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[00:00:04] Ladies and gentlemen, thank you for standing by and welcome to the third quarter twenty twenty Hecla Mining Company earnings conference call. At this time, all participants are in a listen only mode. After the speakers presentation, there will be a question and answer session to ask the question during the session. Will need to press star one on your telephone. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Russell Lawlar, treasurer of Hekla. Thank you. Please go ahead.
[00:00:39] Thank you, operator, this is Russell Lawlar Treasure. Welcome, everyone, and thank you for joining us for Hekla third quarter Twenty twenty Financial and Operational Operations Results Conference Call. Our financial results news release that was issued this morning, Clear Market Open, along with today's presentation are available on his website. On today's call, we have Phil Baker, Heckles President and CEO, Wendy Hall, senior vice president and Chief Financial Officer Lauren Roberts. Seeing Hekla senior vice president and Chief Operating Officer Kurt Allen, director of exploration, and Keith Blair, Chief Geologist. Any forward looking statements made today by the management team coming under the Private Securities Litigation Reform Act and involve risks shown on slide two and three in our earnings release and then our Tinku and 10K filings with the SEC? These and other risks could cause results to differ from those projected in the forward looking statements. Reconciliation's of non gap measures cited in this call and related slides and cautionary language for our use of the term resource instead of reserves are also found in those documents. With that, I will pass the call to Phil Baker.
[00:01:41] Thanks, Russell. Good morning, everyone, and thank you for joining our call. I'm going to start on slide four, and I want to start by commending our management workforce to their resiliency and commitment to operating safely, including the way they've dealt with the exposure to this resiliency and commitment has really allowed Hectorol to deliver very strong operating financial results this quarter. So strong that in our history we've never generated as much EBITDA. This was 75 million this quarter and only four times in our history as the free cash flow going higher. This reflects the quality of our silver mines, particularly Greens Creek. Part of the reason we generated so much free cash flow is that our capital requirements are generally low. So with the 50 million a free cash flow, what we use that to repay our revolver, we put cash on the balance sheet and we announced two hundred and fifty percent increase in this quarter's dividend and that's a 50 percent increase in the base. And the rest is the fact that we triggered the new levels for the SilverLink dividend. Before I hand it over to Lindsey, I want to highlight two of our ESG programs that focus on the social element of ESG that supports our communities. And nothing is more important than that support because frankly, Hecla has been part of these communities for four decades.
[00:03:06] The first program is something we call Hekla Bux, where we support local business by giving employees vouchers that they can spend with the businesses that are in a local business organization. Most of it, most of them are Chamber of Commerce is a big success by providing an injection of spending into the local economy as they deal with the pandemic. The second program, which we are doing with core mining, is bringing covid-19 lab that does PCR testing to Juno. And it's surprising that the capital of Alaska doesn't have adequate testing, but they don't. When you get tested, the test has to go to the lower 48, so it takes three days to know the results. So we have brought a lab to Juno and a decision to testing our employees, which is going to allow us to shorten our quarantine time. We are offering key government organizations like first responders the opportunity to get one day turnaround. And this is going to be critical when the legislation legislative session starts in January. I think we're making a real difference over and above being the largest private employers in these communities. And with that, I'm going to pass it over to Lindsey. Go ahead, Lindsey.
[00:04:20] Thanks, Bill. And good morning, everyone. Starting with Slide six during the third quarter of our third quarter, our assets performed quite well. We recorded some 200 million in revenues for the quarter and a realize silver and gold price per ounce of just over twenty five dollars and one thousand nine hundred and twenty nine dollars. So we capitalize on the favorable precious metals environment we found ourselves in capturing much of the increasing margins this quarter, led by Greens Creek, we produced consolidated the free cash flow of forty nine point seven million, resulting in our cash position of just less than one hundred million at the end of the quarter. Solid cash generation and a record high adjusted EBITDA combine to also reduce our net leverage ratio to less than two, while providing a liquidity position of nearly three hundred and fifty million. As Phil mentioned, our silver price link dividend was triggered and our declared quarterly dividend increased by 250 percent, returning some of these cash flows to our investors. Turning to slide seven, all of our assets generated positive free cash flow this quarter, with the exception of Lucky Friday, which was expected given its ramp up activities, the Lucky Friday ramp up is ahead of schedule and we expect to see positive free cash flow generation in the fourth quarter.
[00:05:37] This is important to us financially because in the first nine months of the year, cash flows from Luckie Friday were in negative 24 million. Net income for the third quarter was thirteen point five million, driven primarily by improved gross profit and all our assets except casaba already, which was impacted by longer than planned and no downtime early in the quarter for major maintenance activities combined. Our operations generated fifty three point five million gross profit, with our low cost profile enabling us to capture growing margins in this rising commodity price environment. Cash provided by operating activities was approximately 74 million for the quarter, and we spent some 24 million in capital expenditures as we continue to invest at our mine sites. With no large capital expenditures in sight, low cash costs and a positive precious metals environment, we expect to continue to generate significant free cash flows, further deleverage the balance sheet, invest in our assets and exploration properties while returning an industry leading silver dividend to our shareholders. With that, I'll turn the call over to learn to go through our operations.
[00:06:48] Thanks, Lindsey, first and most gratifying is that our safety performance continues to be exemplary, despite the distractions caused by the pandemic. As you can see on slide nine, we have a year to date all injury frequency rate of one point zero two, which is a 78 percent reduction over the past six years and a 14 percent reduction compared to the same metrics last quarter. I am very appreciative of the hard work and focus from our operations teams that delivers these results. At the Greens Creek mine, we saw gold and silver production of two point six million ounces and 13000 ounces of gold at an all in sustaining cost of 784 per ounce as shown on Slide 10. That generates a margin of 220 three percent when compared to the realized price of 25 32. As Phil mentioned earlier, we partnered with the covid lab to provide real time testing services for our employees. We expect this service to shorten the quarantine period, save money and reduce the burden on our employees. We envision this being a short term solution until local testing capacity increases. This will be the first commercial laboratory established in Juneau. While the capacity dedicated to Hekla, there is room in the agreement to work with local authorities to address community needs as well. I'm pleased to announce that ramp up activities at the Lucky Friday continue to be ahead of schedule and we anticipate hitting our full production rate in the fourth quarter. At this pace, we expect production in excess of three million ounces of silver in 2029. Grade is expected to improve as we might deeper increasing the projected production to around five million ounces annually over the next three to five years.
[00:08:31] The best part is that no significant planned capital outlay is required to achieve this goal. In addition, we are looking at various mining method changes and other initiatives to improve safety while increasing the productivity of the mine. At the casaba already mind, we saw production of 26000 ounces of gold at an all in sustaining cost of eight hundred and sixty eight dollars, lower gold production and higher costs in the quarter were due to Plainville maintenance activities and delayed access to two high grade underground stoves worked to improve the reliability of the mill is in full swing throughout the quarter. In July, we took about 12 days to conduct planned heavy maintenance on both of the grinding mills. The work was scheduled for about nine days, but ran long, primarily due to some complications with the InSitu machine work a night shift coverage from some of the support contractors. As you can see on Slide 12, the work was extensive, it included machining the feed in trunnion flange and replacing the training on the signal, replacing Babbette Bearings EPS of both mills, maintaining the gears. That's a related work that's conducted while the mills aren't operating. Work was conducted in parallel on the crushing and conveying systems, the skill train and the detox system, as we said before, this is not a short term exercise, but it is an important one to set ourselves up for the future through the biggest jobs. And we are starting to realize the fruits of our labor. In October, the mill delivered 90 percent availability, including scheduled maintenance outages. Gold production also was impacted by geotechnical challenges that delayed several high grade soaps in the West Mine, which now will be produced in the fourth quarter to mitigate this risk.
[00:10:13] In Q4, we redirected development resources to focus on stope development. More Stokes available to secure the underground production. High grades also are anticipated from the East mine for the balance of the year. Striping is underway and progressing well at the New 160. The initial production is expected from the pit late in 2021. Unfortunately, the permits necessary to start were received about a month later than expected. We utilize the contractor to strip the extension of MCP during this time, which resulted in higher operating expenses compared to budget. At San Sebastian, Mining concluded in the third quarter and we anticipate the miling to be complete in the fourth quarter, San Sebastian, with its very low capital demand, has been a successful operation for HACLA. And I want to take this opportunity to thank the San Sebastian team for a job well done. In Nevada, we have substantially completed mining of the developed oxide ore and currently are mining the refractory or bulk sample, which we anticipate delivering to a third party for processing. I'm happy to report that the mining is progressing well with the ground conditions, water and inflow, productivity and cost all being better than planned, yours more structurally controlled and less disseminated. The model which would use positive. We anticipate recognizing this mine was produced in 2021. Once it is processed both on Sobashima, Nevada, provide rich exploration opportunities. I'll now turn the call over to Phil to give more detail on how these exploration programs are progressing.
[00:11:48] Thanks a lot. And we'll turn to Slide 15 now. We've increased our guidance for exploration to 16 million for the year, with about eight million of that being spent in the fourth quarter. And 16 million is about what we had intended to spend at the start of the year, but backed off because of Cauvin. So in the fourth quarter, we'll spend about a million Cassa million at San Sebastian and we're Cincinnatian. We're following up on the new veins that have been discovered with our great mineralization. You can see that on the left hand part of the slide that shows San Sebastian. And you see that's not very far from where we've been mining. Now, more than half of the fourth quarter spending will be in Nevada. And with the majority of that being at Midas, which is shown on the slide, on the left, on the right, rather, we can easily drill the Midas target subsurface. So that's one of the reasons why it's been prioritized. And we've we've already started drawing to the north and the south, the color on the grand design where most of mitosis production has come from and we've expanded the plan of operations so we can drill the East Greven corridor, which has never been never been explored.
[00:13:03] So now looking to slide 16, this is our update on guidance. And this is a little different show a little differently than press release, because here we're comparing the current guidance to what our guidance was before the pandemic, because our silver assets are in the United States. We've never had to shut them down. And with the better grades, Greens Creek and the strong performance at the Lucky Friday, we're producing about a million and a half more ounces than than we thought we would at the beginning of the year. Costs are slightly higher because of covid, but the volume more than covers it. Gold is about 10000 ounces less about what we lost with the Quebec shutdown and costs here, about 100 hundred dollars per ounce higher and capital is down for the year, but up from last quarter's guidance. Overall, I'm very, very happy with the progress we've made this quarter. The results that the company has, you know, just reflects that. And I expect the fourth quarter to be similar to the third quarter with more gold production and about the same level of silver production. With that, I'd like to open the line for questions this time.
[00:14:15] If you would like to ask a question, please. Press star on the number one on your telephone keypad for a moment to compile the Q&A roster. Our first question comes from the line of Heiko Ihle with H.C. Wainwright. Your line is now open.
[00:14:34] Hey, guys, thanks for taking my questions and congratulations on progressing through all this pretty well.
[00:14:42] Thanks.
[00:14:43] I guess part of that is also common, but just building a little bit on what Lindsey said earlier in regards to pricing and then I noticed your average gold solo price this year to date through September or 1972 and 1745, an ounce per page five of the 10. Q Both of those prices are obviously well below what we currently create, even with today's covid vaccine decreasing prices. You do have some hedging in place in your lays out pretty well what it is. But just thinking ahead, we expect more hedging in your future and building on that as your willingness to hedge increase given the high volatility we face this year.
[00:15:25] Well, the short answer is we've had a hedging program in place for precious metals, lead and zinc, rather, since 2009, and we've been very consistent with that program and I don't see any major change happening in that program. We've also consistently hedged the shipments up when they're leaving Greens Creek in order to take the revenue that has been booked and and make sure that we we we don't lose that revenue. Should we have a drop in the in the future? The thing that we've done just for a short period of time was the purchase of PUDs for gold and silver. We started that in 2019. We did it in anticipation of the need to do the refinancing. We did that refinancing. And we have not put in really any positions since the second quarter of this year. So is it possible that we'll put in more puts in the future? It's possible, but the volatility, the precious metals is quite high. So the cost of these pits are very high. So it's it's not a fundamental piece of our strategy. It is something that we will do if we see a real life cycle. We don't have big capital outlays. We've got low cost. We've got cash on the balance sheet. We haven't undrawn revolver. So we have a lot of financial flexibility now that we didn't have when we put these puts in place a year ago.
[00:17:08] This makes a lot of sense, I can't help myself to ask another question related, because I'm assuming they're sort of getting this tribute in the next, whatever it is, 90, 120 days. Will this do anything to look at any of the sites on an asset by asset basis? I mean, it just this whole topic, you know, dominates news that dominates politics, even if. What impact do you think we'll see as as the police?
[00:17:36] Well, I don't think there'll be much impacts from a production standpoint. I think we've been very, very successful at putting in protocols that work.
[00:17:48] I think where we'll we'll see some benefit is a reduction in costs. We won't have to incur all of the you know, for example, the quarantine process that we go through at this point. We have people that are having to quarantine for a week and of course, they get paid during that quarantine period. And so that would be a cost that would be eliminated. Anything to add to that?
[00:18:15] The most significant cost is that at Greens Creek, there are also some management costs and costs of it. It would be a, you know, a pleasant reduction in costs. But I think basically the only other thing I would add is that the rest of our business a bit more.
[00:18:35] That arguably the world of a little bit sorry, go ahead.
[00:18:38] You know, I just. Any other questions I.
[00:18:41] I know that was on my own. Thank you very much. Thanks a lot. Appreciate it.
[00:18:48] My next question comes from Trevor Turnbull with Scotiabank. Your line is now open.
[00:18:55] Hi, Phil. I just wanted to ask about a little bit of a follow on a hike or hike he was asking with respect to costs in your press release, you had a nice breakdown of your Twenty twenty cost outlook on cost of sales by asset in millions of dollars. And that's actually very helpful. So when you look at something like Greens Creek.
[00:19:23] Going forward, you were budgeting, I guess, 250 million this year. I'm just wondering, see, in a in a year without coronavirus, you know, what does that number look like going forward? I mean, have you seen something like five, 10 percent of your costs attributable to what you've had to do to mitigate the virus or or kind of can you just speak a little bit to that 250 number and how that looks going forward into into the future?
[00:19:57] Sure. I'll Lauren, why don't you answer that?
[00:20:01] Sure. Thanks. Phil Trevor at Greens Creek. I think one way to look at this is it's round numbers, about a million dollars a month for us to to manage Koven the way we're managing additional costs. And it costs a variety. It's around 300000. You know, you lump in the rest of the mines, there's probably some knock on effect. Call it a million and a half bucks a month that should come out of the cost structure. I think the only other thing I would add is that it does, you know, impact our ability to operate as flexibly as we like. So I think once the restrictions are removed, you'll see us be able to capitalize on opportunities more effectively.
[00:20:44] Ok, so then just looking at that, like, say, you take Greens Creek, which seemed like it had a pretty normal year other than having to introduce these protocols. And Khoza, are those numbers, you know, fairly steady? I mean, are they a good proxy forward to to think about four run rates?
[00:21:03] Yeah, I mean, in fact, if you go back and you look at us historically, you know, the cost structure in terms of the dollars that we have spent has been pretty consistent, you know, in the aggregate, including everything in capital, the whole ball of wax. And Russell, you can help me with this is roughly around half a billion dollars. This is what we have spent. That's correct. Yeah. OK, so so I think you can anticipate it's going to be something in that range in future.
[00:21:36] Ok, and I appreciate you're trying to speak a little bit high level and not get too granular. But but maybe just one last question on this. On this, it looks like kind of backing into your guidance and what's left to spend in Q4. The Lucky Friday seems like it's about 17 million bucks or so for Q4. Is is that number kind of move around as you get to the full run rate in terms of having to bring on more people or anything? Or is that a pretty good number as well for the Q4 number for lucky?
[00:22:14] You know, we have a bit more capital than we would typically have in the in the quarter, and we have just maybe slightly less production and we would typically have we you know, we're still while we're up to sort of historic levels of production, I mean, we'll be somewhere around 700 to 800 tons per day. You know, we can probably get to 800 days, 50 times a day in the in the future. And what happens is we get these sand cycles where we don't have the same availability to do the backfill, which slows down the production. And so we experienced that in the fourth quarter. And it takes a bit of time of being in operations for that to smooth out. We always have a little bit of that, but it's it's exacerbated when you restart.
[00:23:07] Not understood. OK, that's all I had. Thank you.
[00:23:10] Sure, Trevor.
[00:23:14] And as a reminder, ladies and gentlemen, please press star one on your telephone keypad, if you would like to ask a question. So the next question comes from the line of Mark Nonwage with RBC. Your line is now open.
[00:23:30] Hi, thanks. Good morning. Those in the northeast corner of you, I guess, first off to kind of walk us through how you're thinking about the longer term potential offensive in Nevada all this year, kind of expanding the exploration programs now. What do you think we could get an update on, you know, potential resurfaced, both of those operations and kind of how you're thinking about them in the medium term?
[00:23:57] So so with respect to San Sebastian, it's it's much like where we were in 2013 14, where we're in an exploration phase, we have a base of of known resource, but we don't see it being economic enough to move what we know forward. So we're going to add more to the to the base. And how long that will take is is unclear. Certainly the vertical our sea drilling that we do where we go through the first 10 to, what, 30 meters of topsoil and hit the bedrock and sample it where we're identifying veins in a way that we were not able to do five years ago. So and so those things that have been discovered have been discovered just in the last quarter or quarter and a half or so. So we're optimistic that we'll find more mineralization. We've hit with that the drilling that we've done. There's been all great hits, but we've not been able to piece together something that is is an ore body. So, you know, give us time. But we think it'll be faster than it was the last time we we went into the exploration of there. With respect to Nevada, we're not we stopped mining there. We're continuing the mine that we take two or we've we've got the stockpile. It's it's now ready to go to Nevada gold mines. We're working through the process of doing that. We would anticipate that that material will be shipped before the end of the quarter and will be tested and we'll get the results of it. We'll have another shipment that will be prepared to ship and in 2021 and we'll see where we are. Once we do that, we're also doing and there is some continued exploration that's occurring. We've got some development to do to be able to really put ourselves in position to the exploration that we need to do at Fire Creek.
[00:26:16] So, you know, just stay tuned. We you know, if we knew what the future would be with this type of oil, we would tell you. But it's still open. We got to see what the results are of actually processing the ore before we make a commitment as to as to where it's going.
[00:26:37] Ok.
[00:26:37] In the meantime, we'll continue to in the meantime, we'll continue to mine it and stockpile it, it's you know, there's some risk associated with that, but it's not a huge risk.
[00:26:50] Yeah, that makes sense, and thanks for the color on that, I it's just kind of a. kind of digging into the sense of and a little bit more kind of how do you see like, obviously you were able to bring in a prize for bringing the initial operation back in for very limited capital of the, you know, full milling strategy that you employed there. Kind of how you see that. Do you think that's still a viable alternative or the mill starting to fill up, given where the gold prices are? And, you know, the bar might be a little bit higher because you need to invest in your own infrastructure. Do you still think without Biya be the preferred alternative?
[00:27:31] I think it's very viable. There are a number of missiles that we need, there's there's you know, you double the prices, maybe it's a you know, I don't know what the number is, but you increase the prices. Maybe you do get to that point. But what are a long way from that point with mills being being filled?
[00:27:53] You know, OK, perfect. And then moving over to cast, obviously, you know, pretty big maintenance going on through the quarter and then obviously with some of the health issues, kind of how are you coming with the changes you've made now or going to, you know, get over the hump in terms of both, you know, getting a little more consistent throughput in both through the mill and making sure you've got good stock availability if you're also moving into the mine. So should we really be a big inflection in Q4 to Q1? Sorry, and how should we think about that in the near term?
[00:28:33] Well, we'll certainly we feel confident that we'll have the guidance that we've given and we've certainly seen a very strong October, but in October, then about a year or so, you know, let's let's give it some time to to see the performance and make sure that we've we've made the modifications that need to be made to have the consistency. And that's been the real issue with Kassa. It's never been a drag on cash flow that it's inconsistently provided the positive cash flow. There's been a few years where it's, you know, it's rival Greens Creek.
[00:29:15] But for the most part, it's been it has not delivered the cash flow that we would expect. And we think that by doing these things, we're increasing the potential for that to happen. And we think it could happen in 2021. But let's let's let's wait and give it some time to get to the truth itself. Anything that.
[00:29:38] No, I think you captured it.
[00:29:40] Well, OK. And then just the final one for me, just lucky Friday night that the the the operation coming along and kind of ramping up better than you were expecting kind of already thinking about the remote being miner. Now, is that still part of the medium term plan or kind the update there?
[00:30:05] Well, with covid, we've not been able to have people on the ground to see the work that that's been done and we've covered the Swedes have really cut back their work schedule. So the amount of activity has been less. So we are not pushing that. Well, we'll wait for things to and things to kind of clear so that people can get over there so they can get their work done. And, you know, I would anticipate in Twenty twenty one that will be completed and will be able to bring it over and then start testing it at the lucky Friday. But in the meantime, we're testing alternative mining methods at the Lucky Friday that, you know, could could on its own make an improvement and could also be beneficial to the RBM when we bring it over Wynans and that Calfo.
[00:31:09] Yes, perfect. Thanks. Thanks. That's it for me.
[00:31:13] Ok, thanks, Mark.
[00:31:15] Our next question comes from the line of Lucas Pipes with B. Riley Securities. Your line is now open.
[00:31:23] Hey, good morning, everyone. Very good job. And we wanted to ask a little bit more about the capital allocation policy. Very good to see the increase in the dividend and the silver price link dividend on top of that kind of going forward from here. How should we think about your capital allocation priority to returning more capital to shareholders? Is that for the deleveraging? And of course, you've done progress there, too. Could there be room for M&A, which is really appreciate you are your thoughts on this. Thank you.
[00:31:59] Sure. Because so the what you have seen over the last quarter is I think what you will see last quarter and what we've guided for the fourth quarter is what you'll see in the future will put more cash on the balance sheet. If you think back of Hecla over the last decade, we have on average there had one hundred and fifty two hundred and fifty million in cash on the balance sheet. I think you can anticipate us having something in that order of magnitude. We've we've now gotten to just about 100 million.
[00:32:32] That's kind of our minimum level that we like to have. We have the revolver undrawn. We don't like to utilize the revolver. So so I anticipate that number number two, we've got these dividends that we've announced. We'll hopefully see that SilverLink dividend continuing to pay. No. And maybe in the future we'll see even more as as liquify ramps up, its cash flow continues to improve. If we see Nevada working, maybe you'll see us be able to increase the dividend yield that we provide.
[00:33:13] They're going to expand the exploration spend. You know, we're now back to about what we thought we would have at the beginning of the year. I think you can anticipate next year a bit more exploration spend capital will will get a piece of things. But the reality is we don't have the capital needs of any of our operations. So don't don't expect a huge sort of capital spend.
[00:33:39] And then as far as the M&A goes, we're we're certainly always considering it. But frankly, we've never had as many opportunities within our own portfolio as we have today. So it's not the highest of priorities.
[00:33:58] Very good to hear. Thank you for that additional color and then you touched on exploration, and that's my second question. You mentioned you have quite a few opportunities internally. And if you are to rank the exploration opportunities either at existing operations or non developed ones, can you do that? What would really appreciate your your thoughts on that? Thank you.
[00:34:26] Yeah, I'll I'll I'll just say that we've got the challenge of having a number of things that are almost of equal attractiveness to us, you know, we're fortunate in that we the exploration that we have at our existing operations are building off of the existing infrastructure. And so those are attractive if for no other reason than the capital efficiency is so high. But why don't I let Curt respond from a I guess, a geologic perspective?
[00:35:02] I think from a geologic perspective. Nevada obviously ranks high its location, whether it's minus Fiachra Hollister and even Aurora. San Sebastian has, you know, that's located right in the heart of the Mexican silver belt. And geologically, it is it is very exciting. And some of the things that we've been finding are or are going to go forward in the future gets a variety of fabulous exploration potential to build on the Casselberry defamation zone. So I think, you know, we've got some really good exploration projects somewhere near mine and some are more grassroots.
[00:35:47] And the last thing I'll mention, Lucas, on the exploration is we're anticipating receiving the authority to be able to go underground at Rock Creek and mining or are really on the north side. And if that occurs, then what you'll see us do is develop the inclined to allow us to do the drilling there. And and while you might not view that as pure exploration, because it really is moving the resource into reserves, I just think we'd be remiss not mentioning mentioning that.
[00:36:24] That's good to hear and appreciate that, everybody. Best of luck and keep up the good work.
[00:36:32] Thanks, Lucas.
[00:36:34] Our next question comes from how he concludes with Slinker and Co. Your line is now open.
[00:36:42] I feel Lindsay Lohan, I have a question and then two comments, what did you say about CapEx at Casa Berardi? I didn't hear it clearly.
[00:36:54] I didn't say anything specific about caffeine at Castlebury, but in all of our operations have a pretty minimal amount of capital expenditures in the future, including Castlebury.
[00:37:11] Ok. And two comments. One I picked up from a conference call before you have a fertilizer company called Mosaic, and they had shot for 100 million dollars of savings and expenses. They got so many useful suggestions from their employees that they're not only going to overshoot to 100 million for the next two years, they think they can find another 200 million. So my my point is ask your employees at Casa Berardi for some ideas. You'd be surprised. They said these things have very little or no capital costs you might be surprised by. In fact, I know you'll be surprised by what the employees suggest to save money accessability. And the second is as to hedging gold and silver when it goes down after the fact, people ask why you didn't do it. And then if you did hedge, people ask, well, why are you? She missed all the upside. So don't don't be don't be so don't be sensitive to second guessing questions about hedging. Either you do or you don't. You can't have it both ways.
[00:38:28] So let me let me respond to the second thing first, and that is that we do not so upside on our No. Full stop. We just don't do it with respect, with the exception of stuff that's on a ship. Otherwise, there is no there is no real hedging of the way we sell. So we don't have to do a call that morning. You're going to cost us. We don't do a costless collar. We because it's not costless. If prices go up, we don't sell sell forward the precious metals.
[00:39:06] So that's number one. Number number two, with respect to asking the employees and at CASA. We certainly do that. And in fact, we have a very structured program that where we're still I don't know, we're probably halfway through the implementation of it. And, you know, we'll we'll we'll see what we conclude the results will be. And we'll we'll inform everyone of that in the next if not next quarter, the following quarter, I would expect for the year, next year, one way or the other.
[00:39:45] There'll be lots of little suggestions that don't have to be massive. But when they add up the way they see those, Mosaic said it would be surprised. They were surprised. So and none of them require big capex. So it sounds like a double win for you guys when these when these people are incentivized.
[00:40:05] Yes, we've got that. Thanks, Howie.
[00:40:07] You're welcome. Thanks, guys.
[00:40:11] There are no further questions at this time, I'll turn the call back to some of the criteria for closing comments.
[00:40:18] Ok, well, thanks, everybody, for participating on the call. As I said, this was a very good quarter for the company. I anticipate the fourth quarter to look similar to this quarter. And so I said with that, I'll obviously be very pleased to be talking to you again at the end of the quarter to announce that. So thanks very much for your participation. And if you have any questions, feel free to give me a call or rustle a call and we'll be happy to walk through things. Thanks, everybody.
[00:40:55] She says today's conference call, you may now disconnect from the remote lines.