Coeur Mining's (CDE) CEO Mitchell Krebs on Q2 2014 Results - Earnings Call Transcript

Aug. 7.14 | About: Coeur Mining, (CDE)

Coeur Mining Inc (NYSE:CDE)

Q2 2014 Earnings Conference Call

August 7, 2014 11:00 AM ET

Executives

Bridget Freas – Investor Relations

Mitchell J. Krebs – President and Chief Executive Officer

Peter C. Mitchell – Senior Vice President and Chief Financial Officer

Frank L. Hanagarne – Senior Vice President and Chief Operating Officer

Analysts

Jorge Beristain – Deutsche Bank

Chris Thompson – Raymond James

Michael Dudas – Sterne, Agee & Leach, Inc

John Bridges – JP Morgan

Andrew Kaip – BMO Capital Markets

David Barilla – JP Morgan

Operator

Good morning my name is Connor and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Second Quarter 2014 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions). Thank you.

Bridget Freas, Director of Investor Relations. You may begin your conference.

Bridget Freas

Welcome to our second quarter earnings conference call. There are slides available on our website to accompany today’s remarks. Please review the cautionary statements and the risk factors in our latest 10-K and 10-Q for risks and uncertainties that could cause actual results to differ from any forward-looking statements made during today’s call.

Joining me are Mitch Krebs; Peter Mitchell; Frank Hanagarne; Joe Philips and Hans Rasmussen. Mitch, please go ahead.

Mitchell J. Krebs

Thanks Bridget. Good morning, everyone thanks for joining us. You’ll recall we reported our production results on July 8, which were on track with our budgeted levels. I think our second quarter financial results we put out yesterday provide a lot of evidence of the progress we’re making here at Coeur Mining.

Before we go to Q&A I would like to quickly touch on three areas we’re particularly focused on and those are consistency in our operations, cost reductions and cash flow. On consistency we continue to see more consistent and stable results from all of our operations in the second quarter Palmarejo showed higher grades fewer tons, higher recoveries and fewer production ounces with higher cash flow all is planned.

Rochester showed higher production in cash flow as planned, San Bartolome showed more consistent production and higher cash flow and Kensington also showed higher production with greater consistency. On cost reductions, we delivered lower year-over-year costs across the board. All in sustaining costs per silver equivalent ounce were down 6% CapEx declined 44%, G&A was down 37% and exploration was down 24%.

A few other points, I want to make quickly on our costs, it’s important to note that Palmarejo’s second quarter costs contained an annual workforce bonus payment of about $4 million which equates to about $1 per silver equivalent ounce. So if you back that out of our second quarter results cost would have been around $13 per silver equivalent ounce. At Rochester, our cost applicable sales are obviously impacted by leach pad inventory variations. If you just look at our cost there on a cash basis, before inventory variations our mining, plus processing, plus G&A cost were down 24% in the second quarter compared to the first quarter.

And a Kensington, our costs flat but are expected to now decline in the second half of the year to the mid-$900 an ounce range due to higher grades in the mine plant. And then thirdly on cash flow, these lower costs translated in a higher cash flow despite lower silver prices. Cash flow from operating activities increased $40 million from the first quarter to just over $30 million. Free cash flow generated by our five producing assets totaled $22.5 million in the second quarter to highest level on a year.

Based on our performance to the first half of the year, we reduced our 2014 full year cost guidance and we’ve tightened up our full year production guidance ranges for both silver and gold. I also think, we were able to check off some important priorities since our first quarter earnings call back in early May, the 48% increase in Rochester silver production 13% increase in it’s gold production and it’s jump in cash flow in the second quarter. I think were all important data points that show that the mine is well on its way to a great year.

We also successfully negotiated terms for a new gold stream agreement with Franco-Nevada at our Palmarejo mine in a way that will significantly improve that operations free cash flow going forward. We provided a re-scoped mine plan for Palmarejo like we said we would. It reflects our companies priority to maximize cash flow versus maximizing the number of ounces that our produced. That also reflects the decision we made during the quarter to complete the development of the Guadalupe underground deposit, which contains over half of Palmarejo’s total reserves.

The plan we laid out through 2021 includes a portion of our current reserves at both Guadalupe and Palmarejo as well as a select section of high graded inferred material at Guadalupe. This mine plan forecast lower throughput, but higher grades, higher recovery rates and lower costs than we’ve achieved at Palmarejo in the last year.

We will further update the mine plan for Palmarejo at year end, which will include drilled results from the second half of last year and the first half of this year. I think we also demonstrated during the quarter, our commitment to selectively deploying stockholder capital. The decision to complete development of the Guadalupe deposit at Palmarejo is a great example of this.

Despite the importance of Guadalupe to Palmarejo’s future, we made the call last year to stop that development work when we could not see away to generate an attractive rate of return. We are only now deploying capital into Guadalupe, after we were able to negotiate new terms that we expect will reduce the burden of the Franco-Nevada gold stream there generated a less capital intense development plan for Guadalupe and create a more robust re-scoped mine plan that focuses on selective mining of higher grade material.

Having Franco-Nevada contribute $20 million of their capital to get Guadalupe into production also helps boost returns for our stockholders. Another good example is our decision we announced last week to defer construction of the La Preciosa silver-gold project in Mexico.

We announced the results of the feasibility study last Wednesday. Although the project is a better one now compared to the PEA we put out last year, we’re in no rush to build a project in a price environment that would allow us to grow production, but that wouldn’t result in any value accretion to our stockholders. At a 10% rate of return based on a $22 silver price and a capital requirement of just over $300 million.

We are comfortable to wait until a point, when we are confident that we can realize a higher return for our stockholders and when we have sufficient liquidity in place to fund construction. We plan to continue limited drilling and some optimization work there with the intent of further improving the projects economics.

Overall, our liquidity position remained strong and steady, we ended the second quarter with $317 million of cash and equivalence was about the same level that we had at the end of the first quarter. Net debt was approximately $163 million at June 30.

With the decision to hold off on La Preciosa announced last week, we’re now focused on how best to manage this liquidity on our balance sheet. We recognize that our cash balance as a negative carry associated with it. We don’t feel pressure to do something just for the sake of doing something. High liquidity in times of we can volatile silver and gold price is not the worst thing in the world and being well positioned to take advantage of opportunities that may arise to strengthen the company is not such a bad thing either. In the meantime, we continue to evaluate pursue modest size capital investment opportunities with quick paybacks on our existing operations.

So, just to wrap up, I think we’re doing a very good job of executing on what we’ve said we do so far this year. We’re meeting and beating our production in cost targets, we’ve delivered on some key initiatives during the past three months, our operations are performing much more consistently, and we’re positioning each of our operating mines for long-term success with a focus on stability and on squeezing as much free cash flow as we can out of each asset and we have the flexibility to take advantage of opportunities that may arise that can strengthen our company and our overall asset portfolio.

With that, let’s go ahead and take any questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Jorge Beristain with Deutsche Bank. Your line is open.

Jorge Beristain – Deutsche Bank

Good morning, Mitch and everybody. I guess, my question is just really on La Preciosa with the results from the precision and it’s I guess uneconomic at this silver price juncture, would there be any accounting requirement for the fourth quarter to take a write-down on the money spent on that project so far? I know you’re still I think using about a $25 silver price for your cut-off. So, I just wanted to check the sensitivities, and if there is going to be kind of triggering factor determined by your accountants there in terms of taking a write-down?

Peter C. Mitchell

Hi, Beristain its Peter Mitchell. The answer to that question is we’ll review at year-end, there’s certainly no requirement to do so, but we review carrying value of our mineral interest assets every quarter and we will review it at the end of the third quarter as well as the fourth quarter and make a determination at that point.

Jorge Beristain – Deutsche Bank

Thanks, Peter. Are you still using $25 an ounce as your cut off price?

Peter C. Mitchell

Well, the feasibility itself was done it $22 silver and $1,350 gold. Our reserves have not been updated since at the end of last year $25 was the price down upon reserves.

Jorge Beristain – Deutsche Bank

Yes, thanks. I was asking about the reserves. Okay, thanks very much.

Mitchell J. Krebs

No problem.

Operator

Your next question comes from the line of Chris Thompson with Raymond James. Your line is open.

Chris Thompson – Raymond James

Hi, guys. Thanks for taking my question. I've just two quick questions just on Rochester, could you just provide a little detail on unit costs? I'm really what I'm looking for is cost per ton, I guess from a mining perspective and processing perspective, and also G&A?

Mitchell J. Krebs

Yes, Frank?

Frank L. Hanagarne

Sure, hi, Chris, this is Frank. In our open pit mine, we are going to range a little above a dollar during the short-term, I think over the long-term we’ll be somewhere near $2 per ton as you look forward, processing cost will be above around $3.50 a ton of material placed.

Chris Thompson – Raymond James

Okay. And the G&A there Frank?

Frank L. Hanagarne

G&A is less than a dollar per ton.

Chris Thompson – Raymond James

Okay, all right. And I guess just moving on to Kensington very quickly, we have you I guess processing what about 1,600 unit ton a day, I guess metric ton a day at the moment from that facility I know you can do more. Is there are a plan to increase that once you feel more comfortable I guess with the mine plan. My sense as you do?

Mitchell J. Krebs

Yes, we are currently mining and processing around 1,800 tons per day on average those are imperial time. And we are pushing to see where we can get is close to 2,000 tons per day. At the same time, we are evaluating and our plans to see if there any opportunities to produce good economics of levels even higher than that but it’s very premature our work in that area right now.

Chris Thompson – Raymond James

Okay, perfect. Okay, guys thanks so much.

Mitchell J. Krebs

Yes, no problem Chris.

Operator

Your next question comes from the line Michael Dudas with Sterne Agee. Your line is open.

Michael Dudas – Sterne, Agee & Leach, Inc

Good morning, gentlemen.

Mitchell J. Krebs

Hi, Mike.

Michael Dudas – Sterne, Agee & Leach, Inc

It’s about sustaining capital and in terms of pretty good job of using it over the last 12 months. Level of sustainability to other some, rate of return positive capital spending that we make see or has been budgeted yet, say for the second half of this year or probably in the case of what you have for 2016?

Mitchell J. Krebs

Hi, Mike, I had a hard time here, I heard sustaining capital levels which I think for the full year this year somewhere in the $50 million to $60 million range and we look forward to next year that’s a pretty good number is directionally, most of that is obviously underground development at Palmarejo, as well as Kensington. We do now obviously have the Guadalupe development ramping up here in the second half of the year. And I think we have Franco-Nevada about $8 million in the second half of this year planned to spend on Guadalupe underground, what you’re looking for mic.

Michael Dudas – Sterne, Agee & Leach, Inc

Yes, that is my follow-up question would be the with that net cash balance and the decision for La Preciosa, if you could remind us what your thoughts are relative to opportunities with some of the minority interest levels that you have and it is the market are you seeing opportunities with the market maybe coming through here now you made that decision and have some chance to working capital work for new source thanks.

Mitchell J. Krebs

Yes, good question we have, as you mentioned quite a range of holdings and some non-producing companies where the valuations are probably the most attractive relative to the other kind of – other areas on the spectrum from especially on the producing cash flow generating side those seem to be priced, almost if there is an assumed transaction and you can’t really see an attractive return on the few properties and few companies that are out there generating ounces and cash flow right now.

The development stage area is where you see more of the 0.5, Peter now and below valuations, some distressed companies in terms of their own liquidity positions and those are the situations that seem to come across our debt with more frequency here recently. We’re very mindful there that building up a big wall of capital requirements as we look ahead is not something that we want to do we’re very mindful of sequencing out any capital requirements in the future, but it something came along that could represent a very high rate of return relative to other uses for that capital, we would obviously take a real close and hard look at it to see how it could fit into our overall profile.

In the meantime, allocating capital and things like Rochester expansion that will be coming up here. Again, on the heals of some permit completion hopefully in the second half of next year. Every time we build a new leach pad out there in Rochester that’s a high double-digit rate of return and just the terrific use of the capital, but if we can find some things externally that – we could slot in that get us some outsize returns we’ll obviously take a look and there are those kinds of opportunities out there. But, some of them our cheap for a good reason, but there are others that I think are unique and we take a look at a lot of those kinds of things.

Michael Dudas – Sterne, Agee & Leach, Inc

Thank you, Mitch.

Mitchell J. Krebs

Yes, that’s all Mike.

Operator

Your next question comes from the line of John Bridges with JP Morgan. Your line is open.

John Bridges – JP Morgan

Good morning, Mitch everybody.

Mitchell J. Krebs

Hi, john.

John Bridges – JP Morgan

Just wondered La Preciosa's – are there any holding costs that we should factor in going forward?

Mitchell J. Krebs

Yes, there is about $2 million a year holding cost, between land and some minimal community administrative ongoing cost, but its right around $2 million a year. and there is no limit there. I mean, as far as anything we have – we’re not pressed for time, in terms of there been some deadline in the next year – two or three or four. So we can hold that thing together for about $2 million a year going forward.

John Bridges – JP Morgan

Okay. But there's no underground option just to go after the higher grade material that might work?

Mitchell J. Krebs

Yes, actually we look real hard at that during the feasibility study John and Joe you’re on the phone. Do you want to comment on that?

Joe Phillips

Yes, that’s a common question there are some higher grade zones our ongoing concerns has been the difficult structure and low roughness index that we think would make underground mining costly and maybe dangerous.

Mitchell J. Krebs

Right, right. I didn’t looked that before but then it seems to be the flavor of the month, to go under ground and go after the high grade.

John Bridges – JP Morgan

And then coming back to your previous answer on the Rochester question, dollar a ton mining cost. That's presumably a mix of the stockpile reclaim and a little bit of mining or is any mining in there at all?

Frank L. Hanagarne

John, this is Frank, it’s a mix of stockpiling we’re mining in our open pit right now. We resume mining in the open pit earlier this year and at the moment we’re 100% in that open pit, will be back into the stockpiles and our plan a little bit later this year. But that reflects what we anticipate as an average cost for – of our sources.

Mitchell J. Krebs

John, just let me to jump in there for one second. I should have done maybe after Chris raised it, I think its important to note that those mining cost per ton you go back to the first part of last year and that number started with the three, I mean that was over $3 a ton and so the guys have done a really good job of just being more efficient there and getting those cost per ton down to the levels that we’re talking about today. So they’ve done a really good job I just wanted to flag that. Sorry, go ahead.

John Bridges – JP Morgan

Yes. That’s amazing. So, the dollar ton estimate is that for mines? I'm not sure is that the mix that you expect?

Peter C. Mitchell

First of all, let me clarify something I referred to a dollar on G&A cost.

John Bridges – JP Morgan

I heard dollar on the mining?

Peter C. Mitchell

No. We'll be probably closer to between a range of $2 and $50 per ton on the open-pit mine.

John Bridges – JP Morgan

Okay.

Peter C. Mitchell

And then will be between say $375 up to $4.25 per ton for processing.

John Bridges – JP Morgan

Okay, got it. Sorry about that. And then just finally, you started the loyalty business year or so ago, probably falls within your earlier answer to buying purchase opportunities, but just wondered what your thought was with specifics to your royalties and then how the ones that you pull it already are doing?

Peter C. Mitchell

John, its Peter, the royalties that we have are doing okay and the portfolio is worked out two of them obviously were within our organization already into were as a result of their global royalty corporation acquisition we did. In terms of opportunities that we’re seeing they tend to be more on the development side than the cash flowing side, but we continue to look and source opportunities and to Mitch's earlier point, as we look at opportunities, we really have to look at them in contrast to our cost of capital and ensure that new ones will generate significant returns plus over that cost of capital and that’s been a limiting factor some of the opportunities that we had a chance to look at over the first six months or eight months of operation.

John Bridges – JP Morgan

Okay, got it Peter thanks.

Peter C. Mitchell

John, just add to that I think, I don’t think you’ve seen what man delay has put out recently on Serra bio, which obviously is a mess that we used to own. That one’s doing really well and then El Gallo continues to do well down there in Mexico, and those are two key components to the portfolio. But those guys are doing a good job there (indiscernible)

John Bridges – JP Morgan

Could you click those onto to us sometimes because I'm not on the name list for that, it might be helpful just to say things like that?

Mitchell J. Krebs

Yes, absolutely, we'll do that.

John Bridges – JP Morgan

Thanks for that and best of luck with proving up the underground at Guadalupe this year and look forward to seeing what that looks like. Thanks a lot guys.

Mitchell J. Krebs

Thanks, John.

Operator

Your next question comes from the line of Andrew Kaip with BMO. Your line is open.

Andrew Kaip – BMO Capital Markets

Good morning guys.

Mitchell J. Krebs

Hi, Andrew.

Andrew Kaip – BMO Capital Markets

I've got a question, I noticed that your pre-development/care and maintenance in your P&L has trended upward fairly significantly this year and can you give us – can you give us an indication of what we should be expecting through the remainder of this year it's been? And what those expenditures relate and then maybe looking into 2015 as well?

Mitchell J. Krebs

Yes, it's almost all in the first half the La Preciosa feasibility study. There is also a little bit of Argentina and Martha related care and maintenance that is the only piece of that line that will continue into second half of this year and into 2015 and I think that maybe on an annualized basis couple million dollars – at most.

Andrew Kaip – BMO Capital Markets

Should we expect La Preciosa care and maintenance to show up in that line item as well?

Mitchell J. Krebs

Yes, good point. I've got people nodding their heads at me. Andrew, that's right. So that, call it $2 million annualized holding cost would be in that line there going forward.

Andrew Kaip – BMO Capital Markets

Okay. And then are we going to see any costs related to Guadalupe development in that line item through the remainder of this year and into 2015.

Mitchell J. Krebs

That will be capitalized.

Andrew Kaip – BMO Capital Markets

Okay, great. That's perfect. Thanks very much.

Mitchell J. Krebs

No problem.

Operator

Your next question comes from the line of Matt Vittorioso. Your line is open.

Matthew Vittorioso - Barclays Capital

Yes, good morning, and thanks for taking my question. I guess just want to dig into the cost guidance a bit more. Certainly appreciate the reduction in the overall annual cost, but you by my simple credit math here. You’re still anticipating an uptick in the second half of the year. And I’m just trying to understand at which mine, should we be modeling, higher cost than we saw in the first half or you know, is there any meaningful difference between sales and production and you said that Kensington costs are coming down. So just want to better understand you know where the higher costs in the second half for coming from?

Mitchell J. Krebs

Hopefully, we'll continue tracking as we have through the first half of the year relative to that guidance. And we can take another look at that as we go through the second half of the year, but I do think where we’ll see higher costs, applicable to sales is at Rochester on just a dollar basis given the expected continued ramp-up there in ounces coming off the pad. I think on a per unit basis there will stay in that kind of $14 ounce range for the full year at Rochester, but in terms of just aggregate dollars that will be a contributor and to a certain extent as well San Bartolome again based on higher throughput in the second half, we see relative to the first half of the year, higher total costs applicable to sales, but again pretty flat on a per unit basis. And you're right Kensington on a unit basis, I mentioned, we'll see that lower due to the higher grades, but as Frank alluded to these higher tonnages that we’re putting through the mill up there, we will also see higher dollar spend to go along with that but again on a lower cost per unit driven by that grade.

Andrew Kaip – BMO Capital Markets

Okay, that’s helpful. So, at Rochester then just so I – I’m clear on my own model here. I think production guidance about 4,100 to 4,400 ounces there. If sales expected to be meaningfully different from that production guidance and at this point being halfway through the year, do you see any visibility either to hitting maybe the higher end of that target? Thanks.

Mitchell J. Krebs

Yes. Our sales and production should be the same there at Rochester. In terms of our ability to hit the high end of the range Rochester, I'm looking at Frank and sort of smiling, but I’d like to think that we could you know obviously, we’ll see how the second half goes, but if we keep on track with our internal budget, we should be closer to high-end and low end on Rochester.

Andrew Kaip – BMO Capital Markets

Okay, thanks again.

Frank L. Hanagarne

May I add a comment to that. We’re comfortable in the range of guidance that we provided, but we’re currently executing mine plan this year that as I said before, we're back in the open-pit and we're targeting better gold rates there. And we are seeing that start to flow through very nicely, and you might have noted. We will change on the gold guidance there as well, Matt.

Andrew Kaip – BMO Capital Markets

Great, thanks, Frank.

Operator

Your next question comes from the line of Adam Graf with Cowen. You’re line is open.

Adam Graf – Cowen & Co

Thanks guys. Just getting back to the grade and throughput at Kensington there. I think prior numbers I had lower throughput although I did have a grade increasing, maybe you could give us a little more color on how that, how that's going to balance if you guys, what's the path to, you know, averaging 2,000 tons today and a full quarter basis and then what is the fully diluted head grade that you guys can maintain you know, on that – with that throughput?

Mitchell J. Krebs

I think the second quarter Kensington, Adam it was around 1,800 tons a day. There is some upside to that although I think maintaining 2,000 a day on a sustained basis is not likely, but balancing between 1,800 and 2,000 throughout the second half of the year is what we expect to see. And on the grade side I think first quarter was 0.17 ounces per ton, second quarter was 0.18 ounces. We will see some improvement there not a quantum leap, but I think to get to 0.2 ish level in the back half of the year, would get us to where we are expecting to see in terms ounces and costs on a unit basis.

Peter C. Mitchell

And I would add to Adam, that the target to the end of the year is 0.18. So we’re basically executing according to our plans at this point. We're pushing the tonnages up and trying to maintain higher average daily rates at all times. But those are mine grades and there's a feature that were employing in the mill that helps us increase the grade of material as actually fed into the flotation circuit. We get – from this math of the [indiscernible] we where from 10% to 15% additional grade going into the actual recovery circuit. And we’ve been doing that for quite sometime. So it’s not just that 0.18, what’s going on there.

Adam Graf – Cowen & Co

And then just for clarity the throughput the tons per day that we're talking about that is on a calendar – it is not on a operating quarter day, that's on a calendar days. So you are counting with everyday of the year, not just the operating days that the mill is running?

Peter C. Mitchell

That’s correct.

Adam Graf – Cowen & Co

Okay. I just want to make sure we're all on the same page, thank you guys for the color I appreciate it.

Peter C. Mitchell

Thanks Adam.

Operator

Your next question comes from the line of David Barilla with JP Morgan. Your line is open.

David Barilla – JP Morgan

Hi guys, how you are doing?

Mitchell J. Krebs

Hi.

David Barilla – JP Morgan

Just quick question on Rochester. It's quite a lot of volatility in terms of the amount of tons that you put on the pad. I'm just wondering what is the reason behind that and how should we look at that going forward?

Mitchell J. Krebs

Can you repeat it?

Frank L. Hanagarne

Yes, I couldn’t hear it.

David Barilla – JP Morgan

Volatility in terms of tons going out to the pad, into that…

Peter C. Mitchell

Well, we’re seeing very little volatility now which is one of the great achievements we’ve been able to accomplish over the last – this year and going back into last year, being very stable mining supplier board to our crushing plants and performing very well here with our crushing and delivering a very consistent tonnage and grade of material out to the pads. So in my view there is very little volatility in that and then we’ve achieved that we’re trying to find ways to optimize that somewhat taking advantage of short-term increases of volume. And so on…

David Barilla – JP Morgan

So you are referring on that $3.3 million you got, what you are thinking about sustaining going forward.

Peter C. Mitchell

$3.3 million for the quarter.

David Barilla – JP Morgan

Yes.

Mitchell J. Krebs

Yes, I think in 2013 we did 12.5 million tons this year we should be somewhere around 14 million tons for the full year and that’s a key driver then as we look out over the coming years as to eventually get that up to its close to 20 million tons per year as we can and then that’s point at which we see Rochester really becoming our largest asset in terms of ounces produced both silver and gold and cash flows well that’s kind of the direction we’re trying to go and obviously the permitting that we’re advancing on is part of that process to ultimately get up to those kind of crushing rates.

David Barilla – JP Morgan

All right thanks a lot guys.

Operator

(Operator Instructions) Your next question comes from the line of Andrew Kaip with BMO. Your line is open.

Andrew Kaip – BMO Capital Markets

Sorry about that. Mitch I’ve got one more question, just on your G&A extra stock-based compensation year, your corporate costs have come down quite aggressively Q over Q. And I’m wondering what should we be the forecasting on a go forward run rate for your corporate overhead?

Mitchell J. Krebs

Yes, second quarter is a pretty good run rate for quarters going forward.

Andrew Kaip – BMO Capital Markets

Okay, all right. Thanks very much.

Mitchell J. Krebs

Yes.

Operator

There are no further questions at this time. I will turn the call back over to the presenters.

Mitchell J. Krebs

Okay, thanks for taking the time to dial in today. We are encouraged by the progress we’ve made in the first half of the year. We look forward to speaking with you again either at our Investor Days in October in New York and Toronto or at the very least November to discuss the third quarter results. So, thanks again.

Operator

This concludes today’s conference call. You may now disconnect.

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