Discovery Mining Ltd. (DSV) Q1 2026 Earnings Call Transcript

Good afternoon. My name is Sarah, and I will be your conference operator today. At this time, I would like to welcome everyone to the Discovery First Quarter 2026 conference call and webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again. I will now turn the call over to Mark Utting, Senior Vice President, Investor Relations for Discovery. Mr. Utting, you may begin your conference.

Thanks very much, Operator, and thanks to everyone on the line for joining Discovery's first quarter 2026 conference call on the webcast. uh joining me today are many members of the discovery senior management team speaking will be uh tony mccuch our president and ceo allison white our chief financial officer pier rock our chief operating officer eric calio our senior vice president exploration and jose javelera our senior vice president corporate affairs and sustainability in mexico and again there are many other members of our senior executive team in the room as well before we get started i'll remind you that during today's call we will be making forward-looking statements these statements are based on current expectations and projections about future events they're subject to risk and uncertainties and actual outcomes may not be what is included in those statements I refer you to slide two as well as our website for further information on that in addition we will also be making reference to a number of non-GAAP measures during the presentation these these measures do not have any standardized meaning and they under GAP and therefore may not be comparable to other issuers I refer you to slide three on our deck as well as our website Finally, all dollar amounts will be in U.S. dollars unless otherwise indicated. Now, turning to the quarter, to begin with, as many of you know, we're working towards more than doubling gold production at Porcupine to over 500,000 ounces per year. at the same time we're working towards developing our cadero project in mexico through which we will produce about 14 million ounces of silver per year at least over the first 10 years you know we plan to achieve these levels of performance while averaging the lowest half of the global cost curve for both gold and silk and we're going to achieve these milestones using a disciplined approach to investment with a focus on investor returns during the first quarter there were a number of key developments in support of achieving our growth objectives specifically we announced the acquisition of blendport kit operations in timins we also reported continued outstanding exploration results in and around timins and we continued with our investment programs through which we will both grow and optimize our current operations getting into those in a little bit more detail looking at kid on slide six we announced the acquisition of the kid operations on march 2nd we expect that transaction to close very soon likely over the next few weeks this is a major milestone for our company to achieve over half a million ounces of annual gold production we require additional milling capacity through the kinmet site we have an opportunity to dramatically grow processing capacity and to process different kinds of war there's lots of other benefits as well including adding valuable infrastructure that will support the future expansion of both loyal pawn and tamar including the development of tdz it gives us exposure to critical minerals copper zinc and silver through kid creek mine adds significantly more exploration potential to our already very large and highly prolific portfolio delivers cost synergies and and this is a very important point adds a very large highly skilled workforce that's going to help us with our existing growth plans going to the next slide this gives you a view of the kid met site um and a conceptual plan for what we expect to do and are currently evaluating it's a conceptual plan um but it kind of points are shows you

our thinking in terms of the path forward and maybe at this point i'll turn it over to tony to talk about that okay and maybe yeah just a couple simple things i mean people should understand first off that the oil pond underground operations are actually under under the kit med site and and you can see that the blue rectangular box here and it's trying to show where the location would could be for the new any new vent raises we we can establish for the oil pond mine as well as central location would be for a new shaft if we wanted to develop for the tv dead zone but also i think what we show here there's there's as we we've alluded to before there's four circuits at the at the kit med site and you can see where it says a division conceptualize on here what would be involved in and it shows the location of where we build a new five to seven million ton conventional gold circuit at the plant uh with the organ crushing and how that would how would that would fit in we'd still continue to use the b the base metal circuit the c division we're working pretty hard right now on on that that's about a million ton a year capacity so looking at where you know the board doors to to here and run it run it through this division as early as we can would unlock to give you the sense on on what this could unlock for us this map doesn't

from the bottom of this page and then the idea would be all the pample ores would be it would be trucked and stemming to all the pond doors would be trucked going on to slide eight we'll get to the next next key development that's exploration progress and you know for all the production that that we have and we're going to be adding you know this is we think it's one of the most compelling exploration stories in the industry as well um you know we issued a press release on on april 23rd that's our latest one um i'm not going to get into a lot of the details eric will get into the details of that relief uh shortly i'll just very at a high level say very good results from resource conversion oil pond forward and tamar included in that release was excellent results at a number of district targets near those operations and positive results at our near-term projects specifically dome and tbz and again there's a lot more information slide nine looks at our investment programs in the first quarter sustaining capital for the quarter was about 21 million mainly related to capital development mobile equipment and infrastructure investments at moyle pond and horton and i'll mention we were very much on track with our capital development activities at those mines also contributing with new mobile equipment at pamor and some investments at the tme6 or a tailings facility project as well staying capital was somewhat lower than we planned which was primarily related to the shifting of delivery schedules for new mobile equipment uh to the second quarter and just other quarters of the year growth capital totaled 40 million investment in the tma6 including our new deposition strategy and pre-stripping at panmore accounted for the vast majority of that and again pre-stripping at panmore was very much in line with expectations just going to slide 10 this gets to the operating results during the first quarter allison will get into all the financial numbers in a few minutes and pierre will then add some additional color on operations as well you know in our year-end results we indicated that production in 2026 would be weighted to the second half of the year and the q1 would likely be our lowest quarter of production for the year well production was 60.2 000 ounces for the first quarter what i will say is a highlight of the quarter was oil pond it had a very good quarter in q1 with an average grade exceeding 12 grams per ton also our total mine tons increased by four percent and we ended the porter with stockpiles of close to 1.3 million tons which will help us manage both our throughput levels and grades over the balance of the year like production our unit costs are expected to improve significantly in the second half of the year you know one reason our guidance ranges were as wide as they are is because of the variability we saw coming in the quarters i will say our ASIC number for the quarter was in line with our guidance and we do expect that number to improve as we get into the second half of the year going to slide 11 it shows a visual of well dome mill but specifically in the foreground the crushing circuit as we mentioned we expected quarterly production this year to be lowest in q1 and a significant reason for that was mill throughput we had 698 000 tons in the quarter you know the reduction from the previous quarter most of that was expected an expected reduction due to scheduled downtime and our understanding of the implications of severe winter on our crushing plant at dome we've indicated since we announced the porcupine deal beginning of last year that we were looking at replacing the three-stage crushing system that it needed to be replaced you know that's because it's inefficient and contributes to high unit costs because it's prone to breakdowns particularly in winter conditions and ultimately because we're going to need to move it to get it out of the way as we push back the dome kit when we bring dome mine into production the longer term solution for this is single stage crushing and a sag mill and that's part of our plans going forward in terms of achieving our growth targets um the near-term plan is that we are keeping increasing levels of critical spares on site and there is a newly designed secondary screening system that's going to be delivered at the end of june it will be installed during the scheduled shutdown in july and these steps we're taking now are designed to help us when we get to uh to next winter just going on to slide 12. this shows you our guidance and i can say we remain on track to achieve all of our guidance for 2026. we've completed the lowest quarter of the year we expect to do significantly higher production particularly in q3 and q4 an important contributor there will be hollinger we began ramping up hollinger in q1 and exited the quarter mining about 2 000 tons a day we expect to get over 40 000 tons from hollinger this year um there was only a few thousand in the first quarter we also expect to see higher levels of milk throughput and supported by the large stock stockpiles i mentioned with that i'll turn the

call over to allison white or cfo to look at the financial results thank you mark and good afternoon everyone on the call on slide 13 let's look at what a solid quarter and start we had 2026 which reflects the continued momentum that we are building on from last year we had robust revenues during q1 of 285 million an increase of four percent quarter over quarter primarily reflecting the higher average higher than average total prices for tons during the quarter and coupled with the number of ounces sold over the same period. Cash costs per ounce were $1,000. As previously mentioned, unit costs are projected to be the highest in the first half of the year and are scheduled to improve during the second half of 2026 as production and sales volumes increase and benefits are realized from the investment to all in sustaining costs average reflecting the higher operating and is partially offset by lower spend. The lower than planned sustaining capital is due to the delayed timings that Mark had mentioned earlier for the delivery of new mobile equipment and for construction work that's ongoing at the tailing CMA6 project. EBITDA grew quarter over quarter to $178 million, an increase of 41 percent from Q4 2025, which is driven by an increase in revenue as well prices climbed. Discovery has continued to have progressively strong momentum since its transition to an operational company last year, continuing to grow EBITDA during each quarter of 2025 and now again in the first quarter of 2020. We also continue the trend to generate solid free cash flow with adjusted free cash flow of 63 million dollars, reflecting an adjustment of 87 million for a payment made during the quarter to satisfy the company's 2025 income tax. Further, Discovery deployed 67 million in capital expenditures to further advance the asset base of Porcupine, continuing onward with the vision and capital allocation plans of reinvesting in the business to add value. Q1-2026 net income was $81.7 million, an increase of 25% from Q4-2025, and both earnings per share and adjusted earnings per share were 10 cents. The increase in net income quarter over quarter resulted from the one-time $45 million reclamation expense for non-operating mine sites that occurred in q4 2025 as well as the benefit of higher revenue and lower depreciation and depletion expense during q1 2020 offsetting all of this was the impact of an eight million dollars in q4 2025 six million dollars of income tax expense and higher share-based compensation costs that also occurred the income tax recovery in q4 2025 resulted from the 40.9 million and a deferred tax recovery that was related to revised reclamation and as we end on that tax note let's move to slide 14 to review financial metrics we continue to build on the momentum that began last year across all of our key financial metrics revenue and ebitda have increased through strong earnings earnings generation we continue to see positive momentum with q1 adjusted operating cash flow of 130 million dollars and adjusted free cash flow of situation strengthens so let's take a look at our liquidity at the end of the quarter the stronger gold price environment translated into 130 million of adjusted operating cash flow partially offset by the 2020 continued capital investment discovery's liquidity position remains robust with 385 million dollars in cash on hand and a 250 million dollar revolving credit facility with a $100 million accordion feature, we have meaningful financial flexibility. We believe that this balance sheet strength gives us the foundation to advance our strategic priorities with confidence. And with that, I'm going to pass it over to Pierre.

It is a pleasure to be presenting today. I will be speaking to slide number 16. During Q1, we produced 60,269 ounces of gold, with total gold pour of 59,258 ounces. As Tony mentioned earlier, we expect production to ramp up, particularly in the second half of the year. The change in production in Q1 2026 versus the previous quarter reflected lower tons process. The impact of this reduction was partially upset by a 15% improvement in the average grade, reflecting a significantly higher grade at oil pond and a higher average recovery rate. More than three-quarters of the reduction in tons process was planned and related to the scheduled maintenance, as well as the impact of severe winter conditions on the crushing circuit. The company is currently advancing plans to replace the crushing circuit. Total ore tons mined increased by 4% compared to Q4 2025 and we have close to 1.3 million tons of stockpile material that is available or processing at the end of Q1. Tony discussed the crushing circuit at the mill in his remarks i'll point out that during operating days the dome mill continued to show improved performance daily throughput at the mill exceeded 11 000 tons per day on 26 days in q1 including 10 days when the mill exceeded the operating capacity of 12,000 tons per day. Operating cash costs per ounce sold average 1,413 compared to 1,185 in the previous quarter with the increase mainly reflecting the higher mining costs given the increased mining rate in 2021-2026 and the impact of lower gold sold. Site level all-in sustaining costs, average $1,875 around Seoul, similar to the previous quarter, as the impact of higher operating costs was partially upset by a reduction in sustaining capital expenditures. I'll now turn the call over to Eric Calio, Senior Vice President's Exploration.

Thank you, Pierre, and good afternoon, everyone. i'm on slide 17. we're starting just like today it's been another great quarter for exploration another 67 000 meters drill excellent success with both operating mines and growth projects so this in mind we have again a lot of new information but my plan today is just go through some of the highlights starting with the current flight at fall pond as shown on the slide which is a long section looking south work at the mine continues to focus on the lower f zones included another five holes near the lower limit of the current resort. A very positive result, with several holes containing visible gold and high-grade directly down plunges at positive speed, and others indicating potential new high-grade lenses to the west. The concerns above, we're very happy with progress here so far. We plan to keep these two to three rigs active here for the near term, but also integrating another two to three rigs in the amidst upper part of the mine to start advancing those projects as well turn to the next slide which is number 18. you see the tbz area which is another important drill project for us in c1 as mentioned in the past tbz is a significant zone of mineralization in the southeast part of the whole pond mine that was partially drilled and defined by past operators but we are now back and adding more holes to support a maiden resource estimate for later this year with that in mind what we see here on the slide is an overall view of the target area including the main zones drill platforms and even the workings from both on mine which is well slightly on the main target here this what we're looking at essentially a large northeast plunging structure which is based on drilling states extending from at least the 850 to the 16-80 level, and remaining open in both directions. Internally, the zone consists of a series of lenses, which you show here in various colours, the largest being the TVZ2, which is a large green one sitting on the south side of the zone, and the remainder being clay beans, which sit immediately. And then, in terms of drill platforms, just to point out that the project already has a number of areas with drill platforms that have been set up from past work. And these will be activated fairly quickly, but just a little bit of work. aside from that all of our new buildings has actually been from just the 1210 and 1680 levels and then we'll be certainly starting from 1410 as well turning on to my next slide number 19 we see more detailed view of the zone and long sections including recent drill results as in it is all looking good so far in terms of 1210 which is the upper right hand side of the slide we had multiple new holes with wide high grade digit steps nearby to our first goal that announced in q1 and on 1680 several more which intersected attractive grades in which near the lower limits of past drills just to give you a flavor for what we're seeing intersections on 1210 we're including numbers such as 4.23 of 55 6.41 over 11 5.18 over 9.1 and then intersections from 1680 which is 4.32 over 19 4.24 over 10 and 4.73 over 6. important to note is that all these intersections are similar or better to other previously drilled holes in both areas and the drilling below the 16 levels is still very limited so given above we're very happy with progress so far the program is continuing with three fields active on 12 10 16 80 and 14 10 levels so expect to see a lot of additional new results from the upper and lower parts of the zone very shortly we're also starting on rehab new sports platform on the 1430 level and the 900 which will provide even more platforms as the year progresses returning on to the next slide number 20 we see the oil creek area where we completed another 12 holes near the historic pit as well as at the 750 zone which is 750 meters to these it's indicated here drilling near the historic pit included eight new holes to the surface from the 650 meter level with very encouraging value multiple holes intersecting wide high grade zones near the east side and another continuing to enlarge the overall footprint to the west key intercepts to these confirming the wider wider greater zone include values such as 4.11 over 30 9 over 3 5.24 over 10 4 over 13.8 and the key intercepts to the west includes 4.5 2.2 drilling at the 750 zone includes one new goal which is designed to confirm and extend the realization near the 250 level and that's the lower limits of historic drilling it was also very successful with an intercept of 5.76 over four and a half 2.5704 given above we continue to be very pleased with progress of the project to date and plan to continue with two drills for the near term then turning to slide 21 we see an overall view of the board mine where we add another 24 holes in the north portion of the mine showing here the focus of the current work continues to be on the main zone which is the farthest uh target on the east part of on the right hand part of the slide all drilling being done from the 585 drift testing mostly down plunge northeast of the mine work additionally we also saw drilling start on the lower part east lower zone or elz which is another mineralized structure with similarities to the name zones 500 meters to the left foreign to note the both zones still have limited building down plunge driven open for expansion uh yeah i'm not going to go into a lot of details here in terms of the results the well summarized in our press release but i guess i could just mention that we continue to have a lot of success here with the building getting very good grades in both areas both inside and outside resources and so very optimistic then turning to slide 22 we have the Pam Moore where we completed another 67 holes near the current open pit resource as well as Pam Moore west 1.4 kilometers to the west and the north contact zone north of the base 2 pit drilling near the open pit included 56 new holes designed to upgrade and expand resources and that's what Q4 results were easily meeting expectations with multiple highlights from all areas filling at Pam Moore west with another six holes surrounding the historic mine of the through land, through land property, now 54, also 50 meters, that very nice values, a long strike of Pamor and the similar geologic setting. North contact zone included five new holes to test the major east-west contact north of the Pamor pit and also started to show very positive results. According to notes, there's none of the material from Pamor west or north contact area that's included in the current resort's estimates and we'll be working hard to incorporate this in our next update later this year programs continue with four drills two focused on extensions of samuel pit one at samuel west and one at the north contact then going on to slide 23 we see the dome we had a continuation of drilling in preparation for the new resource estimate later this year as indicated on the image the vast majority of new drilling targeted the northeast part of the resource pit but also included final holes from the area to southwest drilling in the northeast area included 10 holes evaluate mineralization on the dome fault near the lower portion of the current resort very successful indicating close correlation of geology similar better grades and width to historic holes which were drilled mostly before 1970. drilling to the southwest includes four holes that's the exploration targets the south of the current open test as the Q4 continues to intertwine new opportunities for future catch. The site is continuing with two rigs, both now located on the north side of the pit. Considering results and progress to date, the project remains on track for a new resource summit by the end of 2020. So in summary, things continue well and lots more to come. So with that, we'll pass over to Jose Zabalera, Senior VP, Corporate Affairs and Sustainability in Mexico.

Hi, everyone. In Cordero, in Mexico, we continue advancing the project. We'll be in that advancing. We're including the studies on water and power. And that, and then also after the last event of the Flan Mexico event with the president, when she announced incentives on the investment, we got a meeting with senior Mexican authorities. And that comes for a site visit to the project to go in the final process of the evaluation for our media. So we will have that visit on the next week to continue advancing on the processing of the permit for a seminar. So that I pass the words to our CEO, Tony McCutcheon.

Thanks, Jose. thanks everybody for for you know we we had you know really our minds definitely outperformed the mill in terms of throughput uh the mill had had some challenges in terms of results as the year goes on the ones that that that did all the work and got all the success and then to wrap up you know on the other side you can see from exploration and a few other other things we had some kid is one really important as in value data for the company there's a lot of a lot of a lot of synergies a lot of a lot of value in terms of the kit and it takes advantage here the main thing is the unlocking of thank everybody thank you if you would like to ask a question please press star

one on your telephone keypad if you would like to withdraw your question simply press star one again your first question comes from larry lou with CIBC your line is open hi tony allison pierre eric mark and team um i guess i'll start off my first question by asking about kit creek um would you mind reminding us you know what are some of the opportunities you see here does the acquisition of kit creek change the way we should look at the near-term mine plan as well as you know can you also remind us what are some of the steps between now to closing our transaction um in q1 well i think uh you know if the first thing in terms of the acquisition

the kit you know we you know the mine's still operating uh we do expect the mine to operate they you know they're you know and continue to produce produce the horse definitely for the rest of this year uh we're working hard in terms of what can be done there and done safely and effectively i think that's that's that's somewhat of an opportunity there's significant exploration land uh acquired here and i mean that's really part of a long-term exploration program but you know if i am going to slide seven where i tried to show the biggest part here is unlocking the value of of on the metallurgical site what that brings to us in terms of of adding milk we do with very minimal capital investment to the board north at c division because folks we're looking to hurt old doors again these aren't significant capital expenditures for here and and they're not necessarily a significant time too so we expect that you know things go go properly we're doing some test work right now and and working on permitting that it could be september this year and march of next year that we could be actually processing more doors here so that unlocks two to three thousand tons a day capacity for the coal doors we mentioned not not

that the final foundation for that answer i guess you know kind of follow up here on kit creek not diving too deep as well how you know are you comfortable adding copper zinc and silver to portfolio and should you know would this be a good experience for having some processing based metal capacity from Cordero potentially in the future?

Well yeah I mean you know as part of this part you know we have the offtake in place with Glencore and pretty much the offtake terms are not really much different than the offtake it gives us data the zinc concentrate that the copper concentrate those to the horn smelter, the zinc concentrate those to Montreal, and that those in place.

Sounds good. And sorry, if I can, Alison, I do apologize in advance, this is going to be a tax question. So if I look at this quarter's free cash flow, before being adjusted, a large item would be the taxes paid for last year from Porcupine's taxes. So going forward, should we expect more of a monthly installment, or how should we look at taxes, cash taxes being paid going forward. Question.

Never anybody's favorite topic. Nevertheless, yes, you're right, and we will be, and we are.

Thanks so much, Tony and team, for the response, and I'll return to the queue.

Your next question comes from John Tomazos with Very Independent Research. Your line is open.

Thank you for taking my question. I'm trying to envision or anticipate the fourth quarter technical study. The January study last year described resources of four deposits and production from three of them. Based on the drilling results, will we have resources from four more deposits, TVZ, Owl Creek, if you're taking material from Hollinger, and now we've acquired Kidd Creek?

So will the new report describe eight distinct resources and envision production from all eight of them well that's a good good question some of that really you're not you're not offline but yeah yeah well you know say we had the three main ones which are the operations for you know but we were not staying on those and then we've got dome and tvz that's that's the base plan for sure i mean we've had good results that i'll create like you say see if we have enough drilling to do a resource uh there by year end uh but really it's be those five

But we do have Hollinger, and there will be some things out of KID. But we're still working on KID, whether that's part of our – we will give something out of KID, but it might be part of a separate report there.

Is the 131 million tons that Glencore reported for KID good enough to meet your standards?

I mean, okay, I'm not sure. I mean, the level of drilling and the level of quality of workmanship, we're not questioning.

I mean, the drilling system is really where most of the resources, the quality of destination or the drilling, that they're not putting it in.

I just want to make sure I heard you right, Eric. Did you say that there will be a resource for Hollinger or Owl Creek or not?

Now we don't have plans to do it.

If you're taking material from Hollinger, do you have resources without drilling them based on earlier data since you're putting ore through the mill?

Yes, there is material at Hollinger. The material at Hollinger we're mining, that's what you source from work we're doing and something we're considering, but it may be more work, John, for 2027, that only because you know in terms of the level of drilling and and and the software where the other work we need is one level report it made more more role in 20 it is one of the key areas and a lot of potential if i could ask one more when do you expect to have the single stage crusher at the dome mill and where will you put it uh will it be away from the existing mill site in case a decade from now you move the mill site oh well so what what we're looking at doing john is right now with in terms of the primary crusher what we're looking at doing is is is either getting some uh putting an orb in at site and in a short to bring an orb in at site a new orb in and truck dump at site and and do fine crushing that's one alternative second alternative would be to to put that there but you know we're just working on now there's some uh work in the in the back if if i had a drawing up i can show you but there's working in the back it's around the seconds of secondary uh and tertiary crushing plant and going into the doing some foundation work we have uh if you run that they we can run the dome pit for anywhere from depending on on the 10 to 15.

thank you and congratulations on all the progress once again if you have a question it is star one Your next question comes from Ken Elodeib with SCP Results Finance. Your line is open.

Hello, Tony and team. Just congrats on the quarter, and thanks for taking my question. Well, just switching gears to operation. So you've talked about production and costs improving through H2 as, I guess, throughput and mining rates ramp up. So my question is, what are the main things that we should be watching over the next couple of quarters to see if the ramp up is progressing as expected? And maybe just broadly, are you seeing anything so far in April into May from an operational standpoint that gives you confidence in this ramp up?

Yeah, I just want to make sure I understood your question. you want to know what we're going to watch for this year and how we're doing in q2 correct yep right so of the four sources we don't report separately as you know so i'll be kind of speaking in general terms i would say to you that our mining rates are progressing really well we we don't foresee any issues here at any of our operations of course as tony alluded earlier grays do fluctuate up and down mostly due to sequencing and some adjustments with block models that we we're doing throughout the year so with that on that aspect can i don't anticipate any issues delivering material to the mill whether it's q2 q3 or q4 in terms of processing capacity we we did allude to the fact that we had a few mechanical issues in q1 and i just want to bring to to your attention and others attention that if you compare what we did process in q1 of 2026 which was about 7700 tons per day and you compared that to the previous operator which in q1 2045 they processed around 4800 tons per day you can see that we have put in place some improvements already so later this year some of the mechanical parts secondary screens to name it is going to be replaced so that's going to uh increase the availability of the process plant and as i did mention earlier we did exceed the name plate capacity of 12 000 tons per day in q1 we're going to work towards exceeding that 12 000 tons per day uh in the rest of the year

And then to that, then the real two primary key indicators, if you want to watch for how we're achieving the ramp up, one would be dating mill throughput, as you see the mill processing more day to day, average 10,000 tons a day to 10,500 to 11,000 tons a day or whatever. Second part is our, you know, those are the two.

Okay, so is it fair to say that, I guess, in the long term, you're working on a single-stage crusher replacement, but then in the shorter term, you are confident in the reliability of what you have right now?

In the short term, what we need to do is get reliability, and the biggest part is the screen on a secondary is what's been causing some of the troubles. so there's lots of areas within the plant so in the short term it's it's reliability on our on our on our secondary and tertiary crushing circuit mostly before you go into your fine orbit so that that's that's critical in the short term a longer term processing is a much longer term thing is to replace the the sag mill that's up for a dome and then the other aspects now what we're doing with with uh the the kid med site we have we have a number of initiatives there now one initiative is to get a board north of that and open up capacity that gives us like you know 700 000 to a million tons a year no mill because so the first part we're not adding the exploration we need we need more mill capacity and then we can we can become more discernible in terms of a lot of new minds here the mill capacity and those okay that's um yeah that's all for me uh thanks to any other team for taking my questions um best of luck in q2 and i'll pass mike to the next person on the queue and maybe just to reiterate that this is value that by the way when we talk about milk capacity we're not building new mills we're in brownfield permitted sites we're just we're just modifying plants like we don't have to bring in powers we don't have foundations or we got actually existing tailings areas we're working on concludes the question and

answer session. I'll turn the call to Mark Udding for closing remarks.

Thanks very much and again I just want to thank everyone for taking part in the call. As you've heard, to say the least, we have a lot going on. We're making a lot of progress and there's a lot more to come and that's good for a bunch of reasons, one of which is we will definitely have a lot more to talk about when we have our next quarterly call. So we look forward to speaking with you then.

This concludes today's conference call. Thank you for joining. You may now disconnect.