SSR Mining Inc. (SSRM) Q3 2019 Earnings Report, Transcript and Summary

Good morning, everyone, and welcome to SSR Mining’s Third Quarter 2019 Conference Call. [Operator Instructions] At this time for opening remarks and introductions, I would like to turn the call over to Stacey Pavlova, Manager, Investor Relations.

Thank you, operator. Good morning, ladies and gentlemen. Welcome to SSR Mining’s third quarter 2019 call, during which we will provide an update on our business and a review of our financial performance. Our financial statements and management’s discussion and analysis have been filed on SEDAR and EDGAR and are also available on our website. To accompany our call, there is an online webcast, and you will find information to access the webcast in our news release relating to this call. Please note that all figures discussed during the call are in U.S. dollars, unless otherwise indicated. All references to cash costs and all-in sustaining costs are per payable ounce of metal sold. We will be making forward-looking statements today, so please read the disclosures in the relevant documents. Joining us on the call this morning are Paul Benson, President and CEO; Greg Martin, our CFO; Kevin O’Kane, COO; and Carl Edmunds, Vice President, Exploration. Also present is John DeCooman, Senior Vice President, Business Development & Strategy. Now I would like to turn the call over to Paul for opening remarks.

Thank you, Stacey. Good morning, ladies and gentlemen. I’m pleased to welcome you to our call to discuss our third quarter 2019 operating and financial results. Q3 was another strong quarter, as we produced over 100,000 gold equivalent ounces at our three operations, delivering improved margins and maintaining a strong financial position. All three mines achieved solid results. Seabee delivered a record quarterly production with over 32,000 ounces of gold, while achieving quarterly records in recovery and gold grade under our ownership. At Marigold, we produced nearly 53,000 ounces of gold, while stacking 6.4 million tons of ore at a higher quarterly gold grade of 0.51 grams per ton, setting us up well for the remainder of the year. At Puna operations, where we consolidated 100% of our ownership in September, we produced 1.7 million ounces of silver during the quarter. This improved production was coupled with an increased amount of ore mined in advance of the rainy season. The strong operating performance and production results at each site positioned us well to meet or exceed our consolidated production guidance for the eighth consecutive year. From an exploration perspective, 2019 programs at Marigold, Seabee and Puna are continuing, and Carl will provide an update on each shortly. It’s pleasing to see positive exploration results to-date at Marigold and Seabee, which we are expected to add to reserves and resources at year-end 2019. At the recently acquired Trenton Canyon property, immediately south at Marigold, we have focused on confirmatory work that we expect will allow us to bring some of the resources Newmont had identified during its ownership of the property into our inferred resources at year end. Next year, we expect to fund the diamond drilling campaign looking at the deeper high-grade sulfide targets. We’re also pleased with our financial performance during the quarter, as we reported $28 million of adjusted attributable net income and generated $53 million of cash from operating activities. We increased our cash balance to $474 million at the end of the third quarter, as we generated $22 million of free cash flow. Notably, our cash and $51 million in marketable securities amount to over $0.5 billion, which provides us with significant flexibility. With that, I will turn the call over to Kevin, who will discuss our operational performance in more detail. Kevin O’Kane: Thank you, Paul. As you heard, our operational performance in Q3 and year-to-date continues to track well against our consolidated production guidance, which we improved at mid-year. We produced more than 100,000 gold equivalent ounces during Q3 at consolidated cash costs of $759 per gold equivalent ounce. At Marigold, we produced 52,968 ounces of gold, 4% less than the second quarter, mainly due to stacking of ore on to higher locations on the leach pads, which means it takes longer for the solution to reach the collection system. 19 million tons of material were mined, in line with the second quarter. Approximately 6.4 million tons of ore were delivered to the heap leach pads at a grade of 0.51 grams per ton gold, an increase in stack gold compared to Q2. The gold grade to the leach pads was 34% higher quarter-on-quarter, consistent with plan, as we mined higher-grade ore in the current phase of the Mackay pit. The strip ratio was 2:1 for the third quarter. Cash costs were $822 per ounce, 2% lower than the second quarter. Higher fuel and tire costs due to longer hauls and timing of change-outs were offset by lower labor and mine maintenance costs. Cash costs were impacted by increased royalty cost with the higher gold price and lower deferred stripping, offset by higher recoverable ounces stacked during the quarter. Sustaining capital expenditure guidance has been increased by $10 million to $45 million, reflecting the delivery of a replacement hydraulic loading unit in the fourth quarter. The loader was anticipated to be acquired in 2020, but due to favorable lead times, Marigold is advancing replacement before year-end. Subsequent to the quarter end, Marigold received the positive record of decision on its Marigold Mine Mackay optimization EIS. Moving on to Seabee. The mine produced a record 32,345 ounces of gold in the third quarter of 2019, a 22% increase compared to the second quarter, due to higher mill feed grade which more than offset lower throughput. Cash costs were $373 per ounce, compared to $526 per ounce in Q2 2019, 20% lower – 29% lower due to – due mainly to higher production from the higher feed grade. The mill processed 842 tons per day over the third quarter, 13% lower than the previous quarter, mostly due to electrical transformer damage resulting from lightning strikes. Nearly a full week of production was lost from this weather-related power outage. Gold mill feed grade was 12.39 grams per ton, 26% higher than the previous quarter due to the mining of higher-grade stopes. Gold recovery for the quarter was 98.8%, slightly higher than the second quarter and a record quarterly result during our ownership. The new underground equipment commission during the second quarter continues to operate well. Underground development rates were flat for the quarter, mainly due to the power outages. We still expect to reach our mining rate and hence a processing rate of 1,050 tons per day by year-end 2019. As we indicated during previous calls, we are expanding the capacity of our tailing storage facility to accommodate the increase in reserves added during the past two years. We will complete 100% of the 2019 scope for the tailings expansion project during the first half of Q4 2019. The project remains on time in this tracking well to budget. Puna operations produced 1.7 million ounces of silver during the third quarter, 12% higher than the second quarter of 2019, mainly due to higher mill throughput and silver grade. Silver sales totaled 1.5 million ounces. Cash costs were $14.22 per ounce of silver for the third quarter compared to $9.80 per ounce of silver in the second quarter, mainly due to the lower byproduct revenues and higher operating costs. During the third quarter, ore was milled at an average of 3,648 tons per day, a 7% increase compared to the previous quarter, mainly due to improved performance of the new tailings pumping system. During the month of September 2019, ore was milled at an average of 4,539 tons per day. Processed ore in the third quarter contained an average grade of 165 grams per ton silver, a 3% increase compared to the second quarter, consistent with the mine plan and average silver reserve grade. The strip ratio during the quarter was 4.3:1, significantly lower compared to the previous quarter as we indicated during our second quarter conference call. In summary, the operations again delivered solid results during the quarter, setting us up well for a record full year gold equivalent production with higher throughput at Seabee and the head grade at Seabee and Marigold near the reserve averages in the fourth quarter. I will now hand over to Carl, who will take you through our exploration activities.

Thank you, Kevin. During the quarter, our exploration activities remained focused on supporting the growth of mineral resources and reserves at our three mine sites. While most of the activity occurred at our North American operations, we also began mobilization for a diamond drill program at our Pirquitas property at Puna operations. At Marigold, we have been active on several fronts. At Red Dot, geotechnical drilling and engineering work advanced towards the goal of declaring additional mineral reserves, while infill drilling continue at Mackay and North and South Red Dot. Exploration drilling to define new additional resources continued at Valmy, Crossfire and the East Basalt targets. In total, during the third quarter, we completed 17,000 meters of drilling in 51 RC drillholes. We are encouraged by the results received during the quarter from the Crossfire target on the Valmy property, with results such as 48.8 meters grading 0.85 grams per ton and 21.3 meters grading 1.17 grams per ton in two-haul space 75 meters apart. These are open for expansion and located at minimal depths outside areas of past mining and are expected to increase our mineral resources estimate at Marigold at year-end. 2019. Later in June, we announced the acquisition of the contiguous Trenton Canyon property, which almost doubles our land holdings at Marigold. During the quarter, we began drilling on the project which presents several interesting targets ranging from near surface oxide to deeper sulfide targets. We are currently focusing on near surface work to define oxide resources to be added to our mineral resources estimate at year-end 2019. Additionally, we expect to allocate budget in our 2020 exploration program testing for higher-grade deep sulfide targets on both Marigold and the Trenton Canyon property. Moving to Seabee. We have continued underground exploration of the Gap hanging wall, Santoy 8A and Santoy Gap mineralized zones. Most of the work centered on the 12,000-meter long Gap hanging wall zone, where we defined – we are defining additional Mineral Resources and which we expect to report at year-end 2019. During the quarter, 13,732 meters of drilling was completed from three underground drill stations. In addition to the exploration information we published in July, in the quarter, we received positive results from Gap hanging wall, such as 16.3 meters grading 5.97 grams per ton, 5 meters grading 10.9 grams per ton and 3.6 meters grading 11 grams per ton gold. Encouraging results were also returned from Santoy 8A, where we have connected an area between two lobes of indicated resources with results such as 5.8 meters grading 19.8 grams per ton and 2.6 meters grading 29.8 grams per ton gold. Greenfields activities on Seabee and the contiguous Fisher Project wrapped up for the season in the third quarter. Objectives here are to identify new areas with potential for inferred resources through soil geochemistry prospecting trenching and geologic mapping. The workers located numerous zones of anomalous gold in bedrock and soil located near Batman Lake and an area 800 meters north of the gap underground workings, as well as North and South of the Mac zone on the Fisher property. Analytical results will be received during the fourth quarter of 2019 and will form the basis of some of our 2020 exploration work. Shifting to Puna operations, we mobilized one diamond drill to our Pirquitas site to drill the Granada target, which is located 800 to 1,000 meters below the area between the Cortaderas underground resource and the depleted San Miguel pit. The drill target is the intersection zone of two major mineralized structures in the district, and we expect to report on the progress here next quarter. Now over to Greg for a discussion of our financial results.

Thanks, Carl. I’ll keep my comments brief as the quarter delivered what our investors would expect, with improving precious metals prices. Predictable operating performance which delivered strong financial results and expanded margins. All operations contributed positively to the quarter with corporate and capital spending remaining on plan. For the quarter, we generated revenues of $148 million and income from mine operations of $52 million. Revenue was similar to the second quarter as, if you recall, the second quarter benefited from a catch-up in silver and zinc concentrate sales at Puna operations. However, mine operating earnings increased 74% compared to the second quarter, showing the strong increase in operating margins at all of our operations. This improved margin increased our bottom line significantly, as we reported net income of $18.1 million or $0.17 per share and adjusted net income of $28.4 million or $0.23 per share. These were quarter-on-quarter increases of 89% and 53%, respectively, on a per share basis. You likely noted the high tax expense in the quarter. This was driven by a larger than normal deferred tax expense. So therefore, non-cash tax expense at Puna operations due to the significant devaluation of the Argentine peso that impacts the tax basis of the operation. We continue to forecast not paying cash income tax in Argentina over the coming few years. Turning to cash flow, the story is even better. Cash flow from operating activities totaled $53 million, an impressive 57% increase from the second quarter. Cash flow would have been even stronger if we hadn’t built gold bullion and concentrate inventories in the quarter due to timing of shipments from the sites. Sustaining capital at all operations stayed consistent with guidance, with capitalized stripping below expectations as both Marigold and Puna mined at a lower strip ratio. We made a top-up investment in SilverCrest shares of $3.4 million to maintain our 9.8% ownership which was largely financed by offsetting sales in other marketable securities. This investment takes the average entry price of our investment to CAD3.91 per share with their current share price about double that amount. We ended the quarter with a higher cash position of $474 million, as we generated $22 million in free cash flow. Working capital stood at $636 million at quarter end. Of note in the quarter was the acquisition of the 25% interest in Puna operations. Since we already consolidated 100% of Puna’s controlling shareholder, the impacts to our financial statements were fairly benign. We recorded the minor cash payment in our investing cash flows with the remainder of the transaction being balance sheet changes, as the non-controlling interest previously reported was compressed into equity and the partner loan was eliminated. Going forward, this simplifies our reporting and gives us full economic exposure to the asset. The Chinchillas project has now effectively been completed; however, some capital amounts will flow to the last quarter as we clear contracts and holdbacks. Well at Puna operations, just a comment on the reported cash costs, which jumped a fair bit from Q2. I have noted previously that we will see volatility in reported cash costs at Puna due to its nature as a concentrate producer with meaningful byproduct credits. We had a quarter with low byproduct credits and low deferred stripping, both of which impact on reported cash costs. Also, at both Puna and more so at Marigold, higher metal prices well most welcome result in higher royalty charges flowing through cash costs. Looking forward to the fourth quarter, our focus remains on delivering improved, consistent and predictable financial results to close a successful year. With those comments, I’ll turn the call back to Paul.

Thanks, Greg. So in summary, another strong production quarter, which positions us well to meet or exceed guidance for the eighth consecutive year. The solid operating delivery at all three mines translated into a strong financial performance for the quarter, with improved margins $22 million of free cash flow and an increased cash and marketable securities balance of over $0.5 billion. With this, we conclude the formal remarks of our earnings call. I’ll now pass the line to the operator to take any questions you might have.

Thank you, Mr. Benson. We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Mike Parkin of National Bank. Please go ahead.

Hi, guys. Thanks for taking my question. Since with depreciation per ounce, we’ve noticed the trend that this is dropping for Marigold and Seabee, it seems for each quarter on a per ounce basis. Is that something that like where do we see that kind of stabilizing on a go-forward basis or should we benchmark that are off like a per tonnage basis?

Yes. Thanks, Mike. Obviously, the overall depreciation charge is really broken into two components, one which is the PP&E side, which is really looked at – if you look back at our accounting policies has done on a straight-line basis, so that’s more tied to the overall mine life. So with the success, we’ve had at both Seabee and Marigold, we’ve seen that charge drop, because of the mine life extensions there. So, I’d look back at our reserve basis for those two operations to look at how that PP&E gets split over the coming periods. The other piece is, the depletion piece, which is the mineral resource part, which is done on a units of production basis. So again, that should stay relatively stable within the year, but we’ll decline as additional reserves are proven up and we can then amortize that depletion over more ounces. The part that does cause some volatility is really the deferred stripping piece, because that’s done on a phase-by-phase basis. We’ll be amortizing that deferred stripping over the existing phase. And that one is a little bit more challenging to predict, but it’s the smaller component of those three pieces.

Okay. All right. That’s good. And then on Seabee, yes, that’s basically the same really, so with the deferred strip, I would say, so. Okay, that’s good. Thanks so much.

Thank you.

The next question comes from Cosmos Chiu of CIBC. Please go ahead.

Thank you Paul, Greg, Kevin, Carl, and of course, Johnny. Maybe, first off on Marigold here. Good to hear that likely we’ll see some inferred resources come out maybe by year-end on Trenton Canyon, but I’m just wondering like, when could we find a bit more detail – find a bit more detail on these new acquisitions Trenton Canyon and Buffalo Hill, or Buffalo Valley, and when they might potentially come into the mine plan?

Yes. thanks, Cosmos. I’ll answer that one. We – the focus at the moment really is on the QA-QC and confirmatory work on the resource that Newmont had. and that’s what we’re talking about. We expect to see some of that come into now inferred resource when we do the update early next year. And that’s really the work we’re doing there at the moment. Next year, we’ll fund exploration at sort of two levels, one chasing the oxide to see what we can – yes, proved up there, but also we’ll start to fund the deeper exploration program targeting the higher-grade sulfides, and that will start next year. Because it would be a satellite operation, we have to do the work. We’ve got to do any study to see how – any discovery there are actually then brought into the Marigold operation, and that will play out over the next couple of years. We’re really excited by the ground. We’ve doubled the land position and we already know there are targets there and hopefully we’ll continue to find more.

And that sort of leads me to my next question here. It’s a huge positive that you’re able to get the EIS permit for the expansion of Marigold now including Red Dot and the associated facilities. But then again, maybe, this is too early, but if we were to include some of the other acquisitions, the two Trenton Canyon and Buffalo Valley again, could you walk us through what other permits you may potentially need in terms of walking through that process of getting them back up and running?

Yes. As a simple generalization, you can’t have more than one permit application in at any one time in Nevada. So, we started that process back in 2015. Around the same time, we bought Valmy. So, Valmy wasn’t included in that. So, we’re now – we have that Record of Decision on the Marigold mine property. We are going through a planning process to decide how we – what we do next – whether we can amalgamate Valmy with Trenton Canyon and Buffalo Valley. Once we decided the best way forward on that, we will obviously inform the market in terms of the process we are running. The important thing is that Trenton Canyon, there is just a ground and we’re able to drill there already. So that isn’t held up by it, so we don’t see it impacting delaying any of our mining decisions.

Pusher. And then I noticed for your sustaining CapEx for 2019 at Marigold increased by $10 million. You did mention that it’s for the hydraulic loader that you’re going to bring in. That was to be scheduled for 2020, but now brought into 2019. Is 10 million – the entire 10 million for this hydraulic loading, because again, 10 million seems to be a bit high in terms of just for one hydraulic loader? This isn’t those big rope shovels that I’ve seen on site right? This is an addition to it.

Yes. I’ll pass it over to Kevin.

Hi, Kevin. Kevin O’Kane: Thanks, Cosmos. Hi. It is a hydraulic shovel and it’s about halfway in size between our existing hydraulic shovels and the large rope shovel. So, it is a large shovel.

And what we talked about last year was with the optimization study. We looked at whether it made sense to begin a big rope shovel, the issue there you also then had to increase the haulage fleet size significantly as well and that analysis said we didn’t need to do it. This one is a bit bigger than the existing hydraulics and we’ll give us significantly more flexibility and it will have a lower mining cost. The reason we brought it in this year is it just happens that there’s one available at Oroco, ready to go. So, it avoids the 10-month waiting time. So, it was – we were lucky to be able to get that.

Yes, of course. Maybe, switching gears a little bit here. I noticed that you’ve maintained your 9.8% interest in SilverCrest, and that’s a question I get quite a bit on my end as well from investors. So maybe, Paul, if you can kind of reconfirm or remind us of any standstill agreements that you might have in place? And what’s your current thinking right now in terms of that investment? Clearly, you’ve made good money on it. I think you got in with at about a three handle now it’s almost doubled. So what’s your current thinking at this point in time?

Yes. What we’ve said all the way along, when we took that position, we like the project. It’s a great project and obviously, the standout aspect of it is the grade, very high grade and grade always rules. We kept our 9.8% position during the quarter as they did a further capital raise. The team, they have done a tremendous job both in terms of geology, but also advancing the project. I think they are currently working to prefeasibility in Q2 of next year. And what we said to our shareholders all the way along is that we’re very happy with the project. We are benefiting from the exposure. Yes, in long-term, we’ll either end up earning more of it or less of it, but we’ll make a decision based on how we think it suits our shareholders. And so we’re happy to sit back at the moment and so you have that project developed.

And I don’t know, again, if you can answer this question, but is there any kind of timing in terms of when you might be making that decision?

No. We’re happy to sit back and watch them. They’ve indicated at the moment I think around May, for the feasibility study and so we’ll wait and see what happens.

And then maybe one last question, accounting question here if I may. Greg, as you mentioned, you’re not – you don’t foresee paying any kind of cash taxes in Argentina, and if I look at your financial statements, it doesn’t seem like you’re paying cash taxes overall as a company. I’m just wondering if you anticipate that on a go-forward basis in terms of cash taxes. I only asked that question, because I guess I see that your deferred income tax asset has now been decreased to almost now $63,000. Your deferred tax liability has increased. And based on my prior career as a non-practicing accountant, I thought that would be somewhat connected to how much cash taxes you might be paying. Could you maybe walk us through that aspect?

Yes, thanks, Cosmos. Yes, I think as a basis I just refer you to the cash flow statement and it clearly shows the income taxes paid line. So, we are paying cash taxes at Marigold and Seabee. There is mineral taxes payable on both of those, and obviously depending, where gold prices end up, we’ll pay income tax at those two jurisdictions. And as well in Argentina. Yes, we do pay royalties and other provincial taxes. They get reported as royalties, not through the tax line, because they are tied to an NSR, not an income tax. So, I certainly don’t want to leave the impression that we aren’t paying cash income taxes as an organization, because as you can see we’ve paid about $15 million year to-date of the income taxes. It was a bit lower in the quarter, but that’s just timing. As we file our income tax returns at mid-year that tends to focus the bulk of the payments at certain periods of time.

Okay. And then maybe, since you mentioned Argentina or maybe, I’d mention Argentina, you’ve been in Argentina for long time. You know Argentina well. About two weeks ago now, there was an election. A left-leaning party that you might know well got elected. Puna, Chinchilla, Argentina as a percentage of your NAV is now a lot less significant than it would have been seven or eight years ago. However, I’m just wondering if we should be concerned any concerns that we should have in terms of the changes in Argentina?

Obviously, the actual government changes in – I think it’s December. Certainly, the President-elect has a previous track record of, I think, being very fiscally responsible so. Have the over people on the ground, obviously paying attention. but from where we are, we’ve got a good business there, we’re a significant employer in [indiscernible] and the business is running smoothly down there, but we’ll wait and see how things change in the country over the coming 24 months.

Great. That’s all I have, Paul and team, and congrats on a very good financial quarter here.

Thanks very much, Cosmos.

The next question comes from Chris Thompson of PI Financial. Please go ahead.

Good morning, guys. Congratulations on a really, really good quarter, and thanks for taking my questions. I think Cosmos has asked a lot of them and we received a lot of answers. Thank you, Cosmos. So, I have a couple of additional ones. So, really one question, two parts, same theme. I wonder if you could walk us through the nice bump in grades at Seabee and Marigold. Specifically, are they sustainable by way of the Marigold – sorry, by way of the mine plan envisaged in the near-term for each month?

I’ll talk to Seabee and I’ll let Kevin talk to Marigold. With Seabee, there is significant variation in grade across the ore body, the – I think the average at the beginning of the year was 9.2. We’ve obviously mined about that the quarter, but that area that we mined was more or less in line with the model. So, was not unexpected and very much according to our schedule, we’ve indicated that we expect grade to come back closer to reserve rating Q4 Kevin on Marigold? Kevin O’Kane: Yes, I mean – as again at Marigold, I mean the variability in absolute terms is not as large at Marigold just as it Seabee. As we indicated in the call, the grades in the fourth quarter and going forward, we’re going to be in the neighborhood of the reserve grade. And so that’s what you should expect.

Okay, great. Thank you for that and then just a final question, I guess just moving over to Puna. I wonder if you just sort of update us by way of a plant optimization, specifically, the balance between I guess, lead and zinc?

Yes. Zinc is the minor product there. We run the plant to maximize silver production and the silver goes predominantly with the lead as a concentrate. So, everything is driven around maximizing the value, so silver is very much the product. Kevin, any other comment? Kevin O’Kane: And not only do we run the plant that way, but we feed the plant that way from the stockpile, so that we see the highest great value first, our highest value material first with the highest recovery, which is the silver-lead combination.

All right. So, do you think the – I guess the Q3 grades we saw it by way of lead and zinc are a representative of what we should expect moving forward? Kevin O’Kane: Yes.

Perfect. All right, guys. Thank you very much. Kevin O’Kane: And the only other thing I was going to say is, in terms of byproduct credits, we produce two cons, the lead con, which has silver and the zinc con and they get shipped separately in a different time, so that’s why you can get variation in that as well.

All right, guys. Thank you very much.

[Operator Instructions] The next question comes from Adam Graf of B. Riley. Please go ahead.

Hey, guys. Thanks for taking my questions and just a quick. You guys still are holding PetroRio and St. Louis on the books, just curious if there is any progress there or are you guys – have considered given current pricing of the underlying commodities may be potentially spinning those out into a separate equity, it’s been out in trying to gain some value there?

Yes, Adam. I’ll just talk briefly to PetroRio and then I’ll let Greg talk to San Luis. At PetroRio, what we’ve indicated is that at the beginning of last year, we said we were going to have a look at a configuration focused on the high-grade sulfide a depth and we said we would only go ahead with that project if it was a double-digit IRR during the year, we indicated the results. it was definitely NPV positive and this was the spot prices, but it was single-digit and we were sticking with that discipline. What we had noted however is that the resource and reserve modeling had all been done assuming an open pit and the drilling had been done assuming an open pit. So, it tends to be vertical holes, the high-grade mineralization at depth tends to be sub vertical. So, we know that the drilling profile had risk of underestimating the amount of high grade. So, we’re looking at a project to see whether we extend there is an existing decline that was put in the 2000s extending that a bit to get into position, where we could do some horizontal infill drilling, the objective there would be to see whether we can increase the size and of the high grade that would improve the economics of the project. We’re just going through a process of rebidding on the development for that and seeing what’s available there in Mexico, the project all up order of magnitude if we went ahead with ballpark figure would be about 10 million, and it would probably take 18 to 24 months when you consider the development and the drilling that you do from that and I think it would make sense for us, depending on what those contractor costs come in for us to do that before we make any decision on the project and San Luis over to Greg.

Yes. Excuse me. Thanks, Adam. Yes. As you know, I mean San Luis is that high-grade, high cash flowing relatively modest-sized asset. We’ve had some progress this year with the communities, we had step back for a couple of years just to let that situation settle down and we started a strategy of reengaging in late 2018. So, we have seen some progress and we’re back into sort of an active community engagement piece with both the Ecash and Cochabamba communities that and have signed some recent agreements with them. It is still step-by-step. So, we’re taking it slow, but we’re encouraged that there is some progress in some better engagement from the community side there. Ultimately, our strategy here is to position the project for maximum value and whether that comes through as a development project for us or as a different model, we’ll make that decision as we get the project to a point that we really feel it’s stabilized.

I think I just said. I think Greg has led that team in country. And when you look at the other news that is happening in Peru, where there have been lots of issues, where people have gone backwards with respect to community relations et cetera, yes, this has really been an impressive result. We’ve been happy with the progress, it’s been slow and steady, but that’s the way you can move these projects along. So, I’d – hopefully, we’ll continue to chip away at that over the next calendar year.

Excellent. Look forward to hearing further news from those two potential assets.

Okay. From what we can see, that’s the final call. So with that, thank you very much for joining the call, and speak to you again next quarter.

This concludes today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.