Fresnillo plc (OTCPK:FNLPF) Q2 2023 Earnings Convention Name August 1, 2023 4:00 AM ET
Firm Individuals
Octavio Alvidrez – CEO
Mario Arreguin – CFO
Tomas Iturriaga – COO
Convention Name Individuals
Daniel Main – UBS
Jason Fairclough – Financial institution of America
Danielle Chigumira – Credit score Suisse
Sandeep Peety – Morgan Stanley
Patrick Jones – JPMorgan
Amos Fletcher – Barclays
Krishan Agarwal – Citibank
Operator
Good morning, everybody. Thanks for becoming a member of us right now for our 2023 Interim Report, Fresnillo PLC. I am Octavio Alvidrez, CEO of the Firm. And I am happy to be joined this morning by Mario Arreguin, our CFO, and Tomas Iturriaga, our Chief Working Officer. As all the time, I have to level to the disclaimer earlier than I start. However I’ll shortly transfer to the agenda we’ll cowl this morning.
By way of our agenda, I’ll take you thru the important thing operational and monetary highlights and tackle a few of our key latest HSECR initiatives in addition to make some remarks on our exploration actions. Tomas will then cowl some particulars of the operations. And Mario will present our monetary replace. I’ll then conclude with some feedback on the outlook earlier than we tackle our questions — along with your questions.
You can be acquainted with our funding proposition. It stays constant and compelling, however a few of the latest challenges that we now have in Mexico and within the mining trade. We’re the biggest producer of silver worldwide and Mexico’s primary gold miner. We profit from the high-quality mining in our property backed by our massive useful resource base, 2.2 billion ounces of silver and practically 40 million ounces of gold.
Now we have a powerful EBITDA margins and low value and stay very targeted on working our operations effectively.
We take a disciplined strategy to funding by way of the cycles. And we now have a confirmed observe document of finishing our venture, a sequence of most up-to-date addition to our portfolio, the Juanicipio tasks, amongst another tasks previously that we have been constructing and maintaining with our natural development.
We even have a stable venture pipeline of new tasks and prospects in Mexico, in Peru and in Chile, as a result of we’re in a journey to additional enhance our sustainability efficiency and have a protracted observe document of constant dedicated engagement with our native communities. This shall be essential for the upcoming tasks that we now have in Mexico, and particularly, within the scheme of a brand new mining regulation by which we now have the indigenous session.
Shifting briefly to our HSECR initiatives, we now have an excellent trajectory and the protection aspect, as you may see within the decrease chart to the left. Nevertheless, as it is a good trajectory, I am unhappy to report, this 12 months, two fatalities in our contractor workers. This isn’t acceptable and we should redouble our efforts to make sure a real tradition of security throughout all of our operations in order that we obtain our aspiration up to now of a security tradition in all of our explorations and in Fresnillo PLC as a complete.
On the setting aspect, the work on enhancing our carbon emissions efficiency can also be ongoing as we work in direction of decarbonizing our operations, enhancing water recycling charges on all of our mines and upgrading our mining fleets. This 12 months, we’re beginning and we intention to conclude an in-depth evaluation of our two largest property in Fresnillo and in Herradura, the open pits with a purpose to perceive higher what sort of applied sciences we now have out there, what sort of goals we are able to set in phrases decarbonization in our mines and alongside another research primarily based on science, we’re planning to return to a conclusion on what we are able to commit by way of local weather change initiatives.
A few of the working highlights, this has been, as I discussed, just a few difficult years. And these challenges stay as we proceed to work by way of the inflationary setting we’re at present in. Additionally, with some situation by way of international trade in our nation by which we now have seen the peso strengthening only in the near past. I am actually happy with the general efficiency of operations. Now we have achieved stability in Fresnillo and in Saucito, we now have seen a turning level once more going right into a optimistic aspect.
I imagine this reveals how we now have stabilized our operations and we at the moment are in a powerful place to capitalize on additional development alternatives with the legacy operations all in a significantly better place. So, operational efficiency was according to expectations and we’re, as soon as once more, reconfirming our full-year steering.
Clear, a key spotlight was the commissioning and ramp-up of Juanicipio which we nonetheless count on to hit identify plate capability within the third quarter. Now we have additionally accomplished the commissioning of the brand new Pyrites Plant and that’s working — operational proper now.
Lastly, we barely entrance added a few of our exploration funding — our full-year steering. And however we’ll obtain one thing within the strains of our funds.
On the monetary highlights, regardless of the inflationary problem, we’re reporting strong numbers website leads, producing money, sustaining our sturdy steadiness sheet whereas nonetheless paying a wholesome dividend to our shareholders. And Mario will speak about extra about these impacts not just for inflation however the energy of the peso.
Shifting to the explorational entrance. As I discussed beforehand, we now have barely invested extra in our exploration on this first half. As we now have had good ends in Guanajuato and in Tajitos, who shall be becoming a member of our pipeline of development — of natural development. Extra particularly, I am additionally happy to report that we now have moved Orisyvo to the pre-feasibility stage and that is, as we’re transferring this venture forward.
Trying to our exploration entrance as effectively, as I discussed this 12 months, we’re budgeting $175 million. As you may inform, most of that exploration funds goes into our mining operations and growth tasks and people nonetheless being explored with a purpose to improve the knowledge of our assets and reserves and likewise develop on people who we’re nonetheless exploring. As I discussed, not solely in Mexico, however we’re additionally exploring in Chile and Peru.
And with that, I’ll go to Tomas Iturriaga, who can inform us extra in regards to the operation particulars.
Tomas Iturriaga
Thanks, Octavio, and good morning, everybody. It is a pleasure to be right here to speak a few report of what I imagine to be a stable first half of the 12 months within the operational entrance. In fact, we acknowledge the associated fee pressures we face in all 4 mines. However, operationally, I believe we’re on sound footing now to go from there. I’ll begin with the Fresnillo district sequence and nonetheless the place our important focus stays by way of efficiency.
So beginning with the Fresnillo mine, the mine continues to carry out per our expectations. And I am more than happy with the optimistic influence of our efficiency enchancment plan that we carried out there. Growth charges will — for the second half of the 12 months, will proceed to be within the common of three,100 meters per 30 days displaying the consistency of the mine.
One of many key drivers of the Fresnillo enchancment is the San Carlos shaft deepening venture, which continues to progressing effectively and is anticipated to be full by 12 months finish, after the shaft service infrastructure redesign we did early on the 12 months. So with a secure manufacturing base at Fresnillo, we at the moment are specializing in a number of effectivity and cost-containment initiatives that I’ll point out a few of them later within the presentation.
Shifting to Saucito, I believe, the excellent news is that we now have stabilized the efficiency at this mine as Octavio was mentioning earlier. We had an excellent first half of the 12 months and we count on to see additional enchancment within the second half. The excessive seismicity points we had in some zones of the mine are effectively underneath management and inflicting no extra additional delays for slowing of ore mining. Additionally, the floating and pumping system points we had previously are behind us. So I imagine we now have a stable base now to proceed rising the tonnes out of the mine, and due to this fact, the metallic produced at Saucito. The deepening of the Jarillas shaft is progressing effectively additionally there at Saucito.
Shifting to Juanicipio. I am happy to report that after commissioning in Q1, the ramp-up of the current plan goes very effectively. Now we have not discovered any traditional issues on the ramp-up. So we’re in observe to attain nameplate capability throughout Q3. Manufacturing within the first half of the 12 months was sturdy at Juanicipio as we delivered simply over 4 million ounces of silver and metals and ounces of gold within the attributable foundation. However we had, in fact, the advantage of processing some ore in Fresnillo and Saucito, and we’re additionally benefiting from the upper grades within the higher ranges of the mine, which can normalize as we mine down within the following years. So total, has been an excellent begin of the Juanicipio mine as we had been anticipating.
In San Julian, not a lot remark. I imply, apart from efficiency was according to the expectations and we — with some influence within the Veins mine associated to low availability of apparatus that that its overcome and we count on an excellent second-half of the 12 months.
At Cienega, we now have a more difficult first half of the 12 months within the operations, as a result of we’re seeing decrease grades, after which excessive hauling value. As a result of a few of the higher grade ore is coming from satellite tv for pc mines far-off from the method plan space. In order that’s problem value there in that operation. Nevertheless, we imagine that Cienega has an excellent future, as a result of we now have higher grades on the reserves.
So — and we’re analyzing tips on how to get to that space sooner, possibly with a brand new entry to the mine that we’re analyzing. And we’re additionally piloting new know-how to pre-concentrate that high-grade ore that’s coming from far-off. So we might additionally cut back the hauling value influence in that portion of the operation. So we’ll hold you apprised of the progress in Cienega the place, like I stated, we’re working to lock that worth sooner or later, as a result of we imagine in the way forward for La Cienega.
Lastly, the operations at Herradura, we now have an excellent efficiency with nearly 180,000 ounces of gold produced within the first half. And this regardless of the labor stoppage that we had late in April, Might that was roughly reported. Regardless of that, the group there managed to maintain some stage of operations and the output was good.
Now, within the subsequent slide, I wish to present a short description of our cost-containment, cost-reduction effectivity tasks. Now, at Fresnillo, as I stated earlier than, the deepening of the San Carlos shaft, it will be very optimistic influence within the haulage value. So every time that is prepared we’ll seize that profit. Along with that, we now have about seven excessive influence initiatives happening at Fresnillo value $3 million to $5 million on financial savings on an annualized foundation. For instance, financial savings within the shotcreting course of by rationalizing the shotcreting, cut back pumping upkeep value. Then, the pretty distant drilling and autonomous drilling venture that’s listed there might doubtlessly produce in improved productivities representing as much as $7.5 million in annualized financial savings.
At Saucito, we now have 5 tasks having to do with the expediting of the mining cycle, which can enhance the mine output and due to this fact, the associated fee per tonne and instance of these tasks are the bottom supporting cycle, enchancment of that, or the optimizing on the long-haul drilling cycle. We’re additionally engaged on a venture to scale back consumption of reagents within the dynamic leach plant. The haulage fleet weight monitoring system itself, that’s already ongoing might produce to an estimate of $3 million in financial savings within the full-year and that is effectivity within the hauling produced to value financial savings.
At Herradura, 12 initiatives ongoing. So simply prolonged a lifetime, prolonged truck fleet main elements life, cut back diesel and pure fuel logistics value — sorry. All of that representing an estimate of $10 million and financial savings — of value financial savings in an annual foundation. So — and I am simply utilizing these three mines to — because the examples of the sort of tasks that we’re endeavor in all 4 mines to attempt to include the associated fee inflation and the trade charge that’s impacting us.
So, my ultimate message can be that we depend now on a stable operational efficiency of our portfolio of mines as a stable basis to now concentrate on steady enchancment, efficiencies and cost-containment.
Thanks, and over to our CFO, Mr. Mario Arreguin. Thanks.
Mario Arreguin
Thanks very a lot, Tomas. Good morning, everybody. If we are able to transfer please to the earnings assertion, okay. What you see on this slide is principally the earnings assertion for the primary half of the 12 months, and we examine that to the earlier 12 months. And as you may see from all of the totally different revenue ranges, that are outlined in yellow, we’re under final 12 months’s first half outcomes. Gross revenue was under nearly 23% in comparison with final 12 months. Working revenue was nearly 63% under final 12 months. Revenue for the interval was 36% under final 12 months and EBITDA was near 24% under final 12 months.
And with a purpose to perceive the decreases, I want to begin principally with gross revenue, the $83 million lower. If we transfer up that column, all the best way as much as adjusted revenues, you will note that we had a rise of just about $82 million in adjusted revenues. That was principally resulting from quantity. As Tomas reported, we had a rise in manufacturing of silver and gold. Whereas, costs, though silver and gold although went up on this first half, they had been greater than offset by the lower within the worth of zinc.
So costs did not actually do this a lot for us this primary half. It was extra by way of quantity when justifying that rising adjusted revenues. However, I believe, the merchandise that you’re largely serious about has to do with adjusted manufacturing prices, which elevated by nearly 17% or $114.5 million. And I believe, that is the road merchandise that I want to dedicate a while.
So if we are able to please transfer to the — what we name the rainbow evaluation. What we present right here on this slide is on the far proper hand aspect that bar reveals the rise in adjusted manufacturing prices, which was once more $114.5 million. And for those who transfer all the best way to the left on this graph, you will note the totally different variables that impacted our prices.
Beginning with the Bar 1, and a very powerful one, which had a very powerful impact for the interval was the revaluation of the Mexican peso. I am positive all of you’re acquainted with this. The peso has been one of many strongest currencies in comparison with the greenback, principally resulting from the truth that the curiosity that we pay in Mexico is way, a lot greater than the one paid within the U.S. So you may see that the common trade charge for final 12 months was $20.28 pesos, whereas for the primary half of this 12 months, it was $18.21. In order that interprets into a ten.2% revaluation, which had an influence — a unfavorable influence of $45 million.
Now, what we present on Bar 2. Sure, the influence of what we name the underlying value inflation. And the underlying value inflation is the one the place we exclude the influence of the Mexican revaluation. That is purely the rise in unit value, assuming zero revaluation of the Mexican peso. And this underlying value inflation for this primary half of the 12 months was 6.2% on an annualized foundation, which had a unfavorable influence of $41.6 million.
In the event you add these two first columns, you will note that you just get to nearly $87 million, which symbolize near 76% of the full change in manufacturing prices. So by far, I might say, these two parts had been a very powerful ones by way of impacting our adjusted manufacturing prices.
If we proceed to maneuver on, you will note that on Bar 3, we’re displaying the rise in absolute manufacturing prices derived from the truth that the Juanicipio mine ramped-up. It had extracted extra mineral throughout this primary half of the 12 months in comparison with the earlier 12 months. And also you’re additionally conscious that this 12 months, we began the operation of the plant. So, clearly, behind that, there was a $19.6 million improve in absolute adjusted manufacturing value, however we actually needn’t fear about this specific improve as a result of behind this improve, we noticed an important improve within the revenue.
Shifting on to Bar 4, and this has to do with a technical accounting adjustment, I might say. This primary half of the 12 months for the Herradura mine, one of the crucial essential element of the Herradura mine, a better stripping ratio which was under the common life-of-mine stripping ratio. What meaning is that, for this 12 months, we just about capitalize — I imply, expense as a result of earnings assertion. The entire value incurred in stripping on this specific element, which is a very powerful on the Herradura mine.
And on account of that, if you examine the first-half of the 12 months — of the earlier 12 months, the place we had precisely the other, we had a better stripping ratio and numerous that was capitalized. This 12 months, that stripping ratio once more was under the common life-of-mine stripping ratio. So we took extra of the stripping prices to the earnings assertion. And that had a unfavorable influence of $19.5 million.
The fifth column, what you see there may be principally has to do with the present operations. So there was a rise by way of the usage of upkeep, contractors, working supplies, diesel. And this was principally due as you’re conscious of longer haulage distances and deeper mines. And we’re additionally doing extra growth. All of this had a unfavorable influence of $16.7 million.
And lastly on column quantity six, we additionally noticed a better ore volumes course of at a few of our mines. Once more, we do not actually need to fret about this specific improve, as a result of behind that there was an extra revenue generated. And the 2 variables that one way or the other mitigated these hostile results had been one Noche Buena as you realize we’re in technique of closing that mine. So clearly that mine incurred final manufacturing prices. And likewise we reclassified a part of the associated fee incurred on the Herradura and Noche Buena, the place I am positive you keep in mind we had a stoppage, a authorized stoppage for 14 days. And what we did there may be these fastened prices primarily salaries. Now we have reclassified these to unproductive prices.
So let me simply return a bit, and — so I imagine there are two questions that you just would possibly ask. One, how a lot of this was recognized by the market? And two, of the modifications that we present right here on this slide, which will we take into account to be structural or everlasting, and which will we take into account to be short-term or that may be reversed? Beginning for the primary query, how a lot did the market find out about this? And if we begin with Bar 1. Nicely, this should not be any shock in any respect. I imply, that is public info by way of the trade charge and everybody could be very a lot conscious of that. So this isn’t secret.
Second, what we name the underlying value inflation. In early March, once I was sitting right here, a few of you requested me what inflation was anticipated by the corporate. Excluding the trade charge results, and I used to be fortunate as a result of I answered six. So this was just about recognized by the market too. So the market knew about these two first columns, which once more represents 76% of the full improve. Juanicipio mine ramp-up and the startup of the plant additionally market knew about that. So clearly when you have a brand new operation that will improve your absolute adjusted manufacturing prices.
Column quantity 4, the stripping. The elevated stripping prices taken to the earnings assertion. Nicely, possibly we — I imagine we talked about, a part of that within the March assembly that we had right here. However once more, that was technical accounting subject. And once more the one which we’re engaged on is the one displaying in column quantity 5. Nicely, Tomas has defined definitely the actions that we’re attempting to make with a purpose to mitigate that type of deepening and longer distances in our mines.
Now, query quantity two what number of of those bars are structural or everlasting and which of them are short-term. Once more, beginning with column primary.
From my perspective, I imagine this is likely one of the variables that may very well be reversed or that’s short-term. How lengthy will we count on the peso to keep up this energy? Nicely, it is laborious to say. I can let you know that for the second half it will be even worse, as a result of within the first half, we had an 18.21 common trade charge.
In the event you take a look at the H1’s charge proper now’s 16.7%. So it is even under the common of the primary half. We actually do not see any causes for that to vary within the quick time period. In fact, we will have Elections subsequent 12 months, however we’re not anticipating that this political state of affairs might have a unfavorable influence on the trade charge except one thing unexpected occurs. However within the medium-long-term, we do not imagine that the peso can maintain this energy and finally it’s going to possibly come again a minimum of to ’21, ’22 ranges that we simply noticed six or seven months in the past. So, sure, this primary half, I imagine will be reversed.
The second column, inflation. I believe that is structural and everlasting except we begin seeing deflation and decrease unit costs. However we aren’t anticipating to see that. The Juanicipio mine, once more, it is a good factor. In order that’s everlasting. It should keep there, however producing good earnings.
The stripping to prices, effectively, that modifications relying on — if the stripping ratio is above or under the lengthy — the lifetime of mine stripping ratio. So once more, it involves column quantity 5. Our mines are already deep and our open-pit mines have elevated the distances. And they’ll proceed to take action. So, as soon as once more, the one factor that we are able to do is attempt to mitigate these results i.e. implementing methods to be extra environment friendly and extra productive. And once more, Tomas, simply spoke about that a couple of minutes in the past. So I hope this provides you a transparent concept of what we see our value going. If we are able to return to the earnings assertion, please?
The opposite merchandise that I believe it is worthwhile speaking about is exploration bills. As you may see, we had a rise of just about 25% or $19 million. So we spent near $97 million within the first half, which is barely above what we guided for initially of the 12 months. However we count on to, on the finish of the 12 months, just about be according to what we guided you. So most likely we’ll see decrease exploration bills within the second half to fulfill the steering that we gave.
However most of this improve has gone, to not the working mines, however slightly to the brand new exploration tasks that we’re at present engaged on. That is one other line that will be attention-grabbing to speak about, is the Silverstream. You already are very a lot conscious of this. This has no money impact. Nonetheless, we now have to worth to market the Silverstream that we maintain with the — with Penoles’ Sabinas mine.
And given the truth that the costs — ahead costs, after we did this valuation, as of the shut of June, ahead costs had been decrease for silver. We needed to incorporate that into the mannequin and likewise the truth that Sabinas has reported a bit decrease reserves and assets that interprets right into a bit much less silver. I imply that mine sooner or later.
So all of that was considered and the end result was a $17 million discount. Nevertheless, examine that to the earlier 12 months, the place we had a a lot greater impact coming from decrease silver worth after which rising the rates of interest that we used to low cost the money flows. Imagine it or not, that had a optimistic impact of $19 million.
The opposite line gadgets, that I believe it’s best to touch upon are earnings tax expense and mining rights. It’s extremely uncommon and, I might say distinctive to see optimistic numbers there. So I imagine this shall be one of many few firms that’s reporting greater after tax revenue through the interval. And the rationale — when in comparison with the revenue earlier than earnings tax.
And the rationale for that, and this isn’t the primary time that this has occurred. Given the influence of the revaluation of the Mexican peso on deferred taxes and likewise the influence of inflation. However most significantly, the revaluation of the Mexican peso. That has an amazing influence by way of the deferred taxes. So, how we get that — that is the way you get to $89.7 million of revenue for the interval, which is greater than the revenue earlier than earnings taxes. Once more, if the peso goes again to the ’21, ’22 peso per greenback stage, this shall be fully reversed sooner or later. And that is what we count on to occur finally.
And if I skip a few of the strains, I am comfortable to reply these through the Q&A. On to the following slide, please. The following slide. I simply wish to be sure that we’re clear on what we perceive by what we name consolidated value inflation.
Within the Rainbow that I defined to you separated, what we name the structural or the underlying value inflation from the revaluation of the Mexican peso. Nevertheless, if you take a look at them collectively, mixed, that is how we get to do what we name the consolidated value inflation. Which once more takes into consideration our personal specific basket of inputs. And the weighted common of every a type of and that is how we get to the 13.35%.
Once more, for those who take the revaluation of the Mexican peso impact out of this, that is the way you get to the 6.2. So, hopefully, this idea is obvious. And if we are able to transfer to the following slide. I believe that is essential to indicate in a short time. And by the best way, the shaded a part of the circle there may be principally related to contractors. So, contractors, clearly convey their very own personnel, convey their very own cellphone tools, convey a few of their very own working supplies and likewise do a part of the upkeep they usually cost us for every a type of elements.
However anyway, as you may see, working supplies as a complete represents a very powerful element of our adjusted manufacturing representing 23%, adopted by personnel, which represents 20%. Once you mix each our personal personnel and contractors. Upkeep represents roughly 20%. Vitality, principally which means diesel greater than electrical energy represents 18%. And a bunch of different issues, symbolize 12%. So, if you mannequin Fresnillo, it’s best to take this into consideration and likewise consider that between 40% to 45% of the manufacturing prices is denominated in and paid in pesos. And that is the place we get hit when the peso revaluates.
Transfer to the following slide, please. So to conclude, let us take a look at the various factors that affected gross revenue. So once more, the inexperienced bar on the fitting hand aspect represents the $83 million decrease gross revenue.
So what benefited us? In fact, the Juanicipio mine ramp up and the plant startup. Bear in mind after we spoke about manufacturing value, I stated that that was a element that elevated our value, however on the finish of the day, it greater than lined up that value and generated an extra $59.2 million in gross revenue.
Additionally the truth that at a few of our present working mines, we had a better quantity, that additionally elevated our prices, nevertheless it was extra compensated by the rise in gross sales, which clearly lined that and generated $42.6 million in further earnings.
I spoke about greater metallic costs. In fact, gold and silver had been up a bit, 4.2 within the case of gold, 2.4 within the case of silver. Nevertheless, for those who take a look at Column quantity 10, the value of zinc nearly got here down by 30%, and that is turning into an important byproduct.
So the influence of the decrease base metallic costs or byproducts had a unfavorable influence of 51.3, which greater than offset the optimistic impact of the upper gold and silver costs, $38.5 million. We additionally had what we name a gold stock uplift at Herradura.
So what we noticed at our leaching pads was that the stock was coming down and down and down, and we had been going to get to some extent the place it was going to be zero or unfavorable. So we did an evaluation to see how a lot actually was at our leaching pads, and we got here to the conclusion that there was a bit extra gold than what we initially estimated.
In fact, this was audited by Ernst & Younger, who’re auditors. And on the unfavorable aspect, in fact, you have got once more Columns 9 and eight which symbolize the revaluation of the Mexico peso, the associated fee inflation and the upper stripping to prices, all of these components we spoke about within the earlier slide.
So this provides you an concept of the issues that helped us and the issues that went towards us in terms of gross revenue. If we are able to transfer on, please. Sure, I am not going to touch upon this. I assumed it might be good so that you can know the place we’re investing by way of exploration. And as I stated, we’re dedicating numerous assets to prospects and tasks. That is the place the rise was positioned.
Subsequent slide please. Lastly, by way of money movement. As you may see on the underside, first column. We closed the primary half of the 12 months with nearly $880 million which represented a lower within the money steadiness in comparison with what we had initially of the 12 months of $79.4 million. However for those who take into account that we paid dividends for $98 million, you might conclude that we had been web money optimistic excluding the dividend funds, which had been $98 million.
So the primary supply of money got here clearly from the operations, $323 million. I might say the primary makes use of of money had been clearly, taxes paid, profit-sharing paid. Bear in mind, this represents money funds through the first half, principally provisional tax funds and likewise mining rights that we paid in March akin to 2022, however had been paid in March this 12 months, and the revenue sharing akin to 2022, which was paid in Might this 12 months.
These principally are the ideas that kind the $192.3 million. And on the essential information, in fact is CapEx, $228 million, a part of that’s mine growth, and a part of that’s plant and tools, and the dividends paid is $98 million. These had been the primary makes use of of money.
And with that, I’ll depart it at that and when you have any doubts or questions, I am very comfortable to reply these through the Q&A.
Octavio Alvidrez
Thanks, Mario. And coming to the final a part of our presentation, we have seen a rise in silver manufacturing this 12 months stage, I might say manufacturing in gold. As you may see the conduct of lead and zinc. Silver, in fact elevated coming after we’re working Juanicipio, ramping it up and likewise we’ll see some contribution from the Pyrites plant as effectively.
On the CapEx aspect, we now have been reviewing our CapEx wants for this 12 months and this has come down from $630 million to $555 million. By way of reviewing our wants, as I discussed, in addition to this system and the timing for that CapEx deployment. We’re forecasting ’24 and ’25 on the similar stage as we had it earlier than.
By way of the tasks on how these are wanting, as I discussed, happy to report that Orisyvo goes to pre-feasibility. We’re ramping and aiming to nameplate capability Juanicipio in Q3 this 12 months. We talked about the Pyrites plant is working proper now. And good to report good efficiency and worth being moved ahead within the case of Guanajuato with some good exploration outcomes in addition to Tajitos.
So within the coming months and years, we’ll see Tajitos and Rodeo one way or the other rivalry every a type of, about the identical measurement open-pit tasks that might flip into operations, Tajitos neighboring Herradura and Noche Buena. Rodeo in an excellent space by way of infrastructure with power, water, and labor as effectively.
Orisyvo, good challenges mendacity forward by way of infrastructure and funding, in fact is a venture that we nonetheless should de-risk by way of metallurgy and all the pieces, however is wanting good each time or higher each time. And Guanajuato, an outdated mining district within the Central a part of Mexico, underground mine, good exploration outcomes up to now and we’ll proceed to creating it development.
So to conclude, I imply we’re posting an excellent efficiency, I might say. As we talked about, all the best way and the totally different hyperlinks of the chain are making good progress on the exploration, a gradual progress with strong operational efficiency, higher efficiency in Fresnillo, turning Saucito as we talked about, to a extra optimistic efficiency as effectively and Juanicipio easy ramp-up and aiming to attain nameplate capability in Q3. Our focus shall be for the next months on value management. We’re deploying variety of initiatives throughout all of our operations. And based on all of this, we’re reiterating our steering for 2023.
And with that, we are able to go into your questions. Thanks.
Query-and-Reply Session
Q – Daniel Main
Thanks. Dan from UBS. The primary one, simply to recap on the associated fee topic. Your manufacturing steering implies just about flat or related ranges of manufacturing within the second half. Subsequently, ought to we assume an analogous run charge, excessive $700 million, $800 million in sort of manufacturing prices in half-on-half. Clearly, the year-on-year there was a giant value step up resulting from inflation this time final 12 months. However is that, broadly talking, the correct of run charge to count on within the second half?
Okay. After which simply into 2024, if you checked out these variables, clearly nobody’s in charge of the trade charge. Taking a look at your different, if we had been simply to imagine related run charges on the FX charge. You’d nonetheless see inflation in your total value base in greenback phrases in 2024, is that right? Since you bought a full-year of manufacturing at Juanicipio, and I assume inflation will not be zero. Is that the fitting mind-set about it?
Mario Arreguin
By way of absolute phrases?
Daniel Main
Sure, greenback phrases?
Mario Arreguin
However absolute, not unit value.
Daniel Main
No greenback phrases simply over your manufacturing is broadly flat. Ought to we assume that greenback prices are a minimum of flat or up subsequent 12 months?
Mario Arreguin
Flat or up barely, I hope — and hopefully we’ll see a few of these tasks that Tomas was speaking about leading to some type of financial savings.
Daniel Main
Okay. Thanks. After which simply subsequent one in your Herradura specifically, you talked about that stripping ratio is down relative, clearly to earlier durations. To be sincere sustaining value of the property over $750 an oz.. And for those who’re on the under the lifetime of mine stripping ratio, I assume that has to return up or a minimum of be related going ahead. It would not really feel there’s numerous DCF worth within the asset at present gold costs if that is the sort of run charge, the place do you count on the medium time period trajectory by way of CapEx prices? And is there a danger started impairment on the asset on the full-year outcomes?
Octavio Alvidrez
On the Herradura mine?
Daniel Main
Sure.
Octavio Alvidrez
Nicely, I believe you are proper in your evaluation. I am undecided precisely how this stripping ratio goes to behave within the subsequent following years, if it will be above or under, however that mine would require sure funding in CapEx. Sure.
Daniel Main
So we must always assume a money breakeven value related or greater than the place we see within the first half of this 12 months $1,700 $1,800 an oz.?
Octavio Alvidrez
Round that, sure.
Daniel Main
Going ahead?
Octavio Alvidrez
Going ahead.
Daniel Main
Okay. And is there a danger we see an impairment for those who do not rebase your long-term assumptions to a minimum of that sort of stage? As a result of I assume by definition, there’s not a lot worth within the asset if it.
Octavio Alvidrez
I do not assume we’ll get to that time to be recognizing an impairment.
Daniel Main
Okay, I will depart it there.
Octavio Alvidrez
As within the open pits, this 12 months was greater stripping ratio than the common of the mine life. However in coming durations, I imply, that shall be reducing, in fact, and we could have higher stripping ratio than the mine life common. And likewise, the opposite research that we’re ready is the slope…
Tomas Iturriaga
Slope optimization that we’re present process proper now, and that might doubtlessly result in much less waste to be faraway from the pit. Sure.
Octavio Alvidrez
Additionally, because it has occurred previously with Herradura, with the exploration we do. We often flip a few of the blocks that weren’t purported to be or across the open pit, and that offers us further imply. So all of these variables are enjoying proper now. So we count on higher efficiency sooner or later.
Daniel Main
All proper. So the stripping ratio is coming down relative to what we noticed throughout this era. Okay.
Octavio Alvidrez
Sure.
Jason Fairclough
Sir, I am Jason Fairclough of Financial institution of America. Simply a few questions across the development tasks, as a result of I assume what I am listening to right now is that you’ve a bunch of gold mines. You are type of working to face nonetheless by way of prices. The truth is, you are not. Prices simply proceed to work towards you. I really feel like the best way the group used to offset this was by having a pipeline of latest tasks coming by way of.
And clearly Juanicipio helps. What’s subsequent? Like, if I take a look at your slide right here with the outlook and the expansion tasks, there is a little bit of a gap, proper? And even when I take a look at Rodeo, even you are saying manufacturing in 2025, however you are still finding out it, proper. So are you involved about that Octavio? Prefer it seems like extra must be taking place, stuff must be accepted proper now, but it would not really feel like issues are prepared. Is that honest or unfair?
Octavio Alvidrez
It’s. Jason, I imply, if we glance again for the final 15 years, we used to have nearly a brand new venture each different 12 months approaching stream. We had at first, Soledad & Dipolos, Noche Buena, then Saucito then the Saucito growth, in fact, in San Julian. Sure, now we face some two, three years and not using a new venture approaching stream.
And on the similar time, these two, three years I imply we’ll proceed doing what we are able to do in Fresnillo, as I discussed, higher efficiency, a bit extra grade Saucito turning level. So we’ll think about working extra environment friendly. And higher the Fresnillo, Saucito and the present working portfolio.
Now by way of development, sure, we do have these two, three years and not using a venture approaching stream. Subsequent one by way of much less difficulties is Rodeo. In fact, every time we struck a take care of the land entry, I believe it might be a matter of exploring six, seven months, turning these inferred assets into indicated run the prefeasibility, not a big CapEx venture. Within the meantime, we carry on as balancing or receivable. Sure, these two, three years, we do have that hole.
Jason Fairclough
Simply to push you on this once more, it is as a result of I wish to perceive, is the issue an underinvestment in exploration? Is the issue you are simply being unfortunate right here, you are not discovering good tasks? Is the issue an absence of useful resource for the venture group? Or is the issue truly simply Mexico? And you’re feeling like, effectively, let’s simply decelerate and we’re not going to be in a rush to take a position?
Octavio Alvidrez
I believe it is a mixture of issues. Primary, I imply, Rodeo is group associated points. Not with the ability to concrete the land entry. Orisyvo, though it’s a massive useful resource base, we wanted time to strengthen to the degrees by which we just like the Fresnillo property to run them by way of prefeasibility to feasibility. So we wanted to danger that asset by way of recoveries the logical recoveries, one thing that we’re doing proper now, wanting higher each time. So it simply takes time to undergo prefeasibility.
In order that’s technical points I might say alongside the risking that venture. And the opposite ones is simply Tajitos that we wanted to consolidate with totally different ownerships in depth of cash concession. One thing that we have carried out only in the near past. And Guanajuato is simply the exploration and the way that has developed. So it is a mixture. Mexico remains to be not enjoying a big facet by way of challenges proper now. I imply as a result of it has to do with how we are able to develop the portfolio. So it is these different features specific to the totally different tasks, however in numerous features, I might say.
Jason Fairclough
So that you assume it is the property? You do not assume there’s an organizational subject the place you are underneath resourcing the venture groups?
Octavio Alvidrez
No, probably not I imply if we glance again on the useful resource we now have devoted by way of exploration, it has been at an excellent stage. And we maintained the useful resource base I might say, nevertheless not being fortunate or profitable with a purpose to concrete one venture to usher in the next 12 months, 12 months and a half.
Jason Fairclough
Thanks.
Octavio Alvidrez
Sure.
Unidentified Analyst
Thanks. Are you able to give us a bit extra particulars in regards to the drivers behind your lower in CapEx steering for the 12 months? And possibly as an extension of that, do you see any potential for CapEx steering in 2024 and ’25 to be diminished?
Mario Arreguin
Sure, the discount this 12 months is simply primarily based on a evaluation for forecast for the remainder of the 12 months. Enhancements in timetables, revise engineering some tasks, lowering the precise spend by way of the 12 months, principally. And sure, for subsequent 12 months, I might say, I do not foresee any main improve. I imply, ought to stay per the steering as we see it right now. Major bills subsequent 12 months can be tailings dam, some mine tools, primary sustaining CapEx along with no matter we discover for brand spanking new tasks.
Octavio Alvidrez
Sure, that’s primarily sustaining. And if we carry on advancing our tasks, in fact, that will be along with what we noticed within the chart. It has to do with the levels of prefeasibility and a few CapEx deployment at every specific particular venture.
Unidentified Analyst
Thanks.
Octavio Alvidrez
Sure.
Danielle Chigumira
Thanks. It is Danielle Chigumira from Credit score Suisse. One other query on the tasks. So what you’ve got seen is you velocity up the exploration spend and decelerate the CapEx spend within the first half of this 12 months. Ought to we interpret that as you needing to extend the standard of the remaining tasks, your venture pipeline basically?
Octavio Alvidrez
We had the permits, which is sweet to discover Guanajuato and Tajitos. We’re doing good exploration outcomes there. So we velocity up a bit extra the exploration tempo in these two tasks. However with a purpose to come to our funds, I believe we’ll within the second half of the 12 months we diminished the tempo. We can put up a rise in assets in these two tasks, and the remaining primarily is within the operations as I discussed and in another tasks like San Juan, Candamena at a decrease tempo. Additionally we’re exploring in Chile and Peru, however the primary two tasks which might be mirrored within the greater exploration funding within the first half was associated to Guanajuato and Tajitos.
Danielle Chigumira
All proper. And also you sort of talked about that Rodeo and Tajitos are related can be competing for capital. However because it stands on the venture pipeline, they’re at very totally different timelines. Rodeo is meant to be 2025 and Tajitos will not be on the web page. So how seemingly it’s, is it that Rodeo is delayed materially so as in order that there are related timelines with the intention to consider them side-by-side?
Octavio Alvidrez
It’s associated to the sort of venture. I imply Tajitos, we’re very acquainted with exploring in that space. As I discussed, we now have the land there on the floor, the permits, all the pieces. So the exploration may very well be fairly fast with a purpose to go from inferred assets into indicated. If we do not need — we aren’t profitable in Rodeo within the following months, I believe we’ll see Tajitos outpacing Rodeo. Okay, in order that’s the one query that is why I believe as an earlier venture Tajitos it’s not a timeline mirrored within the chart that we offered.
Danielle Chigumira
Okay, so it is extra seemingly that Tajitos is pull ahead a bit.
Octavio Alvidrez
That’s right.
Danielle Chigumira
Okay. And from a decarbonization perspective, you talked about doing research at Fresnillo, Herradura to see what agency targets you can provide round these operations round decarbonization, which is nice to see. When do you assume you’ll begin and end that very same work for the steadiness of the portfolio?
Octavio Alvidrez
Sure. We began this evaluation and this analysis with NG. The research intimately was I discussed Fresnillo and the alternatives what we now have there as an underground mine and being the biggest within the portfolio and likewise in Herradura. With these two features, I imply we’ll be capable to collect essential info, hopefully by the top of the 12 months or starting of subsequent 12 months. And with different research that we’re doing by way of local weather change within the areas the College of Arizona and another initiatives science-based, we could have all the data hopefully earlier subsequent 12 months with a purpose to outline our method ahead.
Danielle Chigumira
Thanks. After which ultimate one from me. And for these of us who aren’t Mexican economists, what provides you the conviction that medium-term the peso will revert again to weaker ranges?
Octavio Alvidrez
We’re not truly positive that that can occur, however the peso has strengthened due principally to distinction. I might say to distinction in rates of interest which might be being paid in Mexico versus the U.S. Mainland. And we won’t hold that charge 11.5% danger free authorities paper being paid out. So these charges finally will come down. And once they do come down, possibly we expect that that is as a consequence, peso will lose a few of its energy. However then, once more, I am not an economist. That is the best way I see it. And there are specific different components political, you by no means know what might occur there. Now we have an election 12 months developing subsequent 12 months, in order that’s an extra issue that you must consider.
Sandeep Peety
Good morning. Thanks for taking my query. That is Sandeep Peety from Morgan Stanley. So I had three questions. Firstly, on the labor reforms, are you able to tell us what are the brand new labor phrases? When do you count on them to be efficient? And on Slide 21, what stage is it solely the labor that will get impacted, or is it additionally the contractors and upkeep?
Tomas Iturriaga
Truly, the labor reform got here into impact in 2021. Mainly, that was on the finish of 2021, September, October of 2021. Mainly what affected us was the truth that the regulation forbidden firms from hiring contractors to hold out what the federal government calls the primary actions of the corporate or the core actions, core enterprise of the corporate. In our specific case, we had a really massive base of contractors performing core enterprise actions, so we needed to substitute these with our personal staff. However once more, that came about principally in 2022. We’re just about carried out with that. In order that was one of the crucial essential features of the brand new labor regulation.
Sandeep Peety
I do know, I used to be extra referring to the labor phrases that had been settled just lately. The labor hikes or…
Tomas Iturriaga
The rise in wages.
Sandeep Peety
Improve within the wages? Sure.
Tomas Iturriaga
Okay. I assumed you stated. Okay, now we now have an annual evaluation of contracts. Each two years, we evaluation extra in depth the contracts, the French advantages, all the pieces. And yearly we do negotiate the rise in wages. Usually, what we use to barter that as a foundation is the earlier 12 months’s inflation. So in 2022, we had an 8% or a bit greater inflation in Mexico based on the Client Value Index. In order that’s why we have granted an 8.5% improve in peso phrases. Proper? However if you mix that 8.5% in peso phrases and compounded by the devaluation of the Mexican peso that is the way you get near the 20% in greenback phrases.
Sandeep Peety
Okay, okay and does it solely apply to the labors or additionally to the contractors and upkeep the bucket that we now have offered on Slide 21?
Octavio Alvidrez
I am undecided I understood.
Sandeep Peety
Does it additionally apply to the contractors and upkeep? So the bucket that you’ve got offered on Slide 21, for those who return to Slide 21?
Octavio Alvidrez
Sure, every contractor firm negotiates their wage will increase on their very own, I imply, we have negotiated the wage will increase for a unionized personnel and the remainder of the businesses negotiate for every one of many known as earlier workforce. However we are able to assume that’s roughly related improve.
Mario Arreguin
Okay, okay. And possibly you’re returning to a minimal wage improve of 37% that the federal government introduced earlier within the 12 months, however that has nothing to do with us, as a result of none of our personnel makes minimal wage, so it is a totally different, proper? It would not apply. Possibly that is what is complicated.
Sandeep Peety
Okay, thanks. After which one clarification on absolutely the manufacturing value. So the $800 million for 2H that you’ve got guided for, is that contemplating the spot FX charge or is it contemplating 1H FX charges?
Mario Arreguin
Contemplating that the trade charge stays at round MXN17 per greenback, stays the identical.
Sandeep Peety
Thanks.
Patrick Jones
Sure. Hello. Patrick Jones, JPMorgan. I do know there may be some proposal modified mining laws just lately I believe again in late Might or early June, might you simply give a little bit of replace as to the place these stand and what you see because the potential outcomes of that influence?
Octavio Alvidrez
Sure. It relies upon — I might say for those who can’t take a normal strategy. It is determined by every one of many mining firms, for instance within the case of Fresnillo by which we now have a big mining concession. It might not — we won’t be impacted by the present administration not granting new mining concessions in Mexico, for instance.
So with the concessions we now have on-hand within the case of Fresnillo, we can probe for the next years with no downside, in fact, each for a brand new mining firm, in fact, that symbolize very numerous problem — a really massive problem or for these mining firms that wish to deal and improve their mining holdings, in fact.
By way of the all features just like the indigenous session, within the case of Fresnillo in fact, we have gone by way of a type of course of. The primary one within the mining trade in Mexico again after we wanted to construct a water pump reservoir for San Julian.
We went by way of that course of as effectively and it was an excellent studying expertise, one thing that we’re ready for. And similtaneously I discussed this, that will not be influence within the case of Fresnillo. By the mining chamber in Mexico and an excellent dialog with the present administration, we’re defining the working guidelines for that new mining regulation, in order that we imagine we are able to get to an excellent final result for making the brand new mining regulation good to function nonetheless as it’s. On the similar time, in fact, we’re additionally constant sample trying to find a invoice, we’re going by way of a authorized course of with a purpose to attraction to this mining regulation as effectively.
Patrick Jones
Sure. Can we return to incorporate statements? Simply a few numbers there with clarification so the unproductive prices there. Is {that a} one-off that reverses, Mario?
Mario Arreguin
That is what’s that is the one-off. Like I stated as a result of stoppage that we had on the Herradura and Noche Buena mine, we took out of the adjusted manufacturing prices and reclassified that.
Patrick Jones
So it is probably not the adjusted manufacturing, so if something we might be adjusting the adjusted manufacturing prices are up by $21.5 million, as these issues come again on-line?
Mario Arreguin
Along with further [indiscernible] due to the 14 days again that we stopped.
Patrick Jones
Sure, okay, after which the opposite one was simply, for those who look under the road, we have got different earnings expense $33.5 million. There’s not a small improve to $26.3 million. So what’s in that quantity?
Mario Arreguin
Okay. I imagine we reported that. It was some unlawful extraction of gold at our Soledad-Dipolos pit.
Patrick Jones
That is impact?
Mario Arreguin
Sure, that is one other phrase that you should utilize.
Patrick Jones
Okay.
Mario Arreguin
You do not forget that Soledad-Dipolis been, for instance, placed on maintain as a result of there may be — there are folks there who’re claiming that that is their land, proper? What we have seen is that — and recognized is that there may very well be sure exercise happening by way of extracting illegally the gold contents at these leaching pads, that are at present not working. So we had a list of gold there acknowledged in our steadiness sheet. We have estimated as finest as we might, how a lot of that stock has been misplaced resulting from these unlawful extraction actions. And that is what is included in there.
Patrick Jones
So, that is a non-cash bills, is it?
Mario Arreguin
It’s a non-cash, nevertheless it’s actual gold stock that is been extracted of the leaching pads at Soledad-Dipolis.
Patrick Jones
Okay after which conversely, we have got a write-back of $22 million of stock in Herradura?
Mario Arreguin
Sure, that was as a result of uplifting inventories.
Patrick Jones
Okay.
Mario Arreguin
That is occurred earlier than.
Patrick Jones
Kind of fantastic with that. However this one is a bit uncommon, proper?
Mario Arreguin
It’s, it’s, sure.
Patrick Jones
And finally, it is a monetary loss to the corporate in its results or is that is likely to be something?
Mario Arreguin
It’s an estimate that we ‘ve carried out as a result of — however we have seen within the space. And we’re within the technique of discussing this actually with the authority as effectively and on the similar time, we now have this dialog with the communities with a purpose to return to the world as effectively. So all of that’s easy. However what we’re –our goal is to ask the authority to intervene and stop in fact that criminality, sure.
Patrick Jones
Okay. Thanks.
Octavio Alvidrez
Received a query on the strains, if we are able to take that one. Operator, can we take the query on-line, please?
Operator
Definitely. [Operator Instructions]. Our first query comes from Amos Fletcher from Barclays. Amos, your line is now open. Please proceed.
Amos Fletcher
Hello there guys. Couple of questions, first one on Juanicipio, the grades had been a bit above expectations, are you able to give us any steering on grades for the second half and into 2024, please?
Octavio Alvidrez
Sure, the grade goes to stay on the similar stage that we noticed within the first half and we could also be somewhat bit — somewhat bit higher as we use much less stockpile ore, which we had low-grade that we used to begin the plant till we normalized the mineralogy of the plant. So I might say somewhat bit higher within the second half, however not a lot, proper, there are on the identical.
Mario Arreguin
Sure, Amos. Thanks. Let me offer you somewhat bit extra colour going ahead as effectively. I imply, and the way we now have began the operation. Now we have began our course of in some growth ore low-grade with decrease grade initially. I imply that after which we now have began mining the stopes, in fact that come recent manufacturing from the mining the stopes. That is why we noticed a rise within the grade.
Going ahead within the following years, as is it within the Fresnillo District, we’ll see an analogous development, greater grade initially for the next two to 3 years after which coming down at that the silver grade and extra improve in base metals as effectively. That is why we talked about previously as a reference a metallic content material common per 12 months by way of silver and gold . However we’ll see the identical conduct, initially greater silver grade after which after the next years begin lower in — improve in base metals.
Amos Fletcher
Okay, thanks. After which one follow-up is, simply round Cienega all-in sustaining prices was over $3,000 an oz., is there something you are able to do to convey that again down?
Octavio Alvidrez
Sure. Sure, it has been unusually excessive this 12 months due to our funding in tailings dam infrastructure principally and a few elevated growth that is quickly clearly. So we must be carried out with the expanded capability of the tailings dam this 12 months after which will normalize.
Amos Fletcher
Okay after which ultimate query was simply to ask on tax. You have been reserving some materials, optimistic accruals within the P&L for the final two halves. However on the similar time making large money tax funds, is that sustainable and may these two align sooner or later, and in the event that they do, does that imply, money tax funds are going to scale back, so ought to we count on the P&L tax to normalize to return to outflows? Thanks.
Octavio Alvidrez
I am undecided I understood the query.
Amos Fletcher
It is mismatch between the money funds in tax versus the optimistic accrual in tax. Does that normalize?
Octavio Alvidrez
Nicely, like I stated, tax funds are principally associated to provisional tax funds. So in Mexico, what you do is principally primarily based in your earlier 12 months revenue stage. And there is a formulation whereby you calculate a sure issue that you just apply to gross sales on the next 12 months with a purpose to pay provisional taxes through the 12 months. On the finish of that 12 months and in March of the next 12 months if you put together your tax statements, you are evaluating the actual quantity that you just get versus your provisional tax funds. And for those who paid extra you recuperate that half that. In the event you paid much less, you pay up.
Amos Fletcher
So money taxes ought to go down?
Octavio Alvidrez
Sure.
Amos Fletcher
Can we get steering to your efficient tax charge on a money foundation 2024?
Octavio Alvidrez
Not at this time limit.
Amos Fletcher
However must be corresponding to your P&L steering vary, all else equal by way of what we all know with FX and all of that.
Octavio Alvidrez
Nicely, we’ll simply work on that factor and get again to you. I am not ready to reply that query proper now. Sorry.
Amos Fletcher
Can I ask one query? So on value initiatives final time that you just talked about was that the inflation goes to be round 6%, which shall be offset by the associated fee financial savings. So now the associated fee financial savings have moved to 2024, is that proper?
Octavio Alvidrez
Nicely, a part of the associated fee financial savings shall be integrated this 12 months as we evolve within the tasks and the figures that I discussed had been calculated in a full-year foundation, however these are ongoing initiatives that can seize as we progress by way of the 12 months and thru the tasks.
Amos Fletcher
So when do you propose to complete them fully? Is it ’24 or ’25?
Octavio Alvidrez
I might say most of them throughout this 12 months, I imply, that is what we plan, however sure, I might say, second half and first quarter of subsequent 12 months till we end all of it after which it is sustainable, proper? As soon as we’re carried out with the tasks, the profit is to remain within the operations.
Amos Fletcher
Thanks.
Tomas Iturriaga
Anyone from new line please.
Operator
Our subsequent query comes from Krishan Agarwal from Citibank. Krishan, your line is now open. Please proceed. Krishan, your line is now open. Please proceed along with your query.
Tomas Iturriaga
Okay. Let’s transfer on.
Operator
Krishan, we seen — okay. We at present don’t have any additional questions registered. So I want to hand the decision again for ultimate remarks.
Octavio Alvidrez
Thanks all. Thanks very a lot.
Mario Arreguin
Thanks.
