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Good morning, everyone, and welcome to SSR Mining's Second Quarter Financial Results Conference Call. This call is being recorded.
At this time, for opening remarks and introduction, I would like to turn the call over to David Wiens, Director of Corporate Finance.
Thank you, operator. Good morning, ladies and gentlemen. Welcome to SSR Mining's Second Quarter 2018 Conference Call, during which we will provide an update on our business and a review of our operational and financial performance. Our financial statements and management's discussion and analysis have been filed on SEDAR and EDGAR and are also available on our website.
To accompany our call, there is an online webcast, and you will find the information to access the webcast in our news release relating to this call. Please note that all figures discussed during the call are in US, unless otherwise indicated. All references to cash costs and all-in sustaining costs are per payable ounce of metal sold. We will be making forward-looking statements today, so please read the disclosures in the relevant documents.
Joining us on the call this morning are Paul Benson, President and CEO; Greg Martin, our CFO; Kevin O'Kane, COO and Carl Edmunds, Chief Geologist.
Now I would like to turn the call over to Paul for opening remarks.
Thank you, David. Good morning, ladies and gentlemen. And welcome to our second quarter call. Positive momentum towards our 2018 goals continued in the second quarter. We grew quarterly gold equivalent production towards 85,000 ounces at lower cash cost. The Chinchillas project moved closer to completion and we delivered solid financial results.
We also released an updated mine plan for the Marigold mine outlining a ten year mine life with robust economics and over 30% growth in the near term gold production, an impressive base case with lots of upside as we look to continue our track record of reserve replacement and potentially if there's an expansion of the operation.
In the second quarter at Marigold, we produced over 49,000 ounces of gold, a 15% increase compared to the first quarter. We look forward to further growth in the second half of the year and into 2019 with the new haul trucks coming into service and commissioning of the new leach pad. We also set a record 7.9 million tons of ore in the second quarter notably at a high average grade, so a solid quarter at Marigold.
At Seabee, we produced over 23,000 ounce of gold in line with production in the first quarter and putting us well on track for full year guidance. Ore mining activities are now taking place at the high grade Santoy mine and the team has been doing a good job of optimizing that transition, setting the stage for a higher throughput in the second half of the year.
At Puna we had another strong quarter, producing nearly 1 million ounces of silver, allowing us to produce well in excess of our first half production guidance of 1.6 million ounces of silver. Importantly the Chinchillas project remains on schedule and on budget. On today's webcast we'll be showing a couple of videos that demonstrate the significant progress we've been making there.
Consistent with strong performance at our operations, we've increased earnings and operating cash flow, added cash to the balance sheet for the eleventh consecutive quarter and lowering our cost guidance.
With that I'm pleased to turn the call over for the first time to Kevin, who'll discuss our operational performance in more detail.
Thank you, Paul. As some of you know, I recently assumed the COO role here at SSR and it's certainly a pleasure to be working with a solid and experienced team here in Vancouver and at the sites. As Paul alluded to in his opening remarks, Q2 was a solid quarter at all of our operations and we remain on track to deliver annual production and improved guidance. In total we produced over 85,000 gold equivalent ounces, 8% increase over Q1 at lower consolidated cash costs of $758 per gold equivalent ounce.
Starting with Marigold, we produced 49,436 ounces of gold in the second quarter, 15% increase over Q1. Cash cost decreased to $700 per ounce from $720 per ounce in Q1. As expected, both production and cash cost in Q2 were positively impacted by higher ore stacking rates achieved through the previous few quarters. We delivered a record 7.9 million tons of ore to the leach pad in the second quarter and importantly at a 14% higher average gold rate as compared to Q1.
An increase in ore mining led to longer haul distances contributing to lower mining rates and higher unit mining costs of $1.92 per ton that were also impacted by higher fuel prices. As noted in our production release a few weeks ago, we expect total material mined to increase during the second half of the year with shorter haul distances and the four additional haul trucks through which came into service in July.
Third quarter production is expected to be between 40,000 to 50,000 ounces of gold. With the commissioning of the new leach pad and the higher stacking rates benefitting gold recovery later in the year, we expect strong fourth quarter production of approximately 60,000 ounces of gold.
At Seabee, we produced 33,582 ounces of gold in Q2 in line with production in the first quarter, as we saw the benefit of the release of in circuit inventory that had accumulated in Q1, offsetting the impact of lower mill throughput and feed grid. The mill performed well in the quarter, with lower quarterly throughput of 923 tons per day, reflecting seasonal planned maintenance, a temporary interruption in operation due to a forest fire and a ramp up in mining activities at the Santoy mine where we now source all of our production.
We expect mill throughput to increase through the second half of the year and continue to target our 1,000 ton per day average for the year consistent with the preliminary economic assessment published last year. And there free grade was 7.95 grams per ton in Q2 reflecting planned sequencing of the mine. Cash cost for the second quarter was $616 per ounce as compared to $481 per ounce in the first quarter.
At Puna operations we continued processing stockpiled material at the Pirquitas plant, while advancing work on the Chinchillas project which I'll come to shortly. The Pirquitas plant continued to perform well, operating at an average throughput rate of 4,353 tons per day for the second quarter, 5% above Q1, which was affected by weather events. The plant shutdown for major plant maintenance and other plant modifications previously scheduled for June was successfully completed during the month of July.
In anticipation of increased zinc and materials we delivered from Chinchillas for processing later this year, we re-commissioned the zinc circuit during the second quarter, which had been out of service since February 2, '16. In May, we began processing stockpiles from Pirquitas that contained higher levels of zinc and once again a concentrate producer. Re-commissioning and other cost associated with zinc production as well as declining rate of stockpiled material are reflected on our second quarter cash cost of $14.73 per ounce of silver sold.
We produced 954,000 ounces of silver in the second quarter marginally higher than the previous quarter as higher plant throughput offset lower grades and quality of stockpiles processed. As a result, we produce 1.9 million ounces of silver in the first half of 2018, exceeding our guidance of 1.6 million ounces of silver an actual result. At the Chinchillas project, significant progress was made with construction in mine development during the second quarter. We'll now play a couple of short videos that demonstrate what this looks like.
Starting with the Chinchillas site as can be seen pre -stripping activities have materially advanced with a total of 1.8 million tons moved through the end of June. In July, we also began transporting limited quantities of ore and building stockpiles at the Pirquitas site, which will be fed to the mill and lead up to commercial production. Infrastructure earthwork's was completed, foundations for the truck shop were laid, with structural steel deliveries initiated and a number of modular buildings were installed during the quarter.
Moving on to the Pirquitas site, the strong footage shows the construction progress we've been making on the stockpile dome. About 90% of the structural frame for the dome was completed by the end of the quarter with the remaining portion completed in July. As can be seen we are now in process of planning the structure and we expect to complete that by the end of the third quarter.
In addition to the work on the dome, all the required planned upgrades to treat Chinchillas ore were completed in the quarter, our successful re-commissioning zinc circuit and producing the zinc concentrate in the second quarter gives us added confidence in a smooth transition to Chinchillas ore later this year.
So the project is now well advanced and looking ahead we expect the remaining construction and development activities to wrap up for sustainable ore delivery to commence in the fourth quarter of this year. To sum-up we had a solid quarter operationally and we continue to expect to deliver to guidance.
I'll now hand over to Carl who will take you through our exploration activities.
Thank you, Kevin. Exploration activities maintain pace at both North American operations in order to make meaningful additions to reserves and resources by year-end and give us exposure to an early stage opportunity in the top Tier North American gold exploration district.
At Marigold, where our main objective is ultimately converts the Red Dot resource to reserve. We completed 27,900 meters of drilling and 75 holes between the Red Dot area and two phases of the Mackay pit.
Recall that we took a phased approach to the Red Dot drilling. Having confirmed their expectations with an assessment of the first half drill results on the current mineral resources we made the decision to advance the phase two, with one completed. It is expected to convert inferred resources to the indicated category.
If phase two is successful and Mine Planning completed the ultimate goal is to convert the Red Dot resources to reserves in 2109. The remaining drilling for the quarter was completed on two phases of the Mackay pit where we suspect the presence of continuous higher grade northeast trending structures.
This drilling has yielded encouraging results with higher than average greater intercepts occurring within inches outside the current mineral reserves at outline. We expect these intercepts to make positive contributions to the mineral resource and reserve at year-end.
At Seabee Gold Operation close to the Santoy mine, we completed 12,160 meters of underground drilling in 40 holes with another 6,800 meters being completed from 12 surface holes. These programs continued our efforts to convert inferred results to indicate at Santoy 8A, and the lower and eastern portions of Santoy Gap.
In addition, drilling continued on the Santoy Gap hanging wall target where we expect to report additional inferred resources at year-end. Results through the quarter on Santoy 8A have been positive on plunge in the core area confirming the high grade nature of the resource and its continuity.
In general, holes completed on the marginal inferred areas of 8A and western most upper gap have returned results that confirm the cost structure at sub or resource grade. With half the year complete, we remain optimistic that we will meet our resource conversion objectives at Santoy.
Today, the majority of our Seabee surface exploration drilling has been on the 34,000 hectare Fisher property. Of the 23 zone in [ph] drillholes comprising 12,050 meters completed during the second quarter 18 holes were completed at Fisher to begin testing a portion of the Santoy shear zone on extension. Initial results continue to demonstrate the Fisher properties prospectivity and underpin our belief that overtime Fisher could demonstrate similar shareholder value like recent discoveries of Santoy.
Elsewhere on the Seabee property we completed selective drill testing for satellite mineralization at the CRJ and Santoy targets as potential Seabee mill fee. Additional drilling is planned to investigate new areas for discovery on the Seabee property this year.
At the SIB project located in British Columbia, we began mobilization of a 30 man camp ahead of drilling that started early July. Our target here is precious metal and rich mass of sulphide that may occur in the same geology that hosted the past-producing Eskay Creek mine.
During the quarter, we received the results of an EM survey that identified a discrete conductor located two kilometers south of our 2017 drilling and this will receive some ground follow-up and drilling in the coming quarter.
Looking ahead to the third quarter at Marigold we will continue to push the completion of the Red Dot drilling together with some targeted follow-up on higher grade intercepts that are present in the Mackay Phase 5 area.
Activity with Seabee will be focused on the conversion of inferred at Santoy Gap and Santoy 8A, we've opportunities for inferred addition at gap hanging wall and 8 east.
With that I'll turn the call over to Greg for a discussion of our financial results.
Thanks Carl. At the halfway point of the year I'm quite pleased with how our financial performance is tracking. Despite metal prices coming off marginally from the first quarter, our continued positive operating performance continues to provide solid results as we move into a stronger second half. With the cash balance approaching $0.5 billion we are capable of funding the remaining Chinchillas capital and new trucks at Marigold without denting our strong balance sheet.
For the quarter, we generated revenues of $104 million, 6% increase from the first quarter and income from mine operations of $21 million, 23% increase from Q1. So both figures are tracking in the right direction despite the lower metal prices.
Our G&A expense is significantly higher than that comparative quarter at $8.2 million, but the difference is largely due to valuation changes on stock based compensation. Paul has still been tough on hiring so our cash G&A is materially the same as it has been over the last few years.
Reported net income was $2.6 million or $0.04 per share. As I noted in my remarks last quarter, we booked a onetime $5.8 million tax expense related to our reorganization in Argentina which results in the Pirquitas and Chinchillas assets been held in the same entity.
This reorganization simplifies our operations in Argentina significantly and gives us a stronger consolidated company to drive our future strategy in the country. The expense was lower than the $7 million estimate I'd previously provided.
Adjusted net income which considers that expense along with other items was $12.1 million or $0.10 per share. So earnings performance remain solid even as we transition to the near term growth we expect in the fourth quarter and beyond.
Cash generated by operating activities was $17.1 million, an approximate 50% increase over the first quarter of this year. You probably noted sales of gold were below production as we built bullion inventory, which deferred about $8 million of cash flow in the quarter. At quarter end, we held approximately 13,000 ounces of gold bullion in inventory.
$35 million in proceeds from the final sales of Pretium shares financed our investments in our assets of $19.3 million and investment in Chinchillas at the $16.1 million. As a result, our cash position grew by $21 million to $494 million, the eleventh consecutive quarter our cash position has increased.
I highlight our working capital position which totaled $670 million as a strong net current asset balance adds to our cash. It remains supported by our undrawn $75 million credit facility.
I'm sure those of you that follow Argentina are aware of the significant devaluation of the Argentine peso. While we don't expect to see any material reduction in costs in the long-term ongoing higher inflation, I draw your attention to the impact it has had on the tax moratorium liability we hold in Argentina.
If you recall one of the benefits we noted was the conversion of a US dollar liability to a peso liability. So well due over five years in 18 months the liability in US dollar terms is now approximately half of what it was when we entered into the moratorium.
We have made some improvements to the higher-end of cash cost guidance at Marigold and Seabee. These improvements reflect the solid first half of the year each mine has posted.
Puna operations continues to show positive performance from the Pirquitas stockpile through Q2. But we need construction completed and actual performance results of the Chinchillas or through the plant they have confidence before adjusting Puna guidance.
Our production remains weighted to the fourth quarter as both Chinchillas ore processing and the new Marigold leach pad are expected to come online during that period.
With regards to the third quarter, a few items to note that will draw cash. At Marigold the new haul trucks will be entering service in that period, so the $22 million in capital will be invested and we will incur the bulk of the new pad build in that quarter.
Chinchillas capital spending will continue through the quarter as we advance that project with the outstanding amount of at a 100% project budget being approximately $40 million. As we supported our partner Golden Arrow through a loan agreement, I expect to see from advances on that $10 million loan in this quarter to fund their 25% share of capital.
So with those comments, I'll turn the call back to Paul.
Thanks, Greg. To conclude we delivered another solid quarter for our shareholders. We look forward to delivering further production growth in the fourth quarter and carrying through to at least 2021, as Marigold, Seabee and Puna also increase production and retain significant exploration upside. Our strong first half operating and financial performance positions as well to meet our production and cost guidance for a seventh consecutive year. Our track recorded delivery had diversified Americas based operating platform and our exceptional balance sheet of what continues to differentiate SSR Mining from the majority of our peers.
This concludes the formal remarks of our earnings call and I'll now pass the line over to the Operator to take any questions you may have.
Thank you, Mr. Benson. [Operator Instructions] The first question is from Rahul Paul with Canaccord Genuity. Please go ahead.
Hi, everyone. At Seabee, it looks like you were able to successfully push the mill to over 1200 tons a day on multiple times this year. Have you begun to evaluate an expansion beyond the current plan which I believed is 10, 50 tons a day or is it too early to say?
I think a bit early to say, we're focused on the transition. We have been focused on the transition moving all the mining across to Santoy. We closed the Seabee mine earlier this year. I think let us get some, yeah runs on the board to consistently moving the bottleneck away from the mine and we will see how we go with it. I'd say we'd review that billing calendar and next year.
Okay. Perfect. And then and just on related question I guess, at what level does the mine become bottleneck and is a now with the Seabee mine shutdown, I mean all of the feeders is coming from Santoy, so at what point would you expect the mining to become a bottleneck here?
So the mine definitely is a bottleneck now. You can see that because as we've said we've run the mill over I think the big days we've had 1300 tons per day and so by definition, yeah, we are not running consistently at 1300 tons. The bottleneck is there, part of it is we're continuing to open up new phases also equipment deliveries are limited to winter ice road, so we will be getting I think two additional trucks and loaders next calendar year and so you'll probably see a stepwise movement in production, but so, yes definitely bottleneck sitting at the mine at the moment.
Okay, perfect. Thanks, Paul. That's all that I had.
The next question is from Michael [indiscernible] with Macquarie Capital Markets. Please go ahead.
Hey, good morning, Paul and team. Couple of questions on Marigold and land, the capital was stripping quiet low in 2Q. Do you still expect to 15 million overall spend for 2108?
Yeah. Thanks. But yeah I was low in the quarter we tend to get variations in deferred stripping depending on the actual phase sequencing. And you noted that obviously we moved a lot of ore tons in the quarter relative to the waste tons. So yes we have an adjusted guidance we still are expecting in that range of deferred stripping as we move through the year.
Okay. Thanks and we still right to assume a higher strip for the second half of the year or closer to 2 to 1?
We certainly see the strip ratio trending up through the second half of the year. We don't provide specific, but obviously we've just announced them and put out the tactical report. So directionally that would give you some guidance as to how that would trend in the second half.
Okay. And just on the pad build. What's the approximate capital cost going in that pad each year?
A - Kevin O'Kane
So that we build pads periodically sort of on at every two years cycle as what we've been on, this particular pad build is a little bit more complicated just because we had to move some roads and some collection ditches and other things. So typically the pad builds range in the $5 million to $6 million, this one is the $8 million to $9 million because there was more infrastructure associated with it.
Okay, great. Thanks for that and just quickly on Santoy and how many stocks do you currently have online and/or development phases?
To be honest of top my head at the moment not sure if we can get at the data for you, at the moment obviously it varies through the year because you're ranging from stopes which can be up to 20 meters wide to stopes which if in five meters wide. But yeah, I can get the data for you later.
Okay. That will be great. That's all my questions. Thank you.
Next question is from Mr. Mike Parkin with National Bank. Please go ahead.
Hi, guys. Congrats on the good quarter. Just a couple of follow up questions, on that Marigold pad that $8 million to $9 million are all going to be spent at the third quarter or we assume that's going to be spread into fourth quarter as well?
Hi, Mike. Thanks. We actually started this pad build late in '17 and then put it on hold through the winter season. So we did incur a couple of million of that last year. The remainder of the bulk well certainly be incurred to the certain quarter we may see some carry over into the fourth quarter but certainly the bulk of that remaining spend will be in this coming quarter.
Okay. And then can you just go into a bit more detail on what you were talking with their earlier with the peso denominated liability in Argentina?
Sure, Mike. We entered into an agreement I think it was called a tax moratorium in Argentina related to export duties that was a U.S. dollar liability through that we converted it to a pesos liability, we're paying that over a five year period. As I noted in my remarks because it's denominated in pesos with the roughly 40% decline we saw in the Argentine peso through late Q1 and through Q2 that's had a significant decline in the principal value of what we would have to pay over the remaining term of that moratorium.
If you want data one have to go back on our website have a look I think the press release would have been March or April of last year and that was just resulting that that export tax issue.
Thanks, so much guys.
[Operator Instructions] The next question is from Chris Thompson with P I Financial. Please go ahead.
Hi, good morning, guys. Congratulations on a good quarter. I've just got few questions. I will start off with Marigold. You did mention the I guess the higher fuel prices during the quarter and their effect on the I guess some earning costs there I mean can you just walk us through sort of expectations on the second half of this year or whether we're going to see I guess the benefit of the tonnage also I should say it would have haul distances sort of compensating for few higher fuel prices?
Yeah. Chris, hey it's Greg. Thanks for the question. I'm obviously one of the factors is going to be where oil trends over the quarter and we've seen it stabilize in a range fairly similar to Q2. So we would next hopefully see much to do with pricing. As Kevin noted in his remarks we're going to see tonnage levels up. So overall we will be using more truck hours in the second part of the year which will consume more in absolute dollar terms but we expect to move more time so on a per ton basis, we'll expect diesel cost or fuel cost to decline in the second half of the year relative to the first half of the year. Diesel is about 15% of the cost structure of Marigold. So that gives you a sense sensitivity and we have about 40% of the diesel edged at Marigold for the remainder of this year and that protects us at oil prices above in the range of $60 to $65. So we're getting some relief on that at the current oil price levels and of all protect a portion of that exposure for oil prices did accelerate from here. We also have the issue with haul you have a longer haul distance getting back to the pad. So if as you mining through the phases you'd find more ore or than waste that actually just increases your haul distances but there's obviously a positive because you're getting more ore than you originally planned as you go through that.
Can you just walk through just quickly on the sort of step up and capacity in a Q3 to Q4 and where do you see this going on a half quarter basis?
No. We don't get that much guidance I mean when we normally don't even give quarterly guidance that we had this year because we saw that much variations, so we said for Q3 of Marigold 40,000 to 50,000 and then around 60,000 in the fourth quarter bit heavy I mean we definitely didn't give any more after results guidance in there.
All right, well that's good. Thanks for that. And just the final question I guess Seabee, just for understand what great reconciliation on the level of dilution as looking back at the Santoy at the moment?
Great reconciliation has always been good there. We continue doing just that as we do each year which is reserve calculation that has been positive over recent years and can continues to track well. And dilution for those you went to the site visit last year, so we don't have a big issue there we tend to get very good breakage on a hanging wall so that's not a major issue. If you - look we did the PI last year and if you're read through that there's quite a bit a data in terms of the different assumptions that are used.
Great, guys, congrats. Thanks.
Thanks very much.
The next question is from John Thomas with John Thomas [ph] Independent Research. Please go ahead.
Thank you. I have a just a couple of mechanical questions. The marketable securities were over $100 million year-end and $8 million remains. What is the $8 million remaining first and second were there something else that were saw older [indiscernible] Pretium shares for example is just treasuring us to return in the cash. And the second question when does the long term debt mature which were I guess naturally reduce our bill in the cash?
Yeah. Hey John thanks. Obviously the reduction in marketable securities on the balance sheet is a combination of the sales plus the decline in value of the pretty in stock over that period, so it's a combination of those two factors. The marketable securities that remain are all fairly immaterial amounts that have arisen generally as we've invested properties over the last two or three years. You've seen here most of those announcements we tended to take a small position in stock back in some of those transactions so there's really nothing material there it's five or six different companies probably our position in Golden Arrow is probably the largest one and that was announced previously. With regards to I'm sorry the second half of the question, pardon me John.
When does the debt mature?
Yeah so the convertible is early 2020, so Feb 1, 2020 is kind of the effective maturity of the convertible adds it's notional maturity is 2033, but there is an investor put option on February 1, 2020, unless the share price increase significantly we would expect those notes to get but at that period.
What is the conversion price?
It is $20 US per share.
Thank you.
Just sort of some added color on the first part of the question the rates we have those security uses which we've made a conscious if it over last a couple of years to - so those projects that we had in the portfolio that we didn't think we would add value to and so we've sold a number of those in quite often what we do is retain some sort of upside exposure through NSR royalties [ph] production exploration payments and often take some equity in that process and really - so when we sell the project if that company is able to move that project forward our shareholders still have some trailing benefit.
Next question is from Humphrey Carey with [indiscernible]. Please go ahead.
Good morning. I just want to talk about the Marigold project looking at 2019 and 2020. I'm looking at the recent changes to the life of some mine's plan. It seems - am I right in thinking that the all in sustaining costs are going to increase quite significantly over the next two years I mean and in which case all the city of the mine will be producing low less cash flow or am I missing something please?
If you have a look on our website you'll be able to see the 33101 document we released - we press released a couple of months ago and the full document went on very recently and it'll give you a year-by-year cash cost and all in sustaining costs and it varies between build in sustaining costs from 900 it gets high in 2024, 2025 primarily due to phasing of stripping and then it drops spec down again so slide us 2028 the all in sustaining cost to avail $790 and so it varies year-by-year but all the detail a is on the website.
Well yeah I was referred on Page 5 from I was referring to but if you look at 2018 you forecasting $936 basic. In 2019, you're forecasting 1062, in 2020, you are forecasting 1125, in the next and in the medium term, the next two to three years you're actually - costs are going up quite a lot?
Yes they're going up and then I come down.
But what I don't understand if you will it mean I was just surprised because obviously I know you're spending a lot of money this year in terms of CapEx, sustaining CapEx and other CapEx plus obviously you're buying the profit from the third quarter, but I was a bit - I assume that CapEx might reduce in the following year but seems to be getting higher. Is that right?
A lot of that is the pretty strip, obviously when you it is the bit optimization, it sequences on maximizing NPB and a lot of that is coming down to the capitalize stripping.
Okay. But if say but obviously I know you've done well in terms of a drilling set for Red Dot but in fact it comes if you can establish the reserve at Red Dot say in the middle of next year would you be able to bring that into the production profile without helpings or if it's?
No, no. So consider that in 43101 is the base case and say that's we have everything in that's or at the moment you have proved probable. I'm sorry Red Dot is currently outside of reserves. Red Dot tend to be high grade but deeper it's got a higher strip ratio and so you would tend to see you are the need to find more material which is why we're doing more haul which is why we run during the early in realization we move precise at the moment and lower your mining cost. So it's an iterative process we doing the drilling this year, early next year will do the mine planning, if it comes in the way it will have a highest trip because we know it it's deeper, but then you get the benefit of high grade and to we do the mine planning we don't know what the answer is but that's something that will be focusing on next year once we get all those drilling results.
Okay. Well that's helpful. I appreciate that. Thank you.
And I think to thing to remember there in Marigold have an amazing operation opened in 89 with and [indiscernible] today again still yeah this project we focused on is it has the potential to increase the reserve by 30%.
No, no. So I just want to check on that. Can I ask you question about Argentina, you've been very nice to your partner and lend them $10 million? Is it right?
Yes. We have a facility, but -
You could have been less nice, can you explain why you chose that strategy if sort what I mean?
Yeah. What we do is to get sort of better laid on the remainder of the property in terms of the security around that one. They could have financed it elsewhere. It's got a reasonable coupon on it. So certainly in an excess cost of capital, so we thought that was the best outcome for our shareholders doing well.
And yeah you know how good the operation is so that helps as well doesn't it?
Yeah.
I think it looks good. Okay, thank you very much.
Thank you.
This concludes the question-and-answer session. I will turn the call back to Mr. Benson.
Again, thanks very much everyone. I'm look forward to doing this again for the Q3 results. Have a good day.
This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.