Aoife McGrath: No, that’s the gist of it. Just to reiterate that the [Indiscernible] mine life [Indiscernible] from those two pits, I mean it’s phenomenal that we have that much mine life ahead of it and we’re beginning to look more seriously at the area between them because of the work we’re doing on the geology models, we’re seeing that there’s potential for higher grade on a whole host of structures that make a really wide deformation level base between those two deposits. So it’s most of what we will be looking at in the next few years is already on POA 11 is right there. It’s permitted. We have good access. We’re — every day, we’re increasing our understanding of the [geology]. So there’s a lot of potential right on our doorstep. It’s a great position to be in, given the runway we have with that mine ahead of us already, it’s really good.
Mick Routledge: And additional to that, there is one area which is underneath our old historic leach pad, number one, right adjacent to the crude pit, we call it the wedge actually. It’s currently in our mine plans as waste because we can’t drill them through the old leach pad but we have put some horizontal drills into that, and it’s given me a little bit of excitement. We still have to investigate it but that’s 40 million tons of waste currently in the plan. And in the next couple of years, we’ll look to investigate that and see how much of that we can convert. But we’re optimistic that and that will present some really impressive material that may be higher grade than the current mine plan.
Operator: And our next question will come from Joseph Reagor with Roth MKM.
Joseph Reagor: So most of my questions have been answered, but I did have a question. In the cash flow for Q1, there was $55.2 million impact from deferred revenue recognition, which compared to prior quarter seemed a bit high. What was driving that, what are the components that go into that? And should we expect that to be lower in the quarters ahead?
Mitch Krebs: Tom, do you want to cover that?
Tom Whelan: So in the financial statements, you’ll see a reference to some gold prepaid activity. So we’ve got a prepaid at Kensington, which we’ve historically used to help us manage short term working capital. And last year, we added prepaids at both Rochester and Wharf. Again, all just in the effort to smooth out the working capital as we went through the last of the expansion and are awaiting these wonderful ounces that Mick is placing on the pad. So we extended those — we renewed those prepaids again. There was $55 million outstanding at the end of December. We paid it all back and then drew down on those prepaids again. So just — it’s a nice way to help us manage working capital. In particular, the first quarter has three lumpy payments.
The annual incentive bonus we paid the Mexican EBITDA tax, as well as the semiannual payment on the bond coupon. And so it was just — it’s a helpful way to manage working capital. As I mentioned in the — starting in the third quarter, once all the free cash flow starts to arrive. The plan would be to begin delevering and we’ll delever based on what’s going to be the highest interest rate between the revolver and prepaid. So expect to see those balances decrease in the second half.
Joseph Reagor: And then one other question, just on kind of the overall company performance in Q1. It seems like you guys are already ahead of plan and the range on guidance at Rochester is a little wide. Is the plan like later this year to tighten that up once you kind of see what the first two or three quarters look like?
Mitch Krebs: Yes, that’s a fair point, Joe, that as we get past the end of the second quarter with that run rate at Rochester, that’s a big milestone for us. On the backside of that, refreshing Rochester’s full year guidance would be probably a good thing to do. So you can look for that probably as we think about third quarter results.
Operator: [Operator Instructions] Our next question here will come from Brian MacArthur with Raymond James.
Brian MacArthur: Can you just review where we are on your NOLs, your tax pools in the United States? Because as you eventually start to ramp up Rochester and generate cash and you have Wharf in the US and Kensing in the US. Is most of that going to the bottom line? Because if I remember, there were significant tax pool. If you can just review how that works, because that should impact, I guess, how much free cash flow there is available?
Mitch Krebs: It’s an often underappreciated asset that we have and that we will start to take advantage of. Tom, do you want to give Brian the…
Tom Whelan: Yes, by memory, in the 10-K is over $630 million of NOLs. And so we’re not going to be paying any federal income tax in the near future. So absolutely, you should be forecasting zero federal income taxes for the foreseeable future. We do pay tax in Nevada, there’s a state tax there as well as Wharf. And at these higher prices, there’s maybe a small amount at Kensington as well, but nothing particularly material.
Brian MacArthur: And that was going to be my second question. So just in Nevada, do you pay it or you get to credit all the capital you’ve just spent so that gets deferred a little bit too or do you start paying that right away?
Tom Whelan: No, there’s a Nevada net proceeds tax that we will start paying right away.
Operator: And this will conclude our question-and-answer session. I would now like to turn the conference back over to Mitch Krebs for any closing remarks.
Mitch Krebs: All right. Well, hey, we appreciate everybody’s time today and look forward to speaking with you all in August to discuss our second quarter results. Have a great rest of the day. Thanks again.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect your lines.
