Sherritt International Corp

TSX:S

Earnings Call Transcript

[Operator]

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Sherritt International Fourth Quarter and 2020 Year-End Results Conference Call and Webcast. [Operator Instructions] I would like to remind everyone that this conference call is being recorded today, Thursday, February 11, 2021, at 9:00 a.m. Eastern Standard Time. I will now turn the presentation over to Joe Racanelli, Director of Investor Relations and Communications. Please go ahead.

[Joe Racanelli, Director of Investor Relations]

Thank you, and good morning, everyone. With me are Sherritt's CEO David Pathe; Interim CFO Nathan Reeve; and our Chief Operating Officer Steve Wood.Before we begin, I'd like to remind everyone that we will be following the presentation today that is available from the Investor Relations section of our website at sherritt.com.Additionally, we will be making a number of forward-looking statements under the provisions of safe harbor. The risks and uncertainties associated with these statements are online in Slide 2 of our presentation as well as in the disclosure materials that we posted last night on our website and also available via SEDAR.David, please go ahead with your opening remarks.

[David V. Pathe, President, CEO & Director]

Great. All right. Well, thanks, Joe, and good morning, everyone. I appreciate you taking the time to join us again this morning. I know today is a particularly busy day and a busy week for results coming out. So we'll try and take you through a few things this morning.As we always do, Steve Wood, and -- we'll take you through some operational highlights, and Nathan Reeve who has stepped into the breach for Andrew Snowden as of 1st of January this year will touch on some financial highlights before I come back and talk about couple of matters, and we'll then take your questions.Couple of things so just from quarter and the year that I want to highlight off the top. 2020 really wraps up a -- what was a significant year of progress for Sherritt despite all the uncertainty and tumult caused by the COVID-19 pandemic. However, we finished 2020 in the strongest financial position that we've been in, in more than a decade and with some real tailwinds behind us now in a number of respects.The highlight of 2020 was the strengthening of our balance sheet. We talked extensively about that at the Q3 release that closed at the end of August. We have -- now have rising nickel and cobalt prices and encouraging signs of improvement in the U.S.-Cuban relationship, which should help our Cuban partners and ultimately help us.And the balance sheet initiative resolved the Ambatovy investment legacy with $300 million in debt. We extended our debt maturities out to the late 2026 and then beyond that to 2029. We cleaned up all the risk a cross defaults between our Ambatovy debt and our other debt instruments. And now we present a much cleaner balance sheet than we've been able to in quite some time.Lastly, I just want to highlight as well, we saw strong collections in our overdue receivables in the fourth quarter. Thanks to the agreements we put in place with our partners. And this one in 2019 actually, when be captured a disproportionate share of the distributions that come out of the -- of our nickel business once we're in excess of budgeted ones, that helped us out to between USD 20 million in the fourth quarter and contributed to a significantly stronger cash position, both overall cash and cash in Canada for the year.With those quick highlights, I'm going to turn it over to Steve and let him take you through some of the operating results, and then we come back at the end with a few matters to update you on, and then take your questions. Steve, you there?

[Stephen James Wood, Executive VP & COO]

Yes. Thanks, Dave, and good morning, everyone. As I normally do, I'll first comment on our progress on safety. We continue to devote considerable efforts to ensure that our employees go home safe and healthy every day by fostering an environment -- or best practices for employee health and safety are followed closely.This has resulted in Sherritt regularly ranking in the lowest quartile of our benchmark peer group, and we continued this in the fourth quarter. For the year, our total recordable injury rate was less than half of that of 2019.I'll move now on to Slide 5 and talk about the impact of COVID-19. The onset and spread of COVID-19 has had a significant impact on mining operations around the world for much of 2020. A number of companies were, in fact, forced to limit or, in some cases, stop production entirely.COVID-19 had a limited impact on our production activities at each of our operations. The only real impact that we experienced in 2020 was the rescheduling of our annual maintenance shutdown at the refinery in Fort Saskatchewan, and its extension by a few days due to limited contractor availability in the region.The limited impact that COVID-19 had on production is attributable in part to the additional health and safety measures that we implemented starting in March 2020 as the virus is spreading around the world. These measures have included practicing social distancing and increased use of hand sanitizers, workplace modifications and additional personal protective equipment.Employee health and safety are paramount at Sherritt, and we will take all necessary measures to continue to protect our employees throughout this pandemic. Measures implemented to-date to prevent the spread of COVID-19 will remain in effect for the foreseeable future.Now turning to our production results, starting with the Moa JV on Slide 6. On a 50% basis, Moa produced 4,020 tonnes of nickel and 451 tonnes of cobalt in the quarter. Although, consistent with last year's results, the production totals in Q4 were impacted by unplanned autoclave repairs at the refinery in Fort Saskatchewan.The repairs resulted in a decline in production to 50% of normal capacity for a few days. And despite this challenge, our production results in quarter 4 allowed us to largely achieve our guidance for the year on a 100% basis.Our production in Q4, in fact, helped to offset the impacts to production caused by the railway service disruptions that you will recall we experienced in the first quarter, and the extension of the annual plant shutdown for several days back in the third quarter.On a 12-month basis, we produced 15,753 tonnes of finished nickel, and ended 1,684 tonnes (sic) [ 1,685 tonnes ] of finished cobalt in 2020. These totals were largely consistent with the results for the previous year.Now turn to Slide 7 and discuss our unit costs at the Moa JV. MPR or Mining, Processing and Refining Costs, declined by 11% in Q4 relative to the previous year. The decline was driven by a combination of factors, including lower input cost for sulfur and fuel as well as expense savings generated by our austerity measures that we implemented earlier in 2020.We implemented these austerity measures in the wake of economic uncertainty caused by the COVID-19 pandemic. And despite the decline in MPR costs, NDCC was up in Q4 by about 19% to $4.47 per pound of nickel sold versus the previous year.The increase was attributable to a combination of factors, including lower cobalt and fertilizer byproduct credits as well as by higher production costs caused by the -- biannual acid plant shutdown at the refinery in Fort Saskatchewan. On a 12-month basis, NDCC was USD 4.20 per pound, and this total put us well within our guidance for the year.Now I'll turn to our oil and gas operations on Slide 8. We produced 2,599 barrels of oil per day in Cuba on a gross working interest basis in Q4. The total marked a decline of approximately 30% from the previous year when we had produced 3,785 barrels of oil per day. This decrease was due to natural reservoir declines.Unit costs in Cuba for Q4 2020 were $23.13 per pound -- sorry, per barrel. That's down 5% from the $24.33 (sic) [ $24.23 ] per barrel for Q4 of the previous year. Unit costs declined largely because of a stronger Canadian dollar relative to the U.S. currency as operating costs are denominated in U.S. dollars.Looking at our results for the Oil and Gas business on a full year basis, production and unit costs were both in line with our guidance for the year, and also reflective of natural reservoir declines at the Yumuri.Now turning to our Power division on Slide 9. We produced 144 gigawatts of electricity in Q4, and that's down 23% from the previous year when we produced 186 gigawatts in the same quarter. The decrease relative to last year was driven by reduced natural gas availability on account of the maturing oilfield production.Despite that decline in the fourth quarter, 2020's total power production of 602 gigawatts was in line with guidance for the year. Unit operating costs for the quarter were $26.73. That's up 21% from $22.15 for the previous year. The increase was due mostly to larger -- sorry, lower production.Unit operating costs on a full year basis declined by 5% in 2020 relative to last year, despite lower production. The year-over-year decline was largely driven by the decision to defer planned maintenance activities and limit operational spending, consistent with the pace of collections against the overdue receivables from our Cuban energy partners.Dave will expand on our outlook for the oil and gas and Power businesses in his closing remarks.That concludes my remarks on operational performance. I'll now turn it over to Nathan for a discussion on our financial results. Nathan?

[Nathan Reeve, Interim Chief Financial Officer]

Thank you, Steve, and good morning, everyone. I would like to begin my remarks with a couple of comments on our balance sheet. As David noted in his opening comments, we ended the year with a much stronger balance sheet by eliminating more than $300 million of debt, and extending the maturities of our debentures with the first maturity in late 2026.We also took measures to strengthen our liquidity, including the renewal of our $70 million credit facility to April 2022. The credit facility with our syndicate of lenders includes a $10 million accordion feature and more flexible covenants. As at the end of 2020, we have drawn $8 million against the facility.Now turning to our consolidated cash and short-term investment balance, which was $167 million at December 31, 2020, up from $166 million at the start of the year.As you can see from the cash waterfall on Slide 11 of our presentation, our improved position was attributable to a number of developments in the year. The most notable being the receipt of $40 million of distributions from the Moa JV in 2020, representing Sherritt's 50% share of distributions.In addition, Sherritt received distributions of $26 million in Q4 2020, which represented the 50% share of distributions earned by Sherritt's JV partner, GNC, and redirected to Sherritt. The redirection was in accordance with the overdue receivables agreement and resulted in a decrease in cash held by Energas in Cuba.After consolidation adjustments, the net impact on our cash position, as you can see from the chart, was $17 million. The key driver of these distributions was the nickel price recovery experienced in the second half of 2020.These increases to our liquidity were offset by a number of cash outlays in 2020, including $28 million of costs related to the balance sheet initiative and early consent considerations, and capital expenditures primarily at the Fort Site location and for the Oil and Gas business unit totaling $12 million. In addition, we paid interest of $5 million on the new second lien notes, which resulted from the balance sheet restructuring.I should point out that in addition to an improved cash position, we also ended 2020 with less cash hold in Cuba than at the start of the year. At December 31, 2020, $75 million of our cash was held in Cuba, down from $80 million at the start of the year.Moving to the next slide. The progress we made collecting on amounts owed to us by our Cuban energy partners is more clearly visible on this slide, Slide 12. At the end of Q4, amounts owed to us by our Cuban energy partners totaled $146 million, down from $159 million at the end of Q3.As mentioned, the decline was principally driven by the receipt of USD 20 million of distributions that were redirected to us by GNC in the fourth quarter of 2020. This amount was received, as previously noted, under the overdue receivables agreement and the proceeds applied against amounts owed to Sherritt by Energas.We will continue to work with our Cuban partners to ensure timely receipt of payments, but do anticipate some lumpiness with collections in 2021, largely because of the continued impact of U.S. sanctions against the country and the decline of tourism caused by COVID-19.Typically, Q1 generates the highest influx of tourism dollars into Cuba. But this year, we'll see a drop relative to recent years. The unification of Cuban currencies, which I will talk to next, has created some near-term delays in connections -- collections.So moving to Slide 13. At the start of 2021, the Cuban government began the process to unify its currencies, consistent with economic reforms it announced over the past several years. Given the interest in the Cuban currency unification and its impact to Sherritt, I'd like to review a couple of highlights with you today.As many of you know, Cuba had 2 currencies until December 31, 2020. The convertible currency, or CUC, was used by travelers and foreign businesses and was pegged against the U.S. dollar on a one-to-one basis. This currency was unified with the Cuban peso or CUP, the local currency effective January 1, 2021.The CUP is now Cuba's only official currency, and its exchange rate against the U.S. currency will be CUP 24 for every American dollar. The rationale for the currency unification was to support economic reforms launched by the country, harmonize wages throughout Cuba, particularly for individuals not involved in the tourism industry, and improve the valuation of Cuba's exports.While a 6-month transition period is underway, whereby CUCs are being converted into CUPs, we do not expect impacts to amounts that will be distributed by Moa Joint Venture, cash held at Energas or amounts owed to us by our Cuban partners. All payments made to Sherritt will continue to be made in foreign currency.We are monitoring development since the unification has only been in effect since January 1, and participating in discussions locally to fully determine the impact on our Cuban businesses. The only real impact that we may see in the near-term related to the timing of receipts against overdue amounts owed to us.While we do not expect amounts owed to us to be devalued or lessened by the currency unification process, payments will likely vary month-to-month in the near term.That concludes my remarks. I will now turn the call back to Dave for his concluding comments.

[David V. Pathe, President, CEO & Director]

All right. Thank you, Nathan. 2 things for me, I just wanted to touch on before we come back to your questions. The first is our 2021 outlook and guidance. You've seen us issue a release on -- 2-3 weeks ago now, I suppose, just a few comments on that.You've seen our production guidance of 32,000 to 34,000 tonnes of nickel on 100% basis. That would represent a slight increase over 2020 production. We believe that's achievable and consistent with historical production at the Moa Joint Venture, and are focused on delivering that along the 3,300 to 3,600 tonnes of cobalt on 100% basis.A couple of comments on our net direct cash cost. We put in some guidance out there of roughly USD 4.25 to USD 4.75 a pound. That -- the variation in that, and the slight uptick in that from 2020 is driven entirely by commodity prices.We expect the trend over the last few years of decline in our controllable MPR costs to continue. But there are some more conservative assumptions in there and some of the other commodities that influence our net direct cash, cash cost that give us some room for improvement on that if commodity prices work in our favor.For example, USD 4.25 to USD 4.75 is assuming a USD 15.58 cobalt price for the year. Cobalt had a very nice start to the year, which I'll highlight for you in a moment. And as far as cobalt right now is about $22. And at the roughly 10:1 ratio that we have for our cobalt production to nickel production, every $1 on the cobalt price is worth about USD 0.10 a pound, an improvement in our net direct cash cost.It also assumes $145 a tonne for sulfur. Sulfur has crept up this year. We're paying about $90 a tonne late last year. It's now up in the $130s range, and we were anticipating some tightness on the sulfur market, and that's why we had the higher price assumption in there. We'll see how that unfolds. But the increase we've seen so far in cobalt this year is more than taken into account in that estimates we put together for the guidance on net direct cash cost.Capital spending, you see that the Moa Joint Venture is up a little bit from last year. That's driven primarily off of some projects that were deferred in 2020, at the beginning of the year when nickel prices are lower in the first half of the year. We do have some flexibility on that if commodity prices retreat again, but we'll hope to be able to look to execute on that to stay up-to-date on our capital spending in Moa.Lastly, just on the Power, as Steve noted, we had some impact on operating costs in the Power business in 2020. Some maintenance was deferred in connection with the pace of collections of the Power business. That will certainly be the practice going forward into 2021 as well for both our capital and maintenance spending in the Power business, keeping those paced with rate of collections in that business.And so we could see some impact on those numbers depending on how collections go and this can just give you some sense of the variables and uncertainty that are at play at the moment.Next, I want to talk about on guidance. Steve mentioned that we talk a little bit about Oil and Gas. We shared with you the final results of our Block 10 drilling last year and where we are now. You will have seen that we have not published any guidance for the oil business for 2021.The reason for that is our existing production sharing contracts, which we've introduced in for last few years are due to revert back to CUPET, the Cuban state-owned oil company, towards the end of the first quarter. We won't have any oil production beyond that date. We do still have a number of different prospects in the country, including Block 10 and other blocks that we have access to.We are continuing to look at -- for partners that may be interested in and participating in that on a type earning basis, and we are in the arrangements like that at this point in time. And as we stand here today, we don't see any meaningful amount of capital being spent by us in the oil business at this point in time, but we'll continue to see if there are opportunities to do anything with those prospects going forward in the future.I mentioned the Power business, we noted that the pace of spending there will be linked to the pace of collections. Our current power arrangements are in effect through 2023. However, we do expect those to be extended. We have had those conversations in Cuba. Frankly, we would have hoped to have made more progress on that in 2020, but with the inability to travel to Cuba that has been pushed out. So that's something we'll be looking to get done this year.A couple of slides on nickel markets. The first there on Page 17 shows you the dramatic moves we've seen in nickel price over the last 6 months, and in cobalt over the last 6 weeks really. There's some significant momentum behind both commodities at this point in time. A number of factors driving the run-up in cobalt prices.We'll start with nickel, the drive up in nickel prices, stronger stainless steel production numbers than potentially were expected out of China in the second half of the year. Weaker U.S. dollar, inflation fears leading to some strength across the whole base metal sector following run up in precious metals. And now more and more momentum around the theme of electric vehicles that we've been talking about for some years.Electric vehicles, as we've talked about in the past, comprises a relatively small [ amount ] to global nickel demand, 3%-4%, but that's expected to be upwards of 40% by 2040. And we actually did see some growth in nickel demand as a component of overall nickel demand in the market from 3%-4% up to 5%, 6%, 7% over the course of 2020, and that trend is expected to continue.The cobalt price was really run just in the last few weeks, driven a momentum behind the electric vehicle and batteries generally. We're now at about $22 a pound. That's the highest price we've seen since early 2019. And certainly, that helps us both from a cash flow perspective and a net direct cash cost perspective, as I mentioned in your guidance discussion there.Where it goes from here is obviously the big question, as we talk a little bit on Slide 18. Analysts that we [ spend ] need to update their forecast to catch up with the movement we've seen in nickel price. And with Mackenzie is now talking about we could be testing $9 by midyear, before seeing potentially a early trend.There are certainly some of the announcements that have continued, but from governments and automakers alike that we've seen over the last few years have continued to -- has helped build momentum on both nickel and cobalt prices. General Motors, for example, you would have seen just this year announced to $27 billion of investment over the next 5 years towards EV production and plans to have bulk of its fleet fully electric by 2035.The change in administration in the U.S. as well is bringing a renewed commitment in green energy as the U.S. reenters the Paris Accord. I expect that to build more moment for the electrification and transportation in -- as a result in the U.S., with momentum that it already has in U.S. and to some extent in Europe as well.Near term, I still think there could be some volatility. We have seen a significant run up in the prices, and that's certainly linked of the global pandemic and that there with our uncertain Cuban collection, we have protect -- we've taken advances at the high spot market to protect ourselves on the downside.But if we do see these prices continue where they are, we'll see a significant improvement in our cash flow over the course of the year, and we will eventually be based on budgets and where commodity prices are now. If these prices sustain themselves, we'll be back into a situation where we were in late 2020, where we're looking to capture a disproportionate share of dividend again -- once again from the Moa Joint Venture.So just to sum up, then back on Page 19 here. 2020 was a busy year as we scrambled to address COVID and keep our operations running successfully, we delivered on that.Eventually more production guidance across the board, and a significant improvement in the financial situation. The balance sheet strength that leaves us now positioned extremely well to capture on this -- the higher commodity prices that we're seeing now, and the longer term story that we've been talking about here for some years around electric vehicles and significant shortages of nickel, particularly Class 1 nickel for battery production in years to come.We may see near-term volatility in nickel prices, but we have really conviction than ever that that's not longer-term story.With that, I think we can wrap up there, operator, and take any questions anybody may certainly.

[Operator]

[Operator Instructions] Your first question comes from Don DeMarco with National Bank Financial.

[Don DeMarco, Analyst]

Do you expect the redirection of your JV partners distributions to be of a similar magnitude in Q1 as they were in Q4?

[David V. Pathe, President, CEO & Director]

Not in Q1, the arrangement we have with our partners is -- there is a budgeted amount of dividends that the Cubans anticipate receiving of the joint venture. And that is all played into their central planning around hard currency inflows and outflows out of the country.If, however, over the course of the year, the budgeted amount -- the actual cash available for distribution from the Moa JV exceeds the budgeted amounts, we, at that point, after that we've exceeded the distributions in accordance with budget of Cubans partners, at that point we'll capture a disproportionate share of the dividends.So we anticipate the first quarter dividends will be shared by the partners pro rata as we look towards budget. But with commodity prices where they are now, if they stay in at this level throughout the year, distributions from the joint venture may well have achieved budget for the year by about midyear, and you could be seeing us capturing a disproportionate share of distributable cash from the JV in the second half of the year.How quickly we get to that point and the magnitude of that over the course of 2021 is obviously partly dependent on commodity prices.

[Don DeMarco, Analyst]

Just shifting over to the Class 1 nickel that you produce. Obviously, this is the best for EV battery applications. Do you see any early evidence of a divergence in pricing between Class 1 and Class II nickel? Are EV manufacturers starting to reach out to you directly to ensure supply?

[David V. Pathe, President, CEO & Director]

There is -- I don't know a divergence, I think you look at the market today in terms of the spot market for physical, in some ways, the price is potentially even stronger than what physical market shows today. There is physical market available -- physical metal available in the market today.You are seeing ferronickel trade at a bigger discount to the LME price than it has in the past. I don't know whether that is a long term trend or just a function of near term supply and demand. But then there is a little bit more of ferronickel and NPI discount at the moment -- nickel. And we'll see whether that does develop into the longer term trend.At the moment, we -- most of -- a lot of our -- the bulk of our nickel is under contracted customers that we've had for many years. There is certainly a lot of interest in battery makers out there in terms of looking and figuring out what their -- and automakers in terms of what their long term procurement strategies and supply chain strategies are going to be as we look to move heavily into electric over production. I think that will play out over the next couple of years.

[Operator]

Your next question comes from Tony Robson with Global Mining Research.

[Anthony Robson, Executive Chairman]

2 questions, if I may, please. The -- good to see, firstly, that Sherritt buying puts protecting about 50% of the downside for this year rather than get into a complex option strategy, which would cause limits to the upside. Question is, is that simply a prudent move by management? Or do you see some real downside risk to nickel? But -- or is nickel looking tubby, in other words, at this price to you now, that's my fist question for you.

[David V. Pathe, President, CEO & Director]

Yes. I can give you a couple of comments on that. I mean, generally, we are not going to be active hedgers of the nickel price. We have one -- have a longstanding policy that we are not hedgers, and we intend to remain fully exposed, and particularly to the upside of nickel and this is not the onset of a more sophisticated hedging strategy.The logic behind this from our perspective was we had seen a significant run-up in nickel prices in the fourth quarter of 2020. And as we look at our cash flow forecast and expectations over the course of 2021, given global uncertainty, there was a lot of talk from analysts about the downside risk in in nickel prices based on just the degree of economic uncertainty from the global pandemic.We also have some uncertainty around the pace of collections out of Cuba given the impact of COVID and U.S. sanctions on the island there and them losing their tourism season. And really the run-up in high spot price in the nickel price gave us an opportunity to buy really what we see as some cheap insurance on 2021 cash flow, given that higher level of uncertainty in the world that you see today.And so that was the logic behind the approach that we took them to buy some on floors or some puts to give us some comfort that a portion of the nickel price would be available. It's only 6 months ago that we had nickel price started with the 5 and I think any time you see the 50% increase in the commodity price in 5, 6, 7 months.And in the midst of a global pandemic you have to be concerned that there's some near-term volatility risk to that. And the spot market gave us an opportunity to predict and give us some insurance against the minimum level of cash flows that enable us to meet our obligations and have some financial flexibility going forward. Even if things sort of take a more difficult turn in commodity markets due to the pandemic, or any of number of other factors. That was the logic behind it.And I think what we were able to do in putting those in place, while preserving all the upside, obviously, we looked at the idea of cashless collars and such as well as we've been actually paying cash for those floors. But we were keen to preserve the upside opportunity in nickel. Those of you who've followed nickel for a long time know of its volatility and its ability to move upwards dramatically once circumstances change, and we certainly didn't want to trade away that opportunity.But having some certainty we have a minimum level of cash flow if nickel prices were to take a near-term retreat. At the same time that we suffered the pace of collections in Cuba, we were able to mitigate that through the spot market and it doesn't affect our long-term expectation of where we think nickel prices are going.

[Anthony Robson, Executive Chairman]

So I take it -- if we take the section of the guide to the future, if and when, but even have been looking to cap 50% of production or as you mentioned, more to do with what your cash outgoings would be at any point in time?

[David V. Pathe, President, CEO & Director]

Yes, I don't think there's anything that you can read into that in terms of our intentions of what we might do going forward. And I don't think this will be regular feature of ours. But it will depend on what various variables look like in terms of prospects for collections, where are the commodity prices compared to near term expectations.It is a tool that is available to us to give us some comfort on our tools that we will -- to give a look at that. It's relative to what our forecast and budgets were that this level of production gave us a level of certainty in terms of the cash flow that will deliver in terms of meeting our cash obligations for interest and other matters over the course of 2021, and that's why we landed on that particular level.But there's no magic to any particular level of production. And it's just the way the math worked out with the values we're able to put those floors in that.

[Anthony Robson, Executive Chairman]

Second, and it's a fairly minor point. The $20 million in prepayments you had nickel sales just post the year end. Any -- what was the thinking there, please? I can understand it improves your near-term liquidity, but the cost -- it will also reduce your future liquidity. So could you give us a little bit more color on that, please?

[David V. Pathe, President, CEO & Director]

Yes, that really is just near-term sort of the intra-year financing over the course of 2021. And it doesn't, in any way, affect the ultimate price that we realize for the nickel because it is all fully exposed to the nickel price over the course of the year. But it does just frontend load our liquidity at the beginning of the year.And the logic of that is, is it was relatively cheap financing and gives us a bit of cash up front, particularly in the first part of the year is the most difficult from a Cuban collection perspective. So is there really an opportunity to enhance the near-term liquidity if that creates opportunities for us to take advantage of anything in debt markets or anywhere else to have that cash up front. But it is paid back over the course of 2021 through nickel sales. You're absolutely right about that. Thanks, Tony. Good day.

[Operator]

[Operator Instructions] And we have no further questions queued up at this time. I would now like to turn the call back over to David Pathe for closing remarks.

[David V. Pathe, President, CEO & Director]

All right. Well, I'll just take a quick moment and thank you once again for joining us this morning. I know it's a busy day, and people are scrambling from one press release to the next.We are, obviously, around the day and always for any further questions or comments. If we don't speak to you before, we'll speak to you again in a few weeks' time when we release our Q1. Have a great day. Thank you.

[Operator]

This concludes today's conference call. You may now disconnect.