Royal Gold, Inc. (RGLD) Earnings Call Transcript & Summary

Good afternoon. We're very pleased to host Jason Hynes, the Vice President of Business Development and Strategy at Royal Gold. Without further ado, Jason, please tell us all the progress at Royal Gold.

You bet, John. Thanks for having us. I'm just going to start just briefly on Slide 2 here. We'll be making forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are discussed in our most recent 10-K we filed with the SEC. And I'll say no more on that topic. Moving along, Slide 3 here. And I'm just going to walk through a presentation here, and John is going to -- feel free to interrupt me whenever he wants to chat and ask questions. But this Slide 3 gives a high-level overview of Royal gold. We're a high-margin precious metals business. We generate consistent cash flow. We've been in business for quite a while, since the mid-80s, and we've been listed on the NASDAQ for over 4 years. The model provides exposure to precious metals and gold without many of the risks that come with investing in operating companies. We operate under 2 main segments, streams, which generate around 2/3 of our revenue and royalties generate the other third. But to boil it down, both of these business lines give us exposure to top line production of mining assets. Our portfolio is diverse. We have close to 200 properties. 41 of these are in production and around 85% of our revenue comes from precious metals with 75% from gold. So we are truly a gold-focused investment. Our market cap today is around $6.5 billion. We've got 31 employees. So that kind of gives you a hint at what an efficient business model it is that we have. Business is performing very well. Our operating and financial performance has been excellent. Our EBITDA margins remain strong at 78% last quarter despite inflationary pressures. We did a few things this year to try to smooth the reporting of our business. We transitioned to a calendar year reporting cycle to align with our peers. We used to be a June 30 year-end. We provided inaugural full year guidance -- production guidance earlier this year, and we raised our dividend again in November. It's now $1.40 a share, and we were recently added to the S&P High Yield Dividend Aristocrats Index. And finally, we have added significant growth to the portfolio recently, which we'll get into a little bit later on. We've got a few slides on that. Slide 4, just to highlight a couple of core attributes of the company here. Our model is designed to provide optionality to metal prices to reserve growth and throughput expansions and other improvements at mines without any capital commitments from Royal Gold. When we look at new investments, we're really looking for those that can provide this upside exposure in the long term, one of the key areas of our due diligence. Secondly, we think in terms of per share metrics. I've been with the company for close to 10 years, and we funded all of our acquisitions, which must be approaching $3 billion worth now, from operating cash flow and our revolving credit facility without having to raise new equity. So what we want to provide is growth that is accretive on a per share basis. And finally, we're committed to our dividend. We have paid a dividend since 2000, and we've increased it every year since. And this is very unique in the precious metals sector, which is one of the reasons we were added to that index I referred to on the last slide. Slide 5 shows why we're a good alternative for investors looking for a conservative exposure to gold. Over on the left there, our beta demonstrates high leverage to gold with lower exposure to the S&P. And on the right, you can see that our share price performance has beaten physical gold, the GDX index and various general market indices since the GDX was formed in 2006. Slide 6 now. I'd expect that this audience doesn't need to be sold on gold as a strategic portfolio asset. The World Gold Council, of which we're a member, conducts high-quality research on the gold market, and I'd encourage people to check out their website. We've pulled a few of their charts into this slide. At the end of the day, Royal Gold's job is to try to get our investors' exposure to the highest quality properties at the lowest price that we can, depending on the gold price environment that we're in. Slide 7 here shows other gold investment options that are out there and how Royal Gold is positioned against them. We provide long-term exposure to gold. We provide that optionality without incremental investment that I alluded to earlier. And this exposure comes at a lower risk than operators because we have a portfolio of producing and developing assets, and due to the fact that we have no direct exposure to operating and capital costs, which is a key factor in today's high inflation environment as you see operating company margins are moving around quite a bit. We are favorably against the other alternative gold investments that are available to investors. Physical gold obviously doesn't provide upside or pay a dividend, and operating companies have exposure to those operating capital cost risks. And I'll spend a few minutes on the next slides on optionality, efficiency and our portfolio in general. Slide 8 shows one of the key reasons our model is successful, it's optionality to reserve and resource growth. Here, we've pulled 2 examples, the Pueblo Viejo and Wassa investments. Both of these investments we made in 2015, so getting on 7 years ago now. Production to date has allowed us to recover over 70% of our $610 million investment at Pueblo Viejo, and over 100% -- actually 114% of our $145 million investment at Wassa. And in each of these cases, the total reserves and resources at the mine today are greater than they were at the time of acquisition. Both of these projects have growth projects underway. At PV, Barrick are moving forward with the throughput expansion to maintain full production levels and extend the mine life to beyond 2040. And at Wassa, the operator, Chifeng, has a PA that shows the potential to extend the mine life by another 11 years beyond the existing 5- to 6-year reserve life. And recall that that's a mainly underground mine. In neither case -- in neither of these projects are we required to fund capital or make further investments to reap the benefits of these expansion projects. So this is growth that we don't have to pay for. This exploration reserve production upside is one of the key features we look for new investment opportunities, and that optionality is really a critical feature of our business model. I think it's one of the reasons that drives our premium multiple that the industry has and we have in particular. These next 2 slides, 9 and 10, they just highlight briefly the efficiency and scalability of our business model. On 9, it just shows here we have 31 employees. We generate over $650 million of revenue and have a greater than $6 billion market cap. So on a per employee basis, obviously, this compares very well to other large companies, both inside and outside of the gold sector. On 10, our low employee count also means a low fixed cash G&A expense, which contributes to our efficiency. In calendar '21, our EBITDA margins were 80%, and our cash G&A was just 4% of revenue. So with low G&A and our stream delivery cost, which is the biggest one of our costs, which is fixed or tied to the commodity price, inflation is not a significant risk to our margins. On 11 here, inflation -- just a little bit more on inflation. It's obviously a big concern for investors these days. Compared to the average gold producer, we're largely insulated from it. Producers obviously are exposed to inflation and operating capital costs, labor, energy, other consumables. And many of these costs increase alongside commodity prices, so they increase alongside revenues. I mentioned in the previous slide, our G&A is small and is not typically subject to short-term increases. And as such, our margins are much more stable. Slide 12 here. This map just gives an overview of the portfolio of assets that are driving our performance. It's weighted towards lower-risk mining-friendly jurisdictions. Our principal properties here, which are listed in no particular order, they provide the bulk of our revenue, and they're operated by world-class mining companies such as Barrick, Newmont, Teck, Centerra. 13, the portfolio is very well diversified. That does provide quite a bit of stability. Geographically, our largest revenue exposures are Canada, the Dominican Republic, Chile and the U.S., all very mining-friendly jurisdictions. And our recent acquisitions that we'll go over here shortly continue to grow our North American exposure, which I think is -- or jurisdictions that investors are comfortable with. On calendar '21, revenues had contributions from 41 operating mines. This diversification really minimizes the effect of underperformance at any given mine from time to time. It is the mining business. It is risky. Things still do go wrong. And when they do, you want it -- you don't want it to have to -- a significant revenue contributor to you, so the diversification helps us there. From a metals perspective, the underlying assets are -- that drive our revenue are approximately 80% precious metals, and 20% of that is -- comes from base metal mines. Although I think if you consider Mount Milligan a copper mine instead of a gold mine depending on the price of metals, this would be a bit more balanced towards copper gold. On 14, our portfolio spans the different stages of mining project development. 144 assets are preproduction in various stages of exploration, evaluation and development. And in this pool, there's a potential organic growth from any of these assets that advance through the development pipeline to production. We'll go over some examples a little bit later on, but Australia's King of the Hills mine and the Bellevue gold projects, both in Australia, are a couple of examples of organic growth from projects moving through the development pipeline. They've been in our portfolio for over a decade, and revenue's expected from both of these royalties here in the near term. So that's obviously what we hope for from our early-stage investments as they move through that cycle without any incremental capital from us. 15 here expands on the theme of organic growth. It shows some of the key catalysts that are in our portfolio today. We see the potential for mine life extensions and production increases at several assets that are already producing, shown here in light blue. We've talked about Pueblo Viejo and Wassa already. But as you can see there from the list, there are several others. We also see potential new revenue from development assets in the portfolio shown in gold here. I mentioned King of the Hills. First gold was poured in June there, and it's ramping up to full production. And in the next couple of years, we expect royalty revenue from Bellevue in Australia, IAMGOLD's Côté mine, Kinross' Manh Choh project, which is planned as a source of satellite -- high-grade satellite feed to their Fort Knox mill. And we're also closely following developments at Hochschild's Mara Rosa project and Sabina's Back River, both of which are now in construction. Obviously the markets are pretty choppy out there and costs are kind of all over the map, but the current metal price environment is supportive of new development, so many operators are motivated to try to advance their projects through the cycle. Slide 16 here, just a quick overview. We've been actively adding to the portfolio in the past year or so, and this slide summarizes what we've acquired. We've deployed $1 billion of capital in 5 transactions to provide gold exposure on assets with upside potential all in safe jurisdictions. These transactions don't just provide growth. They also upgrade our portfolio with long mine lives and high-quality counterparties in RBS. And notably, we funded these transactions without needing to issue any new equity. I'll spend a few minutes on the next few slides going over the newest of these transactions, Cortez and great bear, and give you a sense of how they fit our strategy of strengthening and diversifying our portfolio. Slide 17. So this is our largest recent transaction. The acquisition of an effective 1.2% royalty on the Cortez Complex in Nevada for $525 million in cash. We completed this in early August, fits our strategy and investment criteria. We simplified, boil it down to the 3 Ps: people, place and project, and Cortez clearly checks all these boxes. It's owned by -- owned and operated by of the world's 2 biggest gold producers, Barrick and Newmont, through their Nevada Gold Mines joint venture. It's a world-class Tier 1 gold complex, and by anybody's definition in Nevada, a mining-friendly jurisdiction. We've got -- as Royal Gold, we have a very long history with Cortez, and we're very familiar with the potential of the complex. Royal Gold is actually a founding partner in the original Cortez joint venture in the 1980s, and our royalties on Crossroads and Pipeline, 2 of the deposits within the complex, have been significant contributors to revenue at Royal Gold for many years.

So the 13,000 ounces would be at least $20 million of annual revenue depending on how conservative we are with gold prices.

Yes. I mean if you take -- yes, if you call it, just for easy math, 1 million ounces a year, then you're right.

So you're paying about 25x revenue.

This is definitely an asset of high quality that you had to pay a high-quality price to acquire. On 18, this shows the details of the royalty and the coverage area. It's a sliding scale gross royalty, an effective rate of 1.2%, and it stays at 1.2% as long as gold prices are above $900 an ounce. It's life of mine. There's no step down. There's no caps. And it covers a very large area within the Cortez joint venture grounds. Covers all the main deposits, Crossroads, Pipeline, Cortez Hills mines as well as the Goldrush and the Fourmile development projects and several other exploration targets that we've formed a very constructive view on. The seller of the royalty...

[ That one was ] the first deposit in Royal Gold 30-plus years ago.

Yes, that was the first Tier 1 deposit that was discovered there back in the early 1990s. We bought this from -- we didn't buy this from Barrick or Newmont or NGM. We bought it from Rio Tinto. They created the royalty when they sold their 40% interest in the joint venture to Barrick in 2008. So they created it and held it, and held it right up until basically they rate up against the ounce production limit where the royalty kicks in here. There's very few deductions. It's limited only to the royalties that existed at the mine at the time, which includes our Crossroads, Pipeline and Goldrush royalties. And we do expect this royalty to start paying before the end of this calendar year. Why we bought it. It enhances our exposure to the Cortez District, and the exploration potential here is key to understanding the value of this royalty, John. The land package has proven to be prolific in hosting large gold deposits. I think modern mining began in the late '60s, early '70s. Pipeline, as I mentioned, that was the first Tier 1 deposit. I've got in my notes here, it was discovered in 1991. This was followed by 2 additional Tier 1 deposits were discovered, Cortez Hills in '02 and Goldrush, Fourmile in 2009. As Barrick and NGM have gained experience and ore body knowledge, they've developed a very systematic approach to exploration who's been a new greenfield discovery about every 10 years here since large-scale mining began. NGM had an Investor Day recently. There was excellent exploration potential in the property. In addition to the conversion of existing resources to reserves, there's opportunities for near-mine extensions, brownfield discoveries and new greenfield discoveries. Nevada Gold Mines, I think they estimate mineral resources at approximately 25 million ounces, and we expect this to grow over time as exploration targets are advanced. They can only bite off so much at a time. So I mean, to conclude on this one, production growth and reserve replacement history, if you look back, we think this Cortez is one of the most prospective gold mining areas in the world, and we expect this royalty to be a contributor in our portfolio for decades and decades to come. On to Slide 20, another recent transaction that we just completed was the acquisition of Great Bear royalties for USD 152 million, also cash. We closed this last month. We now own a 2% NSR royalty on the emerging Great Bear Project operated by Kinross -- acquired by Kinross late last year, early this year, their acquisition of Great Bear Resources. Just like Cortez, the transaction meets our investment criteria, the 3 Ps. It's operated by Kinross. It's a well-capitalized, experienced senior producer. It's one of the most interesting global gold discoveries of the past few years. Kinross here are talking about 500,000-plus ounces per year with multi-decade potential. And it's located near infrastructure in Ontario, obviously, a mining-friendly jurisdiction, attractive power -- industrial power costs and whatnot. Slide 21, the map shows the extent of the property and the proximity of the property to the town of Red Lake. The royalty covers the entire 91 square kilometer property package. And it's actually the only royalty that exists on the project to this date. So the only opportunity for a royalty company to get exposure to this project was the acquisition of Great Bear Resources royalties.

[indiscernible] should be at least 300,000 ounces of production that maybe not for another, I don't know, 5 to 7 years?

I think that, that timeline is probably fair, John. I think that Kinross is talking about, at least from the initial open pit, more like 500,000-plus ounces a year.

So if we said 300,000 ounces, you would get 45,000 ounces or $7 million in revenue or a 6% return. If it were bigger, you'd be getting an 8% or 9% return. So you're getting a big discount here because it's not in production this week. Is that the right way to look at it?

I think so, yes. This one, IRR and NPV are really tough ones to use. I mean obviously, you...

And the [ problem ] is the resource yet so we don't have grade in tons.

No, exactly. But you're right. With long-dated projects like this, John, where there's still significant uncertainty as to exactly what the mine is going to look like, NPV and IRR are tough ones to use just because that time value really sucks a lot of the value out of it. But from our perspective, patient, low cost of capital, it's just -- to us, it was just a...

So this is a better deal than Cortez because Cortez has been in production 50 years.

Yes. Definitely, this is obviously...

Great Bear is our future.

Exactly. I mean, obviously, there's still various risks involved.

I've been to Horse Canyon 1980 or '81.

I couldn't -- I didn't catch that one, John.

I've been to the Horse Canyon zone which had a refractory and had a roaster in 1980 or '81.

How many years do you think it had left then?

They haven't figured out any of the fence stuck down south. It's all the sex appeal now.

Yes. No, listen...

I mean, it was an impressive valley.

Yes. Listen, Great Bear, obviously, still has development risks associated with it being a greenfield and not having a resource yet. But we felt it was the right time to act and it was the time that the company wanted to make a move and sell, so this was our opportunity and we jumped on it. So we did something -- I just want to go over here briefly on this Great Bear. We did something fairly unique in our due diligence here with Kinross. Normally, in a third-party royalty acquisition, we wouldn't have access to do due diligence with the operator and their data sets. In this case, we decided to enter into an agreement with Kinross so that we could review their nonpublic technical data. We spent a lot of time with their technical team, and we independently validated their assumptions that they were making. And we understand how they think about the projects. And to us, that really kind of derisked the transaction significantly despite the fact that it's a pre-resource project with obviously a lot of development uncertainty still. And so in exchange for this cooperation, we gave to Kinross was an option for them to acquire a 25 -- to reduce that royalty by 25% in the future just ahead of a construction decision. So to us, that was a fair trade, and really, we've got a good relationship with Kinross from the fact that we did the Manh Choh transaction with them a few years ago as well. And to us here, this Kinross is laser focused on making this project a success. The royalty layers in long-term growth. It layers in scale and optionality into our portfolio. So it kind of goes to some of the strategic boxes we've been looking to check over the past few years. Moving on to Slide 22. This one summarizes some of our other recent acquisitions that have the potential to generate near-term revenue growth for us. Firstly, Khoemacau, this is the copper silver project in Botswana that we got involved in, in 2019. We've since earned a stream on 100% of the silver over a 3-year development period. The project is in production and delivering silver to us. The company is focused right now on ramping up to full production this quarter, which is -- which nameplate capacity there is 10,000 tons per day. It's an underground mine, has -- currently has a 20-year life with forecast silver production to us of, on average, between about 1.8 million to 2 million ounces a year. Moving over to the next one, Red Chris. We acquired a 1% NSR royalty on this operating mine in Northern BC last year. Newcrest is the 70% owner and operator, and they're transitioning the mine from a small open pit to a large bulk tonnage underground operation over the next 5 to 6 years. Expiration to date as -- they've already defined a world-class deposit here, 1.2 billion tonne resource with 15 million ounces of gold and over 4 million tons of copper in situ. And we're receiving royalty revenue from the open pit, and we really believe that Newcrest has only just begun to scratch the surface of this -- the multi-decade...

The deposit is upside down, Jason, where the open pit's low grade, and when you go underground, the grade increases. So it should be better in the future?

Yes. Yes. And I can't think of any better counterparty to be relying on for what could potentially be -- obviously going to be a large bulk tonnage underground mining. I'm sure a combination of block caving and stoping. On NX Gold mine, last year, this is a smaller mine. We acquired a 25% gold stream. This is AeroCopper is producing gold mine in Brazil. Aero continues to report very exciting exploration results, both near mine and on the larger land package, all of which are within our large areas...

[ Is this primary ] copper mine or gold only?

So this is a gold-only mine. So AeroCopper has got a few underground -- high-grade underground copper mines in Brazil, and then they have this small gold mine in Brazil, which is completely...

The 25% off the top doesn't kill them?

It does not, no. So this is a very high-grade underground mine. So their costs are -- I don't want to -- I can't quite know what they are, but they report them, but they're -- even with the stream, we see them as sort of some $1,000 now it's all in. Very high-grade, small-scale mining with a lot of expansion potential, which is what we write. They have a mill there that's only running at 60% capacity, and I mean, almost within just a few quarters of us making the acquisition, they -- Aero announced that they are going to -- what they call the NX 60 program, to expand gold production by 50% from 40,000 to 60,000 ounces a year. So that's only going to help the cost structure. And really, we see this as this beautiful Greenstone belts...

So you get 5,000 free ounces.

Yes. If they're successful, yes. And so this is -- and this property package, this is very much a geology-driven acquisition. Our geological team -- exploration team loved this land, this underexplored Greenstone belt, and believe that this is going to have some great discoveries for years and years to come. Again, it's a small underground mine, so it's hard to point to a long reserve life at any given time, but we've got a lot of hope for this one. Last on this slide here is the Cote Gold project. This was last year as well. We acquired a 1% NSR on an area of interest that covers approximately 70% of the Cote project. This project's in Ontario. I think people are familiar with it. I'll move my screen a little bit here to block the sun. I think people are familiar with some of the issues there that IAMGOLD is having, but they do estimate gold production of almost 500,000 ounces a year for the first 5 years and a mine life of close to 20 years. IAMGOLD, at their last reporting, they said that the project was about 57% complete and they're targeting commercial production in early 2024. But at the end of the day, this is a royalty. It runs with the land. It provides exposure to a large long-life project with very interesting potential in a great jurisdiction.

Jason, do you get a 1% royalty before they declare it commercial?

We would get -- yes. I mean I don't have the exact details in front of me, John, but my assumption on this one is that this royalty pays as soon as metal is produced, as most royalties.

So if they lose their shirts and they're never commercially, you still get the 1% on 70%.

Yes. Now, listen, if they lose their shirts and end up in bankruptcy, obviously, we are a creditor like everybody else. But because royalty is [ anterior ] or tied to the land, we basically have an interest in land, So we're first in line. But I think that this is a high-quality project. IAMGOLD here is going to find a solution to get this thing finished one way or another. And whether it's a quarter delayed or 6 quarters delayed from Royal Gold's perspective isn't material. We're just excited to have exposure to this for the long term. Moving to Slide 23 here. Just -- we'll touch briefly on ESG. Although our business model does not allow direct operating control of mines, ESG is a core part of our business. We're investing for the long term here. So ensuring the sustainability of our investments and of our partners' social license on site is a key part of our due diligence and our monitoring process. We do build language into our new transactions to ensure that operations are managed to the highest standards and where it makes sense. We also fund local initiatives alongside our partners to help the local communities and improve their social license. We have worked to improve our transparency around this process. We've been -- held these processes for a long time, but we've really worked to improve our transparency around them lately. We're pleased to see material improvements in the perception and recognition of our practices. As you can see there with MSCI and Sustainalytics, they're 2 influential ratings providers, and we have excellent ratings with both. And we're very proud of the inaugural ESG report that we published earlier this year, and that's available on our website for interested investors. On 24 just shows some of what we've done in each of the ES and G areas. We are an engaged corporate citizen. We're active in sponsoring innovation and best practices in the mining business and supporting the communities in which we live and work. And on the governance front, we have a very long record of commitment to best practices. And we're guided by a very strong independent Board with relevant industry experience. Slide 25 here, just give a quick update on the state of the market from a business development perspective. The state of the market for our streamer royalty product. Since 2004, when stream financing started, most of the investment opportunities were driven by balance sheet restructuring and project development. As you can see, the timing of stream investments can be a bit lumpy. While it uses stream investment -- stream financing, it really depend on the state of the mining industry in any given year. But at the end of the day, mining is a capital-intensive business, and there's always a need for new capital, which provides a consistent flow of opportunities if you have to kind of average it over a several year period. And outside of streaming, the third-party royalty acquisition opportunities have been robust of late, as you can tell from what I just walked you through with our history with Cortez, Great Bear, Cote and Red Chris and what our competitors have been doing as well. Slide 26 shows our investment history since 2004. We review a lot of opportunities, not all of them make it through to completion, whether that's a fallout because of due diligence reasons or the price gets away from us, or our competitors have an edge for whatever other reason. But our due diligence process is extensive, and we're disciplined in how we deploy capital. If we see technical, environmental, legal or other risks that can't be addressed to our satisfaction, we will walk away. And for us, there's no pressure to do transactions. If we can't find the right opportunities, we'll collect the revenue, we'll build our balance sheet. We'll continue to pay dividends, and we'll wait for the right moment to invest. 27 provides a snapshot of our liquidity, kind of continuing on this theme. Part of being patient on the acquisition front means ensuring that we maintain a strong liquidity position so that we can finance opportunities when they arise. At the end of June, we had no debt and almost $1.3 billion available between our working capital and our undrawn revolver capacity. We did draw $500 million on the revolver in late July to fund the Cortez acquisition, and we'll aim to repay the balance of that over the coming quarters as cash flow allows. But we are very focused on maintaining a strong balance sheet, and we're going to prioritize our use of cash towards debt repayments, dividends and new business and whatever order that needs to be done in. Slide 28 kind of jams together sort of our 20-year history of capital allocation and what we like to view as accretive growth for our shareholders. Since 2000, revenue and cash flow growth has been significant, as you can see here, over 60x and 80x increases. Revenue growth exceeds the rate of increase in our G&A expense, which is an indication of our scalability and our high-margin business. And it's important to note that revenue growth was not dependent solely on metal prices. We added metal volumes as well to give our shareholders exposure to those metal prices. We've largely financed -- I've mentioned this a few times, but we have largely financed our growth through cash flow and improved use of debt, which means there has not been a significant rise in our share count. In fact, we're one of the founding members of the GDX, and we have the lowest share count in the entire index. We want to avoid shareholder dilution, and so funding our business with internal resources to provide per share growth is a core objective of ours. On 28. So John, this is 29 now, apologies. This is -- I'm going to end my presentation with a slide and welcome any questions. We consider return of capital to be a key strategic objective, and it's one of the attributes that makes us unique among other gold investments. We've paid a sustainable dividend since 2000. We've increased that dividend every year despite volatility in the gold price. In total, we've paid out around $750 million of dividends over this time period, and we're the only company in the GDX that has paid an increasing dividend since the index was formed in 2006. And I think I mentioned this before, we're the only precious metals company that's included in the S&P High-Yield Dividend Aristocrats Index. So with that, John, that's kind of the end of the remarks I prepared. I'm happy to take any questions or any discussions you want to have.

So I'm trying to think of something that might have gone wrong or a case study and a bump in the road. A few years ago, Royal Gold announced an investment in Euromax's copper gold project in North Macedonia. I think the project hasn't advanced because of feasibility study kinds of problems. Could you tell us a little bit about that transaction?

Yes, absolutely. And I actually caught up with their CEO, Tim Morgan-Wynne last week. So yes, I think it's just over an $11 million exposure that we have there right now secured. And it's less feasibility study issues that they bumped up against, John. I think it's more kind of political will issues to advance the project in country. I mean the government has kind of changed there several times over the years. I think they've had -- they had some political issues with Greece that they had to deal with a while back and ended up changing the name to the Republic of North Macedonia, I believe, in the agreements with Greece.