Champion Iron Limited (CIA.TO) has announced its first quarter results for the fiscal year 2025, showcasing a period of robust performance and strategic advancements. The company achieved record sales, crossing the 3.4 million tonnes mark, and produced approximately 3.9 million tonnes of high-grade iron ore. A notable achievement during the quarter was the maintenance of cash costs at around $77 per tonne, despite various operational challenges.
Key Takeaways
- Champion Iron reported record sales of over 3.4 million tonnes and production of approximately 3.9 million tonnes.
- EBITDA stood at $180 million, with a net cash position of about $18 million.
- The company successfully managed a forest fire incident with minimal production impact.
- Champion Iron is progressing with the DRPF project, expected to be operational in the second half of 2025.
- High-grade iron ore has been designated as a critical mineral by the Canadian government, potentially benefiting the company's growth projects.
- Additional railcars and mining equipment have been acquired to increase capacity and reduce stockpile.
Company Outlook
- Champion Iron is targeting on-time, on-budget delivery of its DRPF project.
- The company is close to aligning production with logistics, despite setbacks from the forest fire.
- Growth initiatives to be supported by secured green hydroelectric power.
- The company is transitioning towards DR pellet market pricing formulas and away from traditional iron ore pricing.
- Continued focus on supporting community governance and sustainability efforts.
Bearish Highlights
- The forest fire near operations caused a week's production downtime.
- The company has not provided a specific timeline for destocking their stockpile.
Bullish Highlights
- Champion Iron's high-grade product is in demand for its cost and pollution reduction benefits.
- Access to government funding for critical mineral projects.
- Secured contracts and additional power sources to support growth and decarbonization efforts.
Misses
- No specific misses were discussed in the earnings call summary provided.
Q&A Highlights
- Additional railcars are being built and will be delivered in early 2025.
- The potential benefits of high purity iron ore designation for the Kami project include access to special funds for infrastructure.
- The company is discussing potential partnerships for the Kami project.
- Champion Iron is focused on providing dividends while keeping costs down.
During the earnings call, executives of Champion Iron expressed confidence in the company's strategic direction and its focus on the burgeoning market for green steel, which is expected to command a premium. The designation of high-grade iron ore as a critical mineral by the Canadian government was highlighted as a significant positive development for the company's growth projects. Executives also detailed their efforts in community support and environmental sustainability.
The company's proactive approach in handling the forest fire incident and its commitment to safety and environmental stewardship were also emphasized. With the acquisition of additional mining equipment and railcars, Champion Iron is poised to increase its capacity and reduce stockpile tonnes, aligning with their goal to match production with logistics.
Champion Iron's focus on innovation and efficiency is evident in its plans to commission a high-grade plant within 12 months and to move towards pricing formulas that are independent of the traditional iron ore index. The company remains focused on its current market and is exploring opportunities to provide dividends while managing costs effectively.
In conclusion, Champion Iron's first quarter results reflect a strong start to the fiscal year 2025, with the company well-positioned to capitalize on its high-grade iron ore products and green growth initiatives. The earnings call underscored Champion Iron's resilience, strategic growth plans, and commitment to sustainable operations.
Full transcript - None (CIAFF) Q1 2025:
Operator: Good morning, ladies and gentlemen and welcome to Champion's First Quarter Results of the financial year 2025. [Operator Instructions] This call is being recorded on Wednesday, July 31, 2024. I would now like to turn the conference over to Mr. Michael Marcotte, Senior Vice President, Corporate Development and Capital Markets. Please go ahead sir.
Michael Marcotte: Thank you, operator and thank you everyone for joining the call with us here today to discuss our quarterly results. Just for everyone's benefit, if you would like to see this presentation, it is available on our website at championiron.com under the Events and Presentation tab of our website. I also like to highlight that our team will be making forward-looking statements throughout this call. If you'd like to read more regarding our forward-looking statements, risks and assumptions, also, you can also consult our MD&A, also available on our website. Joining me here today is our CEO, David Cataford, who will do the formal portion of this presentation. Our Executive Chairman, Michael O'Keeffe will do closing remarks and I'm also joined here by other executives including, Alexandre Belleau, our COO; and our CFO, Donald Tremblay. With that, I'll turn it over to David for the formal portion of the presentation. David?
David Cataford: Thanks, Michael. Thanks everyone for being here today. I'm happy to be able to discuss our Q1 fiscal year 2025 results. If we look at the highlights, one of the highlights for the quarter is definitely the fact that we've managed to produce roughly about 3.9 million tonnes during the quarter and have record sales as well of just over 3.4 million tonnes. So, I'm very proud of what the team has been able to achieve and how we rebounded from the Q4 2024 fiscal year. In terms of cash costs, relatively flat quarter-on-quarter, we'll be able to get into that a little bit later at just shy of $77 per tonne. And these results allowed us to generate about $180 million of EBITDA during the quarter. We did all of that with no significant workplace incidents and no major environmental issues, so again producing clean tons out of Bloom Lake. In terms of community governance and sustainability, very proud to have hosted the Minister of Mines at our head office, down in Montreal. The minister was here to announce a new program to help local contractors step up their game to be able to work in areas or in companies like Champion. So, good alignment for us to work with the government to help local suppliers, local contractors, be able to increase the level of their companies, to be able to come and work with us. It allows us to strengthen our relationship with the local communities. In terms of our operations, as we mentioned, quarterly production of about 3.9 million tones, an increase of 18% over the previous quarter. We also acquired additional mining equipment and railcars. The additional mining equipment is to be able to continue working on our current mine plan and at the same time, preparing to be able to eventually increase our nameplate capacity beyond the 15 million tonnes per year. The additional railcars do the same and they also add some added flexibility to be able to bring down not only the stockpile tonnes that we have at Bloom right now, but also potentially future tonnes that we'll be able to increase -- when we'll be able to increase over our nameplate capacity. In terms of sales, about 3.4 million tonnes of sales during the quarter, allowing us to achieve a record, but still shy of us matching our current production. So, we'll continue to work with IOC, but we do see positive results in terms of the increased capacity on the rail. Now, if we go back to subsequent events to the quarter, but that you've all seen in recent press releases, there was a significant forest fire that came close to the operations at Bloom Lake that caused us to evacuate the mining side. We had to react pretty quickly, but I think a good testament of the one preparation that we had because following the forest fires last year in the region, we did build pretty significant contingency plans and emergency plans to be able to one, evacuate our people, two, protect our infrastructure. And happy to report that even if the forest fires came close to the operations, there was no impact to any of our infrastructure. You can see a picture right there, someone holding down some trees. We had to cut down bands around the site as well bands around some critical infrastructure that we have, but very proud of the way that the teams reacted and how quickly we managed to evacuate a significant portion of our workforce, while continuing to work to protect the site. The impact roughly about one week's production when you look at the downtime and the and the ramp-up but happy to say that right now we're back to pre-sort of forest fire levels in terms of production. If we look at the operations overview, so we moved quite a lot of tons during the quarter. Our iron recovery, a little bit shy of our targets. In quarters where we have significant shifts if you compare Q4 to Q1, there was a pretty big increase in tonnage, very positive but at the same time more difficult to be able to tune in the recovery circuit when that happens. We're able to achieve our best results when we're fairly stable, fairly flat. So we should be able to increase that in the coming quarters and be able to go back to our over 80% iron recovery. In terms of the industry, we saw the P65 index decreased by about 7% during the quarter. And we did see some elevated exports out of Brazil and Australia, but still saw all the iron ore that was produced being consumed, so very happy that our material is still in high demand from our various customers. We saw also the premium for the P65 over the P62 increase during the quarter, still low compared to historical numbers but a positive sign that fits with the correlation that when the iron ore price goes down, typically the spread for the P65 to P62 increases. If we turn to provisional price adjustments there was a positive impact during this quarter. If you remember we had 1.8 million tons at the end of last quarter on the 31st of March that were booked at $113 per ton. We managed to realize about $124 for those tons, which makes a positive impact of about $21 million during the quarter. If we look at the 30th of June, we had again about 1.8 million tons on the water at the end of this quarter and the expected price was around US$119 per ton for those times. In terms of the average realized selling price, so there was a negative impact when you account for the 1.8 million tons that were on the water at a sub US$120 per ton compared to the $126 average for the quarter. But we still managed to realize close to the P65 and next during the quarter even with that element allowing us to achieve about US$125 per ton looking at the net realized price of about CAD 136 per ton. If we look at our cost, so we did see some improvements on our cost associated to the higher production and sales. So there was a positive impact there. It was a little bit reversed by non-cash items, non-cash items being the reevaluation of the stockpile when we account for the cost, so spreading down the costs over the three million tons that we have stockpiled and also an impact on the shutdown that was done in the Q4 of fiscal year 2024. If you remember there was two major shutdowns that were done during that quarter. And those costs are spread over two quarters as the shutdowns typically last for about six months. So when we look at the impact for the quarter, roughly about flat compared to the previous quarter. But if you remove the non-cash items, we did about $5 per ton better. In terms of the financial highlights, as we mentioned about $180 million of EBITDA and when we look at the net income just over $80 million allowing us to continue our growth initiatives and to reinvest in the assets. Looking at our cash change, so a little bit lower cash than what might have been expected in the market mainly due to the fact that there was a change of about $100 million in working capital. The bulk of that was mainly vessels that left the port at the end of June, which we've since gotten paid at the beginning of July, so more of a timing effect than a real long-term potential issue. So we should see that change in working capital switch in this current quarter. In terms of our balance sheet, so if we include those receivables and include the working capital, we're in a net cash position of about $18 million. So a very healthy balance sheet to allow us to continue our growth initiatives. In terms of growth initiatives, if we go to the DRPF project update, which is the main project that we're working on right now, happy to report that we're still targeting on-time, on-budget. So the work is advancing as planned. Our main focus right now is to finalize all of the building to make sure that we are -- that we are prepared to work inside for the winter. So that's going along very well. And as you can see on the next slide, we have most of our long lead items. So the equipment that is currently being built at our suppliers' facilities and everything is on track in terms of long lead items. So all in all, I feel very confident, we'll be able to deliver the project in the second half of 2025 calendar year and be within the budget of $470 million that we've laid out. This project again is key for our growth and the valuation of our product. So the main goal is to be able to sell our material to steelmakers that will eventually be making lower carbon steel. We can see that there is significant amount of these contracts that are being signed or that have been signed to be able to deliver tonnes starting 2025, 2026 of lower carbon steel. We have seen as mentioned previously that the various governments if you look at Canada, Australia, U.K., U.S. looking to build infrastructure with lower carbon steel. So we're seeing all of that start to materialize starting next year. So our project is going to be very well timed to be able to tap into that market in the future. So very happy of the way that the project is advancing and also the way that the various contracts for lower carbon steel are advancing as well. One other element that's very big highlights for the previous quarter is the fact that high-grade iron ore is now part of the list of critical minerals in Canada. If you remember last year a high-grade iron ore was positioned in Quebec and in Labrador, as a critical mineral. But now we've also managed to include this in the list on the federal level. So we're continuing to evaluate the potential positive this has for our growth initiatives being the current work that we're doing on our projects and also potential future work. But we see this as extremely positive that the Government of Canada now recognizes high-grade iron ore, as critical for decarbonization and part of the list of the minerals they want to support to be able to achieve lower carbon economy. So again, very positive for our growth projects and we'll be able to come back to the market once we finalize all the various elements and all the different impacts this can have on projects like what we have at Kami or others. And I'd like to thank all of our staff for achieving those results. I'd say the results for the quarter are very positive but really the highlight is the way that we reacted during the forest fires. So very proud of the way that we all got together, not only ourselves but helping local communities as well, strengthening our relationship with them with First Nations and with the Quebec government, Showing our credibility as well in the way that we react in various critical situations. So very proud of the way that the team has managed to navigate through that. And that being said I'd like to turn it over to you for the Q&A portion of the call.
Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line of Lucas Pipes from B. Riley Securities. Go ahead
Lucas Pipes: Thank you very much operator. Good morning. Good evening, everyone. My first question is related to the additional railcars. And I wondered if you could kind of give us a sense for when all of them will be online. And then from a cadence on the destocking side what is a good run rate to use from here on going forward? Thank you very much.
David Cataford: Yes. Thanks for the question Lucas. So, we were very fortunate to be able to secure a slot to build those railcars in calendar year 2024. So, they're currently being built right now. The first railcars will be able to be delivered before the end of this calendar year. And then in January and February is when we'll receive also the bulk of our railcars. So, that should allow us to continue the strategy to look at solutions to destock the stockpile, but also allowing us to have that increased capacity when we get our production over mainly capacity of 50 million tonnes. So, those have been ordered they're being built and again we'll be delivered a little bit in 2024 but mostly at the beginning of 2025.
Lucas Pipes: I appreciate that. Thank you very much. And on my second question, I wanted to follow-up on the addition of high purity iron ore under critical minerals list. To what extent could this benefit a project like Kami, I appreciate there's a spotlight and encouragement of high purity iron ore. But if you could maybe speak specifically to Kami and how it might benefit from this designation of the mineral I would appreciate it. Thank you.
David Cataford: Yes. Thanks for the question Lucas. So, I mean it's positive to be on a list, but where it really impacts a lot of programs in the federal level are sort of binary in the sense that if you're on the list you can access them if you're not on the list you can't. There's special funds in the infrastructure bank in Canada that can help do infrastructure projects. And if you look at a project like Kami there's roughly about $700 million of the CapEx that is related to infrastructure that could benefit from a structure like the Canadian Infrastructure Bank. So, those are all elements that we're currently evaluating and having discussions with to see how that could potentially help the project. Can feel a bit preliminary to say what the real impact could potentially be but it puts us in a different position compared to where we were before because in the past we just couldn't even have those discussions with the various groups because we were not part of the critical list there.
Lucas Pipes: That’s very helpful. Really appreciate it and to you and to team, continued best of luck. Thank you.
David Cataford: Thanks Lucas.
Operator: Thank you. Our next question comes from the line of Craig Hutchison from TD Cowen. Go ahead please.
Craig Hutchison: Hi, good morning guys. I just wanted to circle back on the question of sales. I think in your last conference call you mentioned by June you'd hope that your sales would align with production. And now that we're basically going into August here, can you just give us an update on where that stands whether you can give us a specific number of volume that's getting moved per week or per month? Or are your sales now matching production? And then maybe when these cars arrive the 400 that you're ordering, do you expect them to be matched on the downstream side with IOC in terms of locomotors to actually move these volumes? Thanks.
David Cataford: Yes. Thanks for the question Craig. So, we were pretty close to matching production with the logistics side the forest fire has, obviously, put a little bit of a setback because even if we were able to restart operations fairly quickly there was some limitations on the rail. If you remember Labrador City was evacuated and our rail passes through that section. So, we're very fortunate to have the green light from the local mayors and also the Newfoundland province to be able to continue bringing down trains during the forest fires, but there was some limitations in terms of how much we could actually do. And then when the talent was, I don't know how you say it, be evacuated but when people return to Labrador City once the emergency evacuation was lifted well then there was some ramp-up portion. But I'd say that generally speaking we're pretty close now to have the operations match the logistics. Now, the next step is to be able to focus on the destocking. And that's where the railcars that are coming the new local operators will help and also the new locomotives that IOC has ordered. So IOC had ordered extra locos. And we do have some new train operators that have started some more that are coming in September, some more that are coming before the end of this calendar year. So we can see everything aligning for us to start destocking at some time from the stockpile in the coming quarters.
Craig Hutchison: Okay. I think just on costs you guys have settled your labor contract. And I know you guys trying to kind of get recoveries up above 80%. But is the intention still with all those factors to kind of get cost on a long-term basis down into sort of the mid-60s range? Or should we just think about costs probably moving closer to maybe the $70 range just given some of these factors that have impacted your cost structure with labor et cetera?
David Cataford: Yes, if we look at just this quarter now if we didn't have these non-cash items would be closer to $71. So trending down towards the sub-70 mark. Now where will we land as we have mentioned there was an increase with the union contract negotiation that was roughly about one tonne. But realistically I do think that we'll be able to get to that sub-$70 number.
Craig Hutchison: All right. Thanks, guys. I will turn it over to someone else.
David Cataford: Thanks, Craig.
Operator: Thank you. Our next question comes from the line of Julio Mondragon from BMO Capital. Go ahead, please.
Julio Mondragon: Thanks, operator. Thank you. Good morning, David and Michael. So just a couple of questions. The trading will be on production. So you reached 3.9 million tons of concentrate production this quarter getting close to the 16 million tons per annum capacity that you target as or due a target before. So the question is this is the result of the debottlenecking of your operations? Or should -- we expect a maintenance in the coming quarters? And also related to this do you have a ballpark number figure for the investment in debottlenecking of the operations? Or is this still under study?
David Cataford: Yes. So the debottlenecking project because it's not one simple project that just allows us to add one machine, let's say, and then the production increases. It's really a synergy between many different things. So that's why it's taking a bit of time for us to evaluate the full picture. But as we had mentioned in the past, it's not going to be one big project. It's going to be some of many smaller projects that we'll do from quarter-to-quarter that will allow us to get to that level. If you look at the production of 3.9 million tons during the past quarter a very good achievement, but we have to be mindful this was in a quarter that there was no major shutdowns. So in a quarter if you put that on a six months basis with two major shutdowns well then that reduces the annual run rate a little bit. So realistically we're not at the 16 million ton run rate yet. We do feel that we've achieved the sort of nameplate capacity run rate and we'll continue to work to be able to increase towards that 16 million tons and beyond in the coming quarters.
Julio Mondragon: Thanks a lot. So just going back to the concept achievements you already said that you are looking for or you're expecting other performance in the coming quarters. But how would you see the pace or the other pace of volumes of sales improving? Or what will be your optimal level in the next year of the stockpile or the concentrate stockpile like from three million tons to let's say one million in 1 year, 1.5 years? Or do you have an idea of these time lines or numbers?
David Cataford: Yes. We currently don't have an official time line on those numbers. We're working with IOC to try to maximize the tonnes we get down. Obviously, once we get those railcars we get the new locos and the train operators are in position we should be in a much better situation to be able to destock the stockpiles. We're also looking at other alternatives with IOC to see if there's other synergies that we can have to be able to destock that quickly. But we don't have an official, sort of, number on when that will be destocked now.
Julio Mondragon: Perfect. Thank you very much.
David Cataford: Thank you, sir.
Operator: Thank you. Our next question comes from the line of Brian MacArthur from Raymond James. Go ahead, please.
Brian MacArthur: Good morning and thank you for taking my question. Maybe I can ask the last few questions differently, because you sort of said your sales might have caught up to the production if we didn't have boats being delayed in the forest fires and we've talked about destocking. But when you're talking about catching up the production level, should I think about at a 15 million ton annual rate to get around this problem of 3.9% versus 3.4%. Is that what you're talking about or will the rail actually have a capacity with these extra cars to go over the 15 million tonne a year right? And as you said therefore help the destocking?
David Cataford: Thanks for the question, Brian. So we have a contract for 16. So our main target is to be able to get to that full sort of 16 run rate. That's the main goal that we have. We do know that there'll be some small inefficiencies and so what. But that's the ballpark target that we have when we talk about getting to the right level. So that should allow for fluctuations in the quarters that we have shutdowns and quarters that we don't have shutdown.
Brian MacArthur: Great. Thanks. That's very helpful. And my second question relates to another thing you mentioned in the quarter, which I think is quite a good achievement is getting additional power. Could you maybe just talk about with all the power you have access to now what it will actually be able to do in your growth initiatives?
David Cataford: Yes. Thanks for the question, Brian. So when we look at the achievement in the past quarter we managed to be one of the only companies to get access to more green hydroelectric power here in Quebec. I think the only company that actually got two blocks of energy. So, very proud of being able to achieve that. And this is mainly due to the fact that the government recognizes the impact that we have in terms of decarbonization and the impact we have on the local economy. So, very happy to have been able to access that. So as you know last year we secured the power to be able to do the flotation project to get our material or half of our material to 69%. And now we ask this another block to continue in our various growth initiatives. Could that be the plant number one convert to 69% or other initiatives to continue decarbonizing. We're very proud to already be the lowest CO2 intensity hybrid iron ore here in Canada, but I think we can continue to do better and will eventually materialize in the price. So we've got a few potential initiatives to be able to use that power, but again, very proud that we've managed to secure it.
Brian MacArthur: Thank you very much for taking my questions.
David Cataford: Thank you, Brian.
Operator: Thank you. [Operator Instructions] Our next question comes from the line of Dalton Baretto from Canaccord. Please go ahead.
Dalton Baretto: Thanks. Good morning everybody. Thanks for taking my questions. David, I want to stay on this full issue around the logistics here. And I want to ask a slightly different question. Between now and the time you do get the incremental capacity what happens if there are further disruptions whether forest fires or otherwise? Really two questions. Number one how much more finished goods inventory, can you stockpile a site before you have to curtail production? And then number two, how does the rail operator allocate the capacity between the different users if there's a curtailment? Thank you.
David Cataford: Yes. Thanks for the question. So typically the rail operator has to deliver on its contracts. Now realistically, we see when you own your own infrastructure, that's not always what happens. But realistically we have seen a lot of improvements as of late on the rail. So we do see a lot of positive elements. And we do know that IOC is working to be able to deliver on their contracts. So I'd say that there's no sort of official guideline on how that gets allocated. But realistically, I haven't seen a scenario even last year when you remember there was the forest fires that halted the rail. We did see once it started back up, there was a split in terms of capacity when the rail was operating at a lower level between all the various clients. So it's not as if IOC was only moving their tone and not moving ours. So there is some arrangement to make sure that everybody is able to bring down tons. Now in terms of our actual stockpile capacity, it gets down to a cost out because as we continue to stockpile, we have to go further and further away from the plant and that increases the cost to be able to move the material around the mine. So there's no fixed number as to what is the maximum capacity, but as the stockpile gets higher than the cost to be able to manage that increases as well. So they would theoretically be a point where we would see if it's still worth producing and stockpiling so far away from the plant. For now, we're still in a territory where the costs are significant, but not impacting our profitability. So we're still continuing to move those tons.
Dalton Baretto: Great. Thanks for that color, David. And then maybe switching gears, I wanted to talk about your projects a little bit and just try and sort of understand what are next steps now for Kami for the pellet plant as well as for upgrading the rest of your capacity to the DRPF product? Thank you.
David Cataford: Yeah. Thanks for the question. So when you look at Kami the next steps for us well as you might have seen we applied for the environmental process to begin. It was approved by the Newfoundland government so we're now starting the permitting process of the Kami project. So that's going to bring us till 2026 to be able to get a permit. So I don't see significant CapEx being invested in the Kami project until then. And that will allow us the time to be able to finalize the work that we're doing to bring in a partner for this project. So we do have some pretty significant discussions with various groups to be able to have a partnership for the Kami project, and have to admit as well that being on the list of critical minerals here in Canada has definitely helped in that sense. So that project quite a lot of work for the permitting process, but not significant dollars that will be invested. In terms of upgrading our material, I'd say the main focus for us now is delivering the floatation plant on time on budget and being able to realize the price that we believe we'll be able to get to this type of material. So that's the work that we're currently doing on this now. We are evaluating other potential upgrades. But right now, the main focus is really the DRPF plant number two. And when we look at the pelletizing portion, not necessarily the project that is getting the most traction on our side. So finalizing the feasibility study on this. But when we look at the pelletizing capacity and the current pricing environment difficult to see that project making sense in the short term. Still happy that we secured probably the best land in Canada to be able to build a facility, but not something that we would be investing CapEx in the short term for that. So when you look at our balance sheet, the main focus for us is really on continuing to improve our actual operations, increasing the nameplate capacity because I think that's where we're going to create the most value for our shareholders getting the DRPF project up and running and then continuing the permitting process on Kami.
Dalton Baretto: Thanks, David. That's great color. If I can ask just one quick follow-up. Based on your discussion so far, can you give us a sense for what sort of pricing you are triangulating into for your DRPF product?
David Cataford: Yeah. Right now, the main focus is really to have a formula that exposes us to the DR pellet. So the main discussions that, we're having is to slowly remove ourselves from that P62 P65 sort of environment and really get closer to the DR pellet. I think that in the future, there should be a disconnect between typical iron ore and iron ore that is used in this DRI/EAF process, and we want to make sure that we're not exposed to more tons of P62 coming into the market. So that's the main way that we're discussing the pricing formulas with the various clients, and we have been getting quite a lot of traction to be able to do that on.
Dalton Baretto: That's great. So just to confirm, so you're going to move from sort of a discount to pellet pricing as opposed to a premium to the current concentrate benchmarks?
David Cataford: Yeah. The DR pellet pricing, correct. And there might be a mix of both, but the intent is to eventually move away from the P65 market.
Dalton Baretto: Yeah. That's great to hear. Thank you very much Dave.
David Cataford: Thank you.
Operator: There seems to be no further questions at this time. I'd now like to turn the call back over to Mr. Michael O'Keeffe for any final closing comments.
Michael O'Keeffe: Thank you very much, operator. And I'm sitting here reflecting and listening to David talk. And as a major shareholder, I try and put this off outside of the day-to-day goings on with the company. I mean, Dave and I talk every couple of days whether I'm in town or out of town. So I know intimately what's going on and obviously involved in the strategy of how we go forward. But as a major shareholder, I'd like to just sit back out and look back into the company and say what are the elements that are facing us today will, first of all, it's the effect of China. I mean, China costs and everyone else gets it cold, especially no more EBITDA than in the iron ore business. So if I was sitting there thinking what should I be doing? Should it be in iron ore or should we be looking at other commodities, diversifying the self-fill, we effectively are. And if I was sitting in Australia in the Pilbara with low-grade iron ore going to China all the time to their blasters, I would be concerned. And as I discussed in the last quarterly report, there was how the hell they get a microwave into the Pilbara. It may happen eventually, but it's not -- I think I test in my lifetime, and I hope I've got a long time to go. So I look at the elements in the company and say what are the indicators for me? The indicators are obviously people. So close representation of that was the forest fires we've just had. The fact that we mobilized the teams. We secured the area. We evacuated I think, up to 500 people. We were on standby with 737 airplanes. We will work with the local community. And I think we had 300 people mobilized to fight those fires and be prepared for them. And that was done efficiently. One of the things that David didn't mention these things I look at is that we've just completed a new workshop for -- and quite a large infrastructure for the trucks and maintenance on trucks and maintenance, what we call a shed but it's more of a massive building. We'll take on welding and anything else. That was completed on time and budget. Just recently, it sort of doesn't get mentioned. I think that we, as operators need to sometimes reflect back on one of our Board Directors said do you have a path or anything for that? I mean, our problem is today, we're taking that as a norm where other people get quite surprised that they bring on an operation or they bring on a project on time and budget. For us, it's becoming the norm, and I think we probably have to stop and look back at ourselves and say okay start rewarding the people a bit more for what we're doing, what we're achieving as we're going along. But, highlighting for me the fact that, if I'm seeing there as a shareholder, I'm very excited that people can deliver on these projects. And the fact, we've got the people delivering on the projects and we're setting down the road map of the journey, we want to go on to and that is not looking at other commodities, because as David said, our pricing system or the product that we're going to produce, is going to be separated from the index and it's not going to be reliant on China. Now, we're talking about a pretty narrow time frame, and that we're talking about commissioning the high-grade plant in under 12 months or around about 12 months' time. So we're going to endure a pricing system, but everyone else is in that boat. But however, we're fortunate that we have a high-grade 66.2% product. And now you're seeing the spread for that because obviously, the steelmakers want they can buy high grade, they're always need to want it because it brings their unit cost down. It also helps them with their pollution issues. So let's just take that as a given and then look at the road map, the fact that David has been able and his team have been able to achieve this critical minerals for iron ore, is slightly significant. And I say that because, it does give us access to government funding on growth in projects. Currently what we're doing the fact that we've got power ready for the next phase of this, all that's done. And again, it seems to be taken as a given. Now, that allows us to be able to look at the growth opportunities and we have the cash to be able to do it. And it will be a different company, as we get into that process. So, I'm very excited about where we're going. We're totally focused on where we need to get to and we have the people to do that. So also we've got very supportive shareholders, and I'd like to thank you for that. And we're always available to talk. We're always available to take people up to site to see what's happening at the port, what's happening with the rail cars, what's happening with the growth in our development there. So you could be tempted to go out and say jump on the lithium band or jump on some other commodity, which detracts you from what you're doing. But at the same time, I'm trying to leave you with the message and that is this. We totally believe in the commodity, and we believe in the commodity as such that it will be going to a market that is going to be supportive of green steel. So, for that we will get a premium for that. We're putting our eggs into this basket and we will look at opportunities, as they come along in other areas. And if they're low cost and they're good opportunities, we will no doubt investigate them. But in all, we're totally focused on being in 12 months' time into a position where we're selling into a total different market. So, all this emotion that you're seeing today about China and iron ore prices, we're going to be isolated from that. So exciting times for everyone, and will continue over the next 12 months. And in that time we've been able to again, good dividends and we'll continue to do that while the iron ore price is where it is, and we can keep our cost structure coming down. So on that note, thank you everyone and I'll sign off and wish you all a very nice evening or a day wherever you be. Thank you.
Operator: Thank you, Sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.
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