Hudbay Minerals Inc. (NYSE:HBM) Q3 2023 Earnings Call Transcript

Hudbay Minerals Inc. (NYSE:HBM) Q3 2023 Earnings Call Transcript November 9, 2023

Operator: Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Hudbay Third Quarter 2023 Results Conference Call. At this time all participants are in listen-only mode. Following the presentation we will conduct a question-and-answer session. [Operator Instructions]. I would like to remind everyone that this conference call is being recorded today, November 9 at 9 a.m. Eastern Time. I will now turn the conference over to Candace Brûlé, Vice President, Investor Relations. Please go ahead.

Candace Brûlé : Thank you, operator. Good morning and welcome to Hudbay’s 2023 third quarter results conference call. Hudbay’s financial results were issued yesterday and are available on our website at www.hudbay.com. A corresponding PowerPoint presentation is available in the Investor Events section of our website, and we encourage you to refer to it during this call. Our presenter today is Peter Kukielski, Hudbay’s President and Chief Executive Officer. Accompanying Peter for the Q&A portion of the call will be Eugene Lei, our Chief Financial Officer, and Andre Lauzon, our Chief Operating Officer. Please note that comments made on today’s call may contain forward-looking information, and this information by its nature is subject to risks and uncertainties, and as such, actual results may differ materially from the views expressed today.

For further information on these risks and uncertainties, please consult the company’s relevant filings on SEDAR+ and EDGAR. These documents are also available on our website. As a reminder, all amounts discussed on today’s call are in U.S. dollars unless otherwise noted, and now I’ll pass the call over to Peter Kukielski.

Peter Kukielski : Thank you, Candace. Good morning, everyone, and thanks for joining us in today’s presentation. We’ll be taking you through our many record achievements in the third quarter, touching on the operating and financial performance of the business, and providing insight into recent strategic initiatives. In the third quarter, we delivered on our plan for significantly higher production, revenue and cash flow, marking an inflection point as we generate strong returns from our recent brownfield and growth investments across the business. In Peru, operations delivered on plan with anticipated higher copper production and gold production, driven by the higher grades at Pampacancha following a period of higher stripping activities completed in the second quarter.

This resulted in the mine’s lowest quarterly cash costs on record. In Manitoba, mill recoveries increased meaningfully compared to the prior period as we optimized the circuits at the Stall ore mill and the New Britannia Mill. We saw higher gold and copper grades at the Lalor Mine, which led to strong gold production and lower cash costs during the quarter. We also successfully completed the Rockcliff acquisitions in September, which together with the acquisition of the Cook Lake claim significantly expands our land holding in the Snow Lake area to provide potential future feed sources for the Stall and New Britannia Mills. And in British Columbia, our Copper Mountain Mine had its first full quarter of operations under the Hudbay umbrella. Over the past few months, we’ve been focused on completing integration activities, advancing our plans for ramping up the mining fleet, and planning for mill stability and reliability improvement initiatives.

With the strong operating performance in the third quarter, we have reaffirmed our 2023 full year production and cost guidance for our Peru and Manitoba operations. We’ve also updated our consolidated 2023 guidance to incorporate Copper Mountain’s contributions since the acquisition. As we enter this period of meaningful cash flow generation, we remain disciplined with capital spending and focused on advancing our deleveraging efforts. We have a resilient operating platform that will allow us to prudently advance and unlock value from our leading organic pipeline of Brownfield expansion and Greenfield exploration and development opportunities. The third quarter was an important milestone as it represents a step change in the diversified cash flows of the business.

We nearly doubled our copper equivalent production in the third quarter compared to the second quarter as shown on slide four. Copper represented 65% of our consolidated revenues in the quarter with a total of approximately 42,000 tons of copper produced, a 93% increase from last quarter. Consolidated gold production was a record 101,000 ounces in the quarter, representing a 107% increase from the prior quarter. Similarly, silver and zinc production increased by 74% and 18% respectively compared to the prior quarter. The significant increase in production of all metals was driven by meaningfully higher recoveries in Peru and Manitoba, mining of the high copper and gold grade zones at the Pampacancha deposit, higher gold and copper grade zones at Lalor, and incremental production from Copper Mountain Mine.

The significant increase in production of all metals resulted in strong financial performance in the third quarter as summarized on slide five. Consolidated cash costs for the quarter were $1.10 per pound, a meaningful improvement from the second quarter. This was a result of the strong copper and gold production in Peru and Manitoba, which more than offset the higher operating costs associated with now having three operations. Similarly, sustaining cash cost decreased to $1.89 per pound in the quarter as the lower cash costs were only partially offset by higher levels of sustaining capital during the quarter. Both cash cost measures are expected to continue to be strong in the fourth quarter with higher expected copper production and continued strong contributions from precious metal by-product credits.

Consolidated all-in sustaining cash costs were $2.04 per pound in the third quarter, significantly lower than the second quarter. Third quarter operating cash flow before change in non-cash working capital was $182 million, and after deducting sustaining capital expenditures in cash lease and community payments, we generated over $110 million in free cash flow this quarter. The increase in cash flow was primarily the result of higher copper sales volumes in line with the higher production level seen this quarter. Revenue, earnings and operating cash flow would have further benefited from the sale of approximately 20,000 ounces of consolidated gold production that was unsold at the end of the third quarter and is expected to be sold in the fourth quarter.

Our available liquidity increased to $540 million this quarter as our cash position increased to $245 million, and we now have $294 million available under our revolving credit facilities. Moving to slide six, as I mentioned earlier, our Peru operations saw a meaningful increase in production from the first half of 2023 as we had planned. During the third quarter, the higher grades at Pampacancha resulted in 29,000 tons of copper produced and 41,000 ounces of gold produced. In addition to the higher grades this quarter, we also benefited from higher recoveries and higher throughput at our Constancia mill. Production levels in the fourth quarter are expected to continue to benefit from higher grades, remaining on track to achieve our full year production guidance range.

Total ore mined increased by 18% in the third quarter compared to the second quarter in line with the mine plan. Ore mined from Pampacancha increased to about 6 million tons at an average grade of 0.53% copper and 0.3 grams per ton of gold. Ore milled was 9% higher this quarter because of a scheduled plant maintenance shutdown that occurred last quarter. Milled ore grades increased to 0.43% copper and 0.21 grams per ton of gold as expected. These higher recoveries were in line with our metallurgical models as recoveries benefited from the completion of the recovery uplift program in the second quarter, as well as higher head grades and lower contaminants. Combined unit operating costs for the quarter were 13% lower than the second quarter due to lower milling costs and higher throughput.

Peru’s cash costs were at a record low of $0.83 compared to $2.14 per pound in the second quarter. This 61% improvement was a result of higher gold by-product credits, high copper production, and lower milling costs. This solid performance and meaningful decline in cash costs is expected to continue to benefit from strong production in the fourth quarter, and we continue to expect our Peru operations to achieve the cash cost guidance range for 2023. Sustaining cash costs in Peru were $1.51 per pound in the third quarter, a 51% improvement from the prior quarter. Total annual sustaining capital expenditures in Peru are expected to be $10 million lower than the original 2023 guidance levels, primarily the result of lower capitalized stripping costs.

Our Manitoba operations also saw strong production performance in the third quarter as summarized on slide seven. Manitoba produced 56,000 ounces of gold, 3.6 thousandtons of copper, 10,000 tons of zinc, and 265,000 ounces of silver. Gold production was 59% higher than the prior quarter as a result of mining higher grade gold zones, higher recoveries at the New Britannia and Stall Mills, and the recovery of secondary gold products at New Britannia. Improvements completed at New Britannia late in the quarter were able to recover secondary gold products and ensure gold is reporting to Dore as designed. With the recent recovery improvements at the New Britannia and Stall Mills and the higher grades from Lalor in the third quarter, the company expects to achieve full year production guidance for all metals.

As disclosed in our second quarter results, gold production is expected to trend towards the lower end of the guidance ranges, while copper and zinc production are expected to trend to the upper end of the guidance ranges. We continue to advance several key initiatives to support higher production levels, reduce dilution during the mining cycle, and continue to improve metal recoveries at the Snow Lake operations. At Lalor, we are enhancing the quality of ore production and minimizing dilution through improved blast designs, loading procedures, and effective grade control practices. At the Snow Lake mills, we completed changes to optimize the circuits, resulting in increased gold, copper and silver recoveries. We are also exploring the potential to enhance the tailings deposition method at the Anderson facility with a transition from subaqueous to subaerial tailing storage.

This could provide a more efficient use of impoundment space, address seasonal operational challenges, and defer capital expenditures for dam raise construction to future years. Lalor production averaged 4,000 tons per day during the third quarter, slightly lower than the prior quarter. However, we mined higher grades this quarter in all metals, with gold and copper grades roughly 25% higher than the second quarter. Stall Mill processed 7% more ore in the third quarter as we drew down base metal ore stockpile that had built up in the second quarter. After commissioning the first phase of the Stall Mill recovery improvement project in the second quarter, the third quarter was focused on optimizing circuits to achieve targeted recoveries by reducing primary ground size, refining the flotation circuit balance and mass pull, and reagent selection.

These proved highly effective, resulting in notably higher recoveries for copper, gold and silver, with the Stall Mill achieving its targeted gold recovery levels of approximately 68% in the third quarter compared to 60% gold recovery in the second quarter. The New Britannia Mill consistently achieved elevated production, averaging 1,600 tons per day, despite processing significantly higher copper head grades that can impact throughput due to copper flotation limitation. We continue to advance the process debottlenecking initiatives at New Britannia as we pursue higher throughput targets to align with the increased gold ore production from Lalor. Combined units operating costs slightly decreased in the third quarter compared to the prior quarter, reflecting the higher mill throughput.

Manitoba’s gold cash costs were $670 per ounce, 39% lower than the second quarter due to higher gold production driven by improved grades and recoveries. Cash costs are expected to continue to benefit from increasing gold production from higher grade stopes and throughput increases at Lalor, as well as continued strong recoveries. As a result, we expect to achieve the 2023 guidance range for cash costs in Manitoba. Gold sustaining cash costs were $939 per ounce, a decrease from the second quarter based on the same reasons affecting cash costs. Total annual sustaining capital expenditures in Manitoba are expected to be $15 million lower than the original 2023 guidance levels, primarily a result of lower capital development costs realized at Lalor as the team focuses on cost efficiencies.

Slide eight highlights the results from our first full quarter of owning the Copper Mountain Mine. We produced 9.3 thousand tons of copper, 4.6 thousand ounces of gold, and 101 thousand ounces of silver during the third quarter. Our efforts to stabilize the operation are underway. Total ore mined during the third quarter was 3.8 million tons, which was in line with our expectations. We commenced a fleet production ramp up plan to capture the full value of existing idle capital equipment at the Copper Mountain site. Additionally, a new electric shovel was commissioned in September, which will reduce carbon intensity by displacing some of the existing diesel shovel production. The mill processed a total of 3.2 million tons of ore during the quarter, with the mill availability averaging 83.5%.

The milled copper grades were 0.36%, in line with our expectations for the quarter. Copper recoveries were 81% in the third quarter, an increase compared to 79% that was previously reported by Copper Mountain for the full year 2022. Mill throughput was impacted by excessive coarse material bypassing the comminution circuit and restricting flow through the tailings discharge line, causing high levels of unplanned downtime. This issue was rectified in August, and we continue to focus on increasing mill availability. Combined unit operating costs in BC were CAD$24.80 per ton milled. Combined unit operating costs per ton milled are expected to decrease over time as we execute the stabilization and optimization initiatives at Copper Mountain. BC cash costs were $2.67 per pound and sustaining cash costs were $3.39 per pound in the third quarter.

These cash costs have improved compared to the full year 2022 cash costs previously reported by Copper Mountain. We’ve issued Copper Mountain 2023 production and cost guidance for the period since June 20. We expect to produce approximately 19.5 thousand tons of copper at average cash costs of approximately $2.65 per pound based on the midpoint of the guidance range. The new Copper Mountain guidance has also been incorporated into our consolidated 2023 guidance ranges. The production and cash cost guidance ranges for our other business units has otherwise been reaffirmed and remains unchanged. We also expect capital expenditures at Copper Mountain to total approximately $35 million in 2023, including sustaining capital and capitalized stripping costs.

Since the acquisition in June, we’ve been focused on advancing our plans to stabilize operations at Copper Mountain. As seen on slide nine, we’ve been able to realize annual corporate synergies of $9 million and we’re on track to exceed the $10 million target for corporate synergies. We are also on track to achieve the $20 million in targeted annual operational efficiencies to be achieved over the course of three years, as stated at the time of announcement. As I mentioned, we’ve commenced the fleet ramp-up plan in the mine, which entails a ramp-up from 14 trucks to 26 trucks by the end of the year. Once complete, we expect to see a more than 30% increase in tons moved in 2023 compared to 2022. We’re also planning a campaign of accelerated stripping over the next two to three years to enable access to higher grade ore and to mitigate the substantially reduced stripping undertaken by Copper Mountain over the four years prior to acquisition.

Additionally, as part of our near-term stabilization plans, we will be applying our mill efficiency initiatives from the Constancia Mill to the Copper Mountain Mill in an effort to continue to improve concentrate quality and copper recoveries. The key focus area for us is the implementation of improved maintenance management systems as part of our focus on increasing mill availability. Further details on our stabilization plans will be provided in a new technical report, which is expected to be released in the fourth quarter, which will include an updated mine plan, annual production and cost estimates that reflect our stabilization and optimization initiatives, as well as updated mineral reserve and resource estimates. As we delivered on our plan for strong production growth and free cash flow generation in the third quarter, we remain disciplined with capital allocation and deleveraging activities.

We achieved adjusted EBITDA of $191 million in the quarter, the highest quarterly level over the last five years, and a 135% increase from the second quarter. As mentioned earlier, we generated over $110 million of free cash flow in the quarter. A significant driver of this increase was a solid revenue generation from our diversified production base. While copper revenues increased by 62% quarter-over-quarter, our gold revenues similarly increased by 69% as a result of producing over 100,000 ounces this quarter. Copper remains our core metal of focus, but we enjoy the diversified revenue and cash flows our gold exposure offers, with gold prices typically having counter cyclical benefits to copper. This gold diversification is an important aspect of our prudent financial strategy that helps to ensure consistent cash flow generation and uniquely positions us versus our peers.

During the quarter, we reduced net debt to $1.13 billion. The $58 million decline in net debt, together with higher levels of adjusted EBITDA in the quarter, improved our net debt to EBITDA ratio compared to the second quarter, thereby improving our credit facility availability. Subsequent to quarter end, we continued our deleveraging efforts with an additional $40 million repayment on our credit facilities, as well as a $5 million principal repayment on the Copper Mountain bonds. We also recommenced the deliveries under our gold prepay agreement to reduce the repayment liability. Additionally, we’ve been working towards delivering annual discretionary spending reductions with lower growth capital and exploration expenditures, which we’re on track to achieve in 2023.

Total capital expenditures for 2023 are now expected to be approximately $30 million lower than previous guidance levels, a further reduction from the $15 million of savings announced in the second quarter. This represents a 10% reduction in total capital expenditures. From today’s comments, Hudbay is well positioned at an inflection point for continued cash flow generation, and we expect to continue to take prudent measures to position us to deliver our deleveraging targets. During the third quarter we published the results from our pre-feasibility study on Phase 1 at Copper World, which is summarized on slide 11. Phase 1 is a standalone operation requiring state and local permits only. Over the past 12 months, the team completed extensive technical work on Phase 1 to produce this enhanced and de-risked Phase 1 plan for Copper World.

Phase 1 has a mine life of 20 years, which is four years longer than the Phase 1 mine life that was presented in the Preliminary Economic Assessment published in June of 2022. The Phase 1 pre-feasibility study demonstrates attractive economics with a $1.1 billion net present value and a 19% internal rate of return using a $3.75 copper price. Phase 1 has a simplified project design as a traditional open pit, truck and shovel operation with conventional flotation to produce copper concentrate and molybdenum concentrate. In the study, the processing facilities are expanded to include a concentrate leach facility in year five, producing copper cathode and silver gold dore. Phase 1 contemplates average annual copper production of 85,000 tons over the 20-year mine life at average cash costs of $1.47 and sustaining cash costs of $1.81 per pound of copper.

A variable cutoff grade strategy allows for higher mill head grades in the first 10 years, which increases annual production to approximately 92,000 tons of copper at average cash costs and sustaining cash costs of $1.53 and $1.95 per pound of copper, respectively. Phase 1 has an anticipated initial growth capital expenditure of $1.3 billion. The project contributes meaningful annual EBITDA with $372 million on average over the mine life and more than $400 million on average over the first 10 years at a copper price of $3.75. With the pre-feasibility study, we updated the mineral resource estimates for the project, increasing the global measured and indicated mineral resources to 1.2 billion tons at 0.42% copper grades, confirming the significant upside of Copper World with an intended Phase 2 expansion of mining activities onto federal land to further enhance the project economics and extend the mine life well beyond 20 years.

We expect to receive our two outstanding state permits in mid-2024. The opportunity to sanction Copper World is not expected until 2025, based on current estimated timelines. Moving to slide 12, we entered into a framework for a potential exploration partnership in Flin Flon with Marubeni in July. This exploration partnership would allow us to couple our operational and exploration expertise with Marubeni’s balance sheet strength to test our large Flin Flon land package and potentially revive our dormant Flin Flon processing facilities. We’ve discovered and operated 29 mines in Hudbay’s nearly 100-year history in Manitoba, and we have the potential to continue that success with this renewed focus on exploration in Flin Flon. We’re also examining the potential to reprocess Flin Flon tailings, where in excess of 100 million tons of tailings have been deposited for over 90 years.

We completed confirmatory drilling in 2022, which covered about two-thirds of the facility and indicated higher zinc, copper and silver grades than predicted from historical mill records, while confirming the historical gold grade. We are advancing metallurgical test work and evaluating metallurgical technologies. This included the recent signing of a test working agreement with Cobalt Blue Holdings Limited to assess the processing viability of the Flin Flon tailings using Cobalt Blue’s proprietary processing technology that recovers copper, zinc, gold, and silver, while converting sulfides into stable and benign sulfur. In the Snow Lake region, we continue to compile results from ongoing infill drilling at Lalor that will be incorporated in our next annual mineral resource and reserve estimates update in March 2024.

Looking at slide 13, we also entered into agreements to significantly consolidate our land holdings in Snow Lake through several transactions, increasing our holdings by more than 250% in the region. We intend to explore these claims with the aim of finding a new anchor deposit to extend the life of Hudbay’s Snow Lake operations beyond 2038. One of these transactions was the completion of the Rockcliff acquisition during the quarter. This not only expands our land holdings in the Snow Lake area, but it also consolidates Hudbay’s ownership of the Talbot Copper Gold Deposit. This transaction has the potential to further extend mine life at our Snow Lake operations, as well as offers us additional exploration properties to provide further optionality for future feed sources for our Stall and New Britannia Mills.

We completed the acquisition of the Cook Lake properties from Glencore in late June. The Cook Lake properties are located within 10 kilometers of the Lalor mine and have the potential to host a new discovery at depth. We received data regarding approximately 60,000 meters of historical drilling that was completed over 10 years ago at a fraction of Lalor’s current known depth. The mineralization indicates that there is the potential for new deposits on the same favorable mineralized horizons as many known deposits in the area, including the Lalor, 1901, and chisel deposits. The Cook Lake properties are untested by modern deep geophysics, which was the discovery method for the Lalor mine. Concluding on slide 14, we believe that copper has the best long-term supply demand fundamentals in the sector, as global copper mine supply will be unable to meet demand from global decarbonization initiatives.

Hudbay is uniquely positioned to benefit from the strong outlook for copper with attractive copper production growth and significant long-term optionality for investors through our leading organic growth pipeline. Hudbay offers meaningful copper production at first quartile cash costs. We delivered on our plan for higher copper production and lower cash costs in the third quarter, and we provide the highest near-term free cash flow yields versus peers. Our gold diversification is part of this unique positioning, while also offering counter-cyclical benefits. And lastly, we have significant long-term upside through our leading copper growth pipeline, offering the highest net asset value sensitivity to copper prices in our peer group. And with that, we’re pleased to take your questions.

Operator: Thank you. [Operator Instructions]. And our first question today comes from the line of Ralph Profiti of Eight Capital. Your line is open.

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Q&A Session

Ralph Profiti: Thanks. Good morning, everyone. Peter, and perhaps Andre, I just had a question on copper recoveries at Copper Mountain hitting 81% in Q3. And it’s been intimated that those design rates are hovering around sort of 84%, 85% as the goal. I’m just wondering, how much of that is a function of expected higher copper grades, or are there adjustments still to come in the processing circuit? And when perhaps we can see that 84%, 85%? Is that sort of a first half ‘24 phenomenon or more allocated towards the second half?

Peter Kukielski : Good morning, Ralph, and thanks very much for the question. I’m actually going to ask Andre to address the question for you. He’ll do much fuller than I will be able to.

Andre Lauzon: Sure. Thanks for the question and it’s a good one. The recoveries have improved significantly since we’ve been able to integrate with the operation. There’s still more to go. Most of the challenges to-date aren’t – or not challenges. The grade improvements are tied to technical and grind size issues. And so, right now, at the current throughputs, we’ve had to balance, call it grain size to liberate the recoveries. Over the next year, so into 2024, we plan on optimizing our throughput in terms of a stable throughput. So stability of the plant is key for us to achieve really good recoveries, up in the 85% range. That’s going to happen over probably 18 months or so in that range as we put in new maintenance practices.

We’re looking at optimizing some of the reagents and balancing feeds between the SAG mill and the ball mills that currently are a bit of a bottleneck. We can hit as high as 45,000 tonnes per day. But until we get those technical solutions in place, what happens is that we send two cores of a feed through and our cyclones can’t keep up and we plug lines in the lake. And so your question, if I go back to it, was around, is it related to grade? I’d say the answer is, no. So it’s a combination of technical solutions that we’re working on in the short term, like over into next year. And then the maintenance reliability initiatives that Peter mentioned earlier in the call, those will stabilize the plant and those will over the next 18 months or so, those will get us to that level in that 85% range.

Ralph Profiti: Okay. Thanks Andre. Very helpful. Peter and perhaps Eugene, it’s about $45 million in lower CapEx guidance over the course of 2023. How much of this is sort of deferrals and rephasing into 2024 or should we consider the bulk of these reductions truer to greater efficiencies, optimization synergies?

Andre Lauzon : I think both, but Eugene?

Eugene Lei: Yeah, the answer is both. And it’s $30 million in capital savings from the original guidance, and they are across the board actually. So some of the capital savings are in Manitoba, and those are from sustaining capital, and that’s actually from more efficient mining and less development. It’s about a combination of both in Peru in terms of a bit more efficiency and some deferrals. And then there’s the $5 million in Arizona that is deferral to do work that we don’t need until we have the permits and the partner in hand. So it’s a combination of focusing on deleveraging, to allow us to invest in the pipeline in the most prudent way and enhance our operating cash flow platform.

Ralph Profiti: Yep. Very helpful. Thanks very much.

Operator: Your next question comes from a line of Jackie Przybylowski from BMO Capital Markets. Your line is open.

Jackie Przybylowski : Thank you very much, and congratulations on a great quarter. Maybe if I can ask just maybe a quick one first. I’ve seen some headlines that one of your former employees, Javier Toro, moved over to Solaris. I was wondering if you could talk a little bit about any impacts that might have on your operations?

Peter Kukielski : Jackie, morning. Thanks very much for the kind comment. I think our industry is characterized by mobility of high-quality people. And – I mean, Javier has been with us for a long time. He worked on the original Constancia project. He’s been instrumental in advancing Copper World with us, but it’s time for him to take on a new challenge. One of the good things that happens when you get mobility of people is it creates opportunity for others in the organization to move on up. And so we’ve got a very, very strong bench strength behind Javier in the company that enables us just to move other people up and along. So, while we’re sorry to see Javier go, and we expect him to probably return one of these days, in the meanwhile, we’re going to give some of our other younger folks some real opportunities to move on up. So we don’t anticipate that there’ll be any impact on the company at all.

Jackie Przybylowski : Great. That’s helpful. Thanks Peter. Maybe another question. I don’t know if this one’s for Andre, but on Snow Lake, it looks like you’ve had really terrific success with the recovery improvement project at Stall. I was wondering if you could talk a little bit about your thinking for any future optimizations or improvements in Snow Lake or what your plans are maybe going forward there?

Andre Lauzon: Yeah, sure. Thanks for that, Jackie. So as Peter mentioned, the exploration story is something that is probably one of the most exciting things I think that we’re going to see in the coming years. It’s really – it’s the first time around Lalor where we’ve consolidated the land package. And so we have this unique opportunity to explore it to its full potential. And so we’re really excited about that possibility to either find new satellites or potentially an anchor deposit, so that’s probably number one. Number two, we’ve really made some strong headway on the 1901 deposit. So we put that on pause a little bit, about a year ago. The financials and the design, the plan just wasn’t strong enough for us to allocate capital to it.

And the teams have done just an amazing job of rethinking it to where we’re looking at advancing some exploration, drifting into next year and drilling, to better optimize the project, and the returns on that look much stronger now that I think it’ll definitely come into our plan, and that’ll fully optimize feed to Stall mill at New Brit. So New Britannia is achieving what we always hope it did. And now it’s exceeding the throughput on a daily basis. We’re seeing periods of upwards of 2000 tons per day. We’re in the process of permitting it up to 2500. But right now, Rob and team are really focusing on some minor bottlenecks around some of the pumps that are a little bit high maintenance that feed the tailing system that seems to constrain us a little bit and some other maintenance activities.

But the opportunity there is for us, is to really increase the throughput at New Britannia, which makes – we have a surplus of gold resource in the Snow Lake area and getting to very high 90% recoveries through New Brit just is really, really exciting. And so as well, if I pivot just a little bit while we’re talking on Manitoba, the team in Flin Flon areas have done some really good work around de-risking that. And this is our first full year where we’ve – since 777 and the zinc plant has closed and they’ve come up with some really innovative ways to reduce the cost of treatment of waters and the like. We’ve had significant savings and we’re working very well. And Peter mentioned around the tailings opportunity and our plan is to turn that potential, which was perceived by some as a liability in the past to an asset.

And we’re really excited about that in combination with the Marubeni exploration. So there’s a lot of exciting things going on, right, across the board in Manitoba.

Jackie Przybylowski : That’s fantastic. That’s a great list. Thanks Andre. And maybe if you don’t mind, if I can ask one last question. I know you’ve curtailed some of your spending at Copper World, which makes a lot of sense for the near term. Can you give us a bit of an update on any of the project works that you might be starting next year or what the spend could look like next year, assuming you get your permits as you’re expecting?