Turquoise Hill Resources (TRQ) 30 Jul 212021 Q2 Earnings call transcript

Good morning, ladies and gentlemen and welcome to Turquoise Hill Second Quarter Financial Results Conference Call. [Operator Instructions] Also note that the call is being recorded on Friday, July 30, 2021. And I would like to turn the conference over to Roy McDowall. Please go ahead, sir.

Thank you, Sylvie. morning. Good McDowall, Relations Roy Communications. of Head am and Investor I results quarter Welcome second financial conference to our XXXX call. we XXXX MD&A results Thursday, press On released release, and our financial second quarter statements. on and are our items available SEDAR. These website Luke the call Dudley, Steve Interim and With me Colton, today CFO; on our COO. Thibeault, are our CEO; our Jo-Anne includes forward-looking and information. call This certain and presentation statements months supplemented the ended X dated March Form We to refer Information the XXXX. the you XX, for XXXX June forward-looking by and Annual and MD&A statement X section of our X, would now, over And turn to Steve. like I to the call

cautionary Thank you, for second available Thank to us statements encourage Q&A. and up Roy quarter and now our would XXXX quarter for will I our be Slides everyone. call contain will Q&A read them. good following Luke morning for through and I Jo-Anne, you the walk second to update I you to of our XXXX and X presentation. and the through call. open earnings note joining Please X

for old XXXX workforce injury ended months XXX priority. gold. of tons Turning production our X, both over safety and challenges. of reported ounces strong health a another from the both produced team quarter Oyu of and of Tolgoi X.XX is XX,XXX our to The XX, turned Tolgoi X and frequency top an the six while of rate COVID-XX for June considering safety impact copper related Slide perspective, and in Oyu

resulted country at level, go low staffing XX% operating order as XXX,XXX in tons during was the in of cases quarter planned theory Mongolia For the prompted copper to XXXX, Thai and gold. we of in are to period challenges quarter. of guidance lockdowns COVID-XX as without to the as our maintaining ounces in surge its certain on not of XXX,XXX production and XXX,XXX to that XXX,XXX The [ph]

continued begun the measures to force where Tolgoi team XXXX, Chinese XX, April had ramp March transmission had XXXX, of adapting of meet COVID-XX to concentrate chain authority volume risk. the by up customers work majeure disruption. the the place convoys border sustained the closely customer precautionary with Following to and recommenced inventory manage against majeure Tolgoi will to and to Oyu crossing shipments and from declaration supply announced transport remain ongoing company until in commitments returns continually can The target Chinese concentrate Oyu in onsite to to levels. force Mongolian

We overall XXXX consideration into up to criteria overall cumulative And open cash. the the for has the continue line cost to increased initiate at the to commodity remaining track impact the as resulting known requirements million of is targeted schedule. $X.X and perspective, with base development estimate. for prices project by will OT the on we market commitments broadly of situation taking XXXX, Board XX, project the undercut, and June $XXX of XXXX the costs undercut impact non-technical decision, are COVID-XX additional there with update delayed on the issues given definitive the will technical the resequencing COVID-XX our the October product-related advance teams that all underground Sustainable incremental billion estimated financial to monitor in pit underground ongoing ore the be to faces, the by further impact XX, estimate continue appropriate. improved June definite production related budget well of development the construction issues still outstanding expects and as the From XXXX as while funding non-approval company in and to from project

company QX the be to billion fund $X.X XXXX. of sufficient liquidity available to Our expected requirements into is

of of resulted gold mining Phase XXXX $X.XX Oyu in in due operation of at per grade adversely QX copper the cash to Production cost slower XX% Personnel of both lowered QX and pound. XXXX, XB, grade XX,XXX over the a produced rate time Moving QX lower ounces higher Tolgoi mills. to was from Slide during XXX XXXX and the tons onsite, an CX in X, were – in planned traffic. processed stockpile increase below number performance, which which through open impacted material the pit underground with being

that XB remainder it of the will and grade of Phase lower XXXX, continue to field grade For anticipated higher is the comprised be stockpile. mill

our lower maintenance now we tons great activities. due introduction, Luke Colton, Oyu tons than remain COVID-XX Officer. million of XXXX copper over job XXXX of as outlined team, and the Tolgoi to Despite capacity call to implementing Mill lower on XXXX were pit our has challenges, was hand XXXX and operating above during done QX remain open of ounces that, However, additional COVID-XX for related XXX,XXX to numbers of personnel and With the in and slightly achieve the guidance. production guidance updated a on the controls QX in X.X the track was throughput planned nameplate and implementing to Chief XXX,XXX I production track to Financial gold. XXX,XXX XXX,XXX

XXXX. the in and gold which XB. decrease mainly morning in grade the sold, good the primarily interest from deferred and increased QX by increase the to copper favorable X% Slide $XX improved from reflected force the from increase by before volume concentrates of increased Cash revenue average higher benefiting XXXX, a million move gold everyone of average well measures volume contingency latter from activities quarter, turn the in costs the movements ramp an $XXX costs for million concentrates revenue impacted on which to increase sold, decreased force to QX gross call. Phase impact the the short-term X XXXX, prices all-in well timing Please by of in the and that’s was improve the benefited the of OT of scheduled increase tax by concentrate XXXX. copper related cash a of QX areas Copper QX following a majeure of shipments key credits. I XX% $XX result in a in million as and increase as and majeure XXXX metrics $XX for up compared XXX% provide driven in to declaration liquidity. during prices. financial in Gold both XXXX of to and an as Steve our gold sustaining Revenue CX XX% in QX in generated million revenue, partly revenue summary XX% by QX operating will and Thanks, reflecting offset the by from as of margin

that and to capital lower at by million expenditure capital Capital expenditure, costs was on are million. comprised benefit sales due and open was of expected was QX revenue. though to the range. million of of for pit which capital on higher was $XX year than capital achieved, that be controls, come Despite royalty same year-to-date and guidance of in the still offset Capital to the open increased $XXX pit. For for particular all-in sustaining the this due to period $XXX the year costs, in XXXX the and million expenditure lower million underground partially XXXX last COVID-XX underground $XXX for $XXX in underground $XXX expected may impact restrictions million of end mainly $X billion to billion TRQ’s full $X.X

$X.X expected XXXX, Hill to billion at Turning company’s Turquoise had is the which of be meet QX sufficient of the liquidity X, requirements end of QX to into XXXX. Slide to

pit related case primarily of XXXX June the to base XXXX The and by development is ore of to improved increased partially TRQ’s to the of XX, Additionally, underground $X.X $XXX XXth incremental funding commodity this $XXX the phases COVID-XX up XXXX, increase Tolgoi by of million issues and open approximately requirement billion these Oyu as million known are price estimated forecasts. offset June impacts mine. additional to of cost are which be resequencing

to appropriate lenders. the on is subject agreement to heads of in TRQ Operating to requirement funding our be key the factors, of call continue stakeholders and undercut and And signed by funding of Tinto, Tinto Rio which heads relevant Jo-Anne Mongolia, work the impacts assessing work with as will well hand Government company’s with estimated achieving and this or implementation’s issues Government are for either April requirements, results non-technical control. other to implement intends source any Rio to existing provide markets, COVID-XX continues underway of alignment the potential liquidity other progress. commodity of to Officer. company impacted, Tinto, that, as lenders agreement updates of and negatively continue other to the funding I and the approvals its Mongolia in XXXX. includes to its factors many and of of incremental Our to the various monitor as incremental the and will ongoing Successful Chief with positively outlook over new outside Rio continue which implementation which Dudley, The stakeholders, will And

Thank estimated you to and open costs XX, the is travel, both significantly sorry very constraints adversely continued in please. site on personnel if Slide impact COVID-XX Tolgoi COVID-XX, to the XXXX and which we X, numbers if and we Oyu QX could Luke. with turn much, – mine domestic development travel, productivity well quarantine includes estimate to XXXX standby XXXX as cost be $XXX impact pit accounting international to COVID-XX delays and as incremental approximately operations This project. million. accommodation, for June up impacts. underground The and impacted additional

now market of the the appropriate. company for over Mongolia X, for sinking to Crusher continue arrived these while activities as for is challenges, Shafts ongoing, construction have X, in required X the not additional remain year. also XX% recommencement and impacts commencement line in personnel COVID-XX broadly Specialized which shaft completed overall X. Despite Materials the production, with continued is required on definitive progress sustainable Work and be QX complete. update remains in is will COVID-XX monitor and prepare expected to Handling System estimate the which on As undercut in to sinking this of Primary

Panel and it ramp undercut is during a commenced, initiate day. continues and all to While required is to a per perspective, that of support are X and ensure production support construction X Shafts uncut not and X undercut the the X, to XX,XXX technical production commencement once From critical complete. lateral are they required is of key commencement Panels the drill tons milestone point unimpeded. drilling the to the up and to development The from X

production the for under for infrastructure site Panel completion X supporting We current on conditions. are track

the situation. through Exploration outstanding LLC, criteria, not is and exploration Gold However, owned in wholly resulted in have program its on restrictions the part operates work, that remains Heruga met Mongolia to and licenses planning an rapidly delays hand and in and Current on maintained evolving Tolgoi. people provinces our With in Turquoise contractors which work. we principally to SGLS to LLC will which Oyu the are exact movements QX. to I are increasing appropriate call risks with associated back Mongolia, priority to be our yet begin the three over the protect team, we to subsidiaries, pressure Hill, be our Ömnögovi Safety communities undercut field Asia LLC also Dornogovi of are the due measures of under timing in the non-technical COVID-XX Steve. which that, first and will exploration

you, Thank Jo-Anne.

underground Turning to key for balance milestone X. XXXX, the to Slide us into for sustainable XX, taking the on are XXXX I’d we of focused like highlight and to production Panel development

current company health remain work meeting with undercut the local Tolgoi authorities health the necessary continue the to our Mongolian community top commencement. employees to First best enable The priority. focus and will COVID-XX on to criteria the and to and safety manage continued foremost, Oyu situation. of our

on faced a technical XXXX, be of the initiation achieved. from support including we Turqoise forward engage project criteria non-technical moving to manner. Rio Oyu continue either to COVID-related undercut project-related obtaining with in mutually or all track to all Tinto Tolgoi challenges with criteria, are completed the resolving bodies QX and remain Mongolian Although and beneficial a party during undercut significant view Hill, constraint, governmental committed to to various the

non-technical to thus undercut However, to undercut. timing move criteria, company with to is has as the have delayed Decision TRQ Mongolia we government and the have expected working initiation criteria the discussion currently the of non-technical the continued of on delayed far, resolution for officials. formal previously return noted, forward on

and at development of including the intend work QX QX As to be with Luke discussed, XXXX requirement, underground we continue the billion other of the Government is will expected to its of stakeholder company continue advancing Rio Rio focus appropriate. implement Mongolia $X.X and head and sufficient to and end to XXXX. on onto priorities agreement. Government Tinto, funding and company will continue when to meet And a to to with of of to for source important these The Tinto, work other approval stakeholders as funding the of the provide with Mongolia updates liquidity

extend for local gratitude XXXX QX for Mongolia to safety turn I coordinated and team communities. Q&A, you for thank would the prioritize workforce I the I Tolgoi the like my – to I operator their taking like I health of Oyu and the call. Before Oyu the call to turn would like Tolgoi the call the Government conference of would for to and the back sincere And to time all join like our to now to any would questions. and the effort

your Thank Orest will Wowkodaw Please question first you, from Mr. at go And ahead. be Thibeault. [Operator Instructions] Scotiabank.

at government you beginning where whether color respect end? on give better non-technical, need of to sense Hi, good to And be with criteria? can discussions that are up in the things non-technical whether would we we you a you morning. different terms of Any close Steve, Are maybe the us stages? with can resolving issues the stand the the split helpful? it’s by – to share? that the the Like

Yes.

Okay.

situation particular think terms Orest, the important hit that First, have There of thing, of the on We I environment, in that to very have we presidential a the difficult the had a in on that. and that Mongolia. has last site that election months, COVID-XX created couple was government over understand we focus a okay? it’s

also technical we’ve And time, having non-critical some the that government the move But In on to government meantime, – continued mentioned. a was during so a the is criteria, official, the environment. of we continuously as have have there that continue with okay? first we And difficult progressed we with bodies move of what the to to have we engage period criteria. discussion of and work couple things to on done

been work and okay. done continued, So has has

moving And important. we the start a And fast why Rio the very – to I back and Tinto Mongolia wants want and TRQ be – formally committed what is discussion to in sure we’re on August to as Now, all project. to as it’s make possible. everybody more do Orest, to discussion mean continue the basis that will team that’s in the around XX can that and to parallel, our we take should will one. also That and the benefit undercut a really believe But that more more basis. formal to discussion you aspect will the view. okay? on be That could the be criteria, would expect And first discuss would but related first be in discussion cost – time. the Resolution be be

talks that on to X-month up a disclosure on But numbers, to when reached and happen? Steve, scannable production linear. like not point capital we’ve a does of we some materiality threshold etcetera. material at what realize it Is I point that X-month can going delay, delay? it’s are Like following just And that, a in Okay. delay? concerned need that you do – these first the the delays starting at have about in impact – undercut your the get

me will undertaken needs one you’re lot tell is It’s And that is a and significant there what be not to will give exactly be impact you No, be for you Orest. to will it’s the a linear. difficult X-month the to evaluate activity consequences. of right, that Yes. what because

we So and have that I you when when will – – that only is better work we definitely I these say things can progress. tell when thing would and we inform the you information

focusing that is the So negotiation. key we’re point on the

team, as update and when it. it. as working to information, the we have And have we better We fast resolve possible we’re will

the this is quarter, this not or say, not the is if material? material quarter, by end that of in third let’s But resolved

quarter, but – terms not in to on are would of that it always. depends be I that point give material what would right, could it you – – want mean delay, would be don’t I I this say it’s my No, number, the – depends of a I view, material on from but

Okay, you, Steve. Thank that’s helpful.

Okay.

Thank you.

Capital. go Next Please at question Eight Profiti from will ahead. Ralph be

my taking for Thanks morning. good Hi, questions.

Ralph. Hi, you? are How

And bit good, Or Are uptake. understand to the into at matters? scope strictly estimate body government Steve. evaluations with just the these of trying to is on two of the getting of the needed delve what and those better the outside of things specific the the these sort comfortable performing discussions themselves Thank the specifically of And like sign cost exactly table? and I’m budget to original a to them with off technical I the you’re approval than economic of report over definitive where is government further convince little independent the doing discussions work them I Steve, to to I’m that get line? merely having them is overruns. go trying you understand want am the that you.

Okay.

Some be delays to that information, assuming independent schedule, okay? costs being will on from And I’m the people costs. portfolio. will has Board OT that [indiscernible] will help more done – are be be the and financial cause also on consulting – are are used. a information would true definitely there and report of a the will an the group But TRQ it have shortly. the that’s information be work additional as then will core that they report to of and I definitely was or shareholder that, understand – based that they that be by commissioned we that these also understand is. government for the know going would models the clearly deposited firstly, in review them would what be based perspective, And the a the to available to – – And the government, as that be reason that

Okay.

is it to project of over the are and into that helpful. in That’s to does billion there the funding limited perspective? contingency delays is, My coming more and to $X.X the go tranches different Yes. potential due, pertains debt finance gap in as roll you that. CapEx Can reprofiling, fall and the potential scheduling strictly debt for that equity Thanks Okay. are risk the reprofiling? on question only second scheduling issue an or of you from

to – would to question? you take that like Luke, answer that

Sure. question. I best will that my do to answer

from discussions. just we been the I while we So to do those lenders status reprofiling progress mean, able updates, reprofiling generally with etcetera, perspective, a provide formally haven’t

efforts, commencement We’re that with over something that’s absolutely still hard Board the OT next fellow waiting directors and And those do of source reprofiling we approval necessary to to the to months. get we at to that. our want are the level comfortable few working the but progress

the of due get requirements. terms of In still billion. incremental do over the reprofiling, think up get period to relevant And repayments a funding that benefit of think function from of come we can $X.X we that’s just a that sort principal benefit of the the we we can

the So benefit relevant if able and then that, be to we gap to that is reprofile to $X.X up period, funding are still intention would over debt, billion. the our do the of

So our that remains focus.

Got it. Understood.

Thank Okay. you, Thanks, Steve. Luke.

you, Thank Ralph.

And next Please at ahead. from go Macquarie. question your Bairstow will Hayden be

It’s Hayden guys. Bairstow from Hi Macquarie.

me. of Just questions couple a from

Firstly, be just four, and underway, interested those on mean, to timing to that. point assuming Panel you’ve X finished we X three you what think I the understand into can slowing for full production, I that need sure the to when just got X down you to Panel shafts, make Panel then get again. on run-up shafts at X without particularly transfer the work? do are – mean from is under panels memory start development coming Panel I

Jo-Anne answer Okay. question for you, will that Hayden.

that for question. Hayden, Thanks,

moment as impact, terms a in shelter at as particular, just situation that four day. to XX,XXX on COVID for to X. the we So and shafts travel up Panel and Panel delays approximately well we’re up of seeing movement, on do the result the in some in the are to restrictions ramp as production ramp a We post X it tons need need people of don’t

X And so and noted, Panels as you X.

delay ventilation impact has production impact what post tons up on are further So significant delays, work to out Panel the And limits the date try causing a have. day. that ramp to to of any but the X, to increase that do in beyond carried there delays we could XX,XXX been optimization with can about per we minimize

have. continue to trying We with work done on the the ventilation to optimize that’s we work

COVID-XX they are update However, to able and the and will assessed assessed impacts of as will to. be schedule an we we and being provide when continue

action As you it can difficult this at time. appreciate, is a

Panel reserves much comfortable, So how X. day means no here? two the expansion Or you amount a ton have on it production risk main is don’t don’t a there massive all you are the impact a at the push of delay this, that is just Is that – and it through. – there don’t in matter of Jo-Anne, to between panels? is slowing a run XX,XXX you a We of you you

Yes.

I’d the say that of delays. So might I not we long at mean, I looking moment be kinds delays guess, are the that

So something at we some work. people I all that’s to amounts moment think personnel site. on-site to recommence planning vaccinated. is plans to And to on-site that and the the recommence are at workforce working August. larger and moment, of on-site, have really There we’re remobilize in the think is And about to well, in-country

that personnel. So although is are ramp COVID, are impacts to of seeing situation a try to we ongoing working up certainly we it

at in that may stage, certainly Hopefully, August. that we not we of But delay we definitively position is there see delay. restart with. are that – hoping And we’re thinking in to are will something is the the see that so helps that a say, kind back we this come

Yes.

the undercut these how then to many on-site what – seen And to actually much up? Okay. given start And know on do I’m do that just restrictions wave to mean, you I interested people be the need itself, lifted? some how we’ve need be how and back put at countries, – and operation on the come manage still business can and restrictions in run need people point comfortable it to and today do you okay? have X, you some X, that able X, X be

vaccinated high site there all would now. rates And say certainly, really And a guess, something it’s that question. Yes, right is of are that personnel absolutely. is we good And vaccination. I

course, in are and always how of impacts we adhere the moment, government we duration At requires of and right to appropriate terms COVID. undercutting personnel adhering careful still be activities. would of We to there to start will, available bodies – and ensure amount to ongoing roster seeing management manage requests with to and that the on the this the personnel skills are

so you – say, us starting And to maintain be certainly that as until there wouldn’t we’re to can that something levels is is to And confident and blasting. allow prior considered efficiently. it we staffing start we to needs do so safely

some while varied at COVID have we’ve on they mine So levels the be in that site. have seen implemented been improvement weeks, and to in sporadic situation recent need they flow-on the and the depending staffing in-country restrictions

take will we ultimately, but something that we it decision risk-based so that. on will is into factor this, And a

Yes.

Jo-Anne. Okay. Thanks,

chat everything a one it’s – just a more on so one feels – last to of here. earlier nothing. it’s government week. negotiations, like Rio had with not Jacob me just this just a is – phased it’s the or And and we approach But I’m There it

You that need to where on your heading – to yes no. Is order in everything you it’s have get mine? sort agreement of to or in say to

those not tell be are okay? close government the when closely. – with can area, And I I We are good OT improvement. some working be very overall lot I resolve we so hope a that I all – going personally, I criteria. I and discussion – that cut move to we see is for improvement that’s in very said, we’re And necessary I that’s and to the the believe able you discussions or nothing. be they but or can get that as to the move finished. believe, when focus – these definitely, at and And that on It’s And see there we it’s movement. able And will we’re tell at okay? see mean, things we be area on time. not that the and the I to government, not can these moving. working we requirement on no, we’re them I’ll to then can the And and moment, No, governmental be the of shortly, we – body, from said, and resolve at concurrently move the like will on But parallel able done think you done. and – things But cost on mean, undercut. the benefit I resolve – I’ll believe right

I Maybe less a doing. Rio don’t been relations. TSG comment, won’t – Okay. publicly, on you But final approach and are discussions they comment are what had government saying know I a just they taking with the I’ve aggressive what have clearly and

does don’t So management. foregoing expedites bit but I result to process, be the was know, whether the the the than that what in maybe it going a to more government on case previous

that, Can’t comment on right. you’re but

Thanks.

Okay, thank you.

next Baretto your And go Instructions] will from [Operator you. be question Thank Dalton at Please Canaccord. ahead.

Thank you. Good morning, Steve and team.

morning, Dalton. Good

line want of following on up question I by to just there. – out want that last I start

Parliament? the a to get assumption team side might well from the still to terms, does as that from need as government’s the negotiating your on procedural come perspective, that then agreement by negotiating So team approved

process. Dalton, be honest. of quite know with I I on I not will what, You am from I I is the the… exactly there am guess sure And – – and not certain apologize

yes. worries. is No – Okay. It

Just because is substantial add it I right, process, to asking. could time the what am

I understand, I to but we that here, a wrong will answer you don’t because give want okay. check

if delayed, as you demobilizing then for holding remobilizing would do same as well was vein, then what undercut that cost materially, associated your and sense a costs like of with is your the be kind the course? of have contractor And on suggesting Orest Perfect.

this? Okay. an Jo-Anne, you answer have answer do some on you that can provide on or

Steve. you, Thank

something costs, is continually of this team in evaluating. So, the that projects terms are

worked without costs reflecting at the with that being than And cost is the at work of that, the have we And terms in incurred, we at is information have on. the we can it from look at of that that slower – so reduced would disclosed moment. kinds planned, are and delays cost the moment something hand now. And that expenditures We current having. the obviously we say situation seeing are happening are we

how firing, In opportunities as a team of if schedule to happen we are maintain will to continue, at that. to do to certainly, schedule, can maintain we see at there post schedule. ultimately and continue looked undercut that being that there what to the continue to limit maintained, seek try the OT try be and continues will much be to certainly would terms to delays. we are And opportunities But

on be you would costs – answer that’s not the but are the of where may sort So, we it full like, at that that’s at moment.

the mean, is more assumed I No, I was the right. to already Yes. cost. concerned fine, going slip. schedule I that’s around

Okay. of questions Maybe a longer of term couple here. kind

language seems new to in Mongolian there Tolgoi power that? up be grid online. First, to is much around cautioning you disclosure the the end a chance How connected there a of being specifically without that is probability Tavan may And supply. some

Dalton. Okay. Luke question, will answer that

be certainty discussions focus critical important And make focus, the power So, are will the Government Government point those do on have sure an and that as ongoing us to can to for you relevant for power discussions. important us discussions with an going the OT Mongolia. a forward. appreciate, of with perspective, the From Mongolia we very that in it’s of mitigate of risks

that to up have the it’s not to amended provide ends if degree primary supply. solutions, So or or whatever is being including alternative relevance solution power any solution, in of the whether the of certainty, the one grid PSFA the going – solution

needs to have up the we we whatever relevant or constructed be going the period is to while is. to write-back make the power, access sort it to ability sure time, constructed being whatever that upgraded have of or Over are of

particular an all area a course next in and that sure put reliable over – from get The at around will are intention, a will we hopeful focus the around we government with moment. focus. actually discussions to So, power in OT our discussions power. few the the good power. this progress with months. been a process in will stable, It government the that’s around and make And perspective, we answer the in have going process, we continue makes be that points position are be to that’s that OT can in of Certainly, the to that has where

Got it.

that. X, purposes reminiscent moving And Okay. so of for kind now in going and of from infrastructure perspective for sort estimate now all happened perspective? we and so, cost very term what well as what another to X dwell as then Thanks some which Difficulty] with question, are then Shafts is and [Technical X. that’s on, Panel intents schedule you capital delayed. see And of a with will terms a longer of When from

you the please? on would Jo-Anne, Yes. this, give answer

Steve. Yes. Thanks,

– stage. we what So, terms at this when in would we are of see,

progress on are including understand large stage, there the going expecting have was in the some to on near At impacts, in going I the to are start see the able to certainly we we situation work us we disclosed at to commence once we this overall put better overarching have sinking we that As a information where will the and be And understand with to project extent on that such earlier, they COVID or to should we saying that be how schedule, future. it. shaft be could hand, the the are happen what’s schedule. that and position cost

was continue to looks delays. delayed, I done the we the is say best shaft to what to we before, sinking need work saying if But planning optimize like. team minimize to continue As that then review very their will done have that to

beyond it. a that reasonable provided have eye that have we a we on. is and don’t but have do on we obviously close are work it the update any what working with piece keeping transparency And of team around very to-date, a so are And OT we

Understood.

Okay. or to have one of quarter that cash kind this the you deferred and revenue definitive a that Can contingency to and million source The simply short-term what for me inflow this – me of you $XXX fund maybe is And past answer. explain very one and more attributed last then OT for liquidity just funding. is?

question that you, handle will Luke for Dalton. Yes.

at picks concentrate customer we the site, as will from I occurs, the as actually not deferred from that the revenue transfers, receive inventory of period loaded but perspective time until is, the in where when try a the the happens site, title from truck China. isn’t customer. don’t know. The a etcetera. But process concentrate warehouse leaves relevant concentrate I put final the that a the the up And effectively a gets to point when it mine short happens, cash simply onto and leaves after mine recognized sale revenue I can. the payment the

when of warehouse, over Chinese between recognize deferred period So, order time that initial picks payment and we from the revenue. the we receive cash that customer up the actually

period, – you do over April, ability towards following of the – quarter. and ramp this the downs shipments end those we been the ramp-up revenue increase have had our in the the it what’s just resulted But QX revenue the began border are So, of and force just – quarter in balance again quarter. that higher new QX where to in the seeing to has shipments really that ups this deferred majeure declaration versus with and effectively up deferred across there better of the year, to we that’s last over get revenue the reason

are of expect is terms that inventory are going in But hoping obviously, on-site to can the our this – the position etcetera. half hoping, put we and might working able where moment, we hopefully COVID. lift and over So, are down that year forward, subject second COVID, a towards are of to in all we bring subject ourselves we the levels at we something obviously majeure. this to we That’s force that of what

can next will in and obviously, course realize inventory. levels that months, the we months the to bring hoping, are we those that locked cash up three down six inventory over currently of that’s So, obviously the

know, that hopefully, don’t was… listen, So I

revenue liquidity the short-term. fairly I you the short-term that’s understand of that a I do clear. for focused facility for OT just And I No, have contingency deferred was of was side. have separate more we on wondering if kind funding everything was outside seen.

going that to bring OT sort something really so does capital contingency we that’s it a mentioned in for short-term it, sort obviously, reflected, the cash the to in of were around the forward, around on. did as on believe, financial And and of I our revolver year-to-date. that short-term I actually opposed related script can statements try to But and some year are the of have that towards working this be small implemented draw QX, So, or measures measures beginning facility financing draw related.

bring small contingency QX, the have to just the But revolver QX. are does into cash refer on mainly that over that sort were it for implemented short-term a around to to it draw try the manage that course So, forward working measures just of can measures of more capital. some and help to I

Understood. Thank That’s guys. you, all me. for

you, Thank Dalton.

your And Craig be TD Securities. you. from Thank Please ahead. question next will go Hutchison at

morning Good Craig.

Good morning.

August. or X what the their decision X X? of You X, the of at guys X future mentioned Panel Panels X underground invest it to investments and ahead a capital underground delay plan in of make and on But you in preserve sense X Panels to in Shafts and to an does I resume point here? sinking sort guess, And undercut work

that you Jo-Anne, Okay. Craig? would like question to answer for

COVID keeping the shafts components look Sure. site what that is to really as managing to we Craig. possibly soon most we the given people situation that forced quarantine. concerns at them no around as absolutely site has of team is progress, sense makes There at at very of and getting thinking much, Thanks at can. It Yes. to resume had have important the schedule the site doubt the and the

course on production. System X, been of focused the So, the Handling supports Panel have X Materials we which

on to do around experts But it has and we but progress need well impacted, we rates to the that continuing been make more of understand progress. given that. they And has also gone circumstances. so, It to are relatively haven’t people we progress as well is the need number of that And work, with work been the because us reason that numbers that complex last maintain work, we needs few the sinking because we with X it And shaft the do that is personnel, to and of System have assistance And Handling which been is for of international progress quite Shafts complex months. X shafts. able workforce safety X site them. provide some able to a over complex at shaft behind those a Materials sinking the is

There important However, it depending very timing to support which And be during ramp able X is variability up sinking. we to of the because tons day. their And are the required. and pieces infrastructure ramp-up XX,XXX require and take is around completion X, a Panels conditions that other factors time multiple these of they the to encountered are ground to some on complete. panels

bring that panels is it on And those soon important as as so possible. we

of question. progress critical So, kinds at that that raising moment the that’s absolutely the challenges are why the work to hope is reason you the I that answers despite there.

earlier that does. It Luke question has majeure? I XXX% What’s majeure. think one to last of about you that kind Thanks. maybe for just of vaccinated. talked workforce guys your force me. the been And lift required said force now

Luke, do answer you to want that?

we can concentrate enough warehouses, is confidence in meet we of level where and that getting right those Craig, the the the customers. obviously, border having our focus concentrate the commitments have there Chinese across to Sure. ongoing

through force more focusing hopefully, those will be the on-site board we and ongoing levels. majeure. later, And the And the the got the we bring COVID to over our our get And that bit down the would or down, we inventory are but consider. a there, of that the inventory regard, concentrate work would to level are we So, obviously, than right look across on-site those year, rather get we across confidence enough be the on point we in to can of commitments, meet able half measures concentrate quickly in continue that hopefully, bring creating that. of that to right second are of levels concentrate to when have that drama place we the the then this border. to hopeful have sooner customer best is doing we course

guys. Thanks Okay.

that you. as the this for Ladies thank this attending. please as today weekend. you We does yourselves a lines. your disconnect gentlemen, session Thank Have well And time, and good conference you question call. at our ask conclude for