Lundin Mining Corp

TSX:LUN

Good day, and thank you for standing by. Welcome to the Lundin Mining First Quarter 2025 Financial Results Conference Call.

[Operator Instructions]

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jack Lundin, President and CEO. Please go ahead.

Good morning, and thank you, everyone, for joining Lundin Mining's First Quarter 2025 Conference Call. Yesterday, we reported our operating and financial results for Q1. A copy of our press release containing the details of the quarter and the presentation are available on our website where a replay will also be made available. All figures presented are in U.S. dollars unless otherwise noted. I would like to remind everyone that yesterday's results and certain comments on the call include forward-looking information. I will draw your attention to the cautionary statements on this slide for reference and our latest relevant filings on SEDAR.

On the call with me today, I'm joined by my colleagues, Teitur Poulsen, our Executive Vice President and Chief Financial Officer; and Juan Andres Morel, our Executive Vice President and Chief Operating Officer. We will be presenting our figures from continuing operations, Candelaria, Caserones, Chapada and Eagle. Touching on the highlights from quarterly copper production in for the company was 76,774 tons, while gold production was 31,849 ounces, which keeps us on track to meet our annual guidance of between 303,000 to 330,000 tonnes of copper and 135,000 to 150,000 ounces of gold.

The operational performance supported by strong gold prices in the quarter translated into another quarter of almost $1 billion in revenue, $388 million in adjusted EBITDA and $337 million in adjusted operating cash flow, which excludes the impact of a working capital build of $215 million. When we released our annual guidance in January, we introduced the consolidated cash cost range. For the quarter, we produced copper at $2.07 a pound, which is in the lower end of our cash cost guidance range for the year between $2.05 and $2.30 a pound.

In addition to the operations performing as per plan, the company executed on a number of strategic initiatives that I will touch on in the next slide. On April 16, outside the current earnings period, we successfully completed the sale of our European assets, Neves-Corvo and Zinkgruvan for cash proceeds of USD 1.4 billion.

Following receipt of those proceeds, we paid off and canceled our term loan of $1.15 billion and repaid a portion of the debt drawn on our revolving credit facility all of which has significantly strengthened our balance sheet in support of our future growth opportunities. In March, the company entered into an option agreement with Talon Metals to acquire a highly prospective exploration project called Boulderdash adjacent to the company's Eagle Mine.

This transaction provides a low-risk, high-potential opportunity that could extend the mine life at Eagle if exploration continues to be successful in proving out an economic ore body.

During the quarter, Lundin Mining also announced a new shareholder distribution policy that commits an annual return of approximately USD 220 million per year to shareholders. This is in line with previous annual distributions, but we have increased the level of share buybacks and adjusted the dividend to maintain the set amount. On an annualized basis, we are now paying a dividend yield, which is in line with our peers. In February, we updated our mineral resource and mineral reserve statement for our operating assets where we were -- we were able to successfully offset mine depletion and replace reserves associated with the sale of Neves-Corvo and Zinkgruvan.

This past Monday, we announced the impressive initial mineral resource estimate for the Vicuña project, outlining the world's largest at that stage copper, gold, silver development project of which Lundin Mining owns 50% alongside our partnership with BHP. On January 15, we closed the transaction to jointly acquire Filo Corp., and the mineral resource announcement is the first major milestone for the joint venture. It forms the basis for our upcoming integrated technical report that will continue to outline a multiphase development plan for the district in the emerging Argentinian mining province of San Juan.

I will now hand the call over to Juan Andres, our COO, to walk us through in more detail the company's production results.

Thank you, Jack, and good morning, everyone. The company is tracking to production guidance on a consolidated basis for all metals in 2025. As Jack mentioned, copper production for continuing operations for the company was 77,000 tons and gold production was 32,000 ounces for the quarter.

At Candelaria, production was 37,000 tonnes of copper and 21,000 ounces of gold. During the quarter, throughput was positively impacted by softer than anticipated ore from sections in the Phase 11 in the open pit. This is expected to continue into the first part of the second quarter.

Overall, production at Candelaria is tracking to guidance. Caserones has performed well this quarter, and throughput was positively impacted by improvements to operations from the full potential program underway.

During the quarter, the mill processed 8.7 million tonnes, which is a quarterly record for Caserones. In addition, capital production was strong at 6,500 tonnes due to continued benefits from all materials being placed on the pad and higher aggregation rates on the damage. Caserones is tracking to guidance for the full year.

Production at Chapada will be modestly weighted to the second half of the year. During the quarter, Chapada produced 8,900 tonnes of copper and 11,000 ounces of gold. Results were driven by an increase in stockpile material to the mill, which led to lower recoveries for the period.

Grades and copper recoveries are expected to increase in the second half of the year due to higher contributions from fresh ore and less stockpile material process.

Chapada is tracking to guidance for the year for both copper and gold. At Eagle, nickel production was 2,300 tonnes and copper production was 2,100 tonnes for the quarter. Ramp rehabilitation at Eagle East has been completed after the follow ground in Q2 2024 and normal production levels are expected for the remainder of 2025.

Mine sequencing and grades are expected to normalize in Q2 which will support the annual guidance forecast for the year. In the first quarter, we experienced impacts from winter weather that affected the ore haulage, which affected mining rates and yield throughput.

Overall, we have had a good start of the year and production is tracking to guidance for 2025. I will now turn the call over to Teitur to provide the summary on our financial results.

Okay. Thank you, Andres, and good morning, everyone. So before going into the numbers, a reminder that for the first quarter, '25, we continue to report our European assets as discontinued operations and the balance sheet items from these subsidiaries will be reported as assets and liabilities held for sale. As previously mentioned, the transaction closed on 16th of April and as such, our reporting for the second quarter will also include the contribution from our European assets for the first 15 days of the second quarter as discontinued operations.

The company generated $964 million in revenue from continuing operations. The quarter benefited from certain delayed shipments at Caserones, around 40,000 metric tons of concentrate which slipped into January and contributed around $80 million to our revenue generation for the first quarter.

With the sale of our European assets, our revenue mix is now even more geared towards copper, with copper generating 84% of the quarter's revenue compared to last year when copper made up around 76%. Approximately 95% of our revenue now comes from our South American assets with Candelaria and Caserones being the largest contributors.

Turning to Slide 13. As mentioned previously, with the delayed shipments from Caserones, this benefited the volume of copper sold during the quarter. On a consolidated basis, we did, in fact, sell around 5% more copper in the quarter than we produced. The total copper sold amounted to 81,000 tonnes during the quarter at a realized price of $4.63 per tonne of copper and 30,000 ounces of gold at $3,350 per ounce before the impact of streaming and including adjustments from prior period sales. This translated into, as I said, $964 million for the quarter in revenue, which also includes $45 million positive adjustments from prior period provisional pricing on copper and gold.

And as you can see on the graph to the right, this quarter was the highest revenue generation from our continuous operations over the last 5 quarters. Portion of our revenue for the quarter is derived from volumes sold under provisional pricing. The final prices for these volumes are subject to adjustments and will typically be determined in the following quarter. At the end of the first quarter, just over 80,000 tonnes of copper were provisionally priced at $4.43 per pound with final pricing still pending.

Turning to Slide 14. Production costs from continuing operations totaled $517 million for the quarter, which is slightly higher than the costs recorded for the previous couple of quarters. This quarter includes the cost associated with the change in inventory at Caserones in relation to the previously mentioned delayed shipments of concentrate in addition to recording higher production costs at Eagle.

In the previous 2 quarters, a portion of the costs at Eagle were categorized as standby costs so loss reflected in production costs, while ramp rehabilitation work was carried out. But with Eagle now have returned to full production, all costs incurred are now charged to the production cost line and thus increasing our consolidated production costs for the quarter by around $15 million to $20 million compared to the previous 2 quarters.

The various total costs have come down from prior quarter due to lower sales volumes, while C1 costs for the quarter are slightly higher compared to previous 2 quarters as the mine went to higher grade ore during the second half of last year. Costs at Caserones were driven by higher throughputs and an increase in sales volumes from the previously mentioned delayed shipments by Caserones C1 costs continue to remain fairly stable. At Chapada, our C1 costs for the quarter are somewhat higher than the previous 2 quarters due to lower sold volumes for copper and gold.

Nevertheless, the C1 cost for the quarter remained significantly below guidance of $1.80 to $2 per pound copper for the full year. The continued favorable FX and also due to higher gold prices. On a consolidated basis, as previously mentioned, our C1 costs amounted to $2.07 per pound copper, which is towards the bottom end of our guidance of to $2.05 per copper to $2.30 per copper.

Our costs continue to benefit from weaker local currencies and our C1 unit cost also continued to benefit from higher gold prices compared to what's assumed in our guidance. On to Slide 15. The total capital expenditure for the quarter were below guidance, primarily due to the deferral of capital projects at Candelaria, including deferrals of the SAG power system upgrade and the deferral of relocating certain electrical lines as well as lower volume route at Caserones TSF. These are all expenditure deferrals and are expected to be incurred later in the year.

Almost 70% of the sustaining CapEx in the quarter was for stripping and tailings storage development. Lundin Mining's 50% share of capital expenditure related to Vicuna, was EUR 43 million, which is tracking slightly above the full year guidance. Higher expansionary capital costs during the quarter were also the result of an opportunistic mineralize purchase at Candelaria during the quarter.

We remain on track for full year guidance with sustaining and expansionary CapEx of $175 million for the quarter, while the total guidance for the year is $735 million. The first quarter key financial metrics are presented on Slides 16 and 17. As mentioned, we generated adjusted EBITDA of $388 million and adjusted operating cash flow of $337 million, which excludes a build of working capital of $215 million during the first quarter.

Cash taxes of $43 million also impacted the operating cash flow in the quarter with a further cash tax installment of $108 million made in April to settle final taxes due in Chile and Brazil for 2024.

Free cash flow from operations was $22 million from continuing operations, which includes the working capital build of $215 million, and adjusted earnings were $94 million for the quarter. We finished the quarter in a moderate net debt position of $1.44 billion, excluding capital leases, which increases our leverage ratio of on-time net debt to adjusted EBITDA for continuing operations.

The company remains in good financial health, with costs trending according to guidance with some potential upside on the cost structure due to the continued weaker local currencies as well as a stronger gold price. Turning to Slide 18. With the closing of the Vicuna transaction in January and the closing of the European asset sale in April, helping a number of cash inflows and outflows impacting our cash flow statement and our net debt positions.

Reading this chart from left to right, we have already explained the quarterly adjusted operating cash flow, working capital build and the expenditure on capital items.

The closing of Vicuna resulted in a net cash inflow of $79 million with a cash payment to Filo shareholders of $611 million and receive cash from BHP for their 50% stake in Josemaria of $690 million. With our recently announced revised shareholder distribution policy, the company has pivoted to do more share buybacks and the company bought $71 million worth of its own shares during the quarter.

Accounting for cash interest and certain other items, the company ended the quarter with a net debt of $1.44 billion. After Q1, the company completed the sale of the European assets and received $1.4 billion in proceeds and released to Bolien for cash -- accumulated cash in the sold subsidiaries amounting to $84 million.

Following the closing of the European asset sales, the company paid off $1.15 billion in term loans, as well as repaid $170 million of debt on an enrollment credit facility. The company also paid out a Q4 dividend of just over $50 million and continued to repurchase shares during April. As previously mentioned, we paid our cash tax installment of $108 million in April to settle final taxes due in Chile and in Brazil for 2024, leaving the company with a net debt position of $262 million as of May 2, 2025. So with that, I will now turn the call back to Jack.

Thank you, Tyler. During the quarter, as I mentioned, we entered into an earn-in agreement with Talon Metals to acquire up to 70% ownership in the Boulderdash property, which is adjacent to our Eagle Mine. Initial drilling at Boulderdash intercepted 100 meters grading 0.41% nickel and 0.35% copper, starting at a depth of approximately 9 meters. More recently, drilling has intercepted grades of 2.33% nickel and 2.95% copper, which is in line with the current head grades at Eagle. Lundin Mining has agreed to fund an initial 30,000-meter drill campaign.

Following the completion of the 30,000 meters of drilling, the company can decide to find a feasibility study in exchange for a total ownership of 70%. This highly anticipated drilling program is set to start within the coming weeks. On Monday's webinar, we were able to detail the announcement of the impressive Vicuna mineral resource estimate. A replay is available on our website, which I encourage the audience to visit.

The initial mineral resource has highlighted the Vicuna project is one of the highest grade undeveloped open pitable copper projects. its size and scale, not only in copper, validates Vicuna as one of the largest gold and silver resources globally as well. The total measured indicated and inferred resource contains 38 million tonnes of copper, 81 million ounces of gold and just under 1.5 billion ounces of silver. Filo del Sol and the Vicuna district are poised to develop into a world-class deposit that will support a globally ranked mining complex. Since the initial oxide discovery in 2000, Filo del Sol has emerged as a generational discovery highlighted by the drilling of the high-grade Aurora zone in 2021.

Alongside Josemaria discovered in 2004, it forms the Vicuna project now representing the largest greenfield copper discovery in the last 30 years. The figure to the bottom of the screen shows resource data collected from S&P global platform.

The figure shows the relative measured indicated inferred reverse size of initial discoveries from 1990 until present day. You can see Vicuna is stacking up next to the large world-class mining operations such as Collahuasi, Cerro Verde and Escondida. The scale is aggressive. However, not only the size and scale of Vicuna, but also the elevated grade that exist in the core of the deposits make it truly unique.

At Filo del Sol, there is over 600 million tonnes at 1.14% copper equivalent in the measured and indicated category containing 4.5 million tons of copper. At Josemaria, there's a near surface high-grade core of 200 million tonnes at 0.73% copper equivalent containing 1 million tonnes of copper, which would likely contribute to the initial years of mining.

The mineral resource estimate is a key milestone for the district and will form the basis for the integrated technical report that will outline the combined project that is scheduled for completion in the beginning of 2026. In summary, Lundin Mining has completed a significant transformation to start the year. Most importantly, our existing operations are performing well and are tracking to full year production guidance across all metals.

To streamline our portfolio and position the organization with the ability to focus on the key value drivers for our business, we officially launched the Vicuna Corp. in partnership with BHP in January. Since then, we have made solid progress in derisking and confirming the significant growth potential of the Vicuna District, highlighted by the mineral resource estimate, which was released on May 4. The accompanying technical report will follow within the coming weeks.

Subsequent to the first quarter, we finalized the sale of our European assets, generating $1.4 billion in proceeds. This enabled us to repay and cancel our term loan and reduce our revolving credit facility resulting in a strong balance sheet going forward.

As we move into the next phase of growth centered on the high potential of Vicuna district as well as near-term growth opportunities at our existing operations, we do so with an enhanced financial flexibility and a clear focus on delivering long-term shareholder value. The company is well positioned for the future with a strong commitment to achieving our operational targets improving margins through disciplined cost management and maintaining the highest health and safety standards to protect our workforce. Thank you for those on the call, and I'll now open up for questions.

[Operator Instructions]

Our first question comes from Lawson Winder of BofA Securities.

Thank you for the update. We spent a lot of time talking on Monday about Vicuna. So I think maybe I'd like to ask about some of the other operations this morning and ask about Candelaria and the expansion. So at this point, what remains outstanding in terms of information that you need to gather in order to make a decision on the underground expansion? And then what is the current thinking on the time line?

Lawson, it's Jack here. Thanks a lot for the question, and thanks a lot for the interest on the call on Monday as well. Yes, for Candelaria, the underground, we were looking historically at quite a large underground expansion that we were dumping as the QGEP project. And I think we've telegraphed in recent calls that we've since kind of modified the approach to the underground expansion and looked at kind of increasing the capacity from the underground in more of an incremental way and through more traditional measures rather than implementing underground infrastructure like crushing and conveying.

We're looking at improving the productivity of our underground mining crews and then potentially adding more mobile underground equipment to increase production from the underground incrementally. So the large QGEP expansion project has been essentially put to the side. And at our Capital Markets Day in June, we'll be outlining kind of the next steps or how we're going to be incrementally growing production from the underground. But it's not going to be a heavy CapEx item. We're looking at a low capital intensity initiative to incrementally increase production, and we'll outline those details in June at our Capital Markets Day.

Yes, that will be very helpful. But what does that imply in terms of permitting, does incremental mean a more streamlined permitting process? Or do you face the same constraints on that front?

Lawson, this is Juan Andres. In terms of permitting, the underground expansion was already permitted in the EIA 2040. But as Jack mentioned, since we're making some changes from underground material handling system to more mobile-based expansion. We will have to amend some permits, and we're currently working on doing that.

Any sense on the time line to having those amendments?

Not yet.

Okay. Something to follow up with on the Investor Day in June, that will be very informative. On Candelaria as well, I wanted to ask about the stream. So the drop-down in the percent payout to Franco-Nevada on both the gold and silver is approaching relatively quickly in my model, and at current gold and silver prices, we're getting something in the range of an annual boost to cash flow of about $100 million. Is that in line to your estimate at spot prices? And then what's your current estimate on the timing of that drop down?

Lawson, it's Teitur. Yes, so we are currently forecasting that, that step down from 68% of the gold down to 40% gold and silver should happen about towards the end of 2026 and obviously, depending on spot prices at that point in time, I think your order of magnitude number is in the ballpark.

And then just finally on when you're thinking about the capital to develop Josemaria and Filo, which, I mean, I think you made it very clear on the last call that it would be done so in an incremental fashion. Nevertheless, have you considered copper hedges as an option to protect downside risk and ensure funding for that process?

The short answer is no. We're not really compensating copper hedges. I mean as you've seen from our presentation today, our balance sheet is very, very strong. We are effectively a net debt 0. So we have all the flexibility in the world really in terms of how we go about funding this. I mean we obviously will remain very disciplined on cost control and obviously trying to optimize the economics of Vicuna in terms of phasing of CapEx but hedging on commodities is not on the table at the moment.

Our next question comes from the line of Craig Hutchison of TD Cowen.

I just want to follow up from Monday's call. The integrated technical report is going to come out next year. Is the intent that the Phase 1 Josemaria will be a feasibility level and the oxides from Filo be at a PEA level or do I have that right? And I guess I'm just going to ask if the Josemaria is the plan to whatever you put out in Q1, that's the project you are going to move forward with through the RIGI.

Craig, thanks for the question. Yes, that's right. So Phase 1, what we're looking at right now is Josemaria getting the level definition of the study to a definitive feasibility study level. We've obviously been studying Josemaria for a number of years and have much more detail on that project and have significantly derisked it. We've been also looking, of course, at the Filo oxides .

There was a PFS that came out when Filo Corp. was in control of the Filo del Sol deposit. And so we're advancing the and redoing kind of the PFS on the Filo oxides and then for the Filo sulfides, once we get into large-scale full kind of capacity production, that would be at a PEA level that we would be doing the study at. So all of these three studies that are run in parallel are at different definitions based on the amount of data we've accumulated and the amount of work we've done to date.

Great. And do I understand it correctly, the idea is after you've kind of moved through the high-grade zone at Josemaria, you're looking at -- the PA will look at potentially substituting that ore at the high-grade zone from Filo del Sol.

Yes, that's exactly right. I mean we're integrating the deposits together and looking at coming up with the most optimal mine plan based on kind of the mineral resource endowment that both of these deposits have. And so the plan is for us to -- as cost effectively as possible, get into production at scale and then ensure that we have a robust mine plan so that we're mining for as long as possible, the highest grade material from either ore body. So that's why putting these deposits together and building it out in sequence makes so much sense because as we've discussed, there's a high-grade core in both deposits and for us to kind of capitalize on that through integrated mine planning, we'll be able to come up with the most, I think, economic and robust kind of scenario.

And just maybe one housekeeping item for me. Just the negative $215 million in noncash working capital in the quarter. Can you just give some context around that? And do you expect some of that to unwind here in Q2 and Q3?

Yes. I mean if you look at our Q4 numbers, we had the opposite effect, we had a big working capital cash inflow. And part of the reason was that we -- these two Caserones shipments, which got delayed from December into January, we actually got those prepaid, so they were paid up front, which obviously impacted the working capital positively in Q4, but is reversion and then just generally, with copper prices having increased. When you have increase in copper prices, your receivables are increasing too so that increases building working cap. So those are the reasons.

Our next question comes from Connor MacKay of Ventum Financial.

I just wanted to talk about the investment climate in Argentina, but I imagine with the I think we've spoken in the past that the integrated technical report coming early next year is going to form the basis of the RIGI application for the Vicuna project. Are you guys -- have you seen -- have you been seeing other projects kind of start to trickle into the RIGI process? Is there any color you can provide on sort of how those how those projects are advancing and if there's anything that you guys are watching out for in crafting your own application?

Thanks for the question, Connor. I think it's obviously super important to understand kind of the climate in Argentina as we look to potentially make a large investment into the country in the San Juan province. And what we've been seeing is a lot of positive momentum building in Argentina. A lot of the management team will be heading down there at the end of this month. We'll be going to Buenos Aires, we'll be heading to San Juan and visiting the site.

And all of this is in anticipation of us getting ready to submit a RIGI application. And we're working now with the joint venture with our partners to kind of identify and align on when we think that application would be optimal to be sent into the government.

But what we're seeing is, yes, there are other projects coming in, not just in the mining sector. but any kind of industry that can be applicable for the RIGI regime there. There have been a number of applications, not many yet for mining, but we're trending towards being in a position to apply. But overall, what we've been able to see and what Javier Milei, President of Argentina has been able to do has been extremely positive for the investment climate for projects like ours. So we continue to be encouraged with what we're seeing in Argentina.

Awesome. That's good to hear. And then I just had a question on cash costs. And particularly, I just want to get a reminder what gold price did you guys assume in coming off with your cash cost guidance for the year. And if we do see these elevated gold prices continue throughout the remainder of the year, is there potential for guidance to come down? Or are you seeing maybe cost inflation elsewhere to offset some of those gains?

Yes. So we will revisit all our guidance at the Capital Markets Day in mid-June, but what we so far have assumed is 2,500 ounces -- $2,500 per ounce in gold and on FX, we assumed CLP 900 and BRL 550.

[Operator Instructions]

Our next question comes from the line of Daniel Major of UBS.

I just want to follow up a couple on Argentina. I mean, obviously, the integrated technical report is coming. But in terms of thinking about the structure of that, we discussed a little bit on Monday that it you would look to develop the Filo oxides and Josemaria sulfides in conjunction with each other in the first phase. If we're thinking about scaling the CapEx for Phase 1 is a reasonable starting point to assume the $4 billion plus guidance that you previously given for Josemaria plus the kind of $1.8 billion, I think it was Filo guidance from 2023 technical report as a kind of starting point for Phase I.

Thanks, Daniel, for the question. So obviously, as we go through the period that we're in right now to fully define and build those capital estimates for all phases, as I discussed, kind of different level of definition, we'll be in a position to kind of firmly announce what those numbers look like. But Josemaria Phase 1 looking to trend of probably a little bit higher than what you've said. And then the PFS level on the oxide, it's still early days for us to kind of dictate what that number is going to be. But we're working hard to make sure that this is the most cost-effective initial capital project on Phase 1. And at this time, we're not really in a position to reveal more information than that.

And then follow-up on the RIGI and how that fits in with your time line of potential FID in 2026. If you submitted the RIGI by midyear is the deadline for midyear? I mean, would it be possible to FID -- or assume that you could FID the project as you've submitted that application or will it take a long time to kind of process that and have visibility FID the project. Is it going to be a long time line for the RIGI to be processed?

No, we don't believe that critical path item would be the RIGI application. I think from what we're studying and what we understand is once we submit that application, it's quite a clear cut process of going through and getting the -- enabling us to adhere to that. So RIGI is definitely not to hang up. I mean we're putting our efforts forward so that we can be in a position to really understand the magnitude of all phases of the project next year. Understand the fiscal stability regime that once we sign up and at year 2 RIGI that next year, we'll have all of the information in front of us and able to make a decision on sanction or going into construction or initiating Phase 1.

Our next question comes from the line of Ralph Profiti of Stifel.

I wanted to delve into this irrigation rate flow at Caserones, which was behind some of the outperformance on production. I'm just wondering, is that a design change in leach kinetics? Or is this the sort of ore character telling you something and is there going to be a cost impact to some of these higher irrigation rates?

And it leads to my second question was how close should we be watching this. And in terms of similar oxide characteristics at Filo del Sol's oxide core and whether or not you're going to be learning lessons on how you take the approach from Caserones oxides to Filo oxides.

Ralph, thanks for the question. So probably it's good to start by highlighting that Caserones is a dump leach. So the kinetic cycle is normally very long, especially with the secondary sulfides. So as we dumped more secondary sulfides, of course, the extraction becomes a little slower. But in general, we are on track with the budget to our internal plans on the placement of the leaching material. So we are taking advantage of irrigating some slopes in the dam bleeds, and that is how -- why we're being able to produce more cathodes than expected. But we're basically on track with our internal plans.

I am showing no further questions at this time. We'd like to thank you for your participation in today's conference. This does conclude the program. You may now disconnect.