So that’s really the priority. So we will continue to prioritize that move forward. And as we ramp up and down, we’ll flex our production from other parts of the mine, for example. And we’re also looking at alternative mining methods, looking at some of the most expensive equipment we have. We’re looking at different alternatives on that. We need to do better with our way that we manage those in terms of maintenance and other things and improve our, you might call, our general systems in the company. What we’re trying to say, there’s a variety of levels and timing that these activities are going on at Goderich, which you referenced, but then really but everywhere. I think that as we get a little further down the road, we’ll plan to do some Analyst Days, Investor Days up at the mines, and we can show you what we’re doing firsthand, and I hope you would participate in that.
I’ll let George make a few comments as well and then turn it over to Ben.
George Schuller: Just to add a little bit what Ed said. Our strategic focus hasn’t changed one bit at Goderich in regards to the east development that we’re doing there. Keep in mind that Ed has been around on our Board year and a half to two years now, and he was fully versed on that. If anything, I would say Ed, in his short time he’s been here, has probably ask the questions a little bit more around can we do it quicker, faster, better, those kind of things that are all necessary. So again, as he highlighted, we’re looking at some potential ways we can attack it in different directions and how we can actually move that forward. So I would say anything other than the delay is how we can continue to move that effort forward.
Ben Nichols: And I wouldn’t see any fundamental change in our approach. We’re focused on seeking the appropriate value of our product in the market. And I can appreciate the undertone of how price and volume play together to generate cash. And frankly, it would be a little premature even to comment on where we’re headed in the next season because we need to see how this winter plays out. So fundamentally, no change.
Edward Dowling: Let me just close that with the departure of some of our senior executives, Kevin and Jamie, for example, please don’t think there’s something nefarious going on in the background there. These were all made for different decisions. They’re not related to one another and that — for example, we have two high potential executives now on the commercial side and we’ve delayered the organization. So that’s the kind of the focus and kind of an example of kind of the things that are going on and that you’ll continue to see.
Operator: [Operator Instructions] And we will take our next question from Seth Goldstein with Morningstar.
Seth Goldstein: Can you help us understand the $10 million sustaining CapEx decrease? And are you risking long term underinvestment by cutting this similar to what happened that led to the need for Goderich to be fixed several years ago?
Edward Dowling: No, as a quick answer — I mean, we’d give you the details associated with it. George, you want to talk about that a little bit?
George Schuller: Just to kind of build on what Ed highlighted, I would also say no. One of the areas that we’re doing is, as we talked about the East Bay development, what we’re doing around with that mill. We’re looking at utilizing many of the components we have, which in fact which when you go back and look at them are actually new or refurbished, and what we’re trying to do is optimize that whole process. That in itself has drove quite a bit of a change in the sustaining capital. So when you look at the rest of the platform, whether it’d be our plants, our facilities, our bagging facilities, those types of things and our other operations, there’s not a substantial change there at all. So a vast majority of that’s coming directly from that thinking of how we’re going to redevelop the Goderich mine. But again, it’s still high priority for us.
Edward Dowling: What George is saying is that when we initially looked at putting the mill to the north side of the mine and really to the west side on that corner, but from where it is a couple of miles to the south who’s looking initially to build a new mill. And what we’re headed to now is to — because we think we have the flexibility to establish that is to relocate what we have, and that would cut the estimated capital by a very large percentage point, by about two thirds.
George Schuller: Correct. And some of that’s flowing through in fiscal year 2024 is what you’re actually seeing in there, Seth.
Edward Dowling: So anyway, that’s a big part of what you’re seeing there.
Seth Goldstein: And what’s the lead time from when you buy KCL to when it’s sold as SOP? And would we expect to see your input cost coming down from buying KCL for a longer lead time?
George Schuller: So I’d say Seth, again — I think Ben and I will tag that together. I think a couple of comments there. We can — depending on what we do, we do have some longer term contracts on KCL, but we also buy some on a shorter term spot, which lets us optimize our fiscal year 2024 budget. So with that said, there is some opportunity because of the lower MOP price right now, I’d say, there’s some potential upside. But again, as we start to look at this longer term is that we are looking to gain a longer term contract with an MOP provider as we start to go forward. I do think it bodes well for us in the future. Again, I know it’s always tough to sit here and tell you exactly where that is. But you’ve heard Lorin say this multiple times that I’m confident that we’re going to continue to see our SOP price, our cost, the sites, continue to go down with our efforts that we have around the pond process, and the KCL combined. Ben?
Ben Nichols: I might just add, it’s probably fair to say that any KCL we purchase as an input is monetized within that given fiscal year. It’s just kind of a broad statement and we’re turning inventories consistently.
Operator: And we’ll take our final question from Vincent Anderson with Stifel.
Vincent Anderson: I just had two, hopefully, quick ones. So I understand everything that’s been said about refocusing on cash generation. And as it’s been mentioned, parting ways with Kevin and Jamie is quite a bit of experience out the door unless you have a very high conviction level that the business is already moving in the right direction and fairly quickly to basically change jackies mid race here. So I’m wondering if that’s a fair assessment that these comments on further Goderich optimization pushing the Goderich market east, those were really mostly established plants and most of the pieces for achieving your cash generation goals are really already well in place?
Edward Dowling: I would say that the a large percentage of the things that you’re aware of were preexisting, of course, from a Board perspective, we were involved in that as well. And as George said, I’ve been out for the operations and consulting essentially with our operating team to make different suggestions on things that we need to do. I’d say there’s a number of other things that are underway now. For example, some of the changes that we’ve made already and others that we’re looking at with an overall outlook really managing cash that there’s going to be other future changes coming in the way we do business, and to really generate improved cash flows per share.
Vincent Anderson: And I don’t know how fair this question is. But Ed, you’re coming down off of the Board, so I figured I’d lob it at you anyways. I’m just trying to understand — well, what’s the conviction level right now that the public equity markets are ever going to properly value your assets, either before or after you hit these cash flow targets? Because I don’t know if there’s an internal timeline, right? But is anything off the table for achieving that fair valuation?
Edward Dowling: The only thing off the table is doing business in a responsible way. Other than that, we’re looking at everything, and I’d just say that. My crystal ball is no better in years on how the market values things. But through efforts and communication and showing you what we’re doing or going to be doing, I believe that the market could get confidence in how we’re moving ahead. I think there’s been uncertainty on how the business is looked at for growth versus yield. I want to make it clear that we’re out to develop a yield type company. And lithium has also been a big question mark. And doing a project with a technology that hasn’t been successfully deployed yet, that’s inherently — in the regulatory environment, that’s really uncertain. If I was in your shoes, I’d add a higher discount rig to us just on that. So I think with clarity of what we’re doing, the direction that we’re headed, I think the market is efficient.
Operator: And with no further questions at this time, I will now turn the call back to President and CEO, Mr. Ed Dowling, for closing remarks.
Edward Dowling: Well, look, thank you all for joining us today. I will look forward to engaging with you going forward. And please feel free to reach out to contact us if you have additional questions or things that you’d like additional clarity on. Have a great day.
Operator: And ladies and gentlemen, this concludes today’s call, and we thank you for your participation. You may now disconnect.
