McEwen Mining Inc.
Q3 2017 Earnings Call Transcript

Published: 5 Nov 2017

[Operator:]

Good day, ladies and gentlemen, and welcome to the McEwen Mining Third Quarter Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Rob McEwen, Chief Owner. Sir, you may begin.

[Robert McEwen:]

Thank you, operator. Good morning, fellow shareowners and interested investors. With me on the call, today is Xavier Ochoa, our Chief Operating Officer; and Andrew Elinesky, our CFO. I'm going to start by saying that Q3 was very eventful for us. It was a mixture of disappointing production numbers, lower gold and silver prices combined with a strategic acquisition and a financing that produced for me and you, a surprising and unpleasant market reaction. First, here is the bad news. In Mexico, a significant mechanical failure caused more than a month production to be pushed into Q4 and gave us ugly numbers in Q3. In Argentina, poor weather, lower grades, lower recoveries dropped production there. In the market, our share price weakened, already weakened by the lower gold and silver prices fell heavily, when we announced the bought deal financing. I have to say, I was very surprised by the extent of the drop, which was much greater than the dilution incurred. That was the bad news. Here's the good news, and there was a lot of good news. Production in October, the first month of Q4, was 60% of what we did all last quarter. And it was 48% above the, or 48% of the production we did a year ago in Q3. So Q4 2017 looks like it will be much stronger than Q3. Our Gold Bar Mine project has received critical environmental milestone permit, and we expect to begin preparation of the mine site for the start of construction this year. We made a strategic investment in Timmins, the Black Fox Complex at an attractive price that has diversified and increased our production base, increased our resources and given us a processing facility for our Lexam Resources purchased earlier this year. In addition, this purchase comes with $150 million in tax tools that can be used to shelter future income. The financing, this September, allowed us to purchase Black Fox Complex, remain debt-free and have sufficient liquidity remaining to significantly advance the construction of the Gold Bar mine. A new PEA, preliminary economic assessment for Los Azules was issued, and it provides a robust economic picture. Despite a large CapEx of $2.4 billion using a $3 copper price, the project is projected to have a short payback period of 3.6 years and a long life of 36 years. During the first 13 years of production, the average production is projected at 415 million pounds of copper, at an average production cost of a £1.14. So, I want to give you a sense of the projects relative size because we've been pursuing gold and silver for a number of years. So now we have this copper asset, and I'd like to have some fun and put these numbers on a gold equivalent basis to give you a sense of the scale of this project. This morning, the copper price or the gold price was -- or last night, it was 12.76, the gold price and the copper price was 3.13. So, if you divide the copper price into the gold price, you come up with an exchange ratio of approximately 408 pounds of copper is equal to one ounce of gold. So, thinking of Los Azules for a moment as a gold property, 415 million pounds of copper would be the equivalent to over 1 million ounces of gold. At a cost using that exchange ratio 408 times 1.14 comes with a cost per ounce of under $500 an ounce. This is a big deposit, a big project, and we are looking for joint venture partners to build it out. For those who are interested in learning more about Los Azules, the preliminary economic assessment is available online, all 329 pages of it. It's very informative. And our goal is to push this project forward to an application for construction. I will now ask Andrew to address our financials, and he will be followed by Xavier, who will discuss our operations. After which, we will move into a question-and-answer period. We are taking questions that come by e-mail as well as those on the call. And for those who wish to submit questions by e-mail, here is the address to send them to [e-mail]. Andrew?

[Andrew Elinesky:]

Thank you, Rob. Good morning, everyone. Thank you for taking time out of your Friday to join us. As Rob just mentioned, the third quarter for the company was one of mixed results. From the perspective of operating performance and then the subsequent financial outcome, we did not perform as planned. Our production was lower than our anticipated levels. However, as Rob mentioned, our October production is at a level, where we still see ourselves being in a position to finish the year near our full year production as well as our cost guidance on a consolidated basis. The positive performance for the quarter was that at a corporate level, we were able to successfully execute two transactions. The first being the acquisition of the Black Fox complex in Timmins, Ontario. And secondly, the financing required to pay for this acquisition. I am quite excited about this deal, as it's our second step into a world-class mining district, and it allows us to truly expedite our development at the previously acquired Lexam VG properties. In addition, we are also very pleased to report the significant permitting progress that we made at our Gold Bar Project in Nevada. This should allow us to commence initial construction activities as early as next week. Regarding our overall operating result, the company had consolidated production of just over 29,000 gold equivalent ounces. And as previously mentioned, this was not in line with our expectations and well production levels in the fourth quarter will be significantly higher. We do not expect our operations in Mexico or Argentina to exceed our full year guidance. In addition to the lower production levels and operating costs being higher year-on-year, our G&A costs were also higher in the quarter due to the increase in our corporate activities. And as a result, the company reported a net loss of $8.1 million or $0.03 per share. In Mexico, the lower production was due to a loss of crushing capability after a mechanical failure in August. Fortunately, we are in the process of installing a mobile crushing unit at the time of this failure, which allowed us to reduce the impact of this downtime. We have since kept the second crushing unit on site and intend to use it for the rest of the year, which when you combine with the increasing grade profile, should allow El Gallo to produce between 17,000 to 20,000 gold equivalent ounces in the fourth quarter. We have seen this improvement in October, where the site produced approximately 5,100 gold equivalent ounces. Turning to third quarter. This reduced production drove our cash costs and all-in sustaining costs on a per ounce basis to higher levels when compared to the first half of the year. But we do anticipate these costs to continue to be significantly lower than our full year guidance. We are continuing with our capital investment plans in order to extend the mine life beyond 2018, which includes our exploration work plus the studies and evaluations of this significant silver resources in the area. Overall, we anticipate that El Gallo will remain a contributor of free cash flow for the next quarter. At the San José mine in Argentina, production in the quarter was also lower than expected due to lower tonnage mine in processed as a result of unusually harsh winter conditions and the lower ounces produced due to the reduced grade and recoveries. Similar to Mexico, this resulted in higher cost per ounce, both from a cash and all-in sustaining cost perspective. We do expect these production levels to increase significantly for the fourth quarter, as we anticipate our share of production to be over 27,000 gold equivalent ounces, which compares favorably to the 21,800 ounces produced in the third quarter. Throughout San José's history, the fourth quarter is consistently been the strongest quarter. And with wider than anticipated bandwidths currently being encountered, we expect this year to be no different. During October alone, our share of production was over 8,700 gold equivalent ounces. Along with the depreciation of the Argentine peso versus the dollar and the planned increase in production in the fourth quarter, full year cost should reduce from the current levels. However, they will likely exceed our guidance. Regarding dividends, we expect them to continue at a similar level to the $2.3 million, we received during the third quarter. Moving over to our corporate activities. As I mentioned, we are able to close the acquisition of the Black Fox assets in Timmins during the first week of October. And so far, we have seen the mine contribute over 3,700 ounces of production in its first month under our ownership. In addition, we are continuing with our evaluation plans for the former Lexam VG deposits, in order to take advantage of the available processing capacity at the Black Fox mill. And our overall objective is to have these properties in production within next 12 to 18 months. As I mentioned earlier, during the third quarter, the company has successfully completed our financing, where we received net proceeds of $44 million. This financing allowed us to payout the required $27.5 million to close the Black Fox acquisition, and add the remaining balance to our liquid assets, which currently sit at $51 million. At this point, I would like to thank you, again, for taking the time to join us today. And I will now turn it over to Xavier Ochoa, our President and COO.

[Xavier Ochoa:]

Thank you, Andrew. Our operations and projects. I'd like to start with El Gallo Gold, where mining is now taking place in the deeper portions of the last oxides, where we're encountering as expected higher grade ore. On a quarter-on-quarter basis, we had a production decrease of 20%, wherein we compare it to the year before. This is because, on July 30, we had an unusual event when a blast hole drill bit got stuck into the primary crusher, which critically damaged the imparability to crush and load ore onto the heaps during the month of August. We have taken steps to ensure that this is avoided in the future. And what happened is that by early September, we were back online with our crusher as well as the second contractor crushing plant that is allowing us to nearly double the ore processing capacity. What this will do is by the fourth quarter, we'll have the opportunity to make up some of the lost production. Unfortunately, time required for the leap cycle creates a lag, where we will see some of the production gains at the end of the fourth quarter and most of them into the New Year. Therefore, we cannot gain all of the lost production. As we start the quarter, we also expect our cost of trend upward towards our guidance numbers for the entire year. We will see an impact on our cost from the increased crushing operations, the harder transition of sulfide materials are now appearing in the deeper portions of the ore bodies. And this will be partially offset by the increasing grades and additional tonnages we're placing on the heap. The El Gallo Silver project, also in Mexico, saw advances during the quarter that are showing us a positive outlook for an improved project later this quarter. At the San José Mine in Argentina, our 49% interest, during the quarter, saw that our production was impacted by weather at the start of the quarter and the narrow mining widths and lower grades that they were working with. As we come into the fourth quarter, we were seeing improving mining widths and better work rates, which will help the production. Also, the staff at San José is working on increasing the rate production capacity to installation of some Intensive Leach Reactors we have. And this will create an impact on the global recovery by transferring some of the silver that goes out in concentrates into the ray. At the Los Azules Project in Argentina, during the third quarter, we completed the preliminary economic assessment that Robert referred to. And this study indicates that this is, indeed, a world-class deposit withal continuing to advance towards development. To that effect, during the fourth quarter, we're now working on preparations for the next seal season, where we will focus on acquiring important environmental and technical information that is required to -- for the advancement of the project. The Gold Bar in Nevada, which we now know will be our newest mine. We have focused our efforts, and this has brought us closer to having the project fully permitted. We obtained the notice of ability -- availability for the final environmental impact study, and we're now completing the mandatory 30-day waiting period to have the record of decision for the project issued. State permitting was substantially advanced during the quarter. And in the fourth quarter, we look forward to receiving the final permit and initiating construction. Detail engineering work is nearing its final stages and heap contracts for supply and early works are now being finalized. At our new mine, Black Fox, processing low-grade ore stockpiles from blast hole and pit mining was completed. Starting in October, we reduced the mill operating schedule by 50%, which means that we're now operating one-week on, one-week off, will reduce manpower and fixed costs. We also started accepting ore from a neighboring mine on a custom milling basis. This will help offset some of our fixed cost. Work is advancing at the Black Fox mine to continue developing and producing from high-grade zones of depth while initiating a very aggressive exploration program also at depth and on the lateral extensions along the strike of the existing mine. Going into the fourth quarter, we will be continuing to explore these high grade as well as working on the required engineering that will set us up for advancing development of new ore zones and the firm satellite deposit into the -- in the new year. At our properties in the Timmins gap, we are now in the process of completing trade-off studies in the four projects we acquired from the Lexam acquisition towards defining of development plan, where we will be taking advantage of the available processing capacity at the Black Fox mill permitting full of that. El Gallo brownfield exploration continues to look at deeper mineralization as well as looking at the transitional zones containing sulfides. And at the district level, we completed a geochemical evaluation that is giving us better vectoring and a different look at how to explore in the district. And at San José, surface exploration has now started taking advantage of the incoming summer weather. That's all I have. Back to you, Rob.

[Robert McEwen:]

Thank you, Xavier. Ladies and gentlemen, Now I'd like to open the session up for questions. I'm going to propose that we do alternating. We'll first take a call from online, a question, and then we'll take one of the e-mail questions, and we'll alternate between those on the line and those who came by e-mail. So, operator, could you open the session for questions, please?

[Operator:]

[Operator Instructions] And our first question comes from Heiko Ihle with H.C. Wainwright.

[Heiko Ihle:]

Can you hear me, all right? Perfect. I'm in Europe. Congratulations on making the best out of the circumstances that are definitely beyond your control at El Gallo. It sounds like things are back to normal for the most part there. Speaking about the asset, should we see any financial impact past calendar '17 from this? I mean, is the mobile crusher still there? How much does it cost you every month? Do you think it's still going to be here in early 2018, that kind of stuff?

[Xavier Ochoa:]

Robert, do you want me to answer?

[Robert McEwen:]

Please. Heiko, the mobile crusher that we brought in, our plan is to keep it well into the new year. And the idea for that is we want to accelerate placing material on the heap as fast as possible. As you're aware of, we are running a contract operation at the mine. And it's to our advantage to get this as fast as possible, the material onto the heap, allow for the heap leaching time and with the contract mining costs. It's certainly advantageous for us when you look at the overall time sequence of things. And so, our thinking is that we will have that crusher in there at least until January. Sooner or later, the pits will get deeper and narrower, and we will have to throttle back on the crushing availability because of the stripping ratios that we'll have. However, our plan is to try to make up as much tonnage and probably get ahead. In terms of the costs, we are running a cost by having the contract crushing operation. However, we were able to successfully negotiate crushing cost that is very competitive with our own. So, we're essentially just seeing the direct cost of crushing more tons.

[Heiko Ihle:]

Okay. That's great. So, in other words, we can trend line '17 costs for early '18 until the catch up is fully complete? Or trend line Q1 and Q2 costs?

[Xavier Ochoa:]

Yes. I think you're going to see that the Q3 costs were unusual. Q4 will see some of the effect of that. And then going into the beginning of the year, we should see the benefit of the material that we're accelerating onto the heap or its start leaching.

[Heiko Ihle:]

Perfect. Excellent. Moving on to Black Fox, I mean, as you all know, I'm a very big fan of this acquisition. I still think you picked this up for a bargain basement price. But more 30,000 feet base, given that this all happened, I'm just trying to grab my head around the future of your partner strategy. I mean, you have Lexam, you have this. Should we see more consolidation from you guys in Timmins? Are you looking for more assets in Mexico and the Americas? Or do you think you just have your plate full right now integrating all this and trying to just move things forward that you already own like Gold Bar?

[Robert McEwen:]

Heiko, we're looking to get on top of Black Fox, integrate the Lexam assets into there and build that as a solid base of operation. We certainly look at other opportunities in the area. We have a mill with excess capacity. So, we, the opportunity to put additional ore in there is high on our priority list. Looking at other areas. In Mexico, we'll have a new economic study out on El Gallo Silver, in December. So, I think at the moment, looking further field in Mexico, I'd like to get El Gallo Silver moving first and the tail end of the oxides at El Gallo Gold. And we have this sulfide ores that are starting to grow. I'm thinking how we best process those. So, I guess, in summary, we're looking outside, but we also have, we have a lot of growth opportunity internally, right now. Okay. The next question, this came from, by e-mail from Jack Forbes and he was asking, what type of news can be expected for the rest of the year such as relating to drill results, economic assessments, Black Fox updates? In terms of drill news, there's drilling going on at Gold Bar right now and looking for extensions of the pit. So, you'll hear news on that. On Black Fox, we're drilling below the workings of the central zone, and we're also drilling below the bottom of the mineralization defined in the Froome deposit, which is about 800 meters away from the main mine. We'll have an El Gallo Silver report out in December. And as you heard earlier on, we're going to see, production is already well ahead of where it was in the last quarter, both at El Gallo and San José.

[Operator:]

Next question comes from Rob Chang with Cantor Fitzgerald.

[Robert Chang:]

A couple of questions. First, off with Black Fox, I noticed there is a custom milling. Do we have any details on that, in particular, what kind of cash flows you might be able to expect? Or term, or any details, really?

[Andrew Elinesky:]

Well, the custom milling, Rob, it's Andrew. Custom milling, it's just started. It was a little bit lower than we, a little bit late and a little bit lower than we were anticipating or what primarily, we'd originally anticipated. We would expect though that we should see ore from this deposit coming at least for the next 4 months. We would like to see it over the next 2 years and that is the mine plan that has been given to us. Right now, we would anticipate seeing some cash benefit to that. But right now, we're not including it in our budgets at this point. We'd like to make sure that we can see this up and running on a steady basis for the next 2 to 3 months.

[Robert Chang:]

So, I guess, it just won't be meaningful for the next quarter or so then?

[Andrew Elinesky:]

I don't anticipate it being meaningful enough for the next quarter. If it does become meaningful then it should be within 2018.

[Robert Chang:]

Sure. And more logistical question, I guess. For El Gallo, what have you -- can I get a sense of what the silver grades as well as the recoveries for gold and silver were for the quarter? I don't quite see those in the report.

[Andrew Elinesky:]

For the El Gallo mine, the silver grade is -- silver credit was very, very low as it always is. I believe we produced less than 1,800 silver ounces in the quarter. So, I'm afraid, I don't have the grade off the top of my head. But Xavier, I don't know, if you have those handy? I mean, the answer, Rob, is that silver is minimal as per usual, and we don't anticipate that change anytime soon.

[Robert Chang:]

Fair enough. I can just trend it as well based on previous quarters then?

[Andrew Elinesky:]

Right.

[Robert McEwen:]

We'll get those recovery rates too. The next question comes from [Hal Melenbacher]. His question, can we have an idea how active McEwen Mining is and advancing Loz Azules there as an appropriate partner? Or through an outright sale of this exciting project? One of our key drivers was getting the preliminary economic assessment completed. It's very comprehensive, it probably goes beyond the standard PEA in detail. And that was to get a base for our conversation. There are discussions that have been taking place being for a partner to share the upside of this deposit. That's ongoing. With the improving copper price and the improving business environment in Argentina and the durability of the pro-business government in power Argentina, I'd say, property in Argentina is looking much more attractive today. Next question?

[Operator:]

[Operator Instructions] And our next question comes from John Tumazos with John Tumazos Independent Research.

[John Tumazos:]

Congratulations on the progress at Los Azules and in the Timmins district. What is the distance from the open pit deposits or underground deposits that you previously owned to the stock mill? And would you guess the trucking cost per ton would be for the ores?

[Robert McEwen:]

John, it's -- thank you for your congrats. The distance is 28 miles from the Timmins properties to the mill. From the Black Fox mine, the mill, it's on the east side of the mill, but it's 20 miles away. And the trucking costs, I believe, are $0.06 a mile. $0.06.

[John Tumazos:]

Rob, if I can ask another one. What do you think is a fair percentage of the after-tax net present value and load in the Los Azules study as a marker for a potential -- a target price if you were to sell it?

[Robert Ross:]

That's a very good question. As you know, the sale of copper projects over the last couple of years that haven't been a lot. But if you look over the span of about six years, they've ranged from about £0.05 to well above £0.08 a pound depending on how advanced the project is. This is a preliminary economic assessment. I believe, when I sold Taca that was about $400 million. It was 29 million or billion pounds. It had a gold credit to it bigger than ours. But our resource size is about the same. We're not quite as -- I don't think we're -- the resources and as defined at Los Azules as it was at Taca. But that's sold for better than £0.02 a pound and thereabout. £0.014, sorry. So, if you put £0.014 on it, you're up around 300 million on the property. If I look at it from a standpoint of a gold asset, if I came along and said, I got a discovery and equivalent is 78 million ounces and it can produce 1 million ounces a year, $500 costs for the first 13 of 36 years, I think, I get a bigger valuation in the marketplace. So that's part of the reason we're trying to drive this towards an application for construction. And thank you for that referral in Timmins. The next question is from Charles Swap. He has a whole bunch of questions. But I'll try to summarize them. Only has two, but it goes for a while. He is asking about the gold streaming agreement on Black Fox, and it's an 8% stream. And he asked if we had any plans to cancel it? Unfortunately, we can't cancel this. We inherited it. And as you know, I'm not a big fan of streams, but it happens to be here. In the past, there was an option to buy down the stream, but that period is passed. And we're looking at it and saying, we have some other projects to finance right now and possibly, in the future. And have once where we have a stronger treasury. We'll look at that opportunity. The next question had to do with the Black Fox Complex and why or how did Primero reduce the all-in costs from $1,362 in the second quarter of 2016 to $827 in the second quarter of '17? This is a significant drop, and he was wondering if they're high grading or moving more from stockpiles. And if that was sustainable? And I'll just ask Xavier to talk about that.

[Xavier Ochoa:]

Thank you, Rob. I think the real thing to look at here is that Black Fox benefited from a lot of money that Primero spent in there in the -- in very late in their tenure. And one of those late benefits really was the fact that they had a lot of low-grade material available to them. So, they could feed in with their high grade and keep the mill fully utilized. That gives you that advantage in the all-in sustaining costs that we saw in the last quarter. Reality is that going into the fourth quarter and subsequent quarters, we will see a cost increase because we don't have the benefit of having had that low-grade material. The other thing that it created is that because they had tonnage to fill the mill, they were comfortable with the development rate to just develop on a just-in-time basis to get into their stopes. As we see now, going forward, at Black Fox, their development requirements are increasing because we need to get ahead of what their mining to date to get the tonnage to feed the mill even at the 50% capacity. So that goes directly into the all-in sustaining costs.

[Operator:]

[Operator Instructions] And I'm not showing any further questions at this moment.

[Robert McEwen:]

Thank you, Operator. We'll proceed with the questions that came in by e-mail. The next question is from Robert Sanchez and it's regarding Mexico. What was the cause of the mechanical failure at El Gallo? Was it related to maintenance or sabotage? Does the company have a business interruption insurance plan? What is the likelihood of its failure to repeat? Again, I'll ask Xavier to address this question.

[Xavier Ochoa:]

Thanks, Rob. What happened is the mechanical failure at El Gallo was very unusual event. We had a large drill bit from a blast hole rig come through in the ore. And what makes it unusual is not that everyone only gets some metal, is it normally when you lose a large piece of steel in the mine, it gets reported. And because it is reported then as they feed the crusher, there is somebody in the look up to make sure that any strange things are pulled out rather than just feeding as normal or small pieces of things can go through the crusher. In this occasion, as the bit came through, it came in a very unusual way between the side of the crusher and the jaw, jammed the jaw and tore the bushing. And in order to repair the bushing, the whole crusher had to be taken off of its own placement. So, it was really not a maintenance or sabotage issue. It really was an issue of improper recording on behalf of the mining contractor. So, the likelihood of this to repeat itself is very low. We've taken steps to ensure that we have very close tracking of all the wear parts that are used in drilling, all the way from the warehouse and not leaving it up to the contractor anymore. So, we're comfortable, we're taking the proper steps to avoid this. However, as mining goes, you always have to be in the lookout for strange things to coming through. Andrew, do you want to comment on our insurance coverage?

[Andrew Elinesky:]

Yes, no problem. So, for El Gallo -- the El Gallo mine, we do not have business interruption insurance for the mine, as it's nearly end of its life. And well, we've always evaluated having this interruption insurance there. The heap leach operation deems that interruption insurance is usually quite expensive and very stringent in terms of when you can make a claim. So, the actual physical cost of repairing the crusher was not high at all. It was -- I believe, it was below or at around $100,000. It's really -- the interruption ends like I said, it's difficult and very pricey to obtain in Mexico for heap leach operation. So, we have not continued with that at our site.

[Robert McEwen:]

Thank you. Xavier, there's another part to Robert's question. And that is Argentina, what caused the shortfalls of the results? I think you covered a lot of that off, but maybe just repeat it.

[Xavier Ochoa:]

Yes. No, we can repeat it. The operations in San José had shortfalls stemming from different things. I think most notable was the fact that at the beginning of the quarter that there was heavy winter weather that impaired them from being able to take ore from the mine portals to the mill. And that forced them into drilling some material from low-grade stockpiles in front of the mill to keep the mill running as well as throttling back on the tonnage. They also had a couple of minor hiccups to contend with. They had a little bit of a labor stoppage. It wasn't full, but it did affect them. As well as having had a couple of down days of unplanned mechanical issues. They were largely preventative in nature, but there are kind of the thing that ones they creep up, you really have to deal with them before they turn into something larger related to trunnions in one of mills. The other thing that is affecting them very seriously, and I'm speaking of the second quarter was they were mining narrow widths and some of these narrow widths, the veins grades are pretty good. But in the broader zones, the grades were low. As they came out of the quarter and into the fourth quarter, what we're seeing now is an improvement in grade and improvement in width, which should be reflected in an improvement this quarter.

[Robert McEwen:]

Thank you, Xavier. The next question comes from Bob Hollis. And first, he starts with a statement. It seems that operationally, it's been a pretty poor year for MUX and it seems as though there are no prior warning. There was no prior warning. Doesn't look as though the shorts had it right, but I don't know how they knew what the rest of us didn't? First question, can you keep us more closely up to date as things operationally develop or don't develop? And the answer to that is, yes, we try to be very forthright. And telling you what's happening in our operations, both good and bad. The second question. Do you have any intention of announcing any buyback of your shares to help keep the shorts at bay and also to effectively, lower the cost of your Black Fox purchase? For emphasis, selling your shares at $2.25 and buying them back for 20% less. Currently, we do not have a buyback in place. I think that's a good suggestion. As is with excess cash, possibly buying back our shares at the low issue. So, thank you, Bob. We'll look into it. The next question is from Lawrence Gatewood. He states, Rob, I agree that the Cuban mining is asset rich, but the stock is not doing well. Have you considered exploring strategic alternatives for the company, with the goal of maximizing shareholder value? In other words, have you considered the sale of parts or all of the company to maximize shareholder value? Thank you very much for your commitment to McEwen Mining and its shareholders. Lawrence, we have been moving -- our strategic alternatives have been building an asset base, diversifying our asset base. The Timmins acquisition in two parts was strategic. We think there's good exploration value there. As I said, earlier in the Q&A, the preliminary economic assessment we did on Los Azules was designed to be very informative to people interested in copper projects. We think we have a large asset there that is interesting and then it has a lot of flat valley floor that is relatively rare in the high Andes for building processed plants. And although it's remote, it's -- be much easier to develop there than many of the other mine sites in the Andes. So, we are looking at possibility of joint venturing that project. And other than that, we're more in an acquisition than a divestiture mode. The next question comes from Neil, stay the course Barren, private investor. He states, Rob, in the past, U.S. Gold and McEwen Mining have stockpiled some production for future higher prices or the smooth out production variances or surprises. Any thoughts now on stockpiling, given the healthy operational cash situation with the recent financing? Neil, right now, we have a couple of build projects, and we're not in a position to stockpile a lot of metal. Once we're up and running at Gold Bar, Black Fox, we'll look at it. Again, as I think, that's in a [technical difficulty] gold market, that's easy way to make money. The next question is from an anonymous private investor. He makes a number of statements. Starting with, in the last five years Bitcoin has gone from roughly $500 to $7,300, and gold has done nothing over the same time. Roughly, $1,200 in 2015 and 1,270 today. Given the trillions of dollars from worldwide quantitative easing, these actions are very suggestive of price manipulation of the gold market. Anyone looking at a live gold report can see that every time gold starts to run, someone puts a boot on its throat. This is more evidence of gold manipulation. A question. What is being done to stop this obvious manipulation of the precious metals markets? Why aren't miners banning together to stop what's happening? Or are you/they? I just like to say that with regards to Bitcoin, it has become, for the moment, an accepted form of transferring money. It's digital. It's, at the moment, unregulated by governments, unmonitored, private space and is being bid up. While the gold market is, there are 5 big players that have hallmarks, and they make a price for gold. It's an asset that's held by central banks. And therefore, viewed by central banks, sometimes, as a -- like the canary in a coal mine. If it's going up too fast, it might suggest something is wrong with the economy and no government or central bank would like to make that statement. So yes, it probably is being manipulated under the auspices of stabilizing the market. There's a lot of tax dollars behind the government and trying to stop this obvious manipulation is perhaps difficult. Also, in the gold market, it's a very large paper gold market that much greater than the physical market, and it seems to overshadow the price and is at the disposal of large pools of capitals. We're not out there, I guess, trying to stop it. We're out there trying to build our resources and get to a point, where we're producing, where we can make a profit at any price. And the second question is, what's going to get MUX stock price out of the tank? I'd just say, we've been working hard to deliver on our projects. We invest in exploration. We have some -- a strong asset base. And as the earlier questioner, his name, stay the course. We're staying the course and building the company. And hopefully, I'll get us out of the tank. There are a couple more questions that came by e-mail. Just let me -- from [Brian Purliss]. With the recent acquisition of Black Fox from Primero, is there any interest in acquiring Primero's San Dimas property? We've looked at it, Brian. We've -- we'd like to digest our Black Fox purchase first. San Dimas is an interesting property. It's not without some large challenges. And for the moment, we -- I'm happy to be in Timmins. Thank you, Brian. Next question comes from [James Hansen]. Next comment, management, I'm very excited about the Black Fox acquisition. This said I'm surprised of the equipment failure. Is it being an anomaly dropping drill bits into the crusher? Or does it come with the territory and is a typical cost to business? Just to answer that, Xavier provided that answer earlier. That it is very unusual for a piece of steel or drill bit to show up in the primary crusher. As most of you -- all of the parts are supposed to be accounted for and anything lost during the drilling or mining process is accounted for and watched for before the ore going into the crusher. The next part of his question. The theft occurred last year, and we have a drill bit misplaced this year. I just like to correct the timing. It was a theft in 2015, but it was a theft, nevertheless. These occurrences appear to be have been costly. Yes, they were. We recovered most of the money and the gold that was stolen. We got insurance to cover that. The crusher damage is definitely expensive in terms of production and added costs. As we said, it was very unusual. He continues, both of these occurrences might be deemed unusual? Yes. And yet, they are happening. I don't dispute that at all. I assume crushing equipment has only a predictable mining life, but are there measures to be taken to prevent these problems in the future? Excuse me, and, yes, Xavier provided those answers, a few questions earlier. The last question comes from Charles Lazzam, a private investor. Where do you see the price of silver, gold, et cetera going in the next few years? Short answer, higher. Longer answer. Debt loans are continuing to climb, the market seems to be quite ambivalent about the higher-debt loans. Believe central banks will keep interest rates low. And the best place to put your money is in the broad market, which is now pushing record levels. And it might be a time when the majority of investors should start considering rotating out of some of their winners into areas that have been ignored in the market, where they can get more leverage in the future. So that's why gold is going higher. And also, I guess, ScotiaMocatta gold dealer, that got nailed with laundering money and is now being offered up for sale. We may find some tightness in the gold market when that dealer changes hands. Are there any further questions, operator?

[Operator:]

[Operator Instructions] I'm not showing any questions at this time.

[Robert McEwen:]

Thank you, very much operator. Thank you, everyone, for joining the call.

[Operator:]

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.