29Metals Limited (29M) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the 29Metals Limited March Quarter Report Conference Call. [Operator Instructions] I would now like to hand the conference over to Mike Slifirski. Please go ahead.

Thanks, Betsy. Good morning, ladies and gentlemen. We will be speaking this morning to 29Metals March quarterly report, which was released to the ASX this morning. The call and parallel webcast is being recorded and will be available for replay via the 29Metals website and the Open Briefing website. 29Metals' Manager Director and CEO, Peter Albert, will commence the call before passing to our Chief Operating Officer, Ed Cooney, to review operating performance and progress against 2023 priorities. He'll then pass to CFO, Peter Herbert, to talk to the financial outcomes; and then, Mark van Heerden, General Manager, Geology, to discuss the significant exploration results achieved during the quarter. Mark will then pass back to Peter to manage Q&A. So thanks very much, Peter. Let's commence the presentation.

Yes. Thanks, Mike, and thanks for the introduction. [indiscernible], thank you for joining this morning. In many respects, the March quarter was overwhelmed by the extreme weather events at Capricorn Copper. As outlined in our market updates in March and last week, this was a very significant weather event. I do want to recognize upfront the tremendous response from our site team, employees and contractors for their professional, calm and focused way, which they were able to ensure the safety of all of our people and protect the environment. At no time was there any consideration to a lesser [ outlook ]. Whilst the recovery task ahead of us is considerable, we remain focused on finalizing our plans to bring Capricorn Copper back online as quickly, safely and environmentally responsibly as possible. The scale of this event was particularly severe at Capricorn Copper, a function of the higher rainfall in the immediate vicinity area of the mine, which was significantly higher than some other mines in the region, as well as impacted by the topography of the mine site and the proximity of waterway swollen by this more than 1 in 200-year event. The extreme event has resulted in an additional 1.5 gigaliters of water being collected on site, the equivalent of 600 Olympic size swimming poles. As I have said in other forums, 29Metals investment in environmental protection measures over the past 3 years paid off. We had no uncontrolled release of water from regulated structures through the event. Safety performance across the Group continues to be a key focus, and as a result, continues to deliver results. Whilst our focus is on leading indicators such as critical controls, hazard identification and leadership interactions, the results show up in our total recordable frequency rate, the TRIFR, and our lost time injury frequency rate, the LTIFR, both continue to fall with Group TRIFR falling a fifth consecutive quarter to 8.1 lost time injuries per million hours worked and the LTIFR down to 1.6. And indeed, at Capricorn, we achieved 5 months without a single recordable injury. The March quarter was always going to be a weaker quarter with production weighted to the second half of the year and putting aside the Capricorn weather event, the results were broadly in line with our expectations. Our Golden Grove copper production was higher quarter-on-quarter at 3,200 tonnes with zinc production lower at 8,700 tonnes compared to the very significant zinc production in the December quarter 2022. Capricorn Copper production for the 2 months of operation produced 2,600 tonnes. Both mines were impacted by reduced throughput due to tailing capacity constraints, which I'll address shortly. In terms of financial outcomes, Peter Herbert will discuss in greater detail, but a couple of highlights. Revenue of AUD 163.4 million being [ AUD 21 ] million lower than the prior quarter, impacted by the suspension of mining at Capricorn Copper in the early part of March. Lower site costs driven by lower activity levels also impacted by the suspension of operations at Capricorn, maintain low -- maintained low leverage with unaudited net debt of AUD 34 million at quarter end and substantial liquidity, including a USD 40 million revolving credit facility, which remains undrawn. One of our key performance drivers for 2023 is a laser focus on costs, especially at Golden Grove, given the current situation at Capricorn. A dedicated corporate team is engaged with site teams to identify potential business improvements, including efficiencies, as well as costs. Whilst this is still in the early stages, engagement by all teams has been very positive and very encouraging. Peter Herbert will talk later to this in more detail, as well as providing some current examples. Other key performance drivers for the business, including ventilation, development rates and tailings dam were at regulatory approvals. Ventilation and development rates will be discussed later. But in terms of TSF approvals, we have worked closely with the regulators for both sites. And for Golden Grove, I'm very pleased to confirm that approvals for the lift of TSF3, as it's noted -- as it's called, will confirm post the quarter end. The construction team is mobilized, and we look forward to lifting the constraint on mining rates in the current quarter. At Capricorn, while the extreme weather event and recovery planning is the highest priority, we are working closely and very proactively with the regulator and progressing that approval process. In terms of prices through the quarter, copper prices have been mostly stable during the quarter, ranging between [ 3.72 ], a 1 point up to [ 4.28 a pound ], while zinc range from about [ $1.30 a pound to $1.59 a pound ], all U.S., of course. The outlook for copper demand and pressures on supply continued to persist. And whilst at 29Metals, we remain bullish and convinced that we're producing the metals that the world needs to achieve net 0 goals. Our focus in any price environment is on delivering production and controlling costs. Turning to capital investment, capital investment and sustainability and growth projects are investments in our future, and a number of key projects have been advanced in the March quarter, including a remote-control mining system called AutoMine at Golden Grove was implemented, which enables operation of underground loaders to continue during shift change. Both operations work on the life-of-mine tailing storage facilities continued with the intent to submit approval documentation later in this year. And the new ventilation facilities at both sites have been progressed during the quarter with one of the surface fans reinstated at Capricorn Copper and the other one being held in the suppliers workshop pending the restart at Capricorn. And at Golden Grove, the [ high ] level fans and the high-level ore body have been reinstated and operating. Also fans for the Xantho Exended, the deeper Xantho Extended ore body are due for delivery and commissioning by the end of quarter 2. During the quarter, we released the 2022 resources and reserves statement resulting in group or reserve tonnes increasing by 23% after depletion and an 18% increase in copper metal to 540,000 tonnes on reserves. Group mineral resources are up 4% after depletion with an increase to 2.24 million tonnes of copper metal. Also during the quarter, assay results were received from drilling activities at Capricorn Copper for Mammoth and Esperanza South. These were then reported on the 12th of April. The Mammoth drilling results demonstrate a potential for a new mineralized trend not previously identified, and at Esperanza South, drilling results continue to demonstrate the down plunge potential of this ore body. Staying with exploration in the quarter, Capricorn Copper was awarded [Technical Difficulty] government to undertake a combination of geophysical surveys. Mark van Heerden will elaborate and talk [ about ] this further in his section a little later. And in terms of the longer-term outlook for both Capricorn and Golden Grove, an update on the Capricorn Copper status and recovering planning was provided to the market on the 20th of April, and the detailed planning remains work in process. We have an intent to further update the market in mid-May. We also plan at the same time to provide the market, with an update on the outlook for Golden Grove beyond 2023, and [ we need ] to look forward to in the middle of May. And at that this [ juncture ], I'll now hand over to Ed Cooney, the COO, to talk in more detail of our production activities at the 2 operating mines. And as Mike said, Ed will then hand over to Peter to talk about financial and commercial outcomes, and lastly, we'll hear from Mark before we go to Q&A. So over to you, please, Ed?

Thanks, Peter, and good morning, everyone. [ Well ], Peter has talked to our improvements in safety metrics and the production outcomes for the quarter, so I might begin with progress against some of our key performance drivers. Starting with ventilation, an important project currently underway this year at Golden Grove is installation of 2 large underground booster fans. Now the purpose of the fans is to increase volumetric flows into the Xantho Extended ore body to enable higher mining activity levels. Good progress has been made during the quarter to excavate the fan chamber and progress fabrication of the fans. We are aiming, as the fans installed and commissioned late in the June quarter, and this will support higher mining activity in Xantho Extended during the second half. Staying with Golden Grove, development advance is another important driver to increase production levels. Total development of approximately 1,900 meters for the quarter was consistent with that achieved in the December quarter. At Xantho Extended, we progressed the decline of further 130 meters, established another fresh air raise down to the next sub-level and completed total development in the ore body in excess of 400 meters. 2 key enablers to higher future development rates at Xantho Extended are the increased ventilation, as mentioned above, and the establishment of additional headings. As we open up the new sub-levels, these available -- development heading numbers increase. Another notable area of development activity during the quarter was in the A-Copper ore body, which is near to surface that was undertaken in order to replenish available mining inventory from other ore sources depleted during 2022. 2 detractors to overall development performance relative to the December quarter were a planned 4-day power outage trying to take maintenance activities of the sites incoming high-voltage equipment and a temporary suspension of activity at Gossan Hill mine late in the quarter, as a result of remediation to ground support required at the portal. During the temporary suspension, operations at the Scuddles mine continued uninterrupted. As Peter mentioned, the approvals for the proposed lift of TSF3 were confirmed post quarter end [Technical Difficulty]. We anticipate submission of documentation later this year with regulatory approval processes and construction to follow. In terms of production outcomes at Golden Grove, mill throughput was constrained to manage the remaining tailings capacity. And this, combined with the planned power outage meant that ore tonnes milled was approximately 25% lower than the December quarter. Copper feed grades were higher, while zinc and precious metal grades were lower, which contributed to recovery performance of the various metals. Moving on to Capricorn Copper, mining and processing volumes were heavily impacted by the suspension of operations in early March. Prior to the suspension, mining rates were lower than the December quarter, as a result of continuing ventilation constraints at the sub-level cave in Esperanza South. Reinstatement of one of those fans has been successfully completed with a second fan due to be repaired in the June quarter. Tonnes milled of approximately 200,000 tonnes was also lower than the December quarter, the result of the throughput rates constrained to 60% to manage for tailings capacity. Regarding the next lift of the Esperanza tailings facility, Capricorn Copper engagement with the Queensland Department of Environment and Science has been very constructive. The process has taken longer than we had anticipated, but through our engagement, the Department has outlined further information request, which we will respond to imminently. And in parallel studies on a life-of-mine tailings facility progressed. If when complete, we will inform detailed design, planning and regulatory approvals. For the site team, the focus has clearly now shifted to recovery planning and managing water quality, reducing site water inventory, reinstatement of plant and dewatering of Esperanza South ore body. As Peter mentioned, this remains a work in progress with the intention being to provide the market with update in mid-May once the work has further progressed. I'll now hand over to Peter Herbert to discuss financial outcomes of the quarter.

Thanks, Ed, and good morning to everyone on the call. I'll start with revenue outcomes for the quarter. 29Metals' unaudited revenues of $163 million in the March quarter was a decrease of approximately 11% on the December quarter result. This is attributable to the suspension of Capricorn Copper operations in early March and lower mill throughput rates during the March quarter, as we managed about more tailings capacity. Despite the low throughput rates, Golden Grove revenues were in line with the December quarter result with higher copper revenues and lead precious metal concentrate sales, offsetting lower zinc sales after a strong result in the December quarter. Turning now to costs. 29Metals' Group site costs for the March quarter were approximately $30 million lower than the prior quarter, driven by lower activity levels with reduced mining and processing activity at Golden Grove, including the impact of reduced milling rates and the suspension of activity at Capricorn Copper early in the March quarter. Our selling costs were lower by [ $12 ] million driven by lower TCRC costs, reflecting a higher proportion of copper sales during the March quarter. Copper represented 57% of Group revenues, up from 44% in the December quarter. Our C1 cost of $61 million were $5 lower than the prior quarter, net of the $9 million allocation to recovery costs recorded in the March quarter. Group sustaining capital and capitalized development costs were $8 million lower than the prior quarter, reflecting the timing of activity and the suspension of operations at Capricorn Copper part way through the quarter. AISC unit cost for the March quarter reduced by [ $0.21 to USD 4.13 a pound ], reflecting lower site realization and capital costs, as just discussed, and higher copper sales, partially offset by lower by-product credit, particularly lower zinc sales and the impact of Capricorn suspension. Going forward, 29Metals will report costs associated with recovery works at Capricorn Copper separately. For the March quarter, Capricorn Copper site costs from the 1st of March to the 31st of March totaled $9 million and is shown as recovery costs. All other costs and capital amounts for the quarter reported in a manner consistent with prior periods. As Peter mentioned in his opening remarks, we have a significant focus on reducing costs and improving productivity in the business. Cost reduction initiatives commenced during the quarter and included identifying opportunities to reduce personnel on site, including the relocation of 5 payrolls to Perth, where practical, reducing our underground fleet and personnel numbers through operating efficiencies and [ the confidence ] of Capricorn Copper personnel to fill roles currently undertaken by contractors at Golden Grove. [ Golden Grove ] site personnel has been extremely encouraging, and we're in the process of evaluating and prioritizing ideas, where the benefits expected to accrue over 2023 and beyond. Turning now for the balance sheet. 29Metals finished the quarter with substantial liquidity, comprising unaudited cash of -- at 31, March of $163 million and undrawn working capital facilities of USD 40 million. Unaudited cash was after payments of USD 6 million in debt amortization during the quarter and positive working capital movements of approximately $30 million, which [ unwind ] early in the June quarter. On a net basis, the Group had unaudited net debt of $34 million at the end of the quarter, which was in line with the result, as of 31, December. Stamp duty payable in connection with the acquisition of Golden Grove remains outstanding and 29Metals maintains a $26 million provision in relation to stamp duty. Thank you very much for your time. I'll now hand over to Mark to discuss exploration activity for the March quarter.

Thanks, Peter. In the March quarter, 29Metals conducted drilling activities at both Golden Grove and Capricorn Copper with results reported from Mammoth and Esperanza South ore bodies. I would encourage everyone to review the full release dated April 12th for further information and additional disclosures. The key results from the Mammoth drilling program include UDMAM22 [ hole ] 110, which intersected 228 meters at 1.2% copper, including 36 meters at 3.9% copper. These results are within 310 meters of current development at Mammoth and demonstrate significant potential for new mineralization trend, which is currently open in all directions. Early interpretation of the trend suggest something independent to Mammoth itself, and though further drilling is required to better constrain the orientation of the mineralization, these early results are extremely promising. Additionally, drilling at ESS yielded exciting results outside the existing mineral resources estimate with key intercepts including 70 meters at 2.8% copper, 26 grams per tonne silver and [ 1,080 ] ppm cobalt. Overall, these results demonstrate significant continuing potential for organic growth and exploration success within our existing mine footprint at Capricorn Copper. In terms of the regional exploration, we conducted localized soil sampling over several gold and base metals targets at Golden Grove, while at Capricorn Copper, we were awarded a grant by the Queensland Government to complete a combined magnetotelluric, ground gravity and ambient seismic survey over the Southern extents of Capricorn Copper mine site and the Esperanza South Fault Zone. This will give us a better understanding of the structural architecture controlling the mineralization and ideally give us a way to directly detect supply mineralization on a structure of interest. If this proves to be the case, it has the potential to be expanded to other areas of known and prospective mineralization. We've also combined publicly available geochemical data with our in-house data set to prioritize areas of future field work regionally. Thanks for your attention. I'll now hand back to Peter Albert.

Yes. Thanks, Mark, and also thanks Ed, and Peter Herbert. Betsy, we can now go to Q&A, please.

[Operator Instructions] The first question today comes from Alexander Papaioanou from Citi.

Peter and team, I may be jumping ahead, but how are you thinking about mitigating the impact of future potential rainfall events at Capricorn Copper?

Thanks for the question. Well, as I endeavor to highlight in my opening remarks there, the investment that 29Metals have made in environmental protection over the last 3 years, protected the site. There are other operations that we didn't have -- weren't able to protect their sites and indeed had on regulated discharge to the environment. We did not do that. And this was a freak event, as somebody has termed it to me. And certainly, learnings from that process, from that outcome, which we will build into our future protection. But the investment we've made -- we had made paid off that was really very, very significant in terms of our ability to protect the environment. So we're in a good standing. We'll certainly look to improve upon that. But nonetheless, very, very positive outcome really in the consequence of this event.

Yes. And what can we expect in May from the Golden Grove outlook, will it include updates from Gossan Valley and Cervantes?

The intent in terms of outlook for Golden Grove in middle of May is to give the market investors and other stakeholders, a view on the near term, midterm future of Golden Grove and the ore bodies, of course, that feed into that. So there'll be a lot more details coming out at that time. As we have described back in late last year in terms of the studies, feasibility studies for Gossan Valley, that's obviously a key component of our future. And Cervantes likewise is a very prospective ore body, and it's a pre-feasibility at this stage. How that plays into the outcome, we'll be putting all that out in mid-May.

[Operator Instructions] The next question comes from Scott Jones with Ethical Mine.

Peter, I've heard you refer to an embankment that was overwhelmed, which allowed water to flow into the subsequent zone or the cave flooding Esperanza South. Which embankment was overwhelmed?

Well, Scott, thanks for the question. So the Esperanza South ore body is a sub-level cave. And as a consequence of being a sub-level cave, it expresses to surface. So there's an opening at surface. We had provided diversion structures around that opening to protect that opening. But this 1 in 200-plus year event overflowed those embankments, it would have frankly been impossible to design otherwise, and that was a cause of the inflow of water to Esperanza South.

So the permanent mine diversion, is that actually been installed there?

That the diversion structure is there, as a temporary diversion structure, and that will be reviewed in terms of whether there's a potential to improve that. But as I said, a 1 in 200-year event, Scott was [ plus ] that, which is more than likely very difficult to design for that sort of outcome.

The other final question, Peter. The issues with DES approving the next lift of the Esperanza [ downstream ], what are the issues that DES has with our proposed lift?

This is -- it's a process, Scott, that we are going through. They have been very proactive with us, indeed engaging with us in terms of how -- what information they're looking for, how it should be presented. So very positive engagement with them to ensure that we have the best chance for a positive outcome of which we are very confident. And as Ed said, I think earlier, intention to submit that documentation imminently.

The next question comes from Adam Baker with Macquarie.

Just wondering if -- I might be jumping the gun here a bit given there's an update coming in May for Capricorn, but just wondering, if you could guide to potential monthly care and maintenance costs for Capricorn in the mean time?

Yes. Probably jumping the gun, as you say, Adam, in mid-May, we'll be able to articulate and describe the path to recovery and the costs associated with that. So -- and we're putting all that work together now. So thanks for the question. But as you said, little bit jumping the gun there because we're in the throes of firming up all those outcomes.

And then for Golden Grove bit of a soft first quarter starting to the year. Are you happy with guidance at this stage. Clearly, you've reiterated that. Is it going to be second half weighted and how is the June quarter looking?

Yes. No, that's [indiscernible] right, Adam. And that's what we had always described previously and reinforced in this sort of statement today. The -- is second half weighted, the production for Golden -- well, obviously, we've [ grown ] guidance for Capricorn some weeks ago. So that's pretty clear. For Golden Grove, always was going to be a weaker, softer, probably a better word, first quarter and no change to guidance outlook for Golden Grove, as supported by the comments we made in terms of ventilation and development rates, et cetera, had a [ confidence ] of remaining within the guidance ranges that we had previously provided.

The next question comes from Ben Lyons with Jarden.

Maybe firstly on Cap Copper, I appreciate the detail in the release that recently hit the market. Just wondering if you can make any comment about your ability to actually discharge water from the site at this point. Obviously, evaporation rates have a natural constraint, and it sounds like the water treatment plant is the critical piece of [ kit on site ], but then reading the recent release, it sounds like there might actually be some significant damage to that water treatment plant. So first question, can you discharge water? And what's the extent of the damage on the water treatment plant?

Second question -- second part of the question first, and thanks for the question. We assume -- well, the water treatment plant sits within the workshop warehouse area. So that's got a significant water and flooding in that environment. And we're assuming at this point in time that, that won't be available to us at least in the short, medium term. So our water strategy, [ these ] management strategies don't rely upon the water treatment plant for recovery. So that's the first point. As to its ability to be recommissioned is a question, we don't have the answer to yet until we can get in there and really understand what damage there may be. In the meantime, in terms of your first part of your question, again, more detail to follow later, but it's sufficient to say that right now, we don't have an ability to discharge to the creek. It's -- the flows in that creek are now down to very low levels. Our key priorities are 2-fold. One is to clean up the water that we have on site, that 1.5 gigaliters to clean up parts of that water and put it into areas, where we can discharge it in a clean fashion into the environment and to the creek and/or to evaporate. And we -- indeed, we are extending and expanding our evaporation capacity at the site and making quite a big impact, as a result of that. We're looking at water treatment options, and that's well advanced in terms of how we treat the water and then how we potentially release it. And we are working with the regulator on all of those aspects. And they've been -- a [ bit of color ], [ I suppose ] being very supportive, and we've actually done very well in terms of protecting the environment. We've got a good recognition for that, and they're working with us positively in terms of how we overcome and recover the situation at Capricorn.

Maybe staying with Cap Copper, again, just trying to read between the lines, it sounds like you're still being unable to access the Esperanza South ore body at this point, however, you have been able to make an estimate of the extent of the water ingress into the cave. Just wondering if you're able to make any comment around the extent of the underground damage to the infrastructure. For example, have you been able to use remote access techniques, for example, to make a preliminary estimate of what potential ground support damage there is, damage to your ventilation, your pumps, et cetera, et cetera.

Yes. Thanks, Ben. Yes. Well, we have been able to get into Esperanza. We have access into Esperanza [ dam ], of course, to where the water is. So we're monitoring that all the time. We obviously can't assess conditions beyond that. It's flooded. So it is not possible to do that. As we start to extract that water from Esperanza, we'll be able to assess that damage. We've certainly made some assumptions and talk to others in the industry, who may have experienced similar events. So we've got some concept of what we may be dealing with. What was the other part of your question there, Ben, what was the other part?

I assume, it's pretty much [ covered ]. Yes. Maybe leaving Cap Copper for now and just moving across to Golden Grove, some positive commentary from both yourself and Ed there with reference to development rates at Xantho Extended. Does this increase your confidence about accessing more ore towards the back end of this year and certainly into calendar '24? And obviously, there will be a net positive overall grade impact of the operation and the more material you can extract from Xantho Extended?

Yes. That's right, Ben. Your latter comment in terms of more higher grade coming more metal coming with more tonnes from Xantho Extended. In terms of confidence, look, yes, I mean, we are still developing the upper areas and progressively additional sub-levels, as we open up more and more sub-levels, obviously, you get more flexibility, more development fronts, more stoping fronts and more production tonnes will follow. As I did mentioned, though, the XE project, a key enabler for that is the additional ventilation in terms of volumetric flows that will come from commissioning of the booster fan. So we are very focused on completing that -- the excavation of that [ fan, the civils ] receiving the fans and successfully commissioning them this quarter towards the back end of this quarter. So that will set us up nicely for the second half.

Maybe final one for Peter Herbert. I think you made some comments around, there was an unwind of the working capital, which assisted the balance sheet situation at 31, March, but then it sounds like that was layered back onto the balance sheet early in the quarter. Can you possibly just make any further comments around that issue and where the current balance sheet settings may sit?

Yes. Sure. So Ben, it's really just [ timing ] of payments, some of the payments tend to be relatively chunky in this business is, as I'm sure you appreciate, and some of them fell after the end of the quarter, and we just wanted to give as much clarity around that as we could [ that ] really not much more to it than that.

Any further word from the guys that collect the stamp duty or just it's getting kicked out at this point?

Yes. Well, I mean, I probably wouldn't use the word [ kicked and kicked out ]. We just haven't heard much, and that is what it is. So we are -- we just continue to model the situation. But there's nothing to update in respect of that at this stage.

There are no further questions at this time. I will now hand the call back over to Mr. Albert for any closing remarks.

Thanks, Betsy, just making sure there's no further questions, all right, I'm just looking at Mike, we're okay. All right. Well, thanks, everybody. Thanks for the -- all the good questions there. And thanks, Ed, Peter and Mark for the presentations. The March quarter, of course, was pretty challenging for 29Metals, but I do take satisfaction with how the team has responded to the unique set of conditions we've experienced, especially at Capricorn. We have, of course, been frustrated with the time to secure approval, specifically for tailings facilities at both sites. But of course, again, very pleased to have received the Golden Grove tailings storage facility approval recently, and at Capricorn and we discussed this in the Q&A, just now. Very encouraged by the positive engagement we are having with the regulator in Queensland on both the tailings approval, as well as their support and understanding during the extreme weather event. And whilst production in the quarter has been softer as we had anticipated, we have made good progress on our key performance drivers, including ventilation, the focus on development, engaging with the regulators and advancing the life-of-mine tailing solutions for both operations and realizing cost and efficiency improvement initiatives, especially at GG [ well that's a ] -- we'll see the benefit of that through the course of this year and beyond, as Peter has said. Rightly, our immediate focus is on addressing the operational challenges resulting from the extreme weather event at Capricorn and lifting performance at Golden Grove. However, we're not taking our eye of the longer-term opportunities, which are compelling, including advancing our planning for Gossan Valley, there was a question earlier on I think, cobalt studies at Capricorn and continuing the seriously impressive exploration programs at Capricorn. Thank you, everybody, for listening to us today and being part of this presentation, and have a good day. Thank you. Thanks, Betsy.

That does conclude our conference for today. Thank you for your participation. You may now disconnect.