Sherritt International (TSX:S) Q4 2020 Earnings Call

0:00 Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Sherrod International Fourth Quarter in 2020 Year-End Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. I would like to remind everyone that this conference call is being recorded today, Thursday, February 11, 2021, at 9 a.m. Eastern Standard Time. I will now turn the presentation over to Joe Racanelli, Director of Investor Relations. Please go ahead.

0:26 Thank you, operator, and good morning, everyone. With me are Sherrod CEO David Pathé, Interim CFO Nathan Reeve, and our Chief Operating Officer Steve Wood. Before we begin, I'd like to remind everyone that we will be following the presentation today that is available from the Investor Relations section of our website at sherrod.com. Additionally, we will be making a number of forward-looking statements under the provisions of Safe Harbor. The risks and uncertainties associated with these statements are outlined in slide two of our presentation. as well as in the disclosure materials that we posted last night on our website and also available via CDAR. David, please go ahead with your opening remarks.

1:09 Great. All right. Well, thanks, Joe. Good morning, everyone. I appreciate you taking the time to join us again this morning. I know today is a particularly busy day and a busy week of results coming out, so we'll try and take you through a few things this morning. As we always do, Steve Wood will take us through some operational highlights, and Nathan Reeve, who has stepped into the breach for Andrew Snowden as of 1 January this year, will touch on some financial highlights before I come back and talk about a couple of matters, and we'll then take your questions. A couple of things are just from the quarter and the year that I want to highlight off the top. 2020 really wraps up what was a significant year of progress for share, despite all the uncertainty and tumult caused by the COVID-19 pandemic.

1:58 We finished 2020 in the strongest financial position that we've been in in more than a decade, and with some real tailwinds behind us now in a number of respects. The highlight of 2020 was the strengthening of our balance sheet. We talked extensively about that at the Q3 release, where that closed at the end of August. We have a now have rising nickel and cobalt prices and encouraging signs of improvements in the U.S.-Cuban relationship, which should help our Cuban partners and ultimately help us. And the Balance Shaper Initiative resolved our Mbadavi investment legacy, limited $300 million in debt. We extended our debt maturities out to the late 2026 and then beyond that to 2029. We cleaned up all the risk of cross-defaults between our Mbadavi debt and our other debt instruments.

2:46 and now present a much cleaner balance sheet than we've been able to in quite some time. Last, I just want to highlight as well, we sell strong collections on our overdue receivables in the fourth quarter, thanks to the agreements we put in place with our partners, and this one in 2019, actually, where we captured a disproportionate share of the distributions that come out of our nickel business once we're in excess of the budget advance. That helped us out to the tune of $20 million U.S. in the fourth quarter, and contributed to a significantly stronger cash position, both overall cash and cash in Canada for the year. With those quick highlights, I'm going to turn it over to Steve and let him take you through some of the operating results and then come back at the end with a few matters to update you on and then take your questions.

3:32 Steve, are you there?

3:35 Yeah. Thanks, Dave, and good morning, everyone. As I normally do, I'll first comment on our progress on safety. We continue to devote considerable efforts to ensure that our employees go home safe and healthy every day by fostering an environment where best practices for employee health and safety are followed closely. This has resulted in regularly ranking in the lowest quartile of our benchmark peer group, and we continued this in the fourth quarter. For the year, our total recordable injury rate was less than half of that of 2019. I'll move now on to slide five and talk about the impact of COVID-19.

4:20 The onset and spread of COVID-19 has had a significant impact on mining operations around the world for much of 2020. A number of companies were in fact forced to limit or in some cases stop production entirely. COVID-19 had a limited impact on our production activities at each of our operations. The only real impact that we experienced in 2020 was the rescheduling of our annual maintenance shutdown at the refinery in Fort Saskatchewan and its extension by a few days due to limited contractor availability in the region. The limited impact that COVID-19 had on production is attributable in part to the additional health and safety measures that we implemented starting in March 2020 as the virus was spreading around the world.

5:19 These measures have included practicing social distancing and increased use of hand sanitizers, workplace modifications and additional personal protective equipment. Employee health and safety are paramount to share it, and we will take all necessary measures to continue to protect our employees throughout this pandemic. Measures implemented to date to prevent the spread of COVID-19 will remain in effect for the foreseeable future. Now turning to our production results, starting with the MOA-JV on slide 6. On a 50% basis, Moab produced 4,020 tons of nickel and 451 tons of cobalt in the quarter.

6:07 Although consistent with last year's results, the production totals in Q4 were impacted by unplanned autoclave repairs at the refinery in Fort, Saskatchewan. The repairs resulted in a decline in production to 50% of normal capacity for a few days. And despite this challenge, our production results in quarter four allowed us to largely achieve our guidance for the year on a 100% basis. Our production in Q4, in fact, helped to offset the impacts to production caused by the railway service disruptions that you will recall we experienced in the first quarter and the extension of the annual plant shutdown for several days back in the third quarter.

6:55 On a 12-month basis, we produced 15,753 tons of finished nickel and 1,684 tons of finished cobalt in 2020. These totals were largely consistent with the results for the previous year. I'll turn to slide 7 and discuss our unit costs at the Moa JV. MPR, or mining, processing, and refining costs, declined by 11% in Q4 relative to the previous year. The decline was driven by a combination of factors including lower input cost for sulfur and fuel as well as expense savings generated by our austerity measures that we implemented earlier in 2020.

7:45 We implemented these austerity measures in the wake of economic uncertainty caused by the COVID-19 pandemic And despite the decline in NPR costs, NDCC was up in Q4 by about 19% to $4.47 per pound of nickel sold versus the previous year. The increase was attributable to a combination of factors, including lower cobalt and fertilizer byproduct credits, as well as by higher production costs caused by the biannual acid plant shutdown at the refinery in Fort Saskatchewan. On a 12-month basis, NDCC was $4.20 US per pound, and this total put us well within our guidance for the year.

8:39 Now I'll turn to our oil and gas operations on slide 8. We produced 2,599 barrels of oil per day in Cuba on a gross working interest basis in Q4. The total marked a decline of approximately 30% from the previous year when we had produced 3,785 barrels of oil per day. This decrease was due to natural reservoir declines. Unit costs in Cuba for Q4 2020 were $23.13 per barrel. That's down 5% from the $24.33 per barrel for Q4 of the previous year.

9:26 Unit costs declined largely because of a stronger Canadian dollar relative to the U.S. currency as operating costs are denominated in U.S. dollars. Looking at our results for the oil and gas business on a full year basis, production and unit costs were both in line with our guidance for the year. and also reflective of natural reservoir declines at PEU Marie. Now turning to our power division on slide nine, we produced 144 gigawatts of electricity in Q4 and that's down 23% from the previous year when we produced 186 gigawatts in the same quarter. The decrease relative to last year was driven by reduced natural gas availability on account of the maturing oil field production.

10:21 Despite that decline in the fourth quarter, 2020's total power production of 602 gigawatts was in line with guidance for the year. Unit operating costs for the quarter were $26.73. That's up 21% from 2,215 for the previous year. The increase was due mostly to lower production. Unit operating costs on a full year basis declined by 5% in 2020 relative to last year despite lower production. The year-over-year decline was largely driven by the decision to defer planned maintenance activities and limit operational spending consistent with the pace of collections against overdue receivables from our Cuban energy partners.

11:19 Dave will expand on our outlook for the oil and gas and power businesses in his closing remarks. That concludes my remarks on operational performance. I'll now turn it over to Nathan for a discussion on our financial results.

11:37 Nathan? Thank you, Steve, and good morning, everyone. I would like to begin my remarks with a couple of comments on our balance sheet. As David noted in his opening comments, we ended the year with a much stronger balance sheet by eliminating more than $300 million of debt and extending the maturities of our debentures with the first maturity in late 2026. We also took measures to strengthen our liquidity, including the renewal of our $70 million credit facility to April 2022. The credit facility with our syndicate of lenders includes a $10 million accordion feature and more flexible covenants. As at the end of 2020, we had drawn $8 million against the facility.

12:26 Now turning to our consolidated cash and short-term investment balance, which was 167 million at December 31st, 2020, up from 166 million at the start of the year. As you can see from the cash waterfall on slide 11 of our presentation, our improved position was attributable to a number of developments in the year. The most notable being the receipt of $40 million of distributions from the Moore JV in 2020, representing Sherritt's 50% share of distributions. In addition, Sherritt received distributions of 26 million in Q4 2020, which represented the 50% share of distributions earned by Sherritt's JV partner, GNC, and redirected to Sherritt. The redirection was in accordance with the overdue receivables agreement and resulted in a decrease in cash held by Energas in Cuba.

13:29 After consolidation adjustments, the net impact on our cash position, as you can see from the chart, was $17 million. The key driver of these distributions was the nickel price recovery experienced in the second half of 2020. These increases to our liquidity were offset by a number of cash outlays in 2020, including 28 million of costs related to the balance sheet initiative and early consent considerations, and capital expenditures primarily at the Fort site location and for the oil and gas business unit, totaling $12 million. In addition, we paid interest of $5 million on the new second lien notes, which resulted from the balance sheet restructuring.

14:17 I should point out that in addition to an approved cash position, we also ended 2020 with less cash held in Cuba than at the start of the year. At December 31st, 2020, 75 million of our cash was held in Cuba, down from 80 million at the start of the year. Moving to the next slide. The progress we made collecting on amounts owed to us by our Cuban energy partners is more clearly visible on this slide, slide 12. At the end of Q4, amounts owed to us by our Cuban energy partners totaled 146 million, down from 159 million at the end of Q3.

15:03 As mentioned, the decline was principally driven by the receipt of U.S. 20 million of distributions that were redirected to us by GMC in the fourth quarter of 2020. This amount was received, as previously noted, under the overdue receivables agreement, and the proceeds applied against amounts owed to Shareit by Enegas. We will continue to work with our Cuban partners to ensure timely receipt of payments, but do anticipate some lumpiness with collections in 2021. largely because of the continued impact of U.S. sanctions against the country and the decline of tourism caused by COVID-19.

15:48 Typically, Q1 generates the highest influx of tourism dollars into Cuba, but this year we'll see a drop relative to recent years. The unification of Cuban currencies, which I will talk to next, has created some near-term delays in collections. So moving to slide 13, at the start of 2021, the Cuban government began the process to unify its currencies consistent with economic reforms it announced over the past several years. Given the interest in the Cuban currency unification and its impact to share it, I'd like to review a couple of highlights with you today. As many of you know, Cuba had two currencies until December 31st, 2020.

16:38 The convertible currency, or CUC, was used by travelers and foreign businesses and was pegged against the U.S. dollar on a one-to-one basis. This currency was unified with the Cuban peso, or CUP, the local currency effective January 1st, 2021. The CUP is now Cuba's only official currency, and its exchange rate against the U.S. currency will be 24 pesos for every American dollar. The rationale for the currency unification was to support economic reforms launched by the country, harmonize wages throughout Cuba, particularly for individuals not involved in the tourism industry, and approve the valuation of Cuba's exports.

17:27 While a six-month transition period is underway, whereby CUCs are being converted into CUPs, we do not expect impacts to amounts that will be distributed via the MOA joint venture, cash held at Anagas, or amounts owed to us by our Cuban partners. All payments made to share it will continue to be made in foreign currency. We are monitoring development since the unification has only been in effect since January 1st, and participating in discussions locally to fully determine the impact on our Cuban businesses. The only real impact that we may see in the near term relate to the timing of receipts against overdue amounts owed to us. While we do not expect amounts owed to us to be devalued or lessened by the currency unification process, payments will likely vary month to month in the near term.

18:22 That concludes my remarks. I will now turn the call back to Dave for his concluding comments.

18:27 All right. Thank you, Nathan. A few things for me I just wanted to touch on before we come back to your questions. The first is our 2021 outlook and guidance that you would have seen us issue a release on two or three weeks ago now, I suppose. Just a few comments on that. You've seen our production guidance, 32,000 to 34,000 tons of nickel on a 100% basis. That would represent a slight increase over 2020 production. We believe that's achievable and consistent with the historical production of the Mora Joint Venture. and are focused on delivering that, along with 3,300 to 3,600 tons of cobalt on a 100% basis. A couple of comments on our net direct cash cost. We put some guidance out there, roughly 4.25 to 4.75 a pound U.S.

19:17 The variation in that and the slight uptick in that from 2020 is driven entirely by commodity prices. We expect the trend over the last few years of decline in our controllable NPR costs to continue, but there are some more conservative assumptions in there on some of the other commodities that influence our net direct cash costs that give us room for improvement on that if commodity prices work in our favor. For example, that $4.25 to $4.75 is assuming a $15.58 cobalt price for the year. Cobalt had a very nice start to the year, which I'll highlight for you in a moment. Cobalt right now is about $22, and at the roughly 10 to 1 ratio that we have for cobalt production to nickel production, every dollar on the cobalt price is worth about $0.10 a pound to us, an improvement in our net direct cash cost.

20:09 It also assumes $145 a ton for sulfur. Sulfur has crept up this year. We were paying about $90 a ton late last year. It's now up into the $1.30 range, and we were anticipating some tightness in the sulfur market, and that's why we had the higher price assumption there. We'll see how that unfolds, but the increase we've seen so far in cobalt this year is more than taken into account in our estimates we put together for the guidance on that joint cash cost. Capital spending, you see that the more joint venture is up a little bit from last year. That's driven primarily off of some projects that were deferred in 2020. the beginning of the year when nickel prices were low in the first half of the year. We do have some flexibility on that if commodity prices retreat again, but we'll be looking to execute on that to stay up to date on our capital spending in Moher.

21:02 Lastly, just on the power, as Steve noted, we had some impact on operating costs in the power business in 2020. Some maintenance was deferred in connection with the pace of collections of the power businesses. That will certainly be the practice going forward into 2021 as well for both our capital and maintenance spending in the power business, keeping those paced with the rate of collections in that business. And so we can see some impact on those numbers depending on how collections go and just give you some sense of the variables and uncertainty that play there at the moment. That's what I wanted to talk about on guidance. Steve mentioned I would talk a little bit about oil and gas. We shared with you the final results of our Block 10 drilling last year.

21:49 And where we are now, you'll have seen that we have not published any guidance for the oil business for 2021. The reason for that is our existing production and sharing contracts, which we've been producing for the last few years, are due to revert back to QPET, the Cuban State Oil Company, towards the end of the first quarter. We won't have any oil production beyond that date. We do still have a number of different prospects in the country, including Block 10 and other blocks that we have access to. We are continuing to look for partners that may be interested in participating in that on a type of burn-in basis. We don't have any arrangements like that at this point in time, and as we stand here today, We don't see any meaningful amount of capital being spent by us in the oil business at this point in time, but we'll continue to see if there are opportunities to do anything with those prospects going forward in the future.

22:43 I mentioned the power business. The pace of spending there will be linked to the pace of collections. Our current power arrangements are in effect through 2023. However, we do expect those to be extended. We have had those conversations in Cuba. Frankly, we would have hoped to have made more progress on that in 2020, but with the inability to travel to Cuba, that has been pushed up, but that's something we'll be looking to get done this year. A couple of slides on nickel markets. So the first there on page 17 shows you the dramatic moves we've seen in nickel price over the last six months and then in cobalt over the last six weeks, really. There's been significant momentum behind both commodities at this point in time.

23:30 A number of factors driving the run-up in cobalt prices. We'll start with nickel to drive up in nickel prices. Stronger stainless steel production numbers than potentially were expected out of China in the second half of the year. Weaker U.S. dollar. Inflation fears leading to some strength across the whole base metal sector following run-up in precious metals. And now more and more momentum around the theme of electric vehicles that we've been talking about for some years. Electric vehicles, as we've talked about in the past, comprises a relatively small component of global nickel demand, 3%, 4%. But that's expected to be upwards of 40% by 2040. And we actually did see some growth in nickel demand as a component of overall nickel demand in the market from 3%, 4% up to 5%, 6%, 7% over the course of 2020.

24:22 And that trend is expected to continue. The COBOL price was really run just in the last few weeks, driven on momentum behind the electric vehicle and battery generally. We're now at about $22 a pound. That's the highest price we've seen since early 2019, and certainly that helps us both from a cash flow perspective and a direct cash flow cost perspective, as I mentioned in our guidance discussion there. Where it goes from here is obviously the big question. That's what we're talking a little bit about on slide 18. Analysts have been spamming to update their forecast to catch up with the movement we've seen in nickel price. And Wood Mackenzie is now talking about we could be testing $9 by mid-year before seeing it potentially retrench.

25:07 Certainly some of the announcements that have continued from governments and automakers alike that we've seen over the last few years have continued, and that has helped build momentum on both nickel and cobalt prices. General Motors, for example, you would have seen just this year announced $27 billion of investment over the next five years towards EV production. and plans to have the bulk of its fleet fully electric by 2035. The change in the administration of the U.S. as well as bringing a renewed commitment to green energy as the U.S. reenters the Paris Accord. We expect that will build more momentum for the electrification of transportation and batteries in the U.S., momentum that it already has in Asia and to some extent in New York as well. Near-term, we still think that there could be some volatility.

25:52 We have seen a significant run-up in the prices, and that's in the midst of a global pandemic, and that with our uncertainty around future collections. We've all taken advantage of the high-spot market to protect ourselves on the downside. But if we do see these prices continue where they are, we'll see a significant improvement in our cash flow over the course of the year, and we will potentially be, based on budgets and where combining prices are now, if these prices sustain themselves, We'll be back into the situation where we were in late 2020, where we're looking to capture a disproportionate share of the dividends once again from the Moller Joint Venture. So just to sum up, going back on page 19 here, 2020 was a busy year as we scrambled to address COVID and keep our operations running. We've successfully delivered on that.

26:39 We're likely meeting our production guidance across the board. and a significant improvement in the financial situation and balance sheet strength leaves us now positioned extremely well to capture on this and the higher commodity prices that we're seeing now and the longer-term story that we've been talking about here for some years of the theme around electric vehicles and significant shortages of nickel, particularly Class I nickel, for battery production in years to come. We may see near-term volatility in nickel prices, but we have greater conviction than ever in that longer-term story. With that, I think we can wrap up there, operator, and take any questions anybody may have. Certainly. Ladies and gentlemen, to ask a question, please press star followed by the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster.

27:36 Your first question comes from Don DeMarco with National Bank Financial. The line is open.

27:43 Thank you, operator. Good morning, David and team. Do you expect the redirection of your JV partners' distributions to be of a similar magnitude in Q1 as they were in Q4?

27:58 Not in Q1. The arrangement we have with our partners is there is a budgeted amount of dividends that the Cubans anticipate receiving out of the joint venture. and that all plays into their central planning around hard currency inflows and outflows out of the country. If, however, over the course of the year, the actual cash available for distribution from the MOA JV exceeds the budgeted amounts, we at that point, after we've exceeded the distributions in accordance with budgets of the two partners, at that point we'll capture a disproportionate share of the dividends. So we anticipate the first quarter dividends will be shared by the partners pro rata as we look towards budget. But with commodity prices where they are now, if they sustain at these levels throughout the year, distributions from the joint venture may well have achieved budget for the year by about mid-year, and we could be seeing us capturing a disproportionate share of distributable cash from the JV in the second half of the year. how quickly we get to that point and the magnitude of that over the course of 2021 is obviously entirely dependent on commodity prices.

29:16 Okay, great. Just shifting over to the Class 1 nickel that you produce, obviously this is the best for EV battery applications. Do you see any early evidence of a divergence in pricing between Class 1 and Class 2 nickel? Are EV manufacturers starting to reach out to you directly to ensure supply?

29:35 There is a divergence. You look at the market today, in terms of the spot market for physical, in some ways the price is potentially even stronger than what the physical market shows today. There is physical metal available in the market today. You are seeing ferro-nickel trade at a bit bigger discount to the LME price than it has in the past. I don't know whether that is a long-term trend or just a function of near-term supply and demand, but there is a bit more of a ferro-nickel and NPI discount at the moment compared to class I nickel, and we'll see whether that does develop into a longer-term trend. At the moment, a lot of our nickel, the bulk of our nickel is under... contract to customers that we've had for many years. There is certainly a lot of interest in battery makers out there in terms of looking and figuring out what their, and automakers in terms of what their long-term procurement strategies and supply chain strategies are going to be as they look to move more heavily into electric vehicle production.

30:41 And that will play out over the next couple of years.

30:45 Okay. Thank you. That's all from me. Thanks, Tom. Again, as a reminder, please press star followed by the number one on your telephone keypad. Your next question comes from Tony Robson with Global Mining Research. Your line is open.

31:08 Tony Robson, Global Mining Research, Your line is open. Gentlemen, thank you for the presentation. Thank you for taking my questions. Two questions, if I may, please. The good to see, firstly, the short buying puts protecting about 50% of the downside for this year rather than getting to a complex option strategy which would cause limits to the upside. The question is, is that simply a prudent move by management, or do you see some real downside risk to nickel? Or is nickel looking toppy, in other words, at this price to you now? That's my first question, please.

31:45 I can give you a couple comments on that. Generally, we are not going to be active hedgers of the nickel price. We have had a long-standing policy that we are not hedgers and we intend to remain fully exposed, particularly to the upside of nickel. This is not the onset of a more sophisticated hedging strategy. The logic behind this, from our perspective, was we had seen a significant run-up in nickel prices in the fourth quarter of of 2020, and as we looked at our cash flow forecasts and expectations over the course of 2021, given global uncertainty, there was a lot of talk from analysts about the downside risk in nickel prices based on just the degree of economic uncertainty from the global pandemic.

32:31 We also have some uncertainty around the pace of collections out of Cuba, given the impact of COVID and U.S. sanctions on the island there and losing their tourism season. And really, the run-up in the high spot price and the nickel price gave us an opportunity to buy really what we see as some cheap insurance on 2021 cash flow, given that higher level of uncertainty in the world that we see today. And that was the logic behind the approach that we took to buy some floors or some puts to give us some comfort that a portion of the nickel price would be available. It's only six months ago that we had a nickel price that started with a $5. And I think any time you see a 50% increase in the commodity price in five, six, seven months in the midst of a global pandemic, you have to be concerned that there's some near-term volatility risk to that. And the spot market gave us an opportunity to protect and give us some insurance against a minimum level of cash flow, but unable to meet our obligations and have some financial flexibility going forward, even if things take a more difficult turn in commodity markets due to the pandemic or any number of other factors.

33:34 That was the logic behind it, and I think what we were able to do in putting those in place while preserving all the upside, obviously, we looked at the idea of cashless callers and such as well, rather than actually paying cash for those floors, but we were keen to preserve the upside opportunity in Nickel. Those of you who followed Nickel for a long time know of its volatility and its ability to move upwards dramatically when circumstances change, and we certainly didn't want to trade away that opportunity, but having some certainty of a minimum level of cash flow if nickel prices were to take a near-term retreat at the same time that we suffered at the pace of collections in Cuba. We were able to mitigate that through the stock market, and it doesn't affect our long-term expectation of where we think nickel prices are going.

34:21 Okay, good. Thank you. So if we take this section as a guide to the future, if and when, but you don't even be looking to cap 50% of production, or as you mentioned, more to do with what your cash outgoings would be at any point in time?

34:38 Yeah, I don't think there's anything that we can read into that in terms of our intentions of what we might do going forward, and I don't think this will be a regular feature of ours. It will depend on what various variables look like in terms of prospects for collections, where the commodity price is compared to near-term expectations. It is a tool that is available to us to give us some comfort on our tools, and we will continue to look at that. It's relative to what our forecasts and budgets were that this level of production gave us a level of certainty in terms of the cash flow that would deliver in terms of meeting our cash obligations for interest and other matters over the course of 2018. and that's why we landed on that particular level, but there's no magic to any particular level of production.

35:25 It's just the way the math worked out with the values we were able to put those floors in at.

35:32 Okay. Second, and it's a pretty minor point, the $20 million in prepayments you had for future nickel sales just post the year end. What was the thinking there, please? I can understand that it improves your near-term liquidity, but the cost of course, it will reduce your future liquidity. So could you use a little bit more color on that, please?

35:55 Yeah, that really is just near term, sort of intra-year financing over the course of 2021. It doesn't in any way affect the ultimate price that we realize for the nickel because it is all fully exposed to the nickel price over the course of the year. But it does just front end load our liquidity at the beginning of the year. And the logic of that is it was relatively a cheap financing and gives us a bit of cash up front, particularly if the first part of the year is the most difficult from a Cuban collection perspective. So it was just really an opportunity to enhance the return liquidity if that creates opportunities for us to take advantage of anything in debt markets or anywhere else to have that cash up front. But it is paid back over the course of 2021 through nickel sales. You're absolutely right about that.

36:43 Okay, great. No further questions. Thank you. Thanks, Tony. Have a good day. Okay, and as a reminder, to ask a question, please press star followed by the number one on your telephone keypad. And we have no further questions keyed up at this time. I would now like to turn the call back over to David Pathy for closing remarks.

37:08 All right. Well, I'll just take a quick moment and thank you once again for joining us this morning. I know it's a busy day and people are scrambling from one press release to the next. We are obviously around today and always for any further questions or comments. If we don't speak to you before, we'll speak to you again in a few weeks' time when we release Q1. Have a great day. Thank you. This concludes today's conference call. You may now disconnect.