that is also just a physical difficulty in selling concentrate. There was obviously a lot of concentrate around, not a lot of demand for concentrate compared to where we are today.So smelters and traders could be far more discerning about what they would buy. And so you do run a security of sale risk in that. Now we -- and you see we never had a problem, we sold every tonne, and it was it was sold 3 months in advance. So that's pleasing.But transitioning on to majority benchmarks is a part of a risk mitigation from both a cost perspective and also a security and sale perspective there, which is fairly typical.Most miners would operate about 80% benchmark, 20% spot. And spot is -- has flexibility in for production that sort of thing as well. So it's a great time now to be selling spot.But conversely, if everyone was selling on the spot market, the spot price would be through the roof, for example. So there's a reason why spot is lower than benchmark at the moment. It's because not many people are selling into it because everyone is filling their benchmark contracts right now.So spot will move around, as you can see. The benchmark gives you that good consistency in that major cost item for you. And as I said, it's -- in 2020, it was 35% of our total costs. In 2021, it's going to be 17% or even less.So we capture that gain straight onto our bottom line, which is great. And as we increase production over 2021, that gain becomes even bigger because you're selling more and more material at this lower TC rate.So that's all I've got as the questions. So certainly, feel free to e-mail or give us a call if you've got any other follow-up questions. But thanks, everyone. Really appreciate your time listening into it. I guess, we're -- it goes without saying we're really looking forward to presenting the June quarterly and material updates between now and then around drilling, production improvements, that sort of thing that we're really starting to see some -- a real launch pad for the business off the back of what was a relatively solid quarter given the big wet that we had.But yes, we're in a very good position now to supply into what is a fantastic macro that we hope keeps going, ultimately. But yes, I appreciate it, everyone. Thanks for your time, and we'll catch up soon.