Sierra Metals Inc

TSX:SMT

Earnings Call Transcript

[Operator]

Good morning, ladies and gentlemen. Thank you for standing by and welcome to the Sierra Metals' Q1 2020 Consolidated Financial Results Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. [Operator Instructions].I would now like to turn the conference over to your speaker today, Mike McAllister, VP Investor Relations. Please go ahead.

[Michael McAllister, Vice President of Investor Relations]

Thank you, operator, and good morning, everyone. Welcome to Sierra Metals' Q1 2020 Results Conference Call. On today's call, we are joined by Igor Gonzales, our President and CEO; as well as Ed Guimaraes, our CFO. Today's call, as mentioned by the operator, will be followed by a question-and-answer period. The accompanying presentation for today's call is available for download both through the webcast and from the company's website at sierrametals.com. Yesterday's press release, the financial statements, and the management discussion and analysis document are all posted on the company's website.Before I turn the call over to Igor, I would like to indicate that this earnings call contains forward-looking information that is based on the company's current expectations, estimates and beliefs. This forward-looking information is subject to a number of risks, uncertainties and other factors. Actual results could differ materially from our conclusions, forecast, projection as reflected in the forward-looking information. Additional information about the material factors that could cause actual results to differ materially from the conclusion, forecast, or projection in the forward-looking information and the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projections as reflected in the forward-looking information is contained in the company's annual information form which is publicly available on SEDAR or EDGAR via Form 40-F or on the company's website.Please also note that all dollar amounts mentioned on today's call are in U.S. dollars unless otherwise noted.I would now like to turn the call over to Igor Gonzales, our President and CEO. Please go ahead, Igor.

[Igor Alcides Gonzales Galindo;President & CEO]

Thanks, Mike, and good morning, everyone. Before I speak about some of the first quarter 2020 production and financial highlights, I would like to take a quick moment to update you on the most recent COVID-19 developments in Mexico and Peru.If we can turn to Slide #4. Peru entered into a state of emergency on March 17th and has now been extended until May 24th. During this time, only essential services could be -- could operate and travel is restricted within the country. However, the government has allowed some economic activities to start and large open pit mining companies have been cleared to restart operation. We're hopeful that shortly the government will allow mid-sized and underground mining to commence as well.In the case of Mexico, a state of emergency was also declared on March 30th and has been extended to May 30th. However, on May 13th, the Mexican government declared mining as an essential service effective May 18th, allowing for the normalization of mining operations. Therefore, the Bolivar Mine could restart normal operations on May 18th. The Cusi Mine remains in care and maintenance as management continues to evaluate the best path forward and we cannot mobilize the workforce from the nearby city yet while the health emergency state still remains in place.The company continues to focus on the health, safety and well-being of its workforce. A smaller workforce has been retained at Yauricocha to oversee the critical aspects of the operations and complete maintenance activities. Employees due to report for work at Yauricocha and Bolivar are screened, medical screened, tested for COVID, and quarantine before being allowed to join the active workforce at the mine. Additionally, the active workforce continues to be monitored on a daily basis at both mines for any potential symptoms.Through this process, 2 potential cases were detected during the screening process at the Yauricocha Mine. One of them was confirmed positive during the quarantine period and the other is still a potential case that according to the quick test that we have on hand. The potential case was likely due to a previous viral infection, but we are taking every precaution at both -- at all of the cases and they all were returned to their home and referred to further medical treatment. As a precaution, their families have also been offered to be tested.The company is doing everything we can to protect its employees and take care of other families while protecting our active workforces and to prevent labor disruptions. We're also supporting nearby communities with EPP supplies and fumigation equipment.Due to the contained impact of the COVID on metal prices -- sorry, due to the continued impact of the COVID on metal prices, global economic uncertainty, and the related work stoppages at all mines, the company has suspended all previously issued 2020 annual guidance. The overall effect on company's business will depend on how quickly its sites can safely return to normal operation, and on the duration of impact on its customers and market for its products, all of which are unknown at this time. The resumption to normal operating activities is highly dependent on the progression of the pandemic and the success of measures taken to prevent transmission, which will influence when health and government authorities remove their restriction on business activities.Moving now on to quarter one 2020 highlights, turning to Slide #5. The company has achieved a strong consolidated production this quarter. Consolidated mill throughput was 740,689 tonnes, a 30% increase over Q1 2019. Consolidated copper equivalent pounds produced increased 43% to 31.2 million pounds as the company achieved higher production for all metals as compared to Q1 2019, despite the impact of COVID-19 pandemic in the second half of March 2020.At Yauricocha, despite the loss of 15 days production due to COVID pandemic, had 22% higher throughput, thanks in part to running the mill at higher throughput levels until the state of emergency was declared in Q1. Additionally, the mine had a larger stockpile of ore, which we were able to continue processing during the work stoppage with a smaller workforce.At Bolivar, we again had record quarterly throughput this quarter with approximately 4,315 tonnes per day average processed as we continue to ramp up the mine up towards the 5,000 tonnes per day level.Cusi has experienced delay this quarter as we continue to encounter difficulties catching up with development due to previous subsiding issue, which required us to leave a 16-meter pillar containing the previously completed development, which included some high-grade ore.Revenues from metals payable increased 13% to $55.6 million. Adjusted EBITDA increased 24% (sic) [ 33.5% ] to $16.1 million compared to Q1 2019. Adjusted net income came in at $1.2 million or $0.01 per share for Q1 2020. We finished the quarter with a cash balance of $37 million, which decreased from $43 million at the end of 2019 due to $11.2 million of capital expenditures, $1.3 million interest payments offset by $6.5 million of operating cash flow after working capital adjustment and tax.The metals mix as a percentage of revenue for the company has copper leading the way at 40%, which is expected to continue and possibly increase further with the expansion at the Bolivar Mine. Following by zinc and silver each at 20%, followed by lead at 10%, and gold at 9%. Gold has also seen -- we've seen an increase of gold revenues given the latest prices.In Q1, we continue to see lower base metal prices and 92% higher treatment and refining charges as well as higher sustaining capital costs. Despite these challenges, the company generated a significant amount of operating cash flow, which has been allocated carefully and prudently to fund capital expenditures and maintain liquidity. Furthermore, we continue to realize substantial returns on the capital invested in our projects.Turning to Slide #6. At Yauricocha, the mine is trending towards copper as our main product as a percentage of revenue and as a percentage of net smelter royalties. As such, we're reporting copper figures in addition to zinc for Yauricocha. When compared to the same period in 2019, cash costs were down 20% to $0.43 per zinc equivalent payable pound. All-in sustaining costs were down 3% to 80% per zinc equivalent payable pound, as the 46% increase in zinc equivalent pounds sold more than offset the impact of the increase in treatment and refining charges, and higher sustaining capital costs.Looking at cost now for a copper -- from a copper perspective, when compared to the same period in 2019, cash costs were down 7% to $1.17 for copper equivalent payable pound and all-in sustaining costs were up 15% to $2.24 per copper equivalent payable pounds, as the 24% increase in copper equivalent pounds sold could not offset the impact of the higher treatment and refining charges, and higher sustaining capital costs.At Bolivar, compared to the same period in 2019, cash costs were 99% lower at $1.15 per cooper equivalent payable pound. All-in sustaining costs were down 48% to $1.85. The decrease in unit costs at Bolivar were driven by the 43% increase in mill throughput and higher grade resulting in higher metal production and sales. All-in sustaining costs per copper equivalent payable pound during the first quarter decreased largely due to the combined impact of 78% higher copper equivalent pound sold and 70% lower sustaining capital.Cusi faced higher operating cost due to the development cost as a consequence of the subsiding experience in late 2019 and due to the write-off of stockpiles and concentrate inventory at quarter end. As such, cash costs were 30% higher at $22.62 and all-in sustaining costs were flat, coming in at $30 per silver equivalent payable ounce when compared to Q1 2019. We believe that with increased throughput and more efficiencies, we can realize lower costs going forward in this mine.Looking ahead in 2020 on the Slide #7. We still see a strong growth for the company as the COVID pandemic effects begin to ease and operations begin to return to normal, such as in Mexico with mining being declared as essential service and mining operations beginning to normalize there starting on May 18. At Yauricocha, we have the flexibility to run the mill at higher levels to help make up lost tonnages. And we're still optimistic that we will receive our permits from the government this year, which will allow us to increase production by 20% to 3,600 tonnes per day level. Moreover, we are completing studies to increase throughput to 5,500 tonnes per day in the next few years.At Bolivar, we continue to ramp-up production to 5,000 tonnes per day level, which is at 38% increase over 2019. Furthermore, the recent Bolivar Mineral Resource update provided for a significant increase in mineral resources and has demonstrated that further expansion potential exist beyond 5,000 tonne per day level, which will be evaluated through an updated preliminary economic assessment.At Cusi, the mine remains in care and maintenance as management continues to evaluate the best path forward for Cusi to complete the needed development and reach throughput targets. Because of the government imposed lockdown and Cusi being placed into care and maintenance, the anticipated NI 43-101 will be delayed.Turning now to Slide #8. I would like to reassure everyone that during this COVID-19 pandemic, we first and foremost are taking care of our workforce. We continue to have a strong balance sheet, and we have reduced and deferred capital expenditures to ensure we emerge as a strong company as before the pandemic.Once the situation returns to a more normal one and metal prices improve, we remain poised for a strong future growth and cash flow. We will continue to make prudent strategic investments in the company, which will benefit all the shareholders.Sierra Metals has large land packages with many high-value targets that with exploration and development can provide lower cost organic growth for many years ahead.With that, I will now turn the call back to Mike.

[Michael McAllister, Vice President of Investor Relations]

Thanks, Igor. That ends the presentation portion of this call. We would now like to open up the call to questions from our participants. Operator, could you please open up the lines?

[Operator]

[Operator Instructions]. Your first question comes from the line of Jake from Roth Capital Partners.

[Jacob G. Sekelsky, Director & Research Analyst]

It looks like treatment charges increased fairly substantially during the quarter. I'm just wondering, are these locked in over the course of 2020 or do you expect them to come down as we've seen some global supply come offline due to COVID-19?

[Igor Alcides Gonzales Galindo;President & CEO]

Thanks for the question. Yes, the TCs and RCs are locked in for 2020. And what you are seeing in terms of the global TC situation, the spot sales have come down primarily for zinc as -- that's largely because of what's happening in Chile and in Peru with the concentrate restrictions. But they should normalize by the end of the year. So the TCs, RCs are expected to, for zinc anyway, to creep up to around 300 tonnes by the end of the year.

[Edmundo Gontardo Guimaraes, Chief Financial Officer]

And Jake, our -- all our contracts, Jake, are for one year. And so it'll go all the way through the end of this year.

[Jacob G. Sekelsky, Director & Research Analyst]

And then can you just give us a bit more color on the trend we're seeing towards copper production at Yauricocha? Are the copper dominant areas that's up to be mined over the course of the year into next year or just any color surrounding that would be helpful?

[Igor Alcides Gonzales Galindo;President & CEO]

Sure. Yes, we -- fortunately in Yauricocha, the Yauricocha Mine is divided into various areas. One of the areas is Esperanza, which is essentially a copper mine, an underground copper mine, and it extends towards Cachi Cachi. So with current prices, with current conditions, we're trying to maximize the opportunity of trying to go to this area and mine more ore given the current prices and TCs, RCs for zinc. And we are able to do that because we have resources in Esperanza and also we have identified additional ore in the area between Esperanza and Cachi-Cachi. So yes, we're reviewing our mine plan. And we would like to add more copper tonnes in our production for this year.

[Jacob G. Sekelsky, Director & Research Analyst]

It's good to see you guys taking advantage of that flexibility. And then just lastly at Cusi, is there a particular silver price you need to see to move forward with the development work there, assuming things are able to come back online over the medium term?

[Igor Alcides Gonzales Galindo;President & CEO]

Okay. Let me answer first and then Ed will probably complement. In Cusi, what we have done is we have reviewed the needed development. We need additional 1,500 meters of development in order to be able to have enough faces to fit the mill at a steady state of 1,200 tonnes per day. We have tested the mill at 1,200 tonnes per day already many times. So we know it can do it. And so the only thing remaining is to have enough open ore faces to feed -- to have a steady feed to the mill.Then the other activity that is required at Cusi is to finalize the construction of the new tailings facility. So we have put both activities in front of our Board, both the development and the tailings facility. And when the Board approves this capital, then we can move forward with the development. I will let Ed talk about the price.

[Edmundo Gontardo Guimaraes, Chief Financial Officer]

Thanks, Igor. In terms of prices, Jake, it's really based on consensus prices of [ $17.50 ] and above. There's no reason Cusi can't make money. We are in a particularly downturn for silver, especially when you compare it to gold prices. So -- but in terms of consensus going forward, Cusi should be making money at those prices.

[Operator]

Your next question comes from the line of Mark with NOBLE Capital Markets.

[Mark La France Reichman, Senior Natural Resource Analyst]

Just real quickly, I guess to start off. Ed, what are your current thoughts on capital expenditures this year?

[Edmundo Gontardo Guimaraes, Chief Financial Officer]

Thank you. Who asked the question?

[Mark La France Reichman, Senior Natural Resource Analyst]

This is Mark.

[Edmundo Gontardo Guimaraes, Chief Financial Officer]

Mark, well, given that we've suspended guidance, until the pandemic situation returns to a somewhat normal situation or environment, it's very difficult to really comment on our capital spend. We're -- the focus is to preserve as much cash as possible. We don't know how long this pandemic will last or whether it will come in waves. So we're doing everything we can to minimize capital spend without jeopardizing needed development to keep the mines producing. Go ahead, Igor.

[Igor Alcides Gonzales Galindo;President & CEO]

I like to complement that as part of our scenario analysis during this pandemic, we have broken up every major capital project that is in Sierra into small portions that are essential for the operations. And just to give you an example, one of the areas of priority when selecting capital project would be the connection between Esperanza and Cachi-Cachi, which we have already advanced 150 meters and we need to develop that area and drill.Another critical part is restoring, for example, doing maintenance to the central shaft and so forth. So we know exactly now what pieces of and what parts of the different capital project we can commence at each individual time. And during the pandemic, we have to stop all capital project expense just to conserve fund.

[Mark La France Reichman, Senior Natural Resource Analyst]

Just a second question, it's just a follow-up on Cusi. I think there's kind of 2 elements there. There's -- one, there's the silver prices have been not cooperative, I guess. But also there's the issue of more developments needed at the mine to be able to enable it to operate at that 1,200 tonnes per day. And so right now, it's on care and maintenance. And I was just kind of wondering, for the balance of the year, whether you would continue to keep it out of service or how you're thinking about that. In other words, you need to see prices go higher before you're willing to invest more in the development to bring the capacity up to 1,200 tonnes per day, which might protract things a little bit or just maybe a little clarity there.

[Igor Alcides Gonzales Galindo;President & CEO]

Sure. Well, what I indicated is that we need 1,500 meters of development. This translate in terms of timing about 1.5 to 2 months of development. And -- but at the same time, we would have to pick in with the tailings facility continuation of the construction process. So both activities are now been presented to our board. They are fully aware of that that's needed, that capital -- additional capital is needed to commence operations in Cusi. And once we see that conditions are favorable in terms of health and also pricing, then we can immediately ask for the authorization to the Board and resume Cusi. Ed, do you want to comment?

[Edmundo Gontardo Guimaraes, Chief Financial Officer]

No, no.

[Mark La France Reichman, Senior Natural Resource Analyst]

Well, the last question is just more of a kind of an industry question and that is that copper prices have remained obviously reflecting the economic outlook, but at the same token, so the prices are low. But I happened to catch the Financial Times had a headline that says, "Barrick on the hunt for copper deals." And do you think at this point, are the industry participants kind of looking beyond this pandemic and has the industry started to kind of focus on the long term -- intermediate and longer term supply-demand factors for copper which in my view are favorable? So do you think we will see more activity in the space?

[Igor Alcides Gonzales Galindo;President & CEO]

This is Igor. And my opinion is that that indeed will be the case as copper represents a long-term investment. And as we move forward, the industry that consumes copper will become more prevalent, electric cars, solar cells, et cetera. And so I think we have a good future for copper. On our end, as a company, we are growing our resources very fast at Bolivar and also at Yauricocha. And more important perhaps in our case is that the operating cost at Bolivar is very competitive and that puts us in a very positive position for -- as a copper producer.

[Operator]

Your next question comes from the line of Heiko with H.C. Wainwright.

[Heiko Felix Ihle]

Building a bit on what Jake asked earlier with the treatment and refining charges, can you talk a little bit what you've seen in April and more importantly during call at the last week or 2 in May? And are people willing to chat longer term or what are you seeing with that?

[Igor Alcides Gonzales Galindo;President & CEO]

Go ahead, Ed.

[Edmundo Gontardo Guimaraes, Chief Financial Officer]

Yes, I could just talk briefly on what I'm seeing with the zinc TCs. So essentially since about, I'd say, the end of March, we saw a big drop in spot TCs to about $265 a tonne. And then we saw another significant drop over the last week to 2 weeks where zinc TCs are sitting at approximately $185 a tonne. So -- and that was largely due to the production restriction, the shortfalls that were coming out of Peru and Chile. But I believe those to be short-lived. Once production normalizes out of Peru and Chile, you should see a return back to the -- at least the $280 to $300 TCs.

[Igor Alcides Gonzales Galindo;President & CEO]

On the operating side of things, Heiko, all of our production in May and April have been accepted very -- without any inconvenience in the refineries and the concentrate buyer. So we haven't had any issues with shipping our production.

[Heiko Felix Ihle]

Given that we're in pretty crazy and pretty much unprecedented times right now, I mean the capital markets at times out of mostly about March here were going absolutely nuts. Can you just maybe give your thoughts on some potential longer term hedging? I know it's Pandora's box and a lot of investors don't like it at all. But I mean, just at what point in time does it may be -- and I understand prices are low right now, so I'm not saying in this immediate term. At what point in time does it maybe make sense to do a little bit of thinking about hedging some noncore production?

[Igor Alcides Gonzales Galindo;President & CEO]

I will answer a part. I think with our operating cost, we would like to be positioned such -- in such a way that we can benefit from any upside in price. I think that's of importance. Now with gold going up so fast, I -- we have seen some companies hedging on their gold future production. Although our production is not significant yet, it amounts for 9% of our revenue. But I -- at this point in time, I -- given our -- especially our operating cost that we have been able to optimize, we're well placed to benefit from any upside in pricing. Ed, do you want to complement that?

[Edmundo Gontardo Guimaraes, Chief Financial Officer]

Sure, Igor. Just to add, having the benefit of producing 5 metals, we're diversified enough and that's creating a natural hedge in and of itself that we could take advantages of stronger metals, for instance gold right now and copper soon to follow. And so yes, there is no real immediate plan for hedging. And we have enough margin that there is no need for hedging to protect our costs.

[Heiko Felix Ihle]

And then lastly just in regards to travel, I mean your operations are obviously in 2 different countries and to the best of my understanding there really isn't any travel between those 2 places right now. How much of this is actually impacting things? I mean one would think that you can't really give a proper property tour, show that here's what we're doing on an iPad. People want to see things in person and it's hard to see that. And also I would assume that there is something one of the operations doesn't want you to see and probably just going to forget to give it an iPad tour. Is there any impact at all or is it meaningful yet or are you people actually getting around at all?

[Igor Alcides Gonzales Galindo;President & CEO]

Heiko, it's Igor here. Yes, we have not been able to travel. Peru is completely closed for its national and international flight and Mexico likewise. However, from day one of the COVID, we created a crisis committee both in Yauricocha and in Bolivar and Cusi. And we meet via Zoom every day, every morning and every area manager reports, meaning accounting, logistics, IT, operations, of course. And it has actually worked extremely well for us because never before we had so much information from each area manager and we can make corrections on the go very quickly and everybody can pitch in their support for whatever is needed.And so we've been following up on the operations very closely on a daily basis, that includes Saturday and Sunday. So I think we're quite close to the operations. As a matter of fact, as we speak, there is a call going on between the mines. So I think that has helped us tremendously and -- but as soon Mexico starts loosing up, which we think is going to be the first one, we're going to start to see some travel between inside Mexico and then later with Peru.Now the other element that helps us as a company is that our workforce in Mexico is essentially all but 2 of them are Mexican. And in Peru, our workforce is all Peruvian. So they're all onsite and the ones that do travel are the corporate staff from Toronto and from Lima. So that's an update, Heiko.

[Operator]

And your next question comes from the line of Lee Cooperman with Omega Family Office.

[Leon G. Cooperman, President, CEO & Chairman]

I'm curious, as you take all the moving parts, I'm not looking to put you into the guidance game because I realize you don't want to offer guidance. But would you expect, all things being equal, that you have more cash at the end of the year than you have currently? And would you -- are you expecting to generate cash this year?

[Edmundo Gontardo Guimaraes, Chief Financial Officer]

Yes, that's correct.

[Operator]

[Operator Instructions]. Your next question comes from the line of Jim Young with West Family Investments.

[James Young, VP & Investment Analyst]

Couple questions for you. Number 1 is, what seems to differentiate Sierra Metals from other mining companies is the growth opportunities that you have ahead of you. And so what I'm curious about, as you look at the production at Bolivar, can you give us a sense as to, assuming you get the May 18 date hold, how long is it going to take you to be able to ramp towards the 5,000 tonnes per day in 2020?

[Igor Alcides Gonzales Galindo;President & CEO]

Yes. And Jim, this is Igor. And the ramp up in Bolivar has been on track until COVID, of course. And it has to do a lot with development in the mine. The plant is there, it already can do 5,000. We tested the plant many times at 5,000. So the plant is not an issue. I think it's mine development. So as soon as we get back to normal, one of our priorities will be to increase our development meters and be able to continue the ramp where we left it. We left at around 4,500 tonnes per day. And as you know, during this down period, we have not done all the development we need because we were operating with limited workforce.

[James Young, VP & Investment Analyst]

So would you still expect to be able to achieve the 5,000 tonnes per day level in the fourth quarter of 2020?

[Igor Alcides Gonzales Galindo;President & CEO]

Yes, that's our expectation.

[James Young, VP & Investment Analyst]

And then beyond the 5,000 tonnes a day in 2020 in the fourth quarter, is there further ability to grow the Bolivar production in 2021 and beyond? And if so how much?

[Igor Alcides Gonzales Galindo;President & CEO]

We have to make a PEA first. We just published our resources, our new 43-101. And we have a significant increase in resources. However, I should point out that most of the increase is in El Gallo Inferior because we didn't have enough development to do infill drilling in Bolivar West, which where we get most of our better grade. But we will like to continue a next phase of infill drilling in Bolivar West and start to do a PEA study. And this study will tell us what would be a comfortable capacity increase.Now up to this point, we've done it with limited resources and a further increase has to be studied and we have to analyze water, tailings, and power. Those are the 3 elements that will have a big say on a larger increase.

[James Young, VP & Investment Analyst]

So when would you expect to conclude the PEA study then?

[Igor Alcides Gonzales Galindo;President & CEO]

I don't have a date right now, but probably early 2021.

[James Young, VP & Investment Analyst]

And the second question is, I recognize that given the COVID situation where things have been kind of shut down a little bit. But in some of the prior discussions, you had mentioned that the possibility of having the porphyries and there seem to be 2 porphyries at Yauricocha and I'm just kind of wondering if you can discuss the status of those 2 porphyries, where they are? And lastly regarding the porphyry discussion, do you think, is there a porphyry at Bolivar and are you currently looking for a porphyry at Bolivar?

[Igor Alcides Gonzales Galindo;President & CEO]

Yes. The -- I will answer the Bolivar part first. The answer is yes, we have identified a porphyry environment below Bolivar West -- below and north of Bolivar West. And we were in the process of drilling when we were interrupted by COVID. And so we've -- we need to resume that effort when we resume operations work, probably we sometime in mid, late June because we first have to focus on the operation. And yes, we will continue that work.In the case of Yauricocha, I think we reported we entered into a PEA with a major for them to evaluate what we have done to date. And that has been stopped also and we haven't done much work on that this year. As soon as we get back to normal in Peru, we'll touch base with this major and try to accelerate this, the work. Now in Yauricocha, the porphyry is deeper and so it needs a lot more work to make it economical.

[James Young, VP & Investment Analyst]

But at the porphyry at Yauricocha that you were just talking about, I thought in prior discussions you had mentioned there were 2 possible porphyries. I mean you identified the one porphyry that you've entered into the CA with, but is there a second porphyry in the -- at Yauricocha?

[Igor Alcides Gonzales Galindo;President & CEO]

No, there's only a large number of anomalies, nothing like what we have identified via drilling with the first porphyry. We would like to drill first before we confirm that there is another porphyry.

[Operator]

And there are no further question at this time. I will turn the call back over to the presenters for closing remarks.

[Michael McAllister, Vice President of Investor Relations]

Thank you, operator. That concludes today's call. On behalf of the management team, I would like to thank all participants for joining us today. A replay of the webcast and all the materials can be found on our website at sierrametals.com. If there are any further questions or concerns, you may reach us at any time after today's call. Our contact information can be found in today presentation as well as on the company's website. Thank you, operator. Please conclude the call.

[Operator]

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