Coeur Mining - Earnings Call - Q3 2020
October 29, 2020
Transcript
Speaker 0
Good day, and welcome to the Core Mining Third Quarter twenty twenty Financial Results Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Paul DiParto, Director of Investor Relations.
Please go ahead.
Speaker 1
Thank you and good morning. Welcome to Core Mining's third quarter earnings conference call. Our results were released after yesterday's market close and a copy of the press release and slides are available on our website. I would like to remind everyone that our press release, slides and some of our comments today include forward looking statements from which actual results may differ. Please review the cautionary statements included in our press release and presentation as well as the risk factors described in our 2030 Qs and twenty nineteen ten ks.
Now I'll turn it over to Mitch.
Speaker 2
Thanks, Paul, and good morning, everyone. Joining me here are Tom Whelan and Mick Routledge, along with several other members of the management team. We had our best quarterly financial results in nearly decade, driven by strong performances at Palmarejo and Wharf along with higher gold and silver prices. Starting off on Slides three and four in today's presentation materials, I'd like to point out a few headlines from the quarter before turning the call over to Mick and Tom. The first is just how great of a job the Palmarejo team did to bounce back from the government mandated suspension in the second quarter to basically double production levels and generate nearly $45,000,000 of free cash flow in the third quarter, which is one of their highest quarterly free cash flows ever.
I also want to emphasize just how big of a record breaking quarter the team at Wharf had, producing over 33,000 ounces of gold and generating almost $40,000,000 of free cash flow, which is nearly two times higher than the previous record. We also successfully kicked off construction on POA 11 at Rochester. Once completed, Rochester's expected step change in its cash flow from less than $5,000,000 a year to over $100,000,000 a year will help to fundamentally reposition the company. We look forward to sharing the details of this important expansion with you when the updated technical report is issued in December. Another headline is the fact that we ratcheted up our momentum in exploration and are now on pace to invest over $50,000,000 companywide this year.
We continue to view this as an excellent capital allocation decision that has tremendous potential to grow our near mine resource base, generate new discoveries and lead to larger reserves and longer mine lives. And finally, it was great to be able to further strengthen the balance sheet by repaying nearly $50,000,000 of outstanding debt while still having our cash balance increase quarter over quarter. Two major ongoing priorities I want to briefly touch on are the fine tuning taking place at Rochester and the internal prefeasibility study we're wrapping up at Silvertip. Starting with Rochester, the team is doing a lot of great work to optimize several aspects of the operation in advance of POA 11 from the mine and blasting to the crusher circuit and HPGR unit to the stage four leach pad and the recovery of the silver and gold ounces. All of this work is helping to de risk the mine and enhance our understanding of how best to operate Rochester post expansion to achieve consistent, predictable results.
Mick will provide you with some more details, but we remain confident that HPGR is dramatically accelerating silver recoveries and that production levels will accelerate in coming quarters based on the revised stacking plan and use of inner lift liners that we implemented early in the third quarter. Regarding the Silvertip PFS, we're very pleased with the initial results from the technical work that's been focused on a potential mill expansion and on ensuring efficient and reliable performance assuming a restart. Additionally, the drill results we're getting back have been extremely encouraging, further increasing our confidence in the size and quality of the high grade deposit there. We'll assess where we are with Silvertip later this quarter and determine the best path forward from there. As we do this, it's critical for us to remain disciplined and objective and make investment decisions according to our capital allocation framework.
We cannot afford to let the positive results we're seeing at Silvertip distract us from achieving our important near term priorities at Rochester. Before Mick goes through the operations, I want to quickly bring your attention to slide 17, which highlights a few examples of our greenhouse gas reduction initiatives. We've been measuring our energy usage and emissions since 2013 and are now shifting our focus to proactively managing our carbon footprint. The key headline from slide 17 is that Wharf plans to source more than 40% of its electricity next year from wind generated power with the ultimate goal of reaching 100% as more wind power capacity comes online. With that, I'll go ahead and turn it over to Mick.
Speaker 3
Thanks, Mitch. Before covering the operational highlights, I'd like to thank our entire workforce from our Mainers to our office employees and our contractors and suppliers for their relentless commitment to health and safety and for all the hard work and dedication during these challenging times. Let's continue to strive for excellence and pursue higher standard each and every day. Now digging into the results on slide six and starting off with Palmarejo, which was our top free cash flow generator this quarter. We bounced back strong with gold production over up over 90% and silver production more than doubling after being down for roughly forty five days in the second quarter.
Much of the increase in production was due to higher throughput, which averaged just over 5,300 tons per day. Along with solid cost controls, this helped us generate $45,000,000 of free cash flow during the quarter. We were able to accomplish these results through efficiencies in the main and in the mill together with higher staffing levels to ensure business continuity in case of any COVID-nineteen impacts. While there may be periodic changes to workforce restrictions from the government, we are focused on what we can control and consistently executing our operating plans. Looking forward, we expect to offset the forty five days we lost in the second quarter with slightly higher production and considerably lower cash costs for gold for the full year.
Switching to Rochester, the team did an excellent job crushing and stacking during the quarter, which led to the placement of four and a half million tons, 21% higher than the prior period and 80% higher than the 2019. That said, production increases were less than anticipated for a couple of key reasons. First, we are still seeing the impact of dilution from ore we stacked earlier this year on areas of the stage four leach pad, lowering the predictability of breakthrough and slowing the recovery of those ounces. And secondly, there were some challenges with the Meryl Crow plant due to an increase in fine particles in the pregnant solution coming from commissioning the new interlift liners, limiting production towards the end of the quarter. However, we are addressing these items head on and expect to see improvements in production as the results of higher placement rates and continued execution of our interlift liner strategy.
Turning to the next slide, you will see that we have expected expanded the scope of our revised staggering plan by installing additional interlift liners to help drive better operational performance by placing more ounces closer to plastic, so they will recover faster with a higher level of predictability. We have also continued to supplement placement rates with run of mine material, which is stacked separately to maximize the benefits of HPGR crushed ore. All of the lessons learned give us confidence that we can increase production over the coming quarters and more importantly, apply the knowledge to PUA eleven, so we are able to optimize performance on the new heap leach pad. Turning back to the previous slide and looking at Kensington, production was lower as we had several positive cases of COVID-nineteen during August, causing us to briefly suspend underground activities for a couple of weeks as we conducted extensive testing and contact tracing across the site. Despite the minor setback, Kensington has bounced back strong this month and we expect the the mine to finish the year on a high note.
Lastly, and certainly not least at Wharf, we were able to generate record results drive it driven by higher placement rates and better grades over the past couple of quarters. The team produced over 33,400 ounces of gold at an average cost around $800 per ounce helping to generate nearly $40,000,000 of free cash flow. To finish the year, we anticipate production levels similar to the 2020 while we maintain our strong cost discipline. Before handing the call over to Tom, I want to bring your attention to Slide 14 and highlight our updated guidance that reflects overall higher production and lower costs, which underscores our confidence in closing out twenty twenty with a strong fourth quarter. With that, I'll pass
Speaker 2
it over to Tom. Thanks, Mick.
Speaker 4
Starting off on Slide five, our third quarter financials reflect excellent results at Palmarejo and Wharf as well as higher realized prices, which led to nearly 50% revenue growth and $91,000,000 of adjusted EBITDA at a 40% margin. As we continue to increase profitability, LTM EBITDA has grown by almost 60% to $239,000,000 compared to $151,000,000 just one year ago. Operating and free cash flow totaled $80,000,000 and $57,000,000 respectively, significant improvements quarter over quarter. Turning over to Slide 12, our balance sheet remains in excellent shape. We have no near term maturities and ended the quarter with over $285,000,000 of liquidity.
We used much of the cash flow generated during the quarter to repay nearly $50,000,000 of debt, including $40,000,000 of revolver borrowings. We plan to repay the remaining $20,000,000 balance on the revolver by year end, if not sooner, and expect our cash position to remain strong as we head into the end of the year. I would like to also mention that we did not execute any additional hedges since our latest investor call. Additionally, the ATM remains untouched and in place for now as a last resort liquidity backstop. By generating better financial results and our commitment to further bolster the balance sheet, we continue to see our leverage ratios trend downward significantly.
At the end of the third quarter, our net debt to EBITDA was under 1x for the first time since late twenty seventeen. We are proud of the progress that has been made to strengthen the balance sheet and believe we are very well positioned heading into major construction at Rochester over the next two years. I will now pass the call
Speaker 2
back to Mitch. Thanks, Tom. Slide 13 shows several near term priorities as we approach the end of the year. And while our third quarter performance was very strong, we can achieve even stronger results with Kensington returning to its first half form and getting Rochester dialed in the way we know we can. We're looking forward to hosting a virtual Investor Day on December 17 to walk through the updated Rochester technical report as well as provide a status update on Silvertip.
We'll also highlight the progress of our exploration program to build off the strong midyear results we published back in August. Our team is extremely excited about delivering the kind of results and creating the amount of value we all believe is possible in the near future based on our strengthening operational performance, executing our near term organic growth projects and advancing our expanded pipeline of longer term opportunities we're developing from our higher level of exploration investment. We'll keep pursuing a higher standard in every facet of our business with the goal of delivering consistent operating and financial results from our balanced portfolio of North American based precious metals assets. With that, let's go ahead and open it up for questions.
Speaker 0
And we will now begin the question and answer session. And our first question today will come from Mark Reichman with NOBLE Capital Markets. Please go ahead.
Speaker 5
Good morning. With a much more active exploration program in 2020 and probably expected for 2021, just wanted to get your take on kind of the environment for permits, etcetera, because I know that you just recently got that 300 acre disturbance permit at Crown Block and was wondering if there's any other kind of key permits that you need to get to execute the exploration program.
Speaker 2
Yeah. Okay. Hi, Mark. It's Mitch. I'll ask Hans to cover that.
Hans?
Speaker 6
Hey, Mark. Well, as far as permitting, yeah, we just got the 300 acre permit for 300 acres of disturbance at Crown. We're also working specifically on the Seahorse discovery where we've got six new pads permitted through this five acre notice. So no real problems as far as headwinds there. Where I think the industry will see some issues is in drill rig availability and we're grabbing a couple more drill rigs so we'll end up with three RC rigs at Crown and one core rig by the end of the year.
The other headwind, of course, I'm sure you're seeing with a lot of companies is the assay turnaround issue. We switched labs at Crown and now we're down to about a two to three week turnaround from two to three month turnaround earlier in the year. The other permits that are in process are drilling at the Lincoln Hill, Independence Hill assets we got from Alio where we expect a permit by Q3 next year for 200 acres of disturbance. In the interim though we have a five acre notice permit that we can drill on out there. Other than that, no real slowdowns in Mexico or BC, so we're moving forward with those programs pretty easily.
Speaker 5
That's very helpful. And just my follow-up is for Tom. And with the much improved earnings, I was thinking about the net operating loss carryforwards, which I guess could be an advantage in terms of making acquisitions in The U. S. Or even shielding income once the Rochester expansion is in effect.
Could you just maybe address what the NOL position is and kind of the mechanics and the plans to employ it?
Speaker 4
Sure. Great question. Thanks for noticing that. Yes, we have got over $400,000,000 of net operating losses, are going to allow us to not pay federal income tax in The United States for the foreseeable future. And so again, with the major expansion coming up at Rochester, again, we should be not paying federal income taxes for quite some time still.
That that fits right into our capital allocation framework. So when we are thinking about where we want to allocate funds, Mexico or The U. S, The U. S. Wins hands down because of this tax advantage that we have.
Speaker 0
Thank you very much.
Speaker 2
Yes. Thanks, Mark.
Speaker 0
Our next question will come from Joseph Rieger with ROTH Capital Partners. Please go ahead.
Speaker 2
Hi, Joe.
Speaker 7
Hey, guys. Well, first, congrats on a great quarter and great cash flow.
Speaker 8
Thanks, Joe.
Speaker 7
So I guess, first thing at Palmarejo, the recovery rates, particularly for gold, have been pretty high this year compared to last year.
Speaker 2
Can you guys give us
Speaker 7
any color on what's driving that and what the possibilities are for sustaining those levels of recoveries?
Speaker 2
Yes, good question. Mick, do you want to cover that?
Speaker 3
Yes, for sure. So we've seen some great results so far. We expect those results generally to continue. Of course, it's driven somewhat by the mineralogy, but the team down there have got a great BI program ongoing optimizing the performance of the process plant and delivering some really sustainable improvements.
Speaker 7
And has there been any capital expense related to those improvements at the plant or is it just better maintenance, better care of machinery?
Speaker 3
Certainly a very small amount so far. We have a little bit ongoing with projects to continue that optimization.
Speaker 7
That sounds good. Switching gears a bit, Rochester obviously is still kind of lagging behind where you guys hoped it would be. When do you think you'll get this thing running like a top and what would you say your conviction level of reaching that point is?
Speaker 2
Well, I'll start off and then, Mick, you can pick up from where I leave off. I'll start, Joe, with the last last question there, which won't surprise you to hear me say that we have a very high level of conviction. We you know, we've thrown a lot at Rochester all at once. There's a lot of moving parts, right, with between the the the crusher configuration, introducing HPGR. Obviously, we're dealing with a very mature leach pad out there in that in that stage four.
We're we're putting a lot of lot of solution into a into a Meryl Crow plant out there. And so going through and optimizing all of those things here in 2020 is is can be a little painful at times, but it's it's very worthwhile, right, as we think about fine tuning and dialing it in before we invest a lot of capital and then have two HPGR units at the end of this expansion. And when you go back and think about, you know, we put in one HPGR unit late last year for precisely this reason, right, which is to have a year or two of run time with it so that we can get comfortable with it, understand it from the mine, you know, through the leach pad. And that's the process that we're kind of systematically working through right now. I think it's nice that we'll have this Investor Day in December.
We can provide everybody with an update. If things continue as we see them and as we second half of the year versus first half of the year out there, gold production should be kind of a double second half versus first half. Silver should be up 40% or 50% over the first half. So it's happening. You know, these commissioning things with the inter interlift liner strategy is is typical.
And, you know, we've been doing that now for two or three months, but I think we're getting those that debugged as well. So, Nick, I don't know if I've left anything for you to cover.
Speaker 3
But You you covered a lot there, Mitch. But I mean, in an end to end sort of view, right, the main milling, the heat reach, the Merrill core, this short interval control that we can now apply because we have these interlift liners allows us very high visibility in a short period of time. So we can optimize blasting and powder fact there's some bench heights at the main. And then the HBGR is getting optimized for size sizing fraction through the heap leach of course and flow rates and that opportunity for that short interval control. So we're not having to wait long periods with a high depth delay now to understand how things are performing.
And then the Meryl Crowe plant, I mean, we talked about it earlier in the call. This commissioning of the new heap leach pad, it's very typical and normal. You know, you see some things come through when you start up a new heap leach pad. We're getting through those issues now and managing them a little bit of extra clarification at the Meryl Crowe plant and we're seeing better results. And we expect to see a stronger second half as we said earlier.
And then even better and more powerful, the lessons learned that are supporting the program to derisk PWA 11, that's fantastic. Great learnings that are gonna help us to apply in the in the project, the upcoming project, and have a a really robust start up for the PWA 11 project in the next couple of years.
Speaker 7
Okay. Thanks for the color on that guys. One final thing, just any intention to add any more, you know, gold and silver price collar kind of stuff? Or are we, are we done with that for now? It's just what you have is enough.
Speaker 2
Yeah. I you know, the I guess the short answer, Joe Joe, is I think we're comfortable with having that $1,600 floor underneath a pretty good chunk of of next year. And then a smaller chunk of $20.22, which covers, you know, the bulk of the of the spend out there at Rochester. You know, we don't intend to become a perpetual, you know, hedger. We're doing this to protect an important source of of funding for POA eleven over this limited period of time.
And so, you know, today, we're we're comfortable with with what we have. Obviously, that that that thinking evolves as the markets sort of evolve. But Tom, anything to add? Joe, as you know, we need to do
Speaker 4
what we need to do to make sure we get to through the Rochester expansion. And so we are kind of modeling this out. We took a pause as we saw prices running up and where we saw performance improving and felt like we had sufficient cushion at this point in time. We still have that flexibility to add few more ounces in 2022. And if we think it's the right thing to do to maintain that balance sheet flexibility, we'll do so.
But we have taken a pause for now.
Speaker 7
Okay. Good to hear. I'll turn it over. Thanks, guys.
Speaker 2
Yes. Thanks, Joe. Cheers.
Speaker 0
And our next question will come from Mark Mihaljevic with RBC. Please go ahead.
Speaker 1
Hey, thanks and good morning, guys.
Speaker 2
Hi, Mark.
Speaker 1
I guess to kick it off, actually, why not ask about work? It feels like it it never gets the gets the attention despite being a a great cash generator for you guys. So just kinda wondering, you know, obviously, you guys benefited from from the higher stacking rates you you've had in in some of the contract crushing you've done as well. Like, is that something that, especially if higher prices, makes sense for you to, you know, put a little more money into that and keep production levels elevated and, you know, try to capture this this part of the cycle rather than kinda going back to your historical run rate.
Speaker 2
Yeah. Well, thanks for giving WARF a shout out. It definitely deserves deserves one. I'll let I'll let Mick cover that. You know, as you know, there's the the unloading and unloading, offloading of of pads and that sequencing that factors into into that question.
Obviously, summer months out there are a lot easier than fourth quarters and first quarters. So that that is probably gonna play a a be a factor here in the in in the fourth quarter as they, you know, are already dealing with with snow and and things like that. But, Mick, do you wanna cover Mark's question? And then I might ask Hans also to comment. You know, Wharf is one of these assets that has been around for, as you know, thirty plus years, but it seems like we never run out of potential and opportunities to keep extending.
There's been more drilling activity out there that gives us some cautious optimism about the future that maybe Hans can talk about briefly after Mick. Go ahead, Mick.
Speaker 3
Yeah, mean briefly after a great Q2 and Q3 performance, pull announces some ounces forward in the main plan and I'm seeing some good positive reconciliation. Now we expect to just deliver solidly against the plan for Q4. That's this year. And because as Mitch mentioned, we'll have a powder unloading, restocking start in Q4 and finish in Q4, then that's why we see those numbers a little bit lower, but fully as expected and planned. And then the go forward for Wharf is to just continue solid performance year on year as we have done in the past.
Hans?
Speaker 6
Hey, Mark. As you know, Wharf, we haven't done a lot The requirements for expansion are pretty minimal just because of the footprint of the mine permit boundary. This year we've done some work at the Richmond Hill asset which is just North of Wharf, the Old Lac and now Barrick asset that we have an option to purchase on. We're doing some expansion drilling there, looking at potentially new ounces that would flow into the mine life near the end of Wharf if that ever happens.
We're still in the evaluation stage. Q1 we should have all the assays back from the lab to evaluate what that asset looks like. Both surface geology, geochemistry and drilling geochemistry, We should have all that done by Q1 and look at what that means for our future there. For next year, they're getting a little bit more innovative in terms of where we're going to start drilling to expand mine life. It looks like we'll start stepping to the south a bit, permits depending, and do another lay back on the high wall if makes sense.
More news to come from Wharf as far as drilling, and we'll be drilling a bit more next year, almost double the budget of 2020 in 2021.
Speaker 2
And I'll just one last shameless plug there for Wharf. You know, we've we've as you probably remember, Mark, we bought that for 99 and a half million dollars. So for it to throw off nearly 40,000,000 just this quarter really kinda highlights just how great that that thing has been for us as an acquisition and as a as an overall contributor. And I think when we bought it in 2015, it had a six year mine life. Five years later, it has plus six year mine life, maybe seven years and hopefully more more to come.
So it's just been been a terrific one for us, and the third quarter's real credit to the hard work out there by that team. So thanks for the question.
Speaker 1
You know, thanks for thanks for the color around that. And then I I guess between Kensington and Palmarejo, you were actually able to get pretty good throughputs there. You know, might have been some concern heading into the quarter around maintaining, you know, underground mining rates. And and, obviously, you you had some challenges with COVID cases at Kensington that you seem to have managed through pretty well. So just kind of you know, or or do do you think that these run rates are are now sustainable in in with all the protocols in place you can maintain running at these capacity levels?
Or do you even see some opportunities to push even higher than this?
Speaker 2
Yes. I'll start, and then Mick can fill in. Kensington, I think, you know, we were able to run off stockpile material there while while we dealt with the COVID issues in in the underground team there. But I think those mining and processing rates there, you can kind of continue expect to continue. At Palmarejo, definitely were ahead of plan there with the 5,300 tons a day, which is great to see.
I think where we were targeting to get is more on a run rate basis of around 5,000 or so tons a day, which is probably where when you think about the fourth quarter, they might surprise us. But, you know, to to keep going at 5,300 tons a day, a lot of things have to go right. And there's still a lot of moving parts down there as it relates to to COVID and and just overall workforce management. But, Mick, you want to add any other color or is that
Speaker 3
Yes, certainly a couple of things. One on Kensington this year, we had for a while a production limit of 2,000 tons per day and that limit has been lifted. And so now we're looking at the process plan and debottlenecking that process plan to see really what we can do with Kensington going forward. But that's presenting us with a great opportunity with business improvement opportunities to optimize that asset. At Palmarejo, that BI program we mentioned earlier is really supporting well the results that we saw in September and how to sustain them going forward into the future.
So there's a good confidence there that the team are doing a great job supporting that future potential.
Speaker 2
And not to put it back on on the Hans, but, you know, the reason we're spending more at Palmarejo, right, is to get that inventory built up. And if we can get that mine and the the mine life to where it can support it, we've still got some mill excess capacity there. And that is, you know, in terms of internal opportunities to generate incremental cash flow with no virtually no incremental capital, that's that's high on the list. And so we're still, you know, building toward that over some over some time, obviously.
Speaker 1
Yeah. No. That all makes sense. And I I guess not to belabor Rochester points here, but a couple follow ups to to the earlier answers. I I guess first off, you mentioned that the fines that have been disrupting the the Merrill Crow.
And and, obviously, as you mentioned, it's not overly surprising to see it kind of early stages of a a new pad. But just wondering kind of what whether you are seeing any issues with the HPGR creating more funds than you were expecting or is that really you know, is it really just kind of early days on a new pad that that you're starting to see some of that come through?
Speaker 3
Go ahead, Nick. Yep. Certainly, can I can address that? So the the the fraction that we're seeing from the HVGR is right inside the spec. But when we use that material for over liner to put a new heap leach pad in in operation, then that same fractions just a little bit high.
We saw that very early, we optimize that and now we're seeing better performance as those things run through. We normally see some things when we're commissioning a new heap leach pad of course. It's just the nature of distribution, but we're certainly optimizing that. And then we implemented a new clarifier at the Meryl Crowe plant to improve the capacity on the front end of that plant and give us more operating flexibility so that we can deal with that as we go forward and put additional interlift liners in in operation over the next twelve months.
Speaker 1
Okay. Perfect. And kind of the second follow-up here, just to kind of what or how long is the percolation that it takes you to get get down for some of that higher for some of the material you stacked higher on the pads versus kind of molecules that you're placing fresh onto the new InterLift liners?
Speaker 3
So on the on the old part of the the pad, we already see breakthrough. It's a question of how how we track that profile over a long period. It was 400 foot to liner in the old part of the pad where now we're placing very close to plastic. So we're seeing that breakthrough very quickly. Within one or two weeks, we're seeing breakthrough now on the new in the lift lane areas and that's why we're extending our in the lift lane strategy.
We started off with one area and then phase two and we're now starting the construction work for phase three to, implement a wider area within the stage lane so we can, implement that short interval control.
Speaker 1
Okay. Perfect. Thanks. I think that covers what I had and, again, nice to see the three castle this quarter.
Speaker 2
Thanks, Mark. Appreciate it. Cheers.
Speaker 0
And our next question will come from Brian MacArthur with Raymond James. Please go ahead.
Speaker 2
Hi, Brian.
Speaker 0
Hello, Brian. You can hear me? Maybe muted.
Speaker 2
Yeah. There you are. Yep. Got you.
Speaker 8
Oh, sorry. I don't know. Sorry. I apologize about that. Just philosophically, if you go ahead and I realize Rochester
But if you go ahead with, restart a Silvertip, would you consider hedging that as well? I mean, there's a trade off between prudence and, you know, hedging the capital expenditures, which I think makes sense and you're kinda doing at the moment. But, philosophically, to some extent, if you continue to hedge gold against, you know, Silvertip and Rochester, to some extent, we're capping gold, to develop silver. So I'm just kind of trying to figure out how you think through all that. Would you actually go ahead on silver tip and hedge?
I mean or or would you just, philosophically go ahead with it?
Speaker 2
No. Good question. I think you asked a philosophical question last quarter too, Brian. You're into the you're into philosophy.
Speaker 1
It's all strategy. Maybe I should say
Speaker 8
it that way.
Speaker 2
Yeah. That's I think one of the best majors you can have in university is philosophy for life. Like our general counsel over here who's raising his hand. Look. I think you think about the pie chart of revenues from a silver tip, and it's a third silver, a third zinc, a third lead, roughly.
That means two thirds are metals that nobody really buys, I think, our stock for exposure, you know, to zinc and lead. And I think that makes them good candidates to potentially, you know, derisk and bring some higher level of certainty to that project. I think even though silver is not a huge percentage of our business anymore, most of our investors really do prefer having that upside to silver, which we still provide. We have no hedging on any silver at all. And we would be less inclined to do something with that silver revenue coming of silver tip.
But I think those other two metals are fair gain.
Speaker 8
Great. Thank you very much. Very clear.
Speaker 2
Yes. Okay. Good. Thanks, Brian.
Speaker 0
And this concludes our question and answer session. I'd like to turn the conference back over to Mitchell Kreps for any closing remarks.
Speaker 2
Okay. Great. Well, hey, we appreciate everybody's time this morning. Look forward to speaking with you again at our Investor Day, our Virtual Investor Day on December 17. And in the meantime, between now and then, hopefully, everybody will stay healthy and safe.
So have a good day. Thanks.
Speaker 0
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.