Central Asia Metals (LSE:CAML) — H1 2021 Results

0:01 Good afternoon, ladies and gentlemen, and welcome to the CENTRAL ASIA METALS PLC Half one twenty twenty one Results Presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged, can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Please just simply type in your question and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Meet company dashboard, and we'll notify you by email when they are ready for your review. I'd also like to remind you that this presentation is being recorded. Before we begin, we would like to submit the following poll. And if you would give that your kind attention, we would be most grateful. And I'd now like to hand over to Nigel Robinson, CEO, CENTRAL ASIA METALS. Good afternoon.

0:51 Yes. Good afternoon, and thank you for your time. So welcome to CENTRAL ASIA METALS h one twenty twenty one results.

1:00 Just going through the disclaimer there, read that at your leisure, please. Obviously, no... Not enough time to read it now in small font. But a summary, first of all, of our results for the first six months of this year. On the back of very strong commodity prices, we've got some good results to to share with investors today. We've had some stellar performance in terms of percentage increases on the comparable period for 2020. But as many of you will remember, 2020... First half of twenty twenty in particular was particularly dire period for a lot of people with the impact of the coronavirus pandemic, which started around that time. So revenue, first of all, increased from $75,400,000 up to a 106,300,000 and generating an associated EBITDA from that number of 64,400,000.

1:49 That's a margin of 61% on that revenue. That has led us to free cash flow number on the left hand side. You can just see on the bullets there, a $48,900,000, an increase of 131% from the comparable period in 2020. That free cash flow number is the number that we use as a board to decide what dividends pay back to the shareholders. And for this period, we've agreed on a 40% repayment of that, which leads to a dividend of 8p, up from 6p in the comparable period. We also decided at board level to pay back some of our debt early on the back of the strong cash flows and a healthy balance sheet. And so we're repaying early $10,000,000 of our corporate debt facility. So a good financial performance, strong commodity prices, which continue into the second half of this year so far, and a good return back to shareholders and also paying back early some of the debt and deleveraging.

2:42 At the half year, we had just under $61,000,000 of debt, gross debt, and we had cash in the bank of $54,300,000. Outside of the finances, we've had a good response to COVID nineteen at both sites. We've got good procedures in place to protect and maintain the welfare of all our staff and also to maintain the operations through through the COVID pandemic, which we've managed to do. On health and safety, we've had three LTIs in the period, which is a slight disappointment to management, I have to say, and I'll touch on more of that later. Overall sustainability, we produced our second sustainability report in April of this year to GRI standards, and we're pleased with the output of that and the feedback we've had from investors in terms of what we're doing to improve our ESG credentials.

3:28 And one specific target which we've achieved is to agree in North Macedonia an electricity supply agreement, which will be 100%

3:37 renewable with our supplier EVN in country. And that leads effectively to a 35% reduction in our CO two footprint. We have more work to do on that. We're continuing with work on scope one emissions at SASSA and scope one and two at Kunrad, and we'll be reporting later in this year or next year on our overall targets across the group. And finally, we're well enhanced on our cut and fill project at SASSA. And the production numbers, as you can see there on the slide, for copper, zinc, and lead of 6,200 for copper, 11,292 tons for zinc, and 13,807 tons of lead in the first six months of the year. On that point, I'll hand over to Gavin, our CFO, to give a little bit more detail to the financial numbers. Thanks, Nigel. What you can see on that slide is, as Nigel mentioned, the strong commodity prices we've enjoyed over the past half.

4:29 If you look at them compared to h two twenty twenty and h one twenty twenty, we have seen significant rises in copper price in particular, slightly more modest for zinc and lead, but, you know, far better off than we were a year ago in this position. And that has been as a response to stimulus provided by governments and demand for metals like copper in the transition to green economy and zinc as we move towards more galvanized steel demand. Lead has been supported by some supply disruptions in Peru, but the semiconductor shortage has suppressed automotive industry demand, so we're seeing that to lead as well. Treatment charges we mentioned here because those feed directly through to our lead and zinc revenues.

5:15 We have seen an increase half on half in in the in the TCs, modest increase of 4%. But those contracts run from April 1 to March 31, so we are going to see a benefit of lower treatment charges from April 1 onwards, you know, and and that is not fully filtered through into these financial results quite yet. Through the income statement, the revenue, as as Nigel said, is 41% up period on period. We are seeing some cost pressure coming through. Cost of sales has gone up around 13%, and I'll talk through some of the details of that in a minute. And the reason we are reporting adjusted EPS in the bottom line of that table is because we are stripping out a noncash unrealized hedge loss from the income statement to present that adjusted EPS on a like for like basis.

6:12 But what we are pleased to report is improved EBITDA in spite of those cost pressures that we are facing. We can see the increase in revenue by by metal in the table below on the bottom right hand side of the thing, $20,000,000 increase in the copper revenues. That's because of a 64% increase in the copper price received. Similarly, for lead and zinc, we've seen a 26% increase in the lead price and a 44% increase in the zinc price, driving those higher revenue numbers. EBITDA margins on a segmental basis remained strong, 80% at CUNRAD, which is a stunning result, up from 73%, and 54% at SASSA, which is again a very profitable result.

7:00 We look at the development of EBITDA again, largely down to revenue increases half on half. And on the negative side of the equation, we are seeing some of those cost of sales, $3,100,000 increase coming through a finance... A fair value loss on some hedge instruments we put in place of $1,900,000 and 1,900,000 g and a, which is again noncash to leave us with EBITDA of $64,400,000. If we look at the cost in more detail, starting with CAMLNRAD, we've seen a 9¢ per pound increase in cost period on period. 4¢ of that is attributable to increased reagent consumption in the first few months of the of the year.

7:47 That is down to winter operations exclusively on the Western dumps for the first time. We think that's an issue that we've now understood and resolved, and we don't expect that to persist through certainly in the second half and certainly in first half next year. Electricity prices as part of the cost increases we are seeing, we've seen that equate to a 2¢ per pound increase in our costs. And then, of course, the 3¢ balancing is due to slightly lower production of 393 tons period on period.

8:18 One other element which is probably not entirely clear from this slide, but in the announcement itself, is that the cost of sales at Kunrad are around 20% higher than they were period on period. Half of that increase is due to additional royalties we've paid to the government of Kazakhstan, then that relates directly to the higher copper prices that we've enjoyed.

8:43 If we look at SASA, again, cost increased from 43¢, a zinc equivalent pound to 59¢. When we convert from lead into zinc, we look at the proportion of production, and then then we apportion that the cost of the zinc revenues against that that production to to make that con... Make that conversion. And that has resulted in a 7¢ increase in the cost base. That is a result, as I said, of the relative movements of the the zinc and lead prices, but also of the proportion of zinc produced versus lead increasing from 37% to 42%.

9:29 Nigel spoke about the slight sort of decreases in production at SASSA that was due to, you know, some maintenance that we brought forward on the mills and also some lower grades that we we got as we went through some difficult ground conditions. That's resulted in a 4¢ pound reduction. And then cost inflation itself equates to 5¢. That is primarily reagent costs, salary costs that have gone up, with 41% of those cost increases are down to adverse foreign exchange movements.

10:02 The balance sheet's in really good shape, and and that's what drove the decision to prepay $10,000,000 of our corporate debt facility. So you can see that, you know, the cash as... Cash position at the end of the period, $54,300,000, $52,200,000 outstanding balance on the Traxxas corporate debt facility. That's where we're going to apply that additional 10,000,000. And we have liquidity available in North Macedonia of $10,000,000, $8,700,000 of which has been drawn through the period. Let's go to the next slide. CapEx, important for us always, but in in this period has really been the the start of what we call the cut and fill project.

10:47 So I stick to sustaining CapEx first. We've incurred $2,900,000 in sustaining CapEx at SASA related to mine development and some new items of equipment, some of which is fleet replacement, but we do have a new drill rig that's arrived on-site as well. 1,500,000 of CapEx at CONRAD. Again, primarily related to, you know, ongoing operations there with an additional $500,000 related to what we call an intermediate leach solution process, which will allow us to operate both east and west through the winter and, as I said, reduce that risk of additional reagent costs I mentioned earlier. Cut and fill project, that is to future proof the Sassa mine. And so far, spent $3,300,000 there on what we're calling the central decline, which will allow for much more efficient access to the ore body.

11:40 And then the backfill plant and dry stack tailings and prepayments related to those make up the balance of that to CapEx, and we can talk in more detail about what that means for the mine going forward. Last slide on the finances is just the development of the cash balance from the end of December last year to the end of the period. As you can see there, $19,200,000 of debt repayments, $19,400,000 of dividend repayments. All of that is valued directly to shareholders and purchase of PP of 7,700,000. In addition, we've paid income tax of $6,100,000, some interest on the debt, and you can see some overdraft payments that we've been made made through the period as well. But, again, leaving that $48,900,000 of free cash flow generation off of which your dividend of eight p is being calculated.

12:37 Thank you, Gavin. These are our interim results. So as you can see, a lot of focus on the financial numbers and how we performed. And I think you can see from what Gavin's just briefed you on that, generally that the business is in a good shape financially, both in the balance sheet and also the financial performance. But just a quick update on other things that we've been doing in the first six months of the year on sustainability update. Health and safety, I mentioned before, rather disappointing that we have had three LTIs. We always target zero. We never want any incidents on-site, unfortunately, these things do happen on a on a mine site. We've learned our lessons from them, and we'll make sure we put corrective procedure in place or whatever we need to do based on the incidents. Our LTIFR, which is a measurement we have in place for management remuneration, was 2.5 at the half year.

13:23 COVID nineteen, we've got good processes in place. We've had them in place now since March 2020, April 2020 when when the pandemic first hit us. I think they've served us well, but we're ever vigilant about that. And one thing we have been doing over the recent past is is trying to get as many of our staff vaccinated against COVID nineteen as possible. Initially, there's a lot of hesitation, a lot of skepticism effectively about having vaccines, and indeed at Coomad, we initially had 15 people only came forward to wanting to be vaccinated. We've now got to a situation where almost a hundred percent of our workforce are vaccinated, which has been held by government pressure effectively whereby without the vaccination, it's been difficult to, to to live your life effectively in Coonman, both from a business point of view and also, socially.

14:14 Same is true in SASSA, but not quite as advanced. We've about 36% of our employees now that were vaccinated. We have an ongoing education program to try and encourage them to be vaccinated, and we'll continue with that. And I think the government themselves in in North Macedonia are slowly but surely making it more difficult for people without the vaccination, so that helps us on time. So health and safety of the staff is important to us. Just moving on to other things to do with sustainability. Next slide. So we have put out our second sustainability report, as I mentioned before. I won't labor the point on that, but it's been well received by our investors. It's a very good open and transparent document that shows what we're doing. Looking to the future, we are looking to finish off on our climate change strategy. We did quite a lot of work on that in the first six months, and we'll complete on that with specific targets for greenhouse gas emission reductions, other reductions, and improvements that we can make across the two operations in the coming six months. We have also worked on our asset retirement obligation liabilities across the patch, and we've engaged external consultants to help that and to help us plan for the future. And last but by no means least, really, many of you you will remember that we had an incident at our tailings facility in North Macedonia almost a year ago to the day. And one of the initiatives that came out last year in August was the global global industry standard for tailings management. We have agreed to comply with that and we've got a timeline of three years to comply with

15:44 that. We did have an independent audit on-site in late June, early July. It was very commendable about the changes we've made to the operating procedures at SASSA and how we've met the compliance with this particular standard. Still things to do, but we are moving in the right direction to comply with that standard, and we got a good report from the auditors on that. Moving to next slide. Again, performance and targets just emphasize the point here that for each of our five pillars of sustainability, governance, health and safety, managing our people, the environment and community, We set targets now, and the executive and the senior management are rewarded against those targets for delivery on those targets. For 2020, as you can see in the middle column there, we achieved nearly all of them apart from unfortunately suffering the t s f four incident last September. Put similar targets in for this year, and the same will continue as we work towards improving our ESG credentials.

16:42 Next slide, please. Just very specifically on this greenhouse gas emissions, still work in progress. We estimate that about a 100,000 tons of c o two is emitted from our two operations, both in scope one and scope two, and the latest, negotiated agreement with the electricity supplier in North Macedonia should reduce that by approximately 35%, which is something we're pleased at. But we've more work to do on that, and we'll consolidate the whole thing up into our climate change strategy over the coming months and report it publicly in our sustainability report. Next slide. Finally, working with the community, something which we've always valued, we've always put quite a bit of effort into, and both sites now have their own independent legal foundations like the charitable foundation.

17:29 We put so much money into every year and work on particular projects. The one particular one in North Macedonia that we're very proud of is the the youth park by the river there, which was agreed upon with the local mayor. As part of our goodwill gesture back to the community in Kamenitsa following the tailings dam incident last September. We've now completed on that, and also we've completed on the... Effectively the river remediation, which is the next slide showing, you know, the the cleanliness of the of the rivers following the incident last September. We now estimate we've removed probably a 100% of the tank. You probably never claim a 100%, but certainly a high 99,

18:09 98% of the tailings will have been removed. We've removed all the silt traps, and consequence of our work and also nature over winter with heavy rainfalls has flushed out those rivers and are now back to a a pretty pristine condition, I would argue. And we've also done some, environmental work around the the sides of the river, planting trees and shrubs and some some seeds. So we all think we've done a pretty good job of the river remediation there. And certainly, the local community and the the national authorities are happy with the work we've done on it. So that's just a quick update on some of our sustainability work. Operationally, where are we? Coonrad, which is our first operation. We've now got about a 134,000 tons of recoverable copper to recover from Coonrad. There's an aerial photograph there. I think most of you know the Coon mud operation. It's an old open pit, and what we're doing is we're doing leaching processes on the waste to the East and to the Western dumps through a leaching process and recovering the copper through an SX EW plant. As I say, about a 134,000 tons of copper still to recover on this project with a life of mine out to 2034.

19:17 Next slide, Louise. Just the production profile, It it it is quite seasonal. We produce more in the summer months, q two and q three, than we do in q one and q four when it can get down to minus 30, minus 35. That's all taken into consideration to deliver on our guidance this year, which is 12 and a half to 13 and a half thousand tonnes of copper. At the half year, we've just reported this morning 6,200 tonnes of copper, and we're on track for the upper end of that guidance range at the 13 and a half thousand tonnes of pure cathode copper. Next slide, please. Lastly, on Coonrad, in terms of some of the capital investment into the project, most of the capital has been invested over the years. Our ongoing CapEx is around about 1,000,000 to $2,000,000 And something that we're currently doing, we've finished phase one on, is what we call the intermediate leak system in the Western dumps, which is effectively a freshwater pipe from the East to the West, which will help us with the irrigation of those older dumps there. And then we'll be taking the offload from those onto fresh dumps to enhance the the offtake of the the PLS.

20:25 That will be in operation in the summer months of twenty twenty three for seven months of the year.

20:32 Moving quickly on to the SASSA zinc and lead mine in North Macedonia. We acquired this asset approximately four years ago now. And in that time, it's generated EBITDA, as you can see on the slide there, of $214,000,000, and we've repaid debt now of a $134,500,000 of the approximately $200,000,000 of debt that we took on the time took on at the time to acquire the assets. The reserves and resources are out to 2037, and it is a very different operation from Coommel. It's an underground, traditional underground lead and and zinc mine. Quick production update. I think Gavin alluded to it, I may have mentioned it in the initial slide that we had a couple of production issues in the early months of this year with development falling behind and then some ground condition issues at 9 '10 and 990.

21:21 We have got a recovery program in to actually recover from that and try and improve on the grades moving forward. We've had a couple of good months in July and August, and as a consequence of that, we we as a board have decided that we'll stick with our current production guidance even though the the the published numbers from the first half of the year look like we're falling behind a little bit. You can see those numbers there on the slide, but we are sticking with the production guidance of 23,000 to 25,000 tons of zinc and 30,000 to 32,000 tons of lead in concentrate.

21:56 And at SASSA, we have a capital program to change the method of mining effectively. A number of aspects to this program, one is a new decline to go to the lower parts of the ore body, and that's a slightly bigger tunnel than the ones we we we have currently. So it's four and a half meters by four and a half meters as opposed to the three and a half meter tunnels that we inherited for the access to the ore body when we bought the mine. So that started. We've done about 200 meters of development there. We started on the 910 level where we've done a 188 meters, and we've now built the portal on surface and we've gone about 10 to 12 meters into soft rock, and we expect to hit hard rock surely and do about 780 meters of that decline. The reason we're doing this decline, easier access into the ore body. It improves the ventilation, and it will enable us eventually, two things, twofold. One, potentially increase the production capacity to 900,000 tons. And also, potentially in the future, we're looking at a trade off study between using electric vehicles as opposed to diesel vehicles.

23:01 Next slide, please, please. Just a quick diagrammatic of where the decline is going from the process plant down to the spinure at the ore body, which is the ore body on the left of the diagram there, and just accessing it from there. And the other ore body, as you can see, actually goes through the Glenmoreracker ore body. As part of the life of mine review of the cut and fill project and the transition to cut and fill mining, one of the aspects we need to do is build a paste back fill plant. Effectively, this is the plant that takes the tailings from the flotation plant, adds cement and various reagents and turns it into a paste, which is then piped through the mine and back into the voids that we've created from the mining process.

23:45 This this plant itself is well advanced to be start construction q one of next year and complete construction by q four of next year. Most of the key equipment has been ordered and is in the process of being manufactured now to be delivered on-site in q one or earlier of next year. And in terms of the pipe work, what we call the reticulation program, we now have on-site four and a half kilometers of the pipe work ready for installation, which will start in q four of this year. So that's all on track for the end of next year. And just moving to the last part of the the cut and fill project, probably the the more complicated aspect of it is for a while we weren't a 100% clear where we might be able to place what we call a dry stack tailings.

24:32 So whereas at the moment we store our tailings in the tailings facility, which is a wet down facility, The intention in the future is for quite a large proportion of our tailings to be extra moisture taken out of them, turned into like a dry cake and put on the surface in an engineered structure. And that's now been determined where we'll place that. It's a t S... The old T S F 2, close to where the admin and the mining facilities are themselves. And the diagram you can see there, not not the best in the world, I have to say, but it's a it's a landform building in between the valley sides and how we will structure that particular landform. The other side of it is a dry stack tailings filtration plant, and we're well advanced in terms of the design and the procurement of equipment for that plant, again, to be delivered by q four twenty twenty two.

25:20 So that's just a quick update where we are on that program at SASA to move to cut and fill mining. Quickly on on capital allocation priorities, four four fold, really. First is return to shareholders, and we've announced a healthy dividend this morning of 8p, which is 40% of the free cash flow. That will be paid October 22 to shareholders on the register on October 1, and that takes us to a total repay to shareholders of $229,000,000 or £1.20 per share since we started paying dividends back in December 2012. We've also announced a 10,000,000 repayment... Early repayment, should I say, of our corporate debt facility in a in a... On top of the regular payments that we make of $3,200,000 per month to delever the balance sheet quite quickly.

26:09 Up last two legs of it, obviously, the investment that I just mentioned in the cut and fill project at SASSA, we've earmarked 18 to $19,000,000 of CapEx this year and next year to finish off on that program. And the reasons why we're doing that program, as I've already stated, is really to move the mining to the twenty first century, improve the efficiency with which we extract our mineral resources, and improve the the management of our tailings storage in a more environmentally friendly way. And and last but by no means least, we continue to look at growth opportunities. I can see quite a lot of the questions are about that, that's that's been a focus for a long time. It was when we just had good mud and we managed to acquire the SASSA mine. It continues to be a focus. There's no rush for it necessarily. We have got long lines of our assets, but we continue to look on an opportunity basis to acquire another asset to build the portfolio of CAML's assets such that they're accretive for our shareholders and we can create some value out of it.

27:08 This... So far this year, we've increased the energy and the efforts on that, and we've looked at 18 opportunities with 11 NDAs signed and one site visit undertaken. And just finishing off on the slides before we move to questions, just to summarize, some good results announced this morning. We have a strong and sustainable business, we believe. Strong operational performance, a few challenges in the first half of this year, which we got a recovery program in to try and overcome in the second half of the year. Strong EBITDA and free cash flow margins. Our capital allocation priorities, as you can see, paying money back to shareholders and paying some debt down. And looking further ahead, we need to complete on our climate change strategy, which I've mentioned already. We're pleased with the reduction we've achieved so far, but there is more to do on that.

27:55 Production guidance, we are maintaining it. There is a slight challenge on the lead and zinc at SASL in the first two to admit, but we've got the recovery program in place. And we are still experiencing a strong metal price environment into the second half of this year, which is also encouraging really for the full year results, which will be announced next March in line with the audit procedures, etcetera. So at that point, that's the end of the presentation. I will hand over to any questions from the floor, we'll try and answer those as we can. That's great. Nigel, Gowen, Louise, thank you so much for updating investors this afternoon. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. But just while the company take a few moments to review those questions submitted already, I'd like to remind you that the recording of this presentation, along with a copy of the slides and the published Q and A, can be accessed via your Investor Meet company dashboard, and we'll notify you by email when it's ready for your review. I'd also like to remind you that your feedback is important to the company. And immediately after this presentation has ended, you'll be redirected for the opportunity to provide your feedback in order that the company can better understand your views and expectations.

29:01 Louise, it might be an appropriate time, if I may, to hand over to you. Investors have submitted questions throughout today's event. So firstly, thank you to investors that submitted those questions. Perhaps I could ask you to read out the questions where it's appropriate to do so and give a response. So thank you very much. Sure. Absolutely. Thanks very much, Mark, and thanks, everybody, for posting these questions.

29:20 So the first one we've got is from Jeffrey. He's asking if we can please give him an update on Copper Bay, what the position is with Copper Bay. Sure. No problem. So Copper Bay is a small tailings retreatment project that we own in Chile. We've owned it since 2012. I think it was in '12 or '13. 12/13. Yeah. I've forgotten that. Yeah. We completed a feasibility study in 2016, and with the purchase of the Sassa mine concluded that the levels of production and CapEx required for Copper Bay was no longer a core part of our portfolio. So we decided to try and dispose of that asset, and we've actually written off the investment in Copper Bay back in 2016, I think it was, off the balance sheet.

30:14 It's still subject to a sale process. We did have a number of parties interested, which we whittled down to one or two, and one of those has walked away. And we're looking at, you know, potentially trying to sell the asset to some of the other potential suitors in there. Failing that, the board of Copper Bay will have a look at other options available to us. Yep. K. We've got a couple of questions here from Duncan and Simon. I'm I'm gonna read them out together because I think they're kind of asking for a similar answer. So Duncan's saying, what's the likelihood of buying further mines? And Simon's question is, you state management's focus on business development has accelerated. Are there any opportunities you see as happening in the short term?

31:02 Do you mind taking look at that? I'll try and have a go at that, Duncan and Simon. Yeah. I mean, clearly, we'd like to think there are opportunities for buying other mines. Actually, finding the right one to fit our profile is quite difficult, actually. I mean, you are subject to a little bit of geography and geology. You can't choose where you want to buy a mine because there's lots of pros and cons with with mines and and your dependence on where the geology stakes the the ore bodies are. So we do look, but it's very much on an opportunistic basis. We're we're in no rush. I think we've already mentioned that fact. We're we're focusing on delivering on the capital project at SASSA. But in the meantime, we have increased the energy towards looking for business development opportunities. We believe there's a window for the next maybe two or three years whereby we would like to find something. But it has to fit their profile. It has to fit certain criteria in terms of value accretion for our shareholders. Have to have the right risk, you know, risk reward kind of balance.

31:56 But we do look quite broadly in terms of geographical locations. So we will look in Africa, South America, we've looked. North America, we've looked. Ideally, we'd like to find something in our, what we call, maybe our backyard, so in Kazakhstan or Europe, certainly Macedonia or Kazakhstan. Metals, in terms of the metals we look for, sticking primarily with our base metal portfolio of of copper, zinc, and lead, and think copper will be our preferred metal. But, we have started thinking a little bit more creatively than that to some of the future metals, some of the more creative metals that we've not been involved in the past, like nickel, maybe lithium, but these are areas that, you know, we might need to joint venture with because we might not necessarily have the expertise there. So it's it's a it's a difficult answer to give very specifically about what what what we're doing, but we do look at lots of aspects and opportunity wise. We do look for business development opportunities, I would hope that within the next few years, we do find some that that that is as, you know, as good as SaaS has proven to be from the, you know, addition to.

32:59 Okay. Simon is asking if we can tell him what our hedging policy is. Sure, Simon. The the the hedging policy for interest rates and foreign exchange is sort of just mainly restricted to what sort of instruments we can use, which will be swaps in that case. But I think you're probably more asking about the metals given that we did hedge 30% of our metals for 2021. The hedge policy itself allows the board to hedge up to 50% of our rolling twelve month production. But we've what we have hedged and was 30 of sort of straight twelve months in effect. So we haven't layered on any more hedges as those have rolled off.

33:46 The decision to hedge was made in December last year in the context of the prevailing commodity prices at the time and our additional capital requirements to fund the cut and fill project. So that that was the main reason we did it. K. Douglas is asking what is the average cost of debt, please? Douglas, I actually worked that out for you when I saw it come up. It's 3.86%. We do have It's quite impressive. It's very impressive. Well, yeah, Nigel was doing all the hard work. So it... It's split into two. Now it obviously heavily weighted towards our Traxxas corporate debt facility, which at the end of the period was 52,200,000 outstanding on that, and that runs at LIBOR plus 4%. And then we have $10,000,000 of available liquidity in North Macedonia, of which 8,700,000 was drawn.

34:42 At the end of that, the average cost of that is around two and a half percent. Brilliant. So Nick is asking whether we have experienced any supply chain issues. Nick, not to date. It's a good question, I guess, in the context of of two things. One is COVID. You know, that was one of the big risks we saw, this time last year, and we put a quite a lot of mitigation in place around stock levels and critical spares and that sort of thing, to to see us through that period. What that... The knock on effect of COVID has really become freight and availability of containers, and that is both supply chain for us plus also exports of of some of our material that we produce at North Macedonia.

35:29 But to date, we haven't actually experienced any supply chain issues, and we're still managing to get our hands on everything we require at both sites with ease. So nothing to worry about there, but it is a good question because it is a risk that we do see rising across the industry. Yeah. And Steve has asked another question about m and a, what... Whether we're looking at acquisitions and what metals we will be looking at. I think Nigel has has answered that. If you feel like he hasn't, then post again. But, otherwise, I'll I'll move on if that's okay. I think Nigel answered it in a very rambling fashion. Refer to Steve. So Yeah. If if Steve feels Nigel answered it in a rambling fashion, then We can talk. Please feel free to say. We could probably talk for an hour about business developments and how hard it is really, but you know, what stage on the development profile you're looking at, which metals, which jurisdictions, risk profile, etcetera. Certainly, metals is maybe the easiest part to answer, Steve, to be honest with you. Copper is our primary metal that we look for, if I'm honest with you.

36:32 We'll stick with the other base metals, but, you know, again, we will be creative to look at what what else we could add value to the shareholders with. Okay. Nigel, Kevin, Louise, I think safe for a very nice comment from Alex. I think you've addressed all the questions submitted by investors. Thank you so much. And of course, if we see any further questions come through, we will make them available to the company for their review. Nigel, Kevin, I know investor feedback is important to you, and we'll shortly redirect investors to do so. But before doing it, I thought I'd ask you for a few closing comments, and then I will redirect investors. Okay. Just a few closing comments. Firstly, to thank everybody for taking the time out to listen to myself and Gavin presenting the company. We're always open to people contacting us and Louise as investor relations. We'll always listen to people and take questions. And if there's any more that people want, then we're more than happy to to do that. But I hope you found it helpful. It was a quick counter through our results. There's lots more on some of the questions in particular that were raised, certainly on the business development to say there's a long conversation can be had about that.

37:35 And hopefully, you found the presentation useful, and hopefully, as Alex says, and, you know, thank you very much for those nice comments, Alex. I appreciate that in terms of another set of fantastic results, which we're pleased with this morning to announce. That's great. Thank you very much indeed to you all. Can I please ask investors not to close this session as we will now automatically redirect you to the opportunity for you to provide your feedback in order that the management team can really better understand your views and expectations? This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of CENTRAL ASIA METALS PLC, we'd like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.