But right now while we’re in these higher grade sections, the more we can put through the mills the better the copper production will be. In terms of the $240 million, right now, we don’t have $240 million in our plans. But over time, with the addition of Kucing Liar we’ll have that capacity to do it. But having SAG 3 does give us some more opportunities in the near term to — if we continue to have high rates of ore produced from the underground will give us some upside. A mine, we don’t talk a lot about but one that we’re going to try to keep improving on is the [Gossan] mine, it’s a relatively small mine, but very, very high grade. And we’ve got some plans to bring in some additional, and that’s reflected in the five year guidance, but some additional throughput from [Gossan] that will add copper production and gold production.
And Mark, I don’t know if you want to add into any of those comments.
Mark Johnson: Kathleen, the only thing I would add is as part of the KL project, we also add some — over the shorter term, we had some workflow capacity and optionality at GBC. That allows us to get GBC up from like 120,000 up to 140,000 tons a day in 2026. And at that point, we’ll be able to run close to 240,000 tons through the mill. The mine and mill will be matched. And then as you said, the KL come up and then GBC and KL share portions of the ore flow system. But over the short term, we sequenced that part of the KL ore flow that gives us the opportunity at GBC in the much shorter term.
Operator: Your next question comes from the line of Bill Peterson with JPMorgan.
Bill Peterson: Nice job on the quarterly execution, thanks for sneaking in my question here. So I wanted to come back to the leaching efforts, the incremental 200 million pounds. I think you mentioned two to three year period, is that a 30 linear ramp or is that more back end weighted? And you’ve consistently talked about low capital intensity. Can you remind us what the capital associated with this is, I guess, quantified and has there been any CapEx creep in interim similar to just other broader projects?
Kathleen Quirk: On the time frame for the incremental 200 million, we have not given a specific time frame. We do feel we can get it done within a couple of years and we’ll add whatever we can in the interim. This leach everywhere initiative that we have where we are accessing parts of stockpiles that hadn’t been accessed before, getting access to some of the side slopes and some of the areas around the stockpile that we just didn’t leach before, that’s been a big driver of success and will continue to be. The other one that we’re excited about is the targeted drilling. And through our data, we can see where you have situations where the solution that needs to get to the ore has been blocked for some reason over history, and this targeted drilling allows us to get access to it.
We are testing this year some abilities to do that more at scale. And that is something that we’re really interested to see how that develops and whether that will give us some additional incremental production. We haven’t factored that into our plans at this point but we’re going to continue to use these covers. We still don’t have everything — the stockpiles are so massive, covering — spanning particularly Morenci, just miles of area. And so we’re still doing the covers. We’re still looking for other opportunities to get heat into the stockpiles. We’re targeting some pyrite ores in some of our operations that have pyrite in the ores, that is a source of heat as well. But there are a number of things that we’re working on that are not the big R&D effort, but things that we can do from an operational standpoint.
But well stay tuned, we will — this is a big initiative and stay tuned will, as we go forward, love to give you a little bit more as we go through 2024 in terms of the time frame. We haven’t spent much capital on this initiative. We’ve already got the infrastructure — basic infrastructure, the tank house capacity, this is copper that goes to a tank house, not a smelter. And we have already excess latent tank house capacity. We’ve spent some money but it doesn’t round to anything really big. The operating cost, the incremental operating costs of this have been very low on the order of $1 per pound. And so it’s just a really, really exciting opportunity for us to generate value. And so as we go forward, we don’t see huge amounts of capital either that will come into play.
When you get to this piece that’s R&D, that’s where we need to make sure that all these things can be applied and deployed at scale and can be economic but that thing is ongoing. But the first 400 million pounds we think that we can do that without spending a lot of capital.
Richard Adkerson: And you may have noted this, Kathleen, but importantly, there’s no permitting issues. And that is a real challenge for any kind of project you do in terms of brownfield expansions and really tougher greenfield expansion. So here, no capital or operating costs, no permitting delays.
Operator: Our final question will come from the line of Lawson Winder with Bank of America Securities.
Lawson Winder: If I could just sneak in one and a half questions. One would be on the current level of the dividend. I mean, is your view that given the cash flow outlook, your view of the copper price, I mean, is this a comfortable level for the dividend for 2024? And then just my half question would be, is there any movement within your existing TCRC contracts to potentially renegotiate those or get the benefit of some of the really, really low spot pricing we’re seeing today?
Kathleen Quirk: On the dividend question, our Board reviews the financial policy on a regular basis. And we put in place the base dividend, the variable dividend and we’ve been paying at that level for some time now. We’ll continue to review that with the Board. You can see from our results the financial results that we’re projecting for 2024 look very good. But we always going to look at what’s going on in the market and don’t want to put ourselves in a position of running up debt, but we have a good balance sheet. So I don’t want to front run anything. The Board will look at this on a regular basis but our financial position is in really excellent shape. The second question on TCRCs, we reach agreement, as you know, on long term TCRCs that are done on fixed contracts once a year.
And since then, spot rates have come a lot, lot lower given the tightness in supply. We do sell some things on a spot basis but most of it is sold under these fixed contracts where we have the TCRCs fixed. The other thing is once we get the smelter in Indonesia up and running, we don’t have — we still have with Cerro Verde concentrate that we sell. But everything from Indonesia will be really just processed through our own smelters.
