Endeavour Mining plc's (EDVMF) CEO Sebastien de Montessus on Q2 2021 Results - Earnings Call Transcript

Endeavour Mining plc (OTCQX:EDVMF) Q2 2021 Earnings Conference Call August 4, 2021 8:30 AM ET

Company Participants

Martino De Ciccio – Vice President of Strategy & Investor Relations

Sebastien de Montessus – President and Chief Executive Officer

Mark Morcombe – Executive Vice President and Chief Operating Officer

Joanna Pearson – Executive Vice President and Chief Financial Officer

Patrick Bouisset – Executive Vice President Exploration & Growth

Conference Call Participants

Fahad Tariq – Credit Suisse

Ovais Habib – Scotiabank

Anita Soni – CIBC Capital Markets

Wayne Lam – RBC

Don DeMarco – National Bank Financial

Lawson Winder – BoA Securities

Mark Bentley – ShareSoc

Operator

Ladies and gentlemen, thank you for standing by, and welcome to Endeavour Mining's Q2 and Interim 2021 Results Conference Call. At this time all participants are in listen-only mode. After management's presentation, there will be a question-and-answer session. [Operator Instructions] Today's conference call is being recorded, and a transcript of the call will be available on Endeavour's website tomorrow.

I would now like to hand the conference over to the management. Please go ahead.

Martino De Ciccio

Hi, everyone. I am Martino, Vice President, Strategy and Investor Relations, and I'd like to welcome you to our Q2 2021 results webcast. On the call, I am joined by Sebastien, Mark, Joanna and Patrick. Before we start, please note the usual disclaimer. Today's call will follow our usual format. Sebastien and Joanna will start by discussing the Q2 operational and financial highlights, Mark will then walk you through our detailed results by mine and finally Patrick will give you a brief overview of our half year exploration results. We'll try to be as quick as possible to leave time for questions at the end.

And now I'll hand it over to our CEO, Sebastien, to walk you through our Q2 highlights. Sebastien?

Sebastien de Montessus

Thank you Martino. It's definitely been a busy year so far and we have achieved several important milestones, including our LSE listing back in June. To recap the quarter, I would summarize in one sentence, we have had a strong business performance, which has underpinned our ability to deliver excess shareholder returns. And you'll see on the left top box that we delivered a record operating performance with production up 18% compared to Q1. We produced over 400,000 ounces during the quarter, and that's an annualized run rate of over 1.6 million ounces while the initial guidance is 1.4 to 1.5 million ounces.

As a result, we are on track to achieve the top-end of our production guidance and our costs are also on track. Our strong operating performance has of course translated into a very robust set of financials. Our operating cash flow increased by 44%, 45% over Q1 to reach roughly $300 million and our adjusted net earnings nearly doubled to reach roughly $180 million. So yes, we are generating a lot of cash and we are allocating that cash to continue to strengthen our balance sheet, exploration, gross and, of course, shareholder returns. We overall reduced our net debt this quarter with our leverage ratio now standing up near zero. This put us in a very strong good position to deliver excess shareholder returns.

This started earlier this year when we paid our maiden dividend of $60 million for the 2020 fiscal year and today we are pleased to announce the dividend of $70 million for H1 2021. Our minimum commitment for this year is $125 million, so as you can see today's dividends demonstrates our intent to pay more than the minimum. In addition, given the attractiveness of our stock price, we've been actively buying back our stocks and the program was launched in April. To date approximately $70 million has been purchased and we intend to keep the program going as long as we see our share price undervalued. This cash flow has also allowed us to continue to aggressively explore with $50 million spent this year already and given the strong results we will be announcing in the coming weeks, I can already confirm that the group is on track to deliver again over 2.5 million ounces of indicated resources this year, thanks to Patrick and his team.

Moving to Slide 7, you can see our key performance indicators tracking through the year-to-date. Our safety performance has continued to track well ahead of our industry peers and we have enhanced several safety programs with our ultimate goal of zero harm. Despite being busy with corporate activity during the first half of the year, we are very well positioned in terms of production related to our target for the full year. Our performance to date has put us well on track to the top-end of our guidance range with the inclusion of Wahgnion and Sabodala-Massawa for the full quarter having a positive impact. Similarly all-in sustaining costs are on track and during the first half are in the bottom half of our full year guidance range.

On Slide 8, you can see our production and the all-in sustaining costs for the past five quarters with the consolidation of Sabodala-Massawa and Wahgnion for the full quarter. We've had a strong improvement in our production, which is up 18% as well as solid performance on cost controls. Our portfolio moves over the last year have had a clear benefit with production up by more than 2.5 times, while unit cost have declined by 9% compared with the prior year quarter. As we look to the individual contribution of our operation, you can see that Ity, Hounde and Karma are all contributed positively compared with Q1, we saw an anticipated decline at Boungou due to grade sequencing while Mana was essentially flat. In addition, we have the full quarter consolidated benefit of Sabodala-Massawa and Wahgnion.

On Slide 10, I'd like to draw your attention to how our results compared with the first half of 2020, not only in terms of production and all-in sustaining cost, but also in terms of assets and geographic diversification. Our business has changed significantly with the left by representing our original portfolio and the right by representing our current portfolio. We produced 433,000 ounces, more ounces of gold while all-in sustaining costs declined by $56 per ounce. Not only that our portfolio is well-diversified with seven different operations across three different countries with one flagship mine in each of those countries with Sabodala in Senegal, in Ity in Côte D’ivoire and Houndé in Burkina.

On the following slides, Joanna will take you through our financial performance in more detail. Joanna?

Joanna Pearson

Thanks, Sebastien. Moving to Slide 11, our all-in sustaining margin has continued to trend upwards. The combined benefit of increased consolidated production reduced all-in sustaining costs and a modestly stronger gold price have resulted in a 19% increase on a quarter-over-quarter basis. Compared with the prior year quarter, our all-in sustaining margin has increased by more than 250%. This is due to stronger production at our legacy mines, as well as our acquisitions of SEMAFO and Teranga. On Slide 12, you can see the trend of our operating cash flows, which increased by 51% over Q1 2021 and by more than 400% compared to the prior year quarter. When looking at this metric, this is our second best quarter ever following the strong performance of Q4 last year, where the gold price was roughly $50 per ounce higher. Our Q2 performance is not fully representative of the operating performance of the company due to the seasonality of our tax installment payments, which are always higher in the second quarter of the year.

As such moving to Slide 13, we have tried to illustrate a few of the key factors behind the variance and operating cash flows between Q1 and Q2. The waterfall chart starts with our Q1 cash flow of $198 million. You then see that the largest portion was driven by an increase in gold sales, as noted earlier in the presentation. The second quarter is when we normally pay most of our corporate income taxes leading to the outflow for taxes paid. We also benefited from an inflow in changes in working capital of $14 million, while last quarter we had an outflow of $58 million, which was driven primarily from the working capital acquired in the Teranga acquisition. We also got some modest help from the gold price in the quarter. For reference, we had put a few details on the right of the page and, of course, there's a more fulsome notes in our MD&A.

On Slide 14, we show how our net debt position has continued to improve since the start of the year. We are now sitting at a very healthy leverage ratio of 0.07 times net debt to last 12 months of adjusted EBITDA, despite observing the Teranga debt as well as repaying, nearly $120 million of gross debt. Our cash balance remains high at $833 million. We reduced our gross debt during the quarter by $120 million, and we will assess opportunities for further reductions given our large cash position. Slide 15 illustrates the strength of our balance sheet. Despite $59 million of buybacks during the quarter, we have been able to reduce our net debt down to $77 million and our leverage ratio down to about 0.07 times. We have demonstrated a steady trend of debt reduction aside from Q1 of this year, where we assume $332 million of net debt from Teranga. In Q2 alone, we reduced our net debt by $85 million and our gross debt by $120 million.

Moving to Slide 16, we have a detailed breakdown of our net earnings for the past two quarters. At the bottom of the slide, you can see a 46% increase in our adjusted net earnings per share from continuing operations compared to the prior quarter. As usual, I won't go through every line here, but we'll address a few of the most significant items. Earnings from continuing mine operations increased due to stronger production, the full consolidation of the Teranga assets and a slightly better gold price while costs are remained in check. Corporate costs and acquisition and restructuring costs were higher than usual due to the heightened corporate activity as you are all well aware.

Current income tax expense decreased relative to Q1, despite the inclusion of the new mines acquired for the full quarter due to adjustments related to the prior taxes upon filing of our tax returns, as well as the decrease in taxes spent – tax expense in the quarter, based on the lower effective tax rate on the company's taxable earnings in the quarter. Overall, this translated into net earnings of $149 million and adjusted net earnings of $183 million. On Slide 17, you can see how our adjusted net earnings per share has trended over the past several years. Overall, we are very pleased with the trend here and we made more than nine times as much for sharing Q2 2021 relative to Q2 2019, which is quite remarkable.

I'll now hand it back over to Sebastian so that he can probably comment on our shareholder returns program.

Sebastien de Montessus

Thank you, Joanna. Moving to Slide 18, before discussing our interim dividend as we have declared today, I would like to reiterate our commitment to shareholder returns and remind you all of our new shareholder returns framework that we launched earlier this year. We're targeting a distribution of at least $500 million over the next three years minimum if gold remains above 1,500. This is aligned to our expected production growth, so we are rewarding shareholders with a growing dividend, both in nominal terms and of course on a per share basis.

As you can see on this chart, our friendly shareholder return program has – is very well positioned across [indiscernible] from a yield perspective specifically when you sum our dividend and the active buyback program. Also to be clear, our intent is not to compete with Russian gold producer or single mine companies who either needs higher yields to attract investors or do not have growth potential to invest in their portfolio. Before handing it over to Mark, just a quick word on the UK listing, which was recently achieved, that this was a large milestone for us, and we expect to start seeing the results once we are included into the FTSE index and the MSEI indices. But before discussing UK indexation, I wanted to acknowledge our deletion from the S&P/TSX composite, which occurred mid-June. While we didn't expect this to occur, we were pleased to see that the outflow provided natural liquidity for UK and European long-only funds.

In fact, on the rebalancing date, we traded approximately 10 million shares and our share price still finished up. Not that this overhang is completely removed, but it places us in a good position to benefit from the expected inflows related to FTSE indexation, MSEI indexation, and which are expected to be larger than the S&P and TSX composite outflows. On this page, you see our expected pathway to indexation. As we didn't expect our liquidity to shift to the UK, we decided to read them inside the company to the UK. This allows us to have a very low liquidity threshold to be eligible for the indexation.

I will now hand things over to Mark, which is currently onsite at Ity and will go through the details of our operations on a mine by mine basis. Mark, over to you.

Mark Morcombe

Thank you, Sebastien, and hello to everyone on the call. As Sebastian mentioned, I am currently onsite at Ity to spend some time with our General Manager, Riaan and his team, who have put together a fantastic first half, but more about Ity shortly. I'll begin the operations review with Sabodala-Massawa, which we acquired from Teranga in February 2021. We transferred our General Manager, Christo from Houndé to Sabodala in May and he settled in very quickly to the new role. There's a great team onsite and they've handled the transition well, putting in a strong first half. Production increased this quarter compared to Q1 due to higher grades coming from the Sofia Main pit that the Massawa area now contributing all of the mill feed, which is expected to remain the case for the remainder of the year.

On Slide 23, you can see an overview of our ongoing phase 2 expansion, which is well underway. The purpose of this expansion is to install the gravity circuit, increased leach residence time and increase the carbon management to better handle the higher grade in Massawa ore through the existing CIL plant. The project is tracking ahead of schedule and the additional electrowinning cell is now in use. The DFS for phase 2 is underway and on track for completion in Q4 2021. As a reminder, this phase will see the construction of a new biooxidation processing plant to treat the high grade refractory ore from Massawa.

On Slide 24 are some recent pictures highlighting the good progress we are making with the phase 1 upgrades. Starting at the top left, you can see the additional electrowinning cell position in the gold room. In the second picture, in the top right, you can see the new carbon regeneration kiln has installed, in the bottom left you can see the infrastructure for the additional acid wash and elution columns, and the last photo you can see the rolled steel segments of the new leach tanks, which are welded together in situ one straight after another, until the tank reaches the designed height.

Turning to where Houndé production increased significantly this quarter over Q1, making it a key contributor to the group's strong quarterly performance. Our new General Manager, Lauren, has already proven to be a great replacement for Christo and has a strong mining background. The sharp increase in production was attributable to a higher process price and recoveries. Due to the increase in the proportion of high-grade oxide ore from Kari Pump with further benefit coming from positive grade reconciliation in some of the higher grade zones. Processing performance was also very good with improved daily throughput, which resulted in a strong half and puts Houndé on track to meet the top half of its full year production guidance,

Turning to Slide 26. Ity had a similarly strong performance and is on track to achieve the top half of its full year production guidance. Q2 was a busy quarter at Ity with the successful transition from owner to contract mining. In addition, the projects team completed the third wall raise on the TSF through river diversions and the haul road Le Plaque plant. Construction of a leach tank to increase residence time on account of the higher throughput was also commenced. The team has been working to open additional mining areas to increase flexibility, which has paid off with higher production over the second quarter, as the average process grade and gold recovery increased. The ore were sourced mainly from Daapleu and Bakatouo pits, which are both higher grade. Recovery rates increased at the proportion of Daapleu ore in the blend was lower than the previous quarter. Looking at the Flotou here, while we expect grades to decrease with respect to in the blend, we are planning to commence mining for Le Plaque, which we'll see ore production in the last quarter of the year.

Moving onto Boungou, which has now completed its third full year, third full quarter since the restart of mining operations last year, following a strong Q4 and Q1 production declined in Q2 as a greater focus was placed on waste extraction and mining was constrained to lower grade areas. In contrast, during the previous two quarters production was focused on mining of a higher grade ore block during the ramp-up of the mining fleet. Issiyakou, General Manager of Boungou has done a great job to ensure that SFTP, a mining contractor has been able to increase mining volumes to catch up on the shortfall from last unit.

Mining extraction activities continue to focus mainly on the West Pit with a new phase of the pit further to the north commencing as well. Waste stripping activities continued in West Pit. The mining sequence will continue like this for the remainder of the year. Mill throughput is expected to remain broadly consistent with the first half along with average process grade while recovery rates are expected to decline slightly due to the ore characteristics. Ore rate of the TSF was largely completed by the end of the quarter. Overall, Boungou remains well positioned to meet its full year production guidance.

Moving to Mana on Slide 28, which is also on track to meet guidance for the year based on our robust half one performance driven by strong mill throughput and grades. During the quarter production decreased slightly due to reduction in average process grade, which resulted from a decrease in the proportion of ore from the higher grade underground mine, where the focus was on development and back filling that stopes. It is worth highlighting along the detailed review of the Wona ore Stage 4 cutback economics. And given the success of the Siou underground, the decision was taken to forego the next cutback and rather develop the Wona pit as an underground operation. We expect this to start in the coming months. Open pit mining will continue at Wona South at which time the Wona underground will reach production level. Myasin [ph], who has been our GM at Mana for the past nine months, has done a great job to refocus the team, improve operation efficiencies and reconfigure the operation away from open pit mining for a period until some of our open pits satellite deposits are proven, which Patrick will discuss in the next section.

Moving to Wahgnion. On a full quarter basis, production remained relatively stable at higher throughput offset the lower grade. Ore mined was sourced mainly from the Nogbele North and Nogbele South mining areas and were supplemented with all from Fourkoura, when mining commenced earlier this year. Tonnes milled increased following planned maintenance carried out in Q1 to increase mill availability in Q2. The mill feed blend was similar to Q1 with minimal transitional ore and a 60/40 split between oxide and fresh.

[indiscernible] at Wahgnion has been at the mine since commissioning and has done a great job in leading the team through the transition from Durango to Endeavour and ensuring that the mining operations keep pace with the processing plant, which is running well above nine plants. Given its strong half one performance, one that is well positioned to meet its full year guidance. Mining is expected to continue at Nogbele North, Nogbele South and the Fourkoura pit with significant waste development continuing throughout the year. Construction of the second cell of the TSF will continue through 2021 and it will be completed in half one 2022.

Turning to Slide 30. Karma has also had a solid quarterly performance, placing it on track to achieve full year guidance. But Karma is the smallest mine in the group and they are only average, Edema, GM has done a great job in leading his team to improve efficiency, reduce costs, and continue with advanced price control drilling around the pit to extend mine life. Production increased during the quarter due to the higher grade steps, thanks to some high grades coming from Kanongo pit which also had a positive impact on recovery due to setting a high proportion of ore from the same pit. Looking at the rest of the year, mining activity is expected to focus on the GG1 pit. As a result processed grades and recoveries are expected to be lower, while ore stacked is expected to decrease in Q3 due to the wet season, before returning to normal levels in Q4 2021.

Before handing over to Patrick, I would like to take you through our development projects, which are all progressing very well. I touched on this Sabodala-Massawa Phase 1 until expansions earlier. Phase I is unscheduled and we expect all of our packages to be commissioned by the end of the year. The Phase 2 DFS is also on track to be completed by year-end. The Fetekro to DFS is progressing well, all metallurgical and geotechnical tests were completed during Q2, and the mining permit is expected to be awarded shortly. At the same time, our exploration team to improve the drilling area in the Lafigué resource, which would be the main pit for this project along the follow-up drilling timing, which Patrick will talk about later.

At Kalana optimization of the study continued with a particular focus on investigating 13 is a method to reduce – to both reduce the volume of ore to be processed and increasing the Faso. The DFS remains on track to be completed in Q1 2022. As you can see performance across the operations has been strong in quarter two and the growth remains on track to achieve its production and only to standing cost guidance for full year. This is a testament to the overall quality of our portfolio and the capabilities and great work for the operating team.

And with that, I'll hand over to Patrick.

Patrick Bouisset

Thanks, Mark, and hi to everyone on the call.

As you can see on a Slide 33, it's been a really very busy semester for us, with whole more than 300,000 meter, I believe the course of property to date in 2021, amounting to a total spend of over $50 million. With all year over exploration in quarter two result to do today, as already mentioned by Sebastien we should be on par to add more than 2.5 million ounces of new Indicated resources in 2021, which is close to our target. Following on almost significant exploration success in the beginning of the year data. Later the resource estimate are indeed expected to be published in Ity, Hounde, Sabodala-Massawa and also Fetekro.

Moving on Slide 34 talking now with our new flagship operation, Sabodala-Massawa. We are very excited by all the remaining exploration opportunities we see over is relatively still under explored property. We are focused in 2021 in identifying additional non-refractory target within the Massawa, which allocated less than 30 kilometers away from the Sabodala. In the first semester, we are mainly focused on Samina, Tina, Sofia and other undeveloped and especially non-refractory target. Look at the change so far in 2021, we have been quite successful and we expect another date estimate for all of the H1 advanced exploration target we published later on in 2021.

At the Sofia North deposit, we initially focused on detonating it previously identify North extension. These extension has been tracked and he's now extending over 800 meter height, and is and is 150 meters wide and remain open at depth. Drilling conducted also at 79 deposit focused on increasing the formerly known 500 meters mineralized high strikes to over 900 meters and each two remains open. At the Tina deposit, finally initial drilling mainly focused on expanding and contracting previously known inferred resources defined in 2019 in two Indicated resource in 2021. Then you have two CEO slider with the main course section issued on the main target that have been the west of the Sabodala-Massawa deposit due to time, I will keep over, but you see just for the purpose of initiating a good quality of mineralization and confirm in these three deposits.

On Slide 38, at Houndé, H1 exploration efforts were focused on Vindaloo South, Mambo and the intersection between Kari Gap and Kari Center where our initial and previous exploration efforts did not yet closed the mineralization extension. We will discuss the new Mambo discovery in more detail on the following slide, but it must be noted that additional exploration in the Kari Area and the Vindaloo South platform during the first semester concentrated on delineating new mineralized extensions and at is a subject of additional effort later in 2021.

On Slide 39, you can feel that the reading results at the Mambo target in this generated significant internal excitement as it may be considered one of the significant discovery now. Geologically speaking, Mambo is located in a very attractive setting at the boundary between volcanic and granite intrusion. Mineralization trend now extends over 800 meters with pending result expected to hopefully extent these high plains to over 1 to 1.2 kilometer. Mineralization at the year-end to be still over to the northeast, southwest and also depths, since it has been only tested down to approximately 100 meter. Step out drilling in the second half of the year, will target lateral extensions of Mambo and also an initial major resource is expected to be produced before year-end.

Slide 40 shows a section A for the northern part of the deposit, where all quite and very continuous mineralization occurs within the quality infusion.

While on Slide 41, the section B show is located in the Southeastern part of the Mambo deposited at the boundary between the granite and the massive volcanic, where the mineralization also appear to be somewhat similar than in the north, but more importantly much higher grade as shown for example in the whole.

Moving out to Ity. Our exploration first semester effort were mainly focused on the Le Plaque South area and what is now known as new discovery name West Flotouo, and DaapleuDeep, and Yopleu-Legaleuand extension and also on the area located as the junction between Bakatouo and Walter deposits. [indiscernible] application of the award area led us to aggressively, the reason the West Flotouo target, which is located immediately below an old west waste dump. This led us to validate and extend significantly the discovery of a series of continuous high-grade mineralized lens located in the immediate proximity of Ity club.

Elimination is presently going on aggressively and the new discovery, which is still open to the north, south and also a depth, with have a new maiden resource published before the year – at the end of the year. Very positive deep drilling also – was also conducted at depths at Daapleu. And these clearly confirmed that mineralization continues at depths according to our model, and now extends at least 300 meters down deep of the deepest curing line. Finally reading conducted at the junction between Bakatouo the Walter deposit confirmed the continuity of the overall mineralization, existing between these two most cotton type deposit and illustrates the global continuity of mineralization along the whole enclosure.

On Slide 43; we are the close-up of our H1 exploration activity within the Le Plaque area. We saw one of the best selector intercept factor target that reflect the project has been extended laterally, and updates liking it 1,000 that are expansion outside our 2020 peak design. And the Yopleu-Legaleu previous discovery has also been positive confirming significant extended.

On Slide 44, We have the – some discussion of our asset sales in extending high grade mineralization laterally, and that debts in the Delta extension area, clearly demonstrating the possibility of extending our present plan peak laterally, and also down world, and even enabling us to consider or potential on all-rounder on the site for his very attractive shield.

Now going on Burkina Faso on the Boungou mine the explanation was for crews in the first semester on very near mine target in area located in between the east and west peak and within the Southwest, Southeast and Northwest Natougou area. At Natougou northwest higher-grademineralization was either identified and follow-on with a higher grade mineralization extending over 700 meter and remaining open to the north. We also had his identified some interesting mineralized plant that Natougou southeast, Natougou southwest. West Flanc can Boungou northwest and we will focus on extending later on these evacuating additional intra-ratio on those targets.

Jumping now, going on Boungou mine, the Slide 46 briefly illustrates some of the best selected intercept from our H1 leading forum on Boungou. Unfortunately, due to time I'm going to have to jump over these slides, but without too much detail, next, we move quickly to tackle the Mana mine, where we are being very active during the first semester.

On Slide 47, you can see the target that were addressed in the Mana area during H1 and on a general map that is also exhibiting some of our best intercept obtained during this semester. The exploration efforts were focused on several open pit targets, such as for example Maoula 1, and on the evaluating underground targets at Siou and Nyafe. I will discuss reading at Maoula on the next slide, but before I do show, it is worth noting on this slide that deep level conducted that Siou North intersected higher grade mineralized zones adjacent to the planned underground development.

On Slide 48, and really conducted a Maoula clearly extended the mineralization, which within the exploitation license is not made of two east and west mineralized branches. The mineralized trend also now extend to the Southwest within the neighboring exploration license.

On the Slide 49, we – it shows that cross-section through the northern part of the Maoula mineralized plant, which is simply illustrating the two opposite deeply eastern and western Maoula mineralized branches that remains to be fully delineated.

Moving to Wahgnion on Slide 50 we have first a global map of our exploration and exploitation licenses. Within the Wahgnion area showing the antignion where we'll be fully active during 2021. The exploration really only started during Q2 at Wahgnion and it is right now speeding up and focusing on Nogbele North and Nogbele South deposit and targeting the continuation of mineralized structure between the pit. Escalation efforts in the second half will accelerate and will clearly and will continue to focus on the extension of the Nogbele mineralization as a whole. The continuation of the Fourkoura deposit and testing also some extension are insight target. Wahgnion is reading at values at high key targets, such as catching with and [indiscernible]. We also we completed later this year.

Slide 51 show, legislative cross section of Nogbele South, with some interesting mineralized. It's still early days on these exploration, and I will keep over these cost section often due to time constraint.

Moving to Karma now on Slide 52 in the first half of 2021 exploration work was implemented as part of an advance grade control type reading, as mentioned by Mark, targeting the immediate extensions of the Kao Main mine mineralization at Kao north and accelerating, they are naturally incorporation into the very short-term mine plant.

On Slide 53, we are moving now to Fetekro which was again our largest Greenfield exploration focused during H1 2021. The map to the right of the page indicates all the first semester of reading in small yellow circle and highlight some of the best in selected intercept on quartered since the beginning of the year on Lafigué. With more than 50,000 meter drilled, having been completed since the last three stalks of date last year and updated resource estimate is not expected to be published in late 2021. The thing you know, a small part of the exploration program focused on converting some of the remaining inferred resources into indicated resources, but really most of the activity really focused in the area located in between Lafigué Center and Lafigué North deposit. With the result of this aggressive breathing activity being extremely successful and demonstrated the continuity of the mineralized system with shallow, subparallel, stacked mineralized lenses that we are previously located outside of the 2020 resources pit. All these newly discovered mineralization will not be included in the new mineralized of estimate which will support the ongoing DFS.

And finally, Slide 54 exhibit more or less the north, south section of area that has been in termsly the real in between Lafigué North and Center illustrating the extent of the newly discovered mineralized land are clearly located now outside of our previous 2020, shown in extreme north of this section.

And now Sebastien, back to you.

Sebastien de Montessus

Thank you, Joanna. Thank you, Mark, and thank you, Patrick for your overviews.

As you can see with this quarter's results compared to a year ago, we now have four more complete investment proposition with a high quality portfolio, a strong social license to operate, a healthy balance sheet, a robust organic growth pipeline, and a friendly shareholder returns program. Overall, we firmly believe that having a resilient business and having a disciplined capital allocation framework are key to be able to deliver long-term value for shareholders.

And finally, to conclude on Slide 60, you can see our key upcoming catalysts, which we have described throughout the presentation.

With that. I would like first to thank my team for this very solid quarter and in particular Mark's team and our GMs who have been pushing on all fronts and keeping the house in order while some of us were busy on the corporate agenda with the listing and the integration of some of us interacting with people and assets. I think this quarter is a demonstration that the integration is now completed and that we have strong foundations for the future.

Last but not least, thank you all for dialing in.

And I will now open the line up to questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question came from the line of Fahad Tariq from Credit Suisse. Please go ahead. Your line is open.

Fahad Tariq

Hi, good morning. Thanks for taking my question. You reiterated the 2021 cost guidance, but I didn't hear anything – and I apologize if I missed this, but I didn't hear anything on inflationary pressures, which is kind of the most common theme we're hearing from some of your peers. Maybe talk a bit about if you're seeing any labor wage inflation or any other inflation? And how we should be thinking about costs maybe in the second half of this year? Thanks.

Sebastien de Montessus

Thanks, Fahad. I mean, we haven't commented too much on this because we don't have that much impact. So compared to our peers, I mean, we probably have a bit of a different situation. I think the fact that we went through a massive renegotiation with the SEMAFO acquisition and then with the Teranga acquisition on all our main key contracts on the supply chain and logistics side. We have locked in over the last few months is contracts, which are lasting six months, 12 months, 18 months, 24 months with a minimum increase in some cases even some reduction. If I give the example of cyanide with locked in, I mean, our prices for 2021, and we've got even a reduction in 2022 of several percentage.

So we don't – we're not seeing yet inflation cost rising. The only one which is obviously important that we keep monitoring is LFO and HFO depending on where the ore price is and the impact translated in countries where we operate, which depends on a lot of the taxes that we are paying in country. The only one which I would be careful on our side is to see how we will be impacted on CapEx for 2022, when we will finalize the DFS in particular for the next two projects that will go into construction. So I mainly Sabodala-Massawa phase 2 expansion and also Fetekro and obviously we would expect some increases compared to our initial thoughts due to steel prices. But at the same time, we might see a bit of – we might see steel prices to start coming off a bit towards the end of the year. So we'll wait to finalize the DFS and come up with the real CapEx numbers for those two projects to comment on inflation cost or not.

Fahad Tariq

That's very clear. Thank you.

Operator

Thank you for your question. The next question came from the line of Mr. Habib from Scotiabank. Please go ahead. Your line is open.

Ovais Habib

Thanks, operator, and congrats Sebastien and Endeavour team on a solid quarter and a clean pit. Just a couple of questions from me. The first one Sebastien, you've produced about 756,000 ounces in the first half implying around 740,000 ounces in the second half. That's according to the top-end of guidance. Now, in regards to your outlook provided on your key mines, it looks like second half is going to be better than the first half. Are you just being conservative on guidance? Or am I missing something here?

Sebastien de Montessus

You know the rules on the promise of deliver. So, I think, it depends on a lot of parameters. First of all, we know we pushed a bit in Q2 because we were also lucky to have a rainy season that started later than the year before. So when this happens, this is where you want to push as much as possible because then the impact that you can have in the future, you've already back then I would say as much as possible ounces. So rather than having pressure on big Q3 and big Q4, we have now de-risked, I would say, the production profile, I mean, for the full year.

So that's the positive side. We have, I mean, we don't know how the rainy season is going to be in Q3, so we tend to have – depending on when the rainy season starts and how long it goes for, we tend to have lower Q2 and lower Q3 versus Q1 and Q4. So with a strong Q2, it's again de-risked our Q3. And the other element is – you should be producing as much as you can when gold price environment is positive and clearly with gold price around 1,800, this is where you want to be producing a lot. So we've been pushing what we could. Q3 and Q4 will be good quarters. I have no doubt. And therefore, if we can go in until the upper end of the guidance, I think, the contract will be done.

Ovais Habib

And just in terms of the rainy season, how has kind of July fared out? Is it kind of normal rain? Or is it above average, below average, anything – any comment?

Sebastien de Montessus

Mark, who is at Ity, could comment live, but so far it's been pretty good, so on the positive side. But what I'm saying that Mark might tell me that he is under heavy rain. Mark?

Mark Morcombe

Yes. So what I would say is Ity had a pretty good July, actually it's lower than normal, whereas in Burkina Faso it's been fair normal. So yes, it's – yes, it's actually good to say the wet season side. We don't want it to be throwing too much. So the guys have managed well through July and as I said if it seems to be a bit slow on the wet season.

Sebastien de Montessus

But Ovais we are cautious because sometimes what we see is with a late start, I mean, in the rainy season, it can mean also that the rainy season goes over into part of Q4. So let's be cautious. I mean it's good to have this significant advance compared to our target for the full year, which gives us room to deliver the high-end of the guidance.

Ovais Habib

Perfect. Makes sense, Sebastien, thanks for that. And just one more question for me regarding Fetekro, you're going forward with the release of the feasibility study by the year end. Patrick's team continues to be allowed these new targets and new zones and continues to expand Fetekro. How should we be looking at the feasibility study? I mean, in terms of the cutoff on exploration, obviously, it looks like there is a – there could be a lot more upside on Fetekro than what we're going to see in the feasibility study. Am I on the right track on this?

Sebastien de Montessus

Well, the way we're looking at it is the reason why we've been pushing and Patrick's team has been continuing to drill is what we need to be clear is on the size of the plant for the DFS. And you might recall the Ity story, we started with PFS at 1.5 million ton then we moved to 2 million ton, then 3 million ton, launched the construction for 4 million ton plants and ended up with a 5 million ton CIL plant. So we just want to get to know a bit more information. Obviously, we're not going to complete, I mean, all the drilling programs that we wanted, but we're going to take your view at the end of the year with the project team and with Mark and Patrick on based on what we see what's the right size for the plant. And we always said that what an Endeavour project looks like is although 200,000 ounce annual production for about 10 years at 850 or below and I think we are on track on that. So let's see the results at the end of the year.

Ovais Habib

Okay. Sounds good, Sebastien. That's it for me right for now and congrats on a good quarter.

Sebastien de Montessus

Thanks, Ovais.

Operator

Thank you for the question. The next question is from the line of Anita Soni from CIBC Capital Markets. Let's go ahead.

Anita Soni

Good morning, Sebastian and team. Thanks for taking my call. First off, congratulations on a really solid result this quarter. And I guess the question is on operations kind of hitting the top-end, have been already asked by Ovais. So I'm just going to stick to the financials. The restructuring costs that you had this quarter and the depreciation, revaluation again for the Teranga acquisition, we expect that to now be behind us and we won't see any more restructuring costs or any kind of fair value adjustments at this stage?

Sebastien de Montessus

Sure Anita. Joanna?

Joanna Pearson

Sorry. Thanks, Seb. The restructuring cost we would expect to go down significantly or being nominal moving forward, because we were complete the majority of that with the completion of the Teranga acquisition and the completion of the London listing. And with respect to the fair value adjustments in the depreciation adjustments, we have not yet finalized the Teranga purchase price allocation, so that might happen – that we expect that to happen in Q3. So there could be some minor changes, although we don't expect them to be material similar to what happened this quarter with the finalization of the SEMAFO PPA.

Anita Soni

Yes. And then just – if you could just provide Joanna a little bit more clarity on what that adjustment was. It was just with regards to the inventory rather – so with that I guess just, just related to things that were on the pads or was that actually sort of related to the actual sort of physical assets.

Sebastien de Montessus

Do you mean, Anita, do you mean the gold inventory changes or…

Anita Soni

It's just your depreciation adjustment was related to inventory. So I'm just not quite sure if you could provide some color on what that was related to specifically.

Sebastien de Montessus

I think, yes, it's related to gold inventories that moved from one quarter to the second one, but I'll ask Martino to call you back on this with the details.

Anita Soni

Okay. That's it for my question. Thank you.

Operator

Thank you for your question. The next question is from [indiscernible] Canaccord Genuity. Please go ahead.

Unidentified Analyst

Good morning to everyone. So you've got the Sabodala-Massawa feasibility study expected to be done by the end of the year, and just some light of Patrick's comments around a new resource update there. Should we expect a reserve and resource update with that study? Or is that sort of too late to make the cut for the DFS?

Sebastien de Montessus

Yes, you should expect definitely some updates on resources and reserve alongside with the DFS, Karen.

Unidentified Analyst

Okay, great. And then maybe just on the balance sheet, you've got over $800 million cash in, but still quite a bit drawn on the revolver. Just wondering any color on why keep such a high amount still on the credit facility?

Sebastien de Montessus

Sure. So we said as part of our Capital Market Day that the objective was first to close the integration of Teranga and SEMAFO into the listing. And we know we are now ready to work on credit ratings for the company and based on that we restructured the balance sheet. So that's something that would happen in the second half of the year or beginning of next year.

Unidentified Analyst

Okay, great. And then maybe just one more for me, I know you mentioned that Mana going to sort of 100% underground. Just wondering what that's going to look like and sort of how quickly that's expected to happen? So like sort of the underground currently, I think, is only about a third of the middle seat. So should we be expecting the underground to expand overall? Or is the plant going to run at a lower, but higher grade level going forward?

Sebastien de Montessus

Sure, so the plan and we're still working on it, I mean, we completed a PFS and we'll probably provide them into the market with some technical report updates for Mana in the coming months. But the objective is to be able to – I mean, shutdown the Wona open pit and transition to the Wona underground. The Wona underground alongside we see underground should allow to give a good solid profile for the next four, five years for Mana with about 100,000 ounce provided by each underground mines, so between 180,000 to 200,000 ounces annual production for the asset over the next few years.

The objectives through that is to give a stronger – a strong production bases to allow in parallel Patrick's team to work on the exploration side. So that in two, three years time once all the key targets that we wanted to drill are done we can then decide the future of Mana. So, yes, happy to have a plan for the short-term, while Patrick's team will be drilling heavily in the area to get us a better picture on the future of Mana.

Unidentified Analyst

Got it, got it. That's helpful. Many thoughts around the all-in sustaining costs there would look like for a range.

Sebastien de Montessus

Not at this stage, Karen. I mean, we just completed our first PFS, so we'll wait, I mean, for the final results probably in September, October. So, I guess, we would provide visibility as part of our Q3.

Unidentified Analyst

All right. Fair enough. Thanks a lot.

Operator

Thank you for your question. The next question is from Wayne Lam from RBC. Please go ahead.

Wayne Lam

Hi, good morning guys, I'm just curious that Massawa in terms of the mining from the various deposits, how long do you expect ore to be sourced solely from Sofia? And when might you begin stripping and sourcing ore from the central zone?

Sebastien de Montessus

Hi, Wayne, thanks. Mark, do you want to comment?

Mark Morcombe

Yes, sure. Just start inside just as we were talking about the wet season, just as we finished that it started raining here, but moving onto Sabodala, yes, what we're looking at is starting up stripping and getting everything sorted to start mining in central zone at the end of this year, so that it will become a production site for next year. And then we're also looking at the option of recommencing the Sabodala pit next year as well just to provide – just looking at the longer-term profile. So, yes, at this point in time, it's mainly – if it's all Sofia, but then it'll be all Massawa and then we'll have some Sabodala coming back in.

Wayne Lam

Okay, got it. And then just with the exploration focus on the non-refractory ore, if there's significant exploration success and more oxide material found, would that impact the timing of the construction of the BIOX plant?

Sebastien de Montessus

So it wouldn't, Wayne, impact the construction. I think it just give us more flexibility to ramp up the BIOX plant and make sure that we've got everything required. So that's why we're pushing on that front also because this will provide even more flexibility in the coming 24 months.

Wayne Lam

Okay, perfect. And then maybe just last question at Boungou, I'm just wondering what the driver on the higher security cost was this quarter. And just wondering in terms of the grade profile through the year as the East Pit has kind of brought online, how should we think about the grades trending relative to reserve grade?

Sebastien de Montessus

Sure. Maybe, Mark, you want to comment on the mining sequence and the grade, and I'll just give a few comments on the security cost.

Mark Morcombe

Yes, sure. I think what we're mining late last year was a nice high-grade pocket and we did bring some of that forward from this year until into Q4. Hence why we're seeing the trend down, but we are probably trending back towards the reserve grade, which is what you would expect basically through to the end of the year.

Sebastien de Montessus

Yes, on the security cost, I think, it's more a timing of spend in cash out, spend on infrastructure that were reinforced around the mine site and also equipments for all the logistic parts. So yes, nothing particular over there to worry about just we continue to monitor closely, I mean, the situation and we make any adjustments required depending on the environment.

Wayne Lam

Okay, perfect. That's all for me. Thank you very much.

Sebastien de Montessus

Thanks, Wayne.

Operator

Thank you for your question. We have the next question from Don DeMarco from National Bank Financial. Please go ahead.

Don DeMarco

Thank you, operator, and congratulations gentlemen, on a strong quarter, Sebastian and team. Yes, I see the stock is up 7% on the LLC right now. So that's a nice sneak preview, what we can expect in Toronto. Lot of the questions have been answered, but maybe continue with the theme of the rainy season. Would you expect any impacts at Sabodala-Massawa from potential rainy season? We know obviously Ity and Houndé are prone to that, but is there any risk also at that flagship mine?

Sebastien de Montessus

Thanks, Don. I mean, first of all, I wanted to thank you because I saw in your sales note that you were pounding the table with those Q2 sets of results. So agreed and safe. On the Sabodala-Massawa not really, I mean, the rainy season you've got a bit of rain over there, but it doesn't have – I would say massive disruption compared to what do we see at Ity or what we would see at Houndé which has probably the two assets, which are getting – the biggest impact from the rainy season.

Mark, I don't know if you want to comment more than that.

Mark Morcombe

Yes. No. The rainy season is not as – certainly not as strong and from what I've seen and understand I think we will be okay.

Don DeMarco

Okay. Okay. Guys, that's encouraging. I mean, obviously Sabodala-Massawa was a key driver among other assets to the performance we saw in Q2 and just continuing to focus on Sabodala-Massawa further, we saw the grades this quarter, quite a bit above the Sofia reserve grades of 2.7. So what should we be thinking about grades for Q3 and Q4 at this asset? I know we've talked about, there's been commentary about mining Sofia a little bit Sabodala coming into the end of the year, but back in the end year, but – in terms of just magnitude of great; can you – it seemed like it was a bit of an outlier in Q2. And can we expect this to continue or what we'll see is a bit?

Sebastien de Montessus

So Mark, you want to – you want to comment on the gray profile?

Mark Morcombe

Yes. I do agree, we did have a very good time to. We had some very nice high grade in the Sofia main pit. So we expect it to be not quite as strong in Q3 and Q4, but still pretty good.

Don DeMarco

Okay. Okay. That's fair. Then of course, you were looking toward the end of the year. We've got the DFS, Fetekro and Kalana and so on. Well what you guys thinking about potential sequencing of development of both of these, as well as the Phase 2 expansion that Sabodala-Massawa. Like is it possible you could do all three concurrently or would it be sequencing? And I know this is still subject to final go forward decisions on following the release of these studies, but what can you think about here, your boundaries – obviously you went a very strong, quick de-leveraging in Q2 gives you some flexibility, but interested in your thoughts as you build out your pipeline into the future?

Sebastien de Montessus

Sure. Well, I think the view is still the same at this stage Dawn, which is two projects in parallel is good. Three would be as such for management and we'd be also potentially a stretch for balance sheet. Not that the balance is not going to be strong, but unfortunately I can’t forecast yet what the gold price environment will be in 2022 and 2023. So I think that progressing two of those projects in parallel gives us a first wave of organic growth with a strong preference at this stage for Sabodala-Massawa expansion Phase 2 and Fetekro towards Kalana, which gives us a second wave of organic gross after 2023 with Kalana having more time to line-up and to get into becoming a full end of the project, which is as I said earlier, above 200,000 ounce for at least 10 years and below 850 or in sustaining costs.

So this would be of more time, I mean to work on Kalana and also more time to bring up the next Greenfield project or to surprise the market with some expansion at one of the existing mines. So the good thing is that what I like with this portfolio is that there a lot of optionalities. I think we have now a clear in the next five-year picture between the existing portfolio and the two – and the two upcoming projects. The next two years will be about preparing the next – the next wave of organic growth. And I think that we'll have, again a few interesting options for the second wave.

Don DeMarco

Yes. Certainly. Okay. Well, thanks for that. That seems prudent. Well we'll look forward to, congratulations again, we'll look for the talking in Q3 and at that point you should be in a cash surplus position. Thanks again. That's all for me.

Sebastien de Montessus

Thanks, Don.

Operator

The next question is from the line of Lawson Winder from BSA [ph] Securities. Please go ahead.

Lawson Winder

Hello everybody, and thank you for taking a question. Just wanted to ask you about some of the exploration stuff going on. So first of all, on Boungou, Patrick I noted that you were able to do some drilling at Boungou Northwest. Now is that kind of outside of the like safety perimeter area and would that signal that into the second half of next year the exploration program at Boungou might be expanding?

Patrick Bouisset

Yes. Actually we've been reading a little bit outside the fence of the mind to the north just a little bit, but basically in 2021 we wanted to finish all the very, very near mine exploration on the pit and also working a little bit on the junction between the West Peak and the comparative on the profit to the west? That's the first thing. And yes, secondly, we are working on defining improved security office procedure to be able hopefully before the end of the year, starting more August next year on doing some more exploration let's say the close vicinity from the mind, but at least outside the fence.

Lawson Winder

Great. And then on the expected R&R update on Sabodala-Massawa and actually Mambo in particular. Do you have an idea of what the expected split will be between oxide and sulfide on both of those?

Sebastien de Montessus

It’s still too early to say these kinds of things. It should take Sabodala-Massawa just remember that we incorporated the assets in the new in the road only in March and it's only a few months ago. So basically what we're been doing is re-shuffling and re-prioritizing all the targets that we had in mind. And the right now we are quite – I would say aggressively working on Massawa, because if you look at what we plan in the pie chart about the spending, basically we spend less than what we should, are we just because the start of the project, the explosion project was delayed. So it's still too early to speak about the percentage of oxide and fresh. For Maoula it's a bit the same, we have been working mostly in extending on the Mambo. You are talking a Maoula and Mana or Mambo?

Lawson Winder

Mambo.

Sebastien de Montessus

Mambo. Mambo, still Mambo, I thought was just we extended as much as we could and now we are only talking Twinfield readings. So it's a bit too early yet to say what could be the percentage of oxide as the questions on these deposits. Honestly it’s still too early. We should have all that when we provision data on the mineralization.

Lawson Winder

Great. And then the decision to go to underground at Kona; now I would like to undo, impact of the reserve, is there going to be a slight reduction in the total reserve as a result of that?

Sebastien de Montessus

No. In fact, Lawson, we didn't comment in detail during the reserve that we published for at the end of 2020. But in fact we already took out some reserves that were on the one-off open pit side in particular on the north part, which initially have planned to mine. And it was – I think it was about 700,000 ounces that we took out. But we were able to add about a bit more than 800,000 ounces of reserves for the underground. So those reserves already included and we did it on the basis of our PFS. And as I mentioned earlier, the objective now is to finalize all the studies and be ready for construction, hopefully at the end of the year.

Lawson Winder

Okay, great. And then on the topic of Senegal plan; Senegal was quite excited about Bantou and I've noticed Patrick hasn't been particularly focused on Bantou so far this year. Was that a conscious decision? And what was the thinking around that and how are you viewing that asset?

Sebastien de Montessus

Yes, exactly. I think a conscious decision for, two reasons, one is we were extremely busy on other areas. And second we clearing also all the permitting environment around Bantou. So that's something on the agenda for Patrick's team, later this year and in 2022.

Lawson Winder

Okay. Great. And then just one final question I wanted to just ask about Karma, you'd mentioned some additional drilling success in near mine. Perhaps could you quantify that success and what it might mean in terms of life extension or number of balances?

Sebastien de Montessus

Marginal and it doesn't change our view, which is that Karma is non-core and H1 was pretty busy for the corporate team on integration of Teranga and the listing. So team's going to be a bit more focused on the H2 on potentially divesting Karma.

Lawson Winder

Excellent. Great job on the quarter, guys. Thanks.

Sebastien de Montessus

Thank you very much, Lawson.

Operator

The next question from Mark Bentley from ShareSoc. Please go ahead.

Mark Bentley

Hello. Sebastian and team. Thanks very much for excellent delivery in the first half. Firstly, I have a question concerning the possible index inclusion and then three questions concerning exploration matters. So firstly, on the index inclusion; I just want to clarify the liquidity test of 2.5 basis points of shares traded. Is that the number of shares traded daily or monthly?

Sebastien de Montessus

So the test, I mean, based on the cut update which was taken is about 40, a bit more than 40,000 shares a day.

Mark Bentley

Thanks very much. Great. Then the three exploration questions. First of all, the new discovery at Ity west floater where you've found some new mineralized lenses at roughly what depths are these lenses?

Then my second question as you've stated in the results that you expect to add 2.5 million ounces of indicated resources in 2021. How much of that will convert to reserves and will more of that convert to reserves in 2022, rather than 2021?

And then the third question is what are your plans for exploring Golden Hill?

Sebastien de Montessus

Sure. Thanks, Mark. Maybe Patrick, you want to comment first on the Ity.

Patrick Bouisset

Yes. Yes. On Ity, it's pretty simple, they are west is cutting at your face. Some the lands are basically copying out below the waste dump. So it was a big mistake, but still we called team to how we collect gold, so we end-up within that. Overall, I don't know exactly what will be the size, but it's starting from surface down to basically as deep as we could have drilled. We found some continuity of mineralization. So we don't know exactly. We know we target more or less a mineralization in our early October more or less in [indiscernible], that's so far the first question on your choice

Sebastien de Montessus

On the second one, Mark the 2.5 million ounces of indicated resources are predominantly will be coming from the core assets. So Houndé, Ity, Sabodala-Massawa and Fetekro and if I take our historical conversion rates, I would be expecting between 70% to 80% to be converted into reserves.

Mark Bentley

And will that reserve additional come in this year's reserve results or will it take until next year before that can be added?

Sebastien de Montessus

Difficult to say at this stage, because it will depend on the drilling campaigns and in particular infield drilling that we would do in the second half of the year. So, but what we always said is that at least we want to ensure that in terms of reserves, that we will be adding in 2021 at least what we deplete. So you would be expecting at least 1.5 million ounces of reserves added.

Mark Bentley

Thank you.

Martino De Ciccio

And then the final part was; what are the plans for Golden Hill exploration?

Sebastien de Montessus

Yes. Patrick, you want to comment on Golden Here?

Patrick Bouisset

Yes. Some Golden Hill that the same – a little bit the same issue as on Bantou. Gulani is located immediately 30 kilometers south of [indiscernible]. So basically we are keen on evaluating the possibility to connect somehow the Golden Hill mineralization that have been previously discovered. And we're also trying to solve on a natural way, and also license issue and renewal and all that stuff. As soon as everything will be clear. We'll be in action again on the Golden Hill, but not yet for the softer semester.

Mark Bentley

Thanks very much, Sebastian and Patrick. That's very helpful.

Sebastien de Montessus

Great. Thank you, Mark.

Operator

Thank you. I will now back and the conference back to the management. Please go ahead.

Sebastien de Montessus

Thank you everyone for attending the Q2 webcasts. For additional questions we remain available by phone or email. Thank you very much and have a good rest of the day.