First Majestic's (AG) CEO Keith Neumeyer on Q2 2016 Results - Earnings Call Transcript

| About: First Majestic (AG)

First Majestic Silver Corp. (NYSE:AG)

Q2 2016 Results Earnings Conference Call

August 10, 2016 01:00 PM ET

Executives

Keith Neumeyer - President and CEO

Ray Polman - CFO

Connie Lillico - Corporate Secretary

Analysts

Heiko Ihle - Rodman & Renshaw

Chris Thompson - Raymond James

Jessica Fung - BMO Capital Markets

John Sclodnick - Desjardins

Operator

Thank you for standing by. This is the conference operator. Welcome to the First Majestic Silver Q2 Financial Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions]

I would now like to turn the conference over to Keith Neumeyer, President and CEO. Please go ahead.

Keith Neumeyer

Welcome everyone to our conference call this morning. Here in Vancouver, we have a room full of people. We have obviously myself, CEO and President; we’ve got Ray Polman, our Chief Financial Officer; we’ve got Connie Lillico, our Corporate Secretary; we also have in the room Todd Anthony, our Vice President of Investor Relations; we also have our VP of Finance Andrew Poon; and we also have Jill Arias our VP of Marketing.

First off, I’m going to pass this call over to Connie.

Connie Lillico

Thanks, Keith. Prior to us beginning today, I’ll read our disclaimer and forward-looking statement. Certain statements contained in this conference call regarding the Company and its operations constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and Section 21E of the United States Securities Exchange Act of 1934 as amended.

All statements that are not historical facts including without limitation, statements regarding future estimates, plans, objectives, assumptions or expectations of future performance constitute forward-looking statements. We caution you that such forward-looking statements involve known and unknown risks and uncertainties that could cause actual results and future events to differ materially from those anticipated in such statements.

Such risks and uncertainties include fluctuations in precious metal prices; unpredictable results of exploration activities; uncertainties inherent in the estimation of mineral reserves and resources; fluctuations in the cost of goods and services; problems associated with exploration and mining operations; changes in legal, social or political conditions in the jurisdictions where the Company operates; lack of appropriate funding and other such risk factors as discussed in the Company’s filings with the Canadian Securities regulatory agencies. Resources and production goals and forecasts may be based on data insufficient to support them. The Company expressly disclaims any obligation to update any forward-looking statements.

Back to you, Keith.

Keith Neumeyer

Thanks Connie.

I’m sure, everyone that’s on the call has seen our news release this morning. We did preannounce our production numbers some time ago and today the financial numbers were put out into the market. I’m not going to bother going through the numbers in detail but just from a highlight prospective, we did produce 4.7 million equivalent ounces in the quarter, which was the increase from the prior quarter and the same year, Q2 2015, but a slight decrease from the previous quarter.

We also have a very, very strong balance sheet now of over US$108 million in the treasury. Interestingly enough, silver prices everyone knows is now creeping up. We’re in the $20 range, which is nice to see. And Q3 will have much higher silver prices that we’re currently experiencing, both Q1 and Q2. Interestingly enough, Q1 average selling price was $15.08, which was the lowest average selling silver price sales that we experienced in almost five years. At $17.01, average selling price for Q2 was almost identical to the same price of the prior year in Q2, but of course the Company was vastly more profitable this quarter compared to the same quarter in the prior year, as a result of all the cost cutting measures that we’ve been doing.

But, as I’ve been very clear to investors on a worldwide basis throughout my tours with institutions and at conferences, I told all of you and many others obviously that the mining sector has been starving its assets and same is First Majestic of investments dollars over this past year. It’s been a very challenging five years. And as a result of the decrease in investment in exploration and development, we had no choice but to start to reduce production at some of the operations in order to produce profitable ounces, in order to protect the treasury, because it was really the main focus of the business over the last couple of years, was to protect the treasury to prevent the Company from having to go to market to finance at very low share prices.

I think we did a great job doing that, but it’s now time to go back and start reinvesting capital, and that’s a very exciting thing for us to start to commence the game. But, as I’ve said to investors and shareholders over the last 12 months that there is a delay from the moment we decide to start increasing investment again to increase production again. There is a delay of anywhere between 12 and 18 months, depending on the mine.

And just to draw some numbers, our development investment increases 51% from H1 to H2. That’s a big number. We won’t see a benefit right away. This increase of investment dollars in H2 won’t start showing up as a benefit, meaning increase in production until the middle of 2017. The exploration dollars, we’re now decided to increase our exploration by 46,000 meters, which is a big number. And the benefit of that will be updated resource models, updated 43-101s, increased life of mine, and so on and so forth. So, it’s great to see that we are seeing the dynamic or cash flows coming into the business. Our treasury is going up every single week now as a result of earnings, and that is allowing us to start to increase investments again.

Also of note is our investment at Plomosas. This is going to be our next producing asset, become our seventh mine in Mexico. And it’s very exciting for us because this has been in our portfolio since 2012, and we’ve never spent a dollar on this asset. And this is -- the money we’re putting into this asset at the end of 2016 and all throughout 2017 will start to advance this project to a preliminary economic assessment by the end of 2017. So, it’s something we’re very excited about.

So I am going to pass. I am hoping that people are going to line themselves up for questions; I see a couple of people are ready on the question queue. Anyone else, please get on there and then we’ll try to cover as many questions as we can as time allows. So, let’s go to questions. Thank you.

Question-and-Answer Session

Operator

Thank you. We will now be conducting the question-and-answer session. [Operator Instructions] The first question comes from Heiko Ihle of Rodman & Renshaw. Please go ahead.

Heiko Ihle

I’ve gotten some questions from some investors regarding the relationship with First Mining Finance. How much do you exactly currently own after you -- as you just took down the other $0.5 million; what’s the maximum you’d be willing to own? And quite honestly, would you ever just consider taking over the firm as a whole?

Keith Neumeyer

No. First Mining Finance is completely different business model; it’s a different business, even though it is in this office here in Vancouver, it’s a gold company focused on Canada. So, it’s a development company, it’s got no relationship or no -- there’d be no reason for [multiple speakers] no, thank you Ray, thanks for that word. No, synergy at all, it wouldn’t make any sense at all. But First Majestic is substantial shareholder; we just perceived another 800,000 shares as result of the debt settlement that we did with them. I think our share position is somewhere around close to 15.3 million shares we own of that company.

Heiko Ihle

So that’s only 3%, that’s really not all that much. Okay, fair enough. Like I said, I’ve gotten at least a half a dozen people have asked me about this over the last couple of weeks…

Keith Neumeyer

First Majestic I think is silver in Mexico…

Heiko Ihle

I understand, but I mean there is obviously some management overlays and again that pop-up in the press release that’s why I figured I’d bring it up in the questions.

Keith Neumeyer

There is no management overlay. There is some directorship overlay. There is no one in -- no one that works for First Majestic. Actually, Andrew Poon is the VP of Finance for First Majestic; he’s the interim CFO of First Mining Finance, but he’s actually giving that position up over the next little while, but there is no management cross-overlay.

Heiko Ihle

Fair enough. So, you expect to invest a total of $82.5 million in CapEx for a full year 2016; that’s obviously quite a big increase from what we were modeling and what you guys expected previously. Can you just sort of walk me through that quarter by quarter for the remainder of the year? My gut feeling, given that $6 million has gone to La Encantada and the roasting plant there, I think it’s fair to say that Q4 spend is higher than Q3, but could you just quantify it a little bit?

Keith Neumeyer

It’d be best to really talk to Todd on that directly rather than wasting time on this call, Heiko because getting into those kinds of details is really not fair. The $20.9 million increase in investment in exploration development is spread throughout the operations, and then of course the Plomosas being the first money it’s going to be receiving. But there is a very much of focus on La Encantada. The mines that are having a largest challenges due to the lack of investment over the last three to four years are the ones that we’re really focusing on. But we can give you more detail on a one on one call with Todd.

Heiko Ihle

Perfect, thanks a lot.

Operator

The next question comes from Chris Thompson of Raymond James. Please go ahead.

Chris Thompson

I don’t want to get into too much detail here and I don’t expect any, but obviously you just laid out the focus of the capital spend. But, can you give me a sense of the development upside at Del Toro and La Parrilla obviously? Both of these mines have I guess produced or not lived up to initial design expectation. So, is this -- are you going to be revisiting the operating plan for both mines, considering you’ve got a healthier balance sheet now?

Keith Neumeyer

Well, I would agree with your statement regarding Del Toro for sure. I wouldn’t agree with your statement regarding La Parrilla. La Parrilla has been quite an engine of the business for at least since inception of the business. It was our first acquisition and has gone through five expansions since 2004. It’s really the heart of our business. It’s where our ISO9000 certified lab is; it’s where all our due diligence takes place when it comes to looking at other assets or even the metallurgical work that we did at Santa Elena to increase the recoveries from low-60s to the mid-80s. So, all that work was done at La Parrilla. So, it’s where our training takes place; it’s one of the most advanced mills. But, like all the mines, it is no different. We did have to reduce the throughput there from 2,000 tons to 1,700 tons -- and that was oxide circuits, the oxide circuit went from a 1,000 tons a day to 500 tons a day, but we did in fact increase the sulphide circuit from the 1,000 tons a day to 1,200 tons a day, giving total of throughput there, 1,700 tons a day. So, it was really the oxides that we were having the challenge there. But we’re going to focus --refocus some investments in the San Marcos area. With this improved strength in our balance sheet, we hope to see the oxide circuit get back up to traditional levels late in 2017.

Chris Thompson

Okay. That’s what I was indicating about that asset. And Del Toro?

Keith Neumeyer

Del Toro is a different animal. It’s never reached its throughput capacity. We built this 4,000 ton a day mill. We stopped -- we built -- we were building this mill in 2011 and the market was falling apart, the silver price was dropping like crazy and then in 2012 we decided just to shut down the investment. We never did the finish building the shaft, we never got to do all the underground development that we wanted to do. There is $35 million investment yet to be made there to get all that completed, and we stopped it. So, we’ve been running this mill at under capacity. It’s got three circuits; it’s got a doré circuit or cyanidation circuit, it’s got a zinc circuit and it’s got a lead circuit. And the only circuit we are operating is the lead circuit and the other ones are sitting on care and maintenance. So, yes, we are going to get back to that. And part of this increased investment is starting to increase development in the exploration investment there because we do want to ramp that mill back up to -- we don’t have plans to get it to 4,000 tons a day anytime soon but getting it back up to 2,000 and higher by the end of 2017 I think is a conceivable goal.

Chris Thompson

And then -- thanks for that Keith. And then, Plomosas, you say that PA is anticipated I guess next year. What sort of operating scenario do you envisage there?

Keith Neumeyer

Well, it’s little bit too early to really start throwing numbers out on it. But, publicly, I have stated we are looking to build a 2,000 ton a day operation there. And it will be primarily gold silver -- or pardon me sliver gold mine. But it’s -- look, we’re going to throw some numbers out hopefully by mid to late 2017 and we’ll just see how it goes. But we’re just excited to get back to it. It’s a very high grade gold silver operator -- or should be so reasonably good grade silver gold mine.

Chris Thompson

And then, finally, Keith, just obviously Santa Elena, a great quarter from that mine. Is that sustainable at these sorts of levels or do you see it sort of -- maybe the grades dropping back to sort of more normal levels?

Keith Neumeyer

What’s happened there is a bit of a -- one of these surprises, I suppose that’s turned out quite positively there. If you were down on the site, it’d be easier to explain to you, because on the phone, it’s kind of hard to explain. But, we did run into a high-grade narrow structure vein crossing the main Santa Elena dam and it looks like it’s got some legs to it. And the silver grades in the 500 gram range and the gold grades are in the five to six-gram range. And we’re blending this high grade material, which to the ore-grade material, which is really helping out the production there. And we don’t see an end to it, quite frankly. The structure on surface looks like, it goes for quite some time, and it could actually even intersect another parallel structure, which we’re just going to start drilling in the second half of this year. So, there is a lot going on at Santa Elena that could add to life of mine, it’s little bit early to really start getting too excited about it. But, I can tell you some of our technical guys are getting excited.

Operator

The next question comes from Jessica Fung from BMO Capital Markets. Please go ahead.

Jessica Fung

My question is related to La Guitarra. I’m sorry, I didn’t get to go to site earlier this year. Can you just remind us again about what your plans are there, what the timeline looks like, how much development you guys need to do there to get the expansion up?

Keith Neumeyer

Yes. Ray’s got the numbers in front of him. La Guitarra is going to become a major focus of ours over the next two years. It’s going to become one of our important capital spend. That and Plomosas will be the two most important capital spends over the next two, three years, so. Regarding some details on increases in investment H1 over to H2, Ray, do you want just throw those numbers out?

Ray Polman

Sure. What we’re seeing is that sustaining exploration is growing quite significantly. We’re moving it from where it was in H1 at roughly $0.43 up to $2.78 as a component of all-in sustaining cost. And we’re also seeing sustaining development increasing very significantly from $2.42 to $12.31 and for a sustaining property, plant and equipment, which is really the investment in the fleet, which is preparing us for expansion for next year. We’re seeing that go from $1.40 to $4.63. So, all those things are combining to show that the growth in all-in sustaining cost is really quite significant in La Guitarra.

Jessica Fung

Got it. And do you think you need to sort of maintain these levels through next year?

Keith Neumeyer

I think so. I think, Jessica, that’s probably a fair statement. We haven’t done the 2017 budget yet, but there is a lot of exciting geology at La Guitarra that the guys have been wanting to work on for a long, long time in the Mina de Agua area, the Rincón area, the Nazareno area. These are areas that have been ignored since 2012 when this asset first came into our portfolio. And when we bought this company or this mine, our plan in 2012 was to bulldoze this mill down and rebuild a brand new modern facility and do all the work necessary to produce a lot more than what it has been producing ever since we bought it. But because of market conditions, we had to keep the production fairly low, as long as that was making a profit, which is already we cared about which we achieved, it was fine. Now, the cash flows are coming into the business as they are, it’s time to make those investments we wanted to make originally, when we first bought this mine.

Jessica Fung

Thanks, got it. And then, very quickly on Encantada with the roaster, so you guys will gain 1.5 million ounces of silver there. Over what time period is this? I assume this is not an annual figure.

Keith Neumeyer

That is an annual figure.

Jessica Fung

Oh, it is. Okay. Every year, got it. And for how many years do you guys estimate?

Keith Neumeyer

Well, I think it’s basically for as long as the mine is producing, Jessica, because we think that if we are -- if we have 3,000 tons of a throughput from the underground, we’re producing basically 3,000 tons a day of tailings. And this roasting facility is 2,000 tons a day. So, it will have a constant feed, not only of the all the above ground tailings that currently sits there, which is something in the order of -- what, 6 million or 8 million tons or pounds or so? 5 million tons of tailings, sort of the part of the 43-101, plus what’s coming out of the mine. So, it will go on for as long as the mine exists.

Operator

[Operator Instructions] The next question is from John Sclodnick of Desjardins. Please go ahead.

John Sclodnick

Just a quick question, most of them have been answered, but just looking at the strategy going forward, wondering if you guys are planning any investment at all in kind of some of those other projects; La Luz and then La Joya come to mind, or whether you’re just going to be fully committed to Plomosas in the near-term?

Keith Neumeyer

Yes. The reason why we’re focusing on Plomosas because it’s basically already permitted. Here is the mine that was shut down in the mid 80s by Grupo México and typically they had -- very typical the Grupo, they have a problem with the union, so they just bring in all their flat bed trucks and load out the mill and drive. And mine’s never been in production ever since. We’ve been underground, we looked at it. The guys are really excited about it. It was shutdown right in the middle of production. There is a lot of ore there. It needs to be defied, it needs drilling, it needs to have economic study done on it and so on and so forth. But it’s going to be exciting addition to our portfolio. And the reason why it’s easy to get up and running is because the water permits already in place, the explosive permits and all things still in place. The electrical line is there. We actually have a camp that is big enough to house 100 people. We’ve had a family living there since we bought it in 2012, keeping it and care and maintenance. And so, it’s in very good shape. What else? You need to do the change of land or use permit and all the different things that don’t need to be done. So, the only thing we’ll have to do is permit the tailings dam, because that will be in a different location, and that’s generally a fairly easy thing to do. So, from a permitting perspective, it’s a no-brainer, it’s going to be very simple.

But La Luz is a different situation. La Luz is in a much more difficult part of Mexico. It’s as our shareholders are well aware and it’s disclosed in our financial statements, there is an indigenous issue there with some local people that are anti-mining. The government’s fortunately now just in the last year actually starting to say some very positive things to us about getting it up and running. So, maybe we’ll end up getting permit at La Luz in the next year or two, but we’ve been working on getting a permit there since 2011 unsuccessfully. It will one day be a great mine, but until it’s permitted and until the government gives us the go ahead, nothing is going to happen there. So that’s why the focus is on Plomosas.

La Joya is a different animal. La Joya is a very complex ore body, it’s full of all kinds of different metals and no low grade metals. The complexity of that ore is very complex, very, very complicated. So, it needs much, much higher metal prices before it can actually become economic. And sitting in our portfolio, we haven’t decided what to do if they get -- it’s an interesting asset geologically but quite frankly whether it becomes an economic mine, it’s hard to really say.

Operator

The next question comes from Wayne Curtis [ph] who is a private investor. Please go ahead.

UnidentifiedAnalyst

First of all, let me say that I am very impressed with you and your team. I’ve been with you guys and First Mining for the longest when you guys came out here. I mainly -- my portfolio lies a lot with dividends and royal streams, royalties. What are the plans of that happening in the future? And two, wouldn’t attract more new investors coming in that want to have a portfolio of dividend coming at them?

Keith Neumeyer

Yes, I would agree with you 100%. And going back to 2010, 2011, the Board actually was spending quite a bit of time talking about dividends. And then, back then I believe our treasury was somewhere around $110 million, about where it is today. But then, the silver price started to fall off and it just didn’t make sense to start paying a dividend. So, we cancelled the idea. We are very close to actually making a decision to do it. Actually we just had a Board meeting yesterday and it’s starting to recirculate among the Board. So, look, the market’s just started to improve, only six months into this renewed full market in the metals. We don’t know how long it’s going to last or how far it’s going to go. I’ve got my own personal views on it, but that’s not always necessary, [ph] that’s -- my personal view is not always really that in part [ph] when it comes to what we do with our treasury. And we do have a couple of assets that we want to build. And I would like to see the treasury continually as it is now and get maybe another mine built. We’ve got Plomosas built. And just see how the business looks before we actually pull the trigger on paying dividends. But I’m the largest private investor or shareholder in the Company. So, dividend would do me a lot of good. But there is a time and place for everything but this is something we will be -- or we always do consider.

Unidentified Analyst

That’s fantastic and I appreciate that. And second, last, I’m leaving. I enjoyed the First Mining. I’m happy where you guys are at with all that gold content. Have a great year and thank you for the time.

Keith Neumeyer

Well, thanks for calling in, Wayne.

Operator

The next question comes from Greg Pazeski, [ph] who is a Private Investor. Please go ahead.

Unidentified Analyst

Good morning. Half of my answer -- half of my question answered about Santa Elena. I first wanted to say as a four-year investor, I was pretty impressed by your execution during the bear market. And I’m looking forward to such a quality management team doing something with some money. So, I just wanted to pass that along. I really was rewarded by hanging in there with four years of this, but anyway…

Keith Neumeyer

I’m glad you hung on, Greg.

Unidentified Analyst

Yes, thanks. And it’s just a first class Company, and I hope other people appreciate that as well. Any equity positions other than the one that was mentioned for First Mining Finance?

Keith Neumeyer

Yes, we have a portfolio of small things that really aren’t even worth mentioning. In the MD&A, we do break it out. We’ve got a position in PSLV which is the Sprott Silver Fund, which is actually going up, which is nice, finally seeing some profits there. And we obviously got the position in First Mining Finance which is damn quite well as well.

Unidentified Analyst

Okay, thanks. And then, on Santa Elena purchase, the acquisition, I kind of understand obviously what a wonderful asset that is. When you bought it, what did you project as its future growth ability, what’s the like upside to that besides the obvious good stuff about its cost and production?

Keith Neumeyer

When we looked at it, we didn’t actually think of -- there is different ways to looking out at a mine. So, when you buy, really what improvements can you make; not necessary can you increase more production. So, first off, when we looked at it, we realized that the recoveries that were -- by low, they were only in low-60s, so we did some work there at our lab in La Parrilla and hold [ph] with some tweaking we got the recoveries up in the low-80s. And that 20% change in recoveries is huge. And that allowed us to actually decrease the throughputs slightly in the mill, take a little bit of pressure off the mine, use less reagents and chemicals and so on so forth, and also change some of the chemicals. And due to the fact that First Majestic is a much larger company, we’ve better contracts with suppliers. So, we were able to buy things much more cheaply. Our development costs went from $1,600 a meter to $900 a meter and our cyanide cost went from $2.90 to $2.06 and so on and so forth. So, there is a lot of synergies and a lot of work that went on behind the scenes to bring the cost down. The cost in the Q3, the first quarter -- or the last quarter that SilverCrest had that in their portfolio, they had $12.50 all-in sustaining cost. Our all-in sustaining cost is in the $2 range right now. So, we had a $10 improvement in all-in sustaining cost. And we actually didn’t predict that. We expected going into that and to save $3 to $4 as our target. And we obviously did much, much better than we anticipated.

We didn’t expect to run it in high-grade area that we’re currently mining, so that was a bonus. The geological upside right now looks, quite frankly, better than what we actually thought it was when we bought it. So, the focus over the next 18 months at Santa Elena is really to increase life of mine. The life of mine there on a 43-101 basis is eight years. And our technical team wants to see that number go up; we want to see it go up obviously as a Company. So, that’s really the focus. So, we’re going to drill and develop, as much as we can over the 18-month period and see if that life of mine can creep up over the ten years.

Unidentified Analyst

Thank you for that. It’s helping to educate me. Best of luck going forward and congrats to your management team.

Operator

[Operator Instructions] The next question comes from Andy Shopik [ph] who’s also a private investor. Please go ahead.

UnidentifiedAnalyst

Thank you. And thank you Keith for allowing us private investors to participate in the call. I want to ask you a question about the current status of the taxation in Mexico. I recall a few years ago they imposed additional tax burdens on mining companies. And I wondered if there have been any susceptive changes to those regulations or what you anticipate going forward, your tax situation on your mines in Mexico will be?

Keith Neumeyer

Well, we’re not inside government, but the oil and gas sector is being privatized, which I think has helped take some pressure off the mining sector for sure. There has been talk over the last couple of years to actually reduce the taxes for miners. It’s hard to believe that governments ever would actually reduce taxes. But, I know there has been some lobbying towards the government to do that. They did impose the 7.5% tax which is basically based on EBITDA, which is approximately 3.5% or 4% actual real tax hit. They did increase the tax from 29% to 30% as well. They have the 0.5% royalty, which is on revenues of precious metals, which we pay. Look, it’s -- when you look at Mexico and compare to the OECD countries, which I think there is about 130 members, Mexico is about right in the middle of taxation for corporations. They were on the low end of the scale before they did their tax hike, but they increased taxes, not just for mining, they increased taxes right across the board for all industries, including individuals. So, the individual tax rates are up in Mexico as well. So, put them about in the middle of the pack. And I’m not really sure, Ray, do you have any additional comments?

Ray Polman

No, the only additional comment that I would have is with respect to what they did at the end of last year, we had a deconsolidation liability that was imposed upon us a couple of years ago. And they saw to it to provide a credit, so that we could eliminate that liability by 50%. So that was a very positive thing for us. Other than that, the only changes we’ve seen are basically administrative. It’s a very difficult company administratively and that they basically ask for information for everything that we file. They hold on to value added tax clams for quite a while, as most companies will attest to. And in our case, we’ve been very good about recovering those value added taxes and we still have a very large number of value added tax to recover for the acquisition of SilverCrest. And we’re going to continue to work in that direction and that should show up in our balance sheet in a couple of quarters as well. So, I would say that there are no changes and no expected changes.

Keith Neumeyer

Thanks Andy. And I see there is no more calls. If anyone else wants to jump on, you’ve got couple of seconds to do that.

Operator

We have no more questions at this time. This concludes the question-and-answer session. I would like to turn the conference back over to Keith Neumeyer for any closing remarks.

Keith Neumeyer

Well, thanks very much everyone for participating. The participation numbers on the call today were probably one of the highest we’ve seen in the last few years. So, it’s really nice to see the participation rates being at these level. If there are any questions that anyone does have that haven’t been answered today, please call Todd Anthony, our VP of Investor Relations at the Company’s 1800 number and we can answer any of your questions. Thanks again for participating. Have a good day.

Operator

This concludes today’s conference call. You may disconnect your lines. Thank you for participating. And have a pleasant day.

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