Fresnillo plc

Good morning, everyone, and thank you for being here for Fresnillo's year-end results, 2023. I'm Octavio Alvidrez, and I'm glad to be joined by Mario Arreguin, our CFO, also Tomas Iturriaga, our Central Area Chief Operating Officer, Guillermo Gastelum, the Vice President of Exploration, and also joined by Daniel Diaz, who is the newest addition to the team, and he will coordinate the northern part of the operations. The key theme that we will be discussing and talking about this morning, and coming back from a few years on operational challenges, I would say it's about operations for stability in our operations, or focus on how to control and cost. Of course, with a large setting on projects and across the area, how we go about discipline approach, and also one more aspect, which is the investment in exploration through the cycles. But as I mentioned, I mean in 2021 and 2022, We had these operational challenges across our operations. We had some difficulties to meet the guidance, so the very important aspect at that time was to have a much better grasp on the operations and therefore meet the guidance, something that we've been doing in recent years. However, I mean last year, with the inflation running globally and in Mexico more aggravated by the strength of the peso, now the focus is in controlling the cost, running very efficient our operations, and trying to be or get the best out of our current operations. I'm pleased with the performance of last year, despite the fact that we are running in a very tough environment in terms of all the way, I would say, in all the change in exploration, but also on the permitting process and also on the construction and across with communities. Therefore, despite all the challenges, I mean, we've been able to post a strong year and results. I would like to say that the aim of strengthening our team also with Daniel Diaz is twofold. One, so that Tomas and Daniel are closer to the operations given the challenges we faced. but importantly is that they coordinate the efforts more efficiently all the way from the exploration, construction phase, and bringing the new projects into operation.

This is a key aspect in our company. First of all, I will go to the disclaimer.

The agenda for today is about the highlights that I will be presenting, then some of the HSECR initiatives. The operations and updates will be given by Tomas Iturriaga. Then after, we will hear about the exploration portfolio and how the projects are evolving. by Guillermo Gastelum. Then after, Mario will give us an update on the financial part of the company. And coming back to the outlook on the closing of the presentation so that we can take your Q&A. Well, Fresnillo remains the largest silver producer, world's largest silver producer, and the leading producer of gold in Mexico.

We do have a sizable set of assets, all the way from the exploration concessions

to the projects that we are developing and ending on the operations across our portfolio. We produce healthy margins, of course, underpinned by the strength of our operations. I mentioned the control on cost and efficiency. attractive returns, of course, a strong balance sheet, and free cash flow from our operations. We continue to make good progress, despite the fact that we have headwinds on the project front. Specifically, the extension of the permitting process, which is a bit challenging in Mexico nowadays. However, And we'll go in more detail. We are making some advances. 2.7 billion in revenues, 31 US cents per share are the numbers that we are posting, reporting this morning. healthy dividends, and Mario will explain more about the rationale behind this dividend, so that we also have a strong EBITDA numbers and cash flow generation. Something that I would like to mention is that our results have been affected but by the inflation running globally in Mexico as well in the mining industry. But this is being aggravated by the strength of the peso. As of yesterday, I mean, the peso broke some of the floors, making or showing this strength just below 17 pesos per U.S. dollar. Some of the HSECR initiatives, very important, the safety of our personnel, guaranteeing the integrity of all those that we work at Fresnillo PLC is something that we've been dealing with, especially coming back from 2022 in which we had the labor reform in Mexico. And therefore, we had to include in our headcount or bring into the company a lot of contractor people and presenting a challenge in terms of a culture of that personnel. We've suffered some fatality last year and that reversing the trend that you see on the screen from the... lost time as well as the TRIFR coming down from 2018 to last year in which we reversed that good trend that we had before. So it's about reinforcing our measure, showing our leadership in terms of safety in our company. We start the week with a meeting, a safety meeting involving all of the leadership groups across our operation, our exploration offices, and also in the administrative areas as well. But these incidents and accidents, I mean, it's just a reminder that we have to do more every time. So with these measures in place, very directly or more directly, not only to our personnel, but importantly to our contractor base. We are hoping to reverse this trend. On environment, we continue to work on aspects, key aspects like water. Of course, the sustainability across our operations, trying to reduce our carbon footprint with different projects. We continue to gather information. Importantly, a study that we developed on climate change that we developed through the University of Arizona. One more key aspect so that we can have all the information possible to define our way forward with projects in terms of reducing our carbon footprint all the way from our operations. In communities, very importantly, and now even more in this administration, we cannot be more in line with the communities and trying to work in different capacities. I mean, building capacities at the communities so that they strengthen and have advantage of our economic opportunities or economic involvement in the area, and so they can have a part of that. In terms of all the payments to our personnel, salaries, contractors, suppliers, and taxes, you can see the contribution that we are making. And with this, I would like to bring to the microphone to Tomas Iturriaga, so that he can give us some of the main aspects of last year in our operation front.

Tomas Iturriaga.

It's a pleasure to be here again, talking to you about the work 2020 results. As Octavio said, safety-wise, 2023 was a very challenging year that we suffered three fatalities that were so deep on mind. We are deeply sorry for these tragic events. However, we remain convinced and committed to our iCareWeCare safety program. and also to our high-risk management program to avoid serious injuries and fatal incidents. As Octavio said, also the unusual high turnover rates in the mining industry in general and in Mexico have impacted our safety performance across all of our mines, and particularly in Saucito. So we are working very hard to reinforce our training on safety induction programs to be able to quickly and efficiently onboard and develop the safety and risk awareness skills for very young crews and supervisors. We are committed to that and keep working very hard to keep our employees safe. Moving into the operation results, 2023 was a confirmatory year of the stabilized performance at our mines. So, I'm very pleased with the positive impact of our performance improvement plan at our mines. With coal production making guidance and silver production slightly missing the guidance we provided for the year, mainly due to the delay tying to the public power grid of the Juanisipio process plant and and the Fresnillo Pirate Plant, and to a lesser extent, also impacted by a bit lower than expected performance at Fresnillo and South Seat. Moving to the mine-by-mine details, we will start with the Fresnillo District, which is where the focus remains. And the Fresnillo Mine, although we were able to increase the throughput HEP grades were below expectations, mainly due to negative geological model reconciliations against the actual grades and orthons, and also impacted by higher dilution, mainly associated with poor ground conditions. We are implementing all the necessary remediation measures to minimize the impact of these conditions going forward. And in the positive side of events at Fresnillo, we were able to increase throughput and mold the average development meters by 6% year-on-year. The deepening of the San Carlos chaff concluded, and that's going to have a very positive impact going forward. And we are nowadays working on the final details to bring the chaff to operation from its new deeper level. We were also able to successfully commission and ramp up the pyrus plant after finally being connected to the public power grid by the end of the second quarter. Moving to Saucito, throughput increased by 4% year-on-year. but results were impacted by lower than planned head rains, mainly due to bolting and scaler equipment low availability, and also by the implementation of a stricter ground control standard, slowing down mining cycles in certain areas of the mine. Availability of that equipment has been corrected, and the new standards have been now fully incorporated to our operating processes. So we expect a better operating performance in 2024, while also putting a special emphasis in our safety programs to prevent any more incidents in Saucito. Down to Juanisipio. where despite not being fully operational for the whole period, Coindesipio had a strong year, taking advantage of the synergies in the Fresnillo District and contributed with 16.7% of the silver production of the group. The commissioning of the process plan was completed with no major issues and nameplate capacity achieved by Q3. Our grade for the year was suspected, and with mine development meters increased by 15% year-on-year at Juanicipio. So we think that Juanicipio is a very good story to share with you so far. Going to Herradura, yeah, gold production was slightly higher than than last year due to higher rates in sulfide ore and positive geological model reconciliation granting additional ore tons. And I'm happy to report that the electrical system issues in the dynamic leasing plants that we reported during last year have been root solved, so we expect 2024 free of unexpected downtime, or run restrictions for those plants. At San Julian, we continue to explore for additional resources with no success. So, as previously disclosed, the disseminated ore body operation is entering its last year of production. The veins operation had a good year in terms of silver production. and gold production was slightly below plans due to lower grades. Finally, Cienega. Cienega had a stable year where we focused on reducing the contractor base and other cost reduction initiatives to set up a better 2024. After two years of great efforts spent on stabilizing the operations and setting a solid and stable production base, we are now going to increase our focus on cost reduction and improve efficiency programs that help us deal with the high inflation and the strong Mexican peso affecting our margins. So among those relevant cost reduction and efficiency projects across all of our mines, I can list the following. We'll do an in-depth review of our contracted mining unit cost to look and drive for the saving opportunities in all of our contracts. We'll also review our fixed cost structures in all of our mines to detect cost saving opportunities We will rationalize the equipment rentals in all the operations. We will work on the optimized use of operating materials and reagents. We'll do the engineering required to optimize explosive loading factors and stay from that very relevant item. Also, we will do the required redesigns to reduce the drift and ramp sections where possible in our mines to save in the excavation and not the volume removed at the end. During the year, we will also focus on developing our brownfield projects to increase and improve our minimal reserves of current operations. and particularly at the Fresnillo District and the Herradura mine, and these to be able to take full advantage of our assets and existing install capacity in those operations. So, with that solid ground on the operations now, the focus moves stronger to efficiency and cost savings.

Thank you. Thank you, Tomás. And... As I mentioned to Max, we'll be coordinating the three operations in the Fresnillo District, Fresnillo, Salcito, and Juanicipio, and importantly coordinating the efforts from all of the areas in order to bring the projects earlier in the program, specifically Orizibo and Guanajuato, who's giving us good exploration results. And I would like to, and Daniel, yes, who's been with us for a couple of months now, well, since December last year. And they've been in a transition with Tomasi Turriaga, going around the operations. And I would like to ask you, Daniel, some of the initiatives that we've been putting in place, or we believe, for your operations, which are Duración and San Julián. and also some of the projects that you'll be coordinated with Tajitos, Rodeo, and one in Chile, Capricorn.

Good morning to everybody. Even when this presentation focuses about the results from 2023, I just want to in a couple minutes, give you a glimpse of what this restructure for the company is. And it's mostly about focus, about focus in our operations, in focus about performance, but also focus about getting the most value out of the assets that we already have. That's why What we're presenting on this slide, it's a glimpse of what we're doing in one of our cornerstone assets, that is Herradura. And as you can see, there are two parts on what you can see on the slide. And it's about the balance that we need to provide in terms of capturing value in the short term with clear initiatives in order to increase productivity and decrease our cost base, and what we have to do in thinking on our operations and our assets in the longer term. So, on the first part about capturing value in the short term, we have started an operational turnaround initiative in Herradura. We started up a couple weeks ago a second study about a new mine redesign, and that is important because we'll set the foundations of what we think the long-term will be for Heragura. We're also starting a maintenance efficiency program that is something that we require. We have a large fleet with different ages, and we know we need to optimize that in order to provide a better cost base in the future. So we're starting that right now. And we also think we have a good opportunity to capture better better recoveries out of our leach paths. So we're starting a couple studies on that end as well. All that is focused on capturing value as soon as possible. But also, we think we have a very good opportunity in Herradura to create a district that could remain in the long term. We have several assets in the vicinity of Herradura that we think we need to change the approach in order to maximize the return over the install capacity that we have in there. That's why we're also, at the same time that we're optimizing Garaguda right now, as we see it in the big open pit, we're also continuing analysis about the underground resources. We think there is a possibility on the underground resources to bring production even in parallel with the open pit, and that is a great possibility in order to increase the average grade that we can put on the plant in the coming years. We're reanalyzing the Potentially reopening of Valles Mine, that is also an underground operation that we had before that still have some reserve in that. And we have the Tajitos project that is 30 kilometers away. We are analyzing the possibilities that we have with Tajitos as a standalone project, but also as a potential feed of higher grade oil sent to Herradura. And Guillermo, he will tell us in his portfolio, we also have a good land package with very promising exploration opportunities in the area. So we foresee Herradura, and I'm focusing this early discussion on Herradura because we foresee a great deal of value for the company in the short term, but also in the longer term. In the upcoming presentations, we will be sharing as well the strategy moving forward with the rest of our assets and projects.

Thank you, Daniel. And this goes along the columns that we've had in Fresnillo in terms of the strategy, of course, optimizing and getting the most out of the current assets, something that Tomas described. Now we're focusing on control, our margins, focus on margins, cost, and operational efficiency. And also, the other one is extending the pipeline of projects, and I would like you, Guillermo, to overture the presentation, please.

Thank you, Octavio. Good morning, everyone. I will provide you with an update of the resource and reserves status at Presnillo and also some of the progress that we have achieved at the most important exploration and development projects. As Octavio mentioned, we continue to have a very strong base of resources and reserves, starting from silver, Year and year, we see the resources remain stable, a marginal increase, which was mostly driven by good exploration results at Guanajuato and at San Julian that were offset by the decreases in resources out of our mines, which was mentioned previously, were hit by higher costs, which translated into higher cutoff rates, which had a big impact on the resources and reserves numbers that we're about to see. However, I would like to mention that the decreases you are seeing at Fresnillo and Saucito happened 100% over inferred resources. And overall, the measured and indicated resources were increased over the year. So we lost some of the lower quality material in this process. And at San Julian, resources decreased due to mostly a depletion of new designs, new pillar designs of the underground operation, which is facing this last year of production at the disseminated deposit at San Julian. The reserves... We are posting a 10% decrease of the silver reserves, despite the fact that, given good exploration results at Fresnillo, the mine was able to replace the reserves with a surplus of 7 million ounces, and the San Julian and Saucito operations partially replaced the reserves. Reserves at Senegal were badly hit by costs, as mentioned before, And the decrease in reserves at the disseminated old body at San Julián and at Juanicipio was basically due also to the extraction of the old bodies since no new reserves have been added to the disseminated old body at San Julián and also no new reserves at the Juanicipio. I will move on to the gold. We're posting a small decrease on the resources of gold. Again, despite the fact of having an increase of over half a million ounces of gold out of the Guanajuato district and 200,000 ounces of new resources from the Centauro Profundo deposit, we're posting a marginal decrease out of Tejitos. But the most part of the resources decrease comes from the Herradura operation due to mining extraction and to higher costs involved, as I mentioned before. And we are seeing a Well, the decreases that we are posting for Fresnillo and Saucito, again, over 90% of those of the resources happen in the inferred category. Going to reserves, we are having a 13.7% decrease of the gold reserves. We remain over 7%. 7 million ounces of reserves where the most significant impact came out of Herradura, again, because of the extraction and the higher cost in the rest of the operations. It's really difficult to increase resources and reserve from an almost fully evaluated open pit. Okay. Okay. And I will give you a brief summary of the progress of our projects, starting from Orecibo. I will remind you that Orecibo is a large gold deposit, 9.6 million ounces of gold. And I'm pleased to report that we are having a significant progress on the pre-feasibility level studies. We expect to deliver the final feasibility study by mid-year, and we will start immediately with the feasibility study, which we are expecting to provide the feasibility study by mid-2025, and then submit it to the board for approval. At Orisibo, well, we have several studies that are going on. I will focus... other than looking for, I'm sorry, let me rephrase this. This is a big deposit that has a high rate core. So we are evaluating the scenarios for an underground operation there. and also evaluation for the plausible tailing disposal sites and some alternatives for mineral processing which include milling and metallurgical processes that we are expecting that will translate into reduced CAPEX and OPEX for this project as it enters its development phase. Moving on to Rodeo, unfortunately, the project remained on standby for 2023. However, we are entering a new phase of negotiations with the communities, which are with the support of the pro-mining government of the Durango State. But simultaneously, we've been advancing some PFS-level studies, geo-hydrological, environmental studies, and water and energy supply to the project. If we move next to Guanajuato, we have a very intense drill program there. We drill over 83,000 meters. Some of those were actually drilled from underground, from the historic workings of the Las Torres and Peregrina operations. We are posting a significant increase of the total resources, as mentioned before. 684,000 ounces of gold were added to the resource base, along with 122 million ounces of silver. So the total resources in the district amount to around 2.8 million ounces of gold and and 275 million ounces of silver. So it's a very significant district. This is a, remember, it's a historical district, extensive, that spans along, around 40 kilometers along the strike, and so we are dividing it in three areas, the north, central, and south. So most of the of the increases are coming from the central part, but most importantly, from the southern Greenfields part of the district, where we discovered a deep, a high-grade old chute lying 450 to 500 meters below the surface, but of, as I said, a high-grade vein up to a significant structure with average width of four meters. And moving on to Tajitos, we had a very intensive drill program, also slightly over 83,000 meters were drilled there. And we completed a new metallurgical study out of outcropping ores. We delivered very good results. And as we speak, we are conducting a second phase of metallurgical investigation from Tajitos. from samples from previous core trailing, and we are preparing for another metallurgical investigation, and we are having progress on dedicated metallurgical drill program there. The PEA of Tahitos will be updated later in this year once we finalize the full evaluation of the main resources zone. So Tahitos has resources slightly over 1 million ounces of gold, but it has a lot of exploration potential to the west of the project, and we have already some good, interesting, and brilliant receptions west of the main ore body. So we have a story. There's a story still to be written out of Tahitos. And I would like to wrap up with the last year highlights. We invested almost $186 million in exploration. We have good results. I will emphasize the good results out of Fresnillo, San Julian, and Guanajuato, and also the good progress we are reporting on the PFS studies at Orecibo. And we are reporting also measure resources and proven reserves at Juan Ecipio, which are adding to the proven reserves that we already have at our open pit operations. And we are having a good progress to us reporting proven reserves in all of our mines. So what we are seeing for 2024, again, investing approximately $190 million. That accounts also for mining rights and some fixed asset purchases. But overall, 42%. of the budget for 2024 will be devoted to brownfields exploration at our mines. It will account for 42% of the budget. The next significant part of the budget will be invested in the most important projects that I have just mentioned. 35% of the budget will go to it to advance and update the PAs at Tajitos and Guanajuato. And once we have access to Rodeo, we are ready to start a very intensive drill program of in-field, step-out, metallurgical, and geotechnical, and fast-track Rodeo into the PFS level as soon as we have the land access, which I mentioned at Rodeo. It's looking favorable this year. And, of course, the progress I mentioned of the path from pre-feasibility to feasibility at Orecebo. We will devote a slightly less amount of money, 14%, to produce conceptual studies out of advanced exploration projects such as Pilarica, San Juan, and Lucerito. We will conduct some metallurgical investigation from the lessons that we've learned from the experiments that have been running out of Arecibo about how to treat the gold-bearing sulfide ores of Lucerito and Candamenia. And also, we'll start drilling in some promising, good-looking projects, including ones in Peru as well. Finally, in a minor amount, we'll be devoted to continue feeding our portfolio and bringing the most promising-looking prospects at the base of the triangle into the drill-ready stage. And this is what I have to say about the expiration, so I will put the microphone on, pass to Mr. Mario Arreguin.

Thank you, Guillermo. If we can go to page 22, please. Here on this page, we show the income statement for 2023, and we compare that to 2022. As you can see in the lines highlighted in yellow, We showed the different profit levels. We are lower compared to last year. In terms of gross profit, we were lower by 6%. In terms of operating profit, we were lower by almost 50%. In terms of profit for the period, we were lower 6.5%. And in terms of EBITDA, we were lower 12.7%. Let me start with gross profit, if I may. the $32.8 million reduction in gross profit. If you move up that same column, you will see that there were three major changes from one year to the other. Starting on the positive side, you will see that adjusted revenues were up $272 million, or 10.5%. Of the $272 million, 55% of that was due to volume, increasing volume, mainly silver. And 45% of that was due to higher prices, mainly gold and silver. And we will talk a little bit about that when we go to the gross profit. The second most important variation, I would say, was the adjusted production cost, which went up by $178 million, or 12.3%. And in order to analyze this variation, I would ask you to please go to slide number 23, where we show a rainbow variation. I find this chart quite helpful in terms of understanding the different aspects behind this increase. As always, on the far right you will see the green bar, which represents the $178 million increase in production costs. And if you move to the first bar on the left-hand side, you will see that the most important adverse effect was the revaluation of the Mexican PES. So here we're talking about the average exchange rate. And when you compare one year to the other, you will see that there was an 11.7% revaluation. And this had a huge impact on our results. We're talking about an adverse effect of $113 million. Now, if you combine that with column number two, where you see cost inflation excluding any Mexican peso effects, that was 3.9% cost inflation, which had a negative impact of 56.9%. million. If you add those two bars, you will see that you get to $170 million by combining the revaluation of the Mexican peso together with the cost inflation, which represents $170 million or 97% of the total variation in terms of adjusted production cost. So one could say simply that these were the two main factors. However, there were a couple of other things going on during the year. On column number three, you can see that the Juanisipio mine ramped up during 2023. Remember that mine started operations in 2022. So we were able to ramp up in 2023. And also we had the startup of the plant in March, April of 2023. Of course, this meant incurring additional costs and that had an impact of $43.4 million. Now, we definitely don't need to worry about this increase because behind this increase there was an important increase in profit, which we will see later on. Moving on to bar number five, you can see there that the impact of longer haulage distances and also the increase in the use of maintenance and contractors at some of our mines, this is excluding any Mexican peso strength or inflation. This is purely the increase in the use of these items, and that had a negative impact of $29.7 million. Now, mitigating all these red bars, you can see on bar number eight a reduction in cost of $81.9 million. Behind this is the fact that we are now closing the Nochebuena mine. We are now only extracting the gold contents from the leaching pads. We're no longer depositing any mineral, so we're not incurring that cost, and that's the reason behind that reduction in cost. But I think most importantly and worth mentioning is in column number seven, where you see the efforts of the operations in terms of finding cost reductions and economies of scale and efficiencies. And we were able to reduce those costs by $24.7 million. So when you bring all of this together, that's how you get to the final increase of $178 million. If we can go back to the previous page, please, where we show the income statement. So we've spoken about the two most important changes, but there was a third important variation. If you look at change in inventories, you would see that that had a negative impact of $114 million, a very big number. It's worth just spending a minute to understand what happened here. If you look at 2022, the change in inventories was a positive $61.6 million, which means that we had an increase in inventories basically at Juanicipio. I'm sure you remember that in 2022 when we started that mine, We didn't have the plant, so we sent the mineral to the Saucito and Fresnillo mines to be processed. However, there was more mineral produced that could be processed at Fresnillo and Saucito, so we started building up inventory. Also, we had an important increase in inventory at the Erraduna mine, where we deposited more gold in the leaching pans than the volume that we were able to extract that year. And we had exactly the opposite happening in 2023. You can see an inventory reduction of 52.6 million. In 2023, we reversed that increase in inventories at Juan Ecipio with the plant running. We were able to bring that basically back to zero. And we also had a very important reduction in inventories at Nochebuena. As I said, we're basically leaching the gold contents at the leaching path, so that means an important reduction in inventories. So when you combine those two effects, that's how you get to the $114 million adverse effect, which is not easy to catch. Now moving on to cross-profit, where we had a reduction of $32.8 million. I think it's worth taking a couple of minutes just to look at the rainbow analysis that we did for the cross-profit on page 24. Again, on the far right, you can see the green bar, which represents the $32.8 million reduction. And if we move to the left, you will see the two most important items. favorable effects, if you will. Firstly, the increase in production of silver that basically came out of the Juanisipio mine, where we had a positive impact of $206 million. Secondly, you can see the positive effect of the higher gold and silver prices. Gold was up 9% and silver 8.1% in terms of prices. So that had a positive effect of $193 million. We have to look at this together with bar number nine. Because in the case of base metals, we obviously saw a reduction in the price of zinc of almost 23% and also a slight reduction in the price of lead of 1.4%. And that had a negative impact of 70%. But when you look at the net effect of prices, you will see that we had a net effect, a positive net effect of $122 million. If you look at bar 11, this is The variation that we just spoke about in terms of changing inventories, which was $145 million, this was mitigated by bar number three, where you see the positive effect of the additional ounces that we found in Herradura that were not accounted for. We reported that in the first half of 2023. On bar 10, we already spoke about the negative effect of the revaluation of the Mexican peso. And in bar number eight, we already spoke about cost inflation. So this gives you a clear picture of what was behind that reduction in gross profit. Now, if we go back quickly to the income statement on page 22, you will see that from the lower gross profit of $32.8 million, we jump to a reduction in operating profit of $141 million. So what's behind the additional $109 million between gross profit and operating profit? Well, to explain that very quickly, you will see that in the line, other income and expenses, there was a negative impact of $49 million. And again, we had certain extraordinary circumstances that generated this adverse effect. First, in 2023, you'll see a positive number there, income of $33 million, and that's related to the recognition of the deal that we did with Orla, the layback agreement, we call it, whereby we allowed Orla to come into our own property so they could expand their pet. And, of course, for that, we... we negotiated certain benefits for Fresnillo, and those were registered in 2022. In 2023, you see a negative number, an expense of 15.8. Most of that is related to the illegal extraction that we reported in June at Soledad and Dipolos of Fresnillo. illegal extraction of gold contents in our leaching pad. That had a negative impact of approximately $22 million. So, again, you're comparing two very unique circumstances, and that's what generated the $49 million negative number that you see there in other income and expense. Now, another reason for the lower operating profit was the increase in general in administrative expenses. We had an increase of $34 million. And the reason behind that, I would say it was threefold. One has to do with the fact that the five-year service agreement with Peñoles was concluded in 2023, so we renegotiated that agreement. In 2020, yeah, we negotiated that, and that meant reviewing the unit prices that were charged. For that, we hired an independent party to define the unit prices that would be charged from Peñoles to Fresnillo, and, of course, we saw an increase. We have now signed a new five-year contract with Peñoles. That was reason number one. Reason number two, In terms of volume, the use of services that we require now has also increased because we have increased mines and we also have increased certain very specific needs. And the third and last reason I would say has to do obviously with the revaluation of the Mexican peso again because most of these expenses are peso denominated. Lastly, you see an increase in exploration expenses of 10%. Again, the revaluation of the Mexican peso because a lot of these expenses are paid in pesos. Remember, just the revaluation alone was 11.7%. So that was the main reason behind the increase in exploration expenses. Lastly, I would like to point out a unique event that occurred in 2023. If you look at the income tax expense, it's actually, you see there, a positive number of $205 million, which means that the profit for the period of $288 million was higher than the profit before income tax. So the reason behind that, again, was the strength of the Mexico, the superpeso, that's what we call it, which had a very important impact in terms of the deferred taxes, in particular in the tax value of assets and liabilities. And during the Q&A, if anyone is interested in knowing exactly what's behind this and the numbers behind this, I'm happy to explain. But for the time being, just mention that this is an unusual event. Of course, when we define the dividend payment, given the fact that this is a non-cash item, And not only that, most importantly I would say that this can be reverted any time the peso goes back to the 20 peso level or 22 peso level that we've seen it for many, many years. That effect will revert. So that's why we did not consider this particular line item when defining our dividend for 2023, our final dividend. Finally, very quickly on cash flow on page 25. If you look at the first column in the bottom part, you will see that we closed the year with a cash balance of $535 million. That was a reduction of $434 million compared to our $969 million beginning balance. And clearly you can see here that there were three or four main uses of cash. Firstly, CapEx, of course, $483 million. But an unusual event occurred in 2023, which was the maturity of some of the bonds that we had outstanding for $317 million. That's in financial expenses. And that is the main reason behind the $324 million cash reduction there. So we paid out those bonds that matured then. We currently have only $850 million in bonds outstanding, and those are due in the year 2050. And I should mention that in order to, you know, somehow guarantee the liquidity of the company, we have now contracted a revolving line of credit, what we call a committed revolving line of credit for $350 million with five banks, for a five-year period. So that facility, together with the cash balance that we currently have, we believe will, you know, give us sufficient confidence that we have the liquidity to confront any unforeseen event in the future, especially, you know, this year where we have elections in Mexico, elections in the U.S., and all sorts of global, you know, wars going on. So it's nice to know that we have that opportunity. that cash available for us. Of course, we pay dividends for $108 million. So if you take out the debt payment and the dividend payment, you will see that we basically would have broken even without considering the dividends and the bond payment. Lastly, the The most important cash generation came from the cash generated by operations, which was $649 million, only 12% below what we saw last year. So I would say those are the main features in terms of the financial results. Happy to answer any questions that you might have during the Q&A.

Thank you, Mario. Just wrapping up the presentation, I'm going to go to page number 28. You will see on the silver production profile a bit downward trend. This recognizes the St. Julian disseminated body running out of reserves. We'll continue with the production out of the vein system in San Julian. Juanicipio, of course, is producing according to plan, but is not compensating this San Julian loss. On the gold side, the last years of Nochebuena, out of the leaching pad, softer production in 2026. And on the base metal case, lead and zinc, the contribution of Panisipio, but also I mean higher grades of base metals in Saucito and Fresnillo at depth. On the... Well, good to mention that in the production profile, of course, we are not considering any of the brownfield projects that Daniel mentioned, something that we will be exploring and trying to bring at a faster pace around the Herradura operation. Also, we are evaluating some other opportunities in the Fresnillo district. CAPEX, I mean, quite level over the next years as we, in the region of 500 million, as we are not contemplating any large CAPEX amounts from green fields. And then on the consolidated outlook, yes, recognizing the headwinds that we have in Mexico in terms of permitting. We are extending a bit the evolution of our projects, Rodeo and Orizibo. and an indicative program for Tajitos and Guanajuato. As we mentioned before, Tajitos, better setting. We have the ground, the land there compared to Rodeo. something that will try to advance firmly at a better pace. And Guanajuato, in which we've had good exploration results, will try to do more for this project as well. Coricibon, a pre-visibility aid to be finished very soon, going to pre-visibility B. So that's according to... And just to close out, I mean, as we mentioned, prioritize safety across all of our operations. Focus on operational efficiencies, cost reduction, very importantly on our margins and cash flow generation across all of our operations. Capital allocation discipline is very important. Having very much four projects running in parallel, I would say, is something that we will continue to prioritize. And on the exploration front, with Guillermo, of course, good opportunities in Mexico, but also in Peru, something that we start to... to be railing out this year, hopefully with good results in areas with good potential, and looking forward to the sustainability of Fresnillo. In this short-term area, focusing on our operations and the medium-term and long-term, developing efficiently and efficiently. We discipline the projects we have. Some external factors worth mentioning is, as Mario mentioned, this year is an election year in Mexico. We expect some volatility on the effects front, on the strength of the peso. And also, we are positive on the silver and gold price, of course. with lower rates in the front. And with that, I would like to open up for your questions. Daniel.

Hi, Dan Major, UBS. A couple of questions. Just the first one on the cost outlook for 2024. If we focus on your adjusted production cost line, what's your expected rate of inflation there? And then just second to that, I mean, I've asked this question over the years, why do Do you not provide group cost metrics like all of your peers on a silver or gold equivalent basis to help the market to refine its cost estimates?

OK. Regarding the cost outlook for 2024, We're not expecting to see again the strengthening of the peso, although I said that last year. And it continues to strengthen. So we were very, very surprised. But it will be very difficult during an election year for the peso to strengthen anymore. I think it's reached bottom. So we won't be hurt by that in 2024. Thank God. So in terms of cost inflation, we would be expecting something around 3%. But hopefully, and this is very important, with some of the initiatives that my colleagues will be implementing in terms of cost reduction and efficiencies this year also, we hope that we are able to reduce compared to 2023 our production costs. Let's see if we can meet that target. But for the time being... I would say, you know, something around 3%, 3.5%. If the peso remains the same, if the values, well, then we will see a reduction if that were to happen.

So that's 3.5% increase in adjusted production costs, not inflation, because you've got slightly higher volumes in silver based on midpoint of your guidance. Cost inflation, not inflation. adjusted production cost, 3%. If we think adjusted production cost, it was like 1.63 billion. Would you expect that to be... You've got 3% inflation, you've got slightly higher volumes. Directionally, is that up or flat?

We will continue to close Nochebuena. So in absolute terms... Well, a slight increase. Okay, a slight increase.

In absolute terms. In absolute terms. All right, thank you. And then, yeah, next question just on the exploration projects, reserve and resource dynamic. I guess... Is $190 million exploration spend the right number? If we look in the last few years, you've been spending a similar amount. Group reserves and resources continue to shrink. Your project pipeline hasn't actually progressed. If I look at the run rate of spend against some of your main London listed peer that spends less than half, the expiration dollars yet are growing their reserves and have got projects in the pipeline. Is $190 million the best use of shareholders' funds?

We believe so, Daniel. I mean, let's break that down a bit to what we have. Out of that, probably 25, 28 million comes from the concession package that we have in Mexico that this year has proven – well, not this year. I mean, this administration has proven to be a valuable asset. as the current administration has not granted any new concessions in Mexico. Also, we do have 1.7 million hectares in Mexico of exploration ground, approximately 400,000 in Peru, and some 150,000 in Chile. So that's a part. And then also let's recognize that our underground mines are, of course, vein systems in which we have to invest. And as Guillermo mentioned in our triangle, approximately 40% of those funds go to Confirm. certainty for our operation in our underground mines. And then the green fields, of course, we have to devote some exploration funds there, approximately 50, 45% of the total. And this is what we are about in Fresnillo. I mean, generating our own pipeline of projects, We just finished building Juanicipio. We do have one, two good projects on the pipeline and one exploration discovery in Guanajuato as well. Okay, thanks. Jason.

Jason, Faircloth Bank of America. Can I come back to something we've talked about quite a bit over the years? Just the grade reconciliation against the reserves. So Is it right that the latest reserve statement for Saucedo and Fres is 200 plus? 240? And year after year, you're mining at sort of 180, 190. And the guidance, again, is 180, 190. And I think, Tomas, you had a comment about negative reconciliations against the geology. So my question is a very fundamental one. Are those reserve grades correct?

Yes, thank you for your question, Jason. We feel comfortable in those grades. It's about the metal content in the reserves and something that we confirmed this last two, two and a half years with the guidance. I mean, if somehow we were not confident in geological model, Of course, we would not be able to project what we were estimating in production. So the answers are there, of course. We still have some reconciliation in some of our minds still to tighten that process. But I would mention that the answers are there. It's just about how we mine those reserves. And we continue to study the case, not only study, but I mean tighten in terms of dilution control and the right sizing of the equipment and all what involves mining. But the larger confidence, as I mentioned, is that we are producing the ounces we are expecting.

Thank you.

Just to push you on this a little bit, why wouldn't you adjust your dilution factors in thinking about the reserves? I mean, the amount of metal will be the same. Maybe we won't mine it as quickly. And then we won't have this sort of question year after year. Because honestly, Octavio, I think it's four or five years now that we've been talking about this. Four or five years, you're mining consistently below the reserve grade. And it's not getting better. Is that unfair?

I think it's a bit unfair because, of course, the reserve statement is a photograph at the end of the year. What do we have for the different assets at that point in time? For Fresnillo and Saucito, you would expect that going to debt, the increase of base metals and the decrease of silver in general terms. When we mentioned two years ago that Fresnillo was going to produce a bit more silver, we did. I think this is the opposite case. But then going to another example, for example, Juan Ecipio. Higher grade now. In the future, and the reserve statement, in the future, in the following years, You will continue, as it is a trend in the Fresno District, trending down a bit silver, something that you see in this statement, in this production sequence that we have for 2024. Increase as well in base metals, but the reserve statement would be higher. compared to what we produce on a yearly basis. So it depends on the mine, and what we are comparing is the production of a specific year or the current year compared to that photograph that we have on the reserve 7, 8, 10 years of reserve trade. So last follow-up, sorry.

So in the medium term, if I think about my model for Fresnillo, for Saucito, Should I be assuming that the grades that go into those concentrators come up to 240?

In Fresnillo, yes. That's what we have in the following three to four years. In Salcito, it depends very much on the sequence, on the mining sequence specifically for each one of the years. It could be a bit higher, a bit lower. But in Fresnillo, yeah, we can expect that in the following two to three years. Okay. Thank you. Yeah. Yes.

Good morning. Richard Hatch from Berenberg. And first question, I've just got on your CapEx profile. If I look at this year, you're guiding to 440 million. If I look at the H1 results from the summer, it was 530. So can you just explain where that 90 million's gone?

Right. in the capex profile, and then you go to which year?

Slide 29, 2024. I think I'm right. Yeah, if I look at your H1 results from the summer, capex for... That's in 2024, you mean? Or... Might be... What we were expecting. Yeah, what you were expecting, yeah. So in the summer, you were expecting 530 million for capex this year. And your guidance this year now is 440. So it's a 90 difference. So where's that 90 gone?

What we're expecting compared to what we deployed in terms of CAPEX. So your previous CAPEX guidance for 2024. Oh, okay, okay. For 2024. Yes.

So it was 530 million and it's now lower at 440. So... Can you clarify what's the difference?

Yes. I mean, some of that was referred to some equipment that we were expecting. I mean, with the labour reform. We didn't know which contractor companies were staying with the company or not. And we were forecasting, in case of those companies would not remain with the company, some equipment purchases. Some of those remained with the company, and then we didn't need to deploy that equipment. Also, what we were forecasting was higher rates of development, expected higher rates of development at Fresnillo and also at Saucito. After a study we did last year, we confirmed that the 3,000 meters per month was the proper development rate in Salcito and also in Fresnillo. But we were forecasting, let's recall, 3,500 or so higher development rates. So that's an adjustment to the CAPEX figure as well.

Okay, understood.

The second one's just on Hereduri. You kind of talked a bit about some plans for the project. Daniel's talked about that. Are you able to sketch out a bit about, you know, where you think that asset could potentially get to in terms of volumes, you know, anything more broadly, or is it too early to

I think it's a bit early, but let's recall what we've done in the past. And that's based on Daniel's comments, based on what we did in the past and what we have for the near future. In the walls at different levels in Herradura, we do have ore that is entering into the other direction, not to the open pit, of course. We were mining those valles that we call at the point in time Centauro Profundo, Centauro Deep. And we were producing approximately 30,000, 35,000 ounces per year, more or less. We said, well, this is not the right approach, because we were doing it with big effort with jack legs at a point in time. And so let's study the case, something that we are doing and will continue to do. Let's find a more mechanized way to bring that ore to production. And that is one of the areas that we will continue defining. but a more mechanized way. So if we were producing 35,000 ounces per year on a very artisanal way of doing it, in a more mechanized way, I think we can do much more and a better cost. This is just to give you an example of what we are trying to do as brownfield new production, which is not reflected here.

Okay, understood. Thanks. And the last one is just on Juana Cipriani. I just wonder if you might be able to help us with either a guided cost per tonne for 24 or, you know, where we should think that this asset kind of shapes out. To Daniel's point, it's quite challenging to model the company if there's no cost guidance. So, if we can have, if you're able to give something on , which is obviously incredibly low cost and can really help the business. Can you help us a bit about that, what it looks like in 24?

Yes, we have additional information in our front of what we are reporting. But let me just mention what we have. Reported is for 23, of course, with an operation which is running on a smooth path. Let's remember that we had to haul some of the ore to Fresnillo with some cost and process it in the plants of Fresnillo, also to Saucito with a higher cost and process it in the Saucito flotation plant. And also, we were doing some development ore that is more diluted, of course, a lower grade. So it was not what we expect for the following years on producing out of the production stoves, all being processed in the flotation plant of Juan Ecipio itself. So we are expecting lower cost. But, Tomas, can you mention something? Yeah, the cost per tonne, and I think that will be reflected in what we – it's around $100 and $510 per tonne of ore. It's financial year 24.

Okay.

No, 2024. 24. Helpful.

Thank you. Good night. Good morning. Thank you for the presentation. This is Sandeep Pithy from Morgan Stanley. I have two questions. One is on coming back to sustaining capex. So for 2024, you are expecting sustaining capex to be US dollar 440 million. This is expected to increase to 500 million by 2026. At the same time, the silver equivalent production is expected to decline. Can you explain the anomaly?

Sorry, can you repeat that question again? Sustaining CapEx.

Silver equivalent production is trending down versus 2024 levels. So in theory, sustaining capex should have been lower per turn of production.

Well, let's recall that our minds continue to go deeper. Also, we need to develop along strikes in Fresnillo, Salcito, and of course, in Juanicipio. We also have another component, which is Juanicipio and the sustaining part of the business. Also, the Pirates plant of Fresnillo, which we just connected at the end of last year, that's another component of sustaining costs. What else, Mario, that I...

I would say maybe increased mine development because of that reason, going deeper and a lot of strikes, basically.

Yeah. But what we guided before, even as a rough number going forward in terms of sustaining, was 480 or 470 to 500, which is very much what we have.

And, Octavio, if I may, also for that year, expansion of the tailings dam at Herradura is scheduled that year as an item that will affect that year specifically.

That is correct, and it's good that you brought that. We are expanding San Julián as well in the following few years and the Herradura tailings dam as well.

All right. And the second question is around zinc treatment charge. So which has, like, if you look at the spot treatment charge, it's close to US dollar 100 per ton. 2023 settlement was US dollar 274 ton. It has declined significantly. Silver and gold is sort of black box. So overall, if you were to think about 2024, what are you thinking in terms of zinc treatment charge?

Yes, you're right. I mean, our concentrates, of course, and our deal with MedMex Peñoles follows the trend of the concentrate benchmarks in international terms. It's correct what you mentioned. What we did notice, and I think that will continue, is a good refining charge, a better refining charge going from 2022 to 2023, lower refining charge, something that we foresee to continue in 2024. because of the demand for concentrates with high silver and gold contents. Also, in the spot market, I mean the copper concentrate as well as lead are... The smelters have been very aggressive recently. Some payments for the copper content, of course, and the lead concentrates as well. So we believe that will continue to be the case, and either a treatment charge at the level is what we're forecasting. Thank you.

Thank you.

If you are dialled into the call and would like to ask a question, please signal by pressing star 1 on your telephone keypad to raise your hand and join the queue. If you are listening to the conference via your phone loudspeaker and are called upon to ask your question, we do request that you pick up your handset to ensure your question can be clearly heard. Again, to ask a question on the phone lines, please press star 1. And your first question comes from the line of Amos Fletcher from Barclays. Please go ahead.

Yeah, morning, guys. A couple of questions. The first one is, can you just talk us through the lower production guidance in 2026 compared to 2025 and which assets are driving that?

Yes, of course, on the silver side, probably, and I will refer to the gold side in a minute as well. On the silver side, in 2024. We have San Julian with the two process, the vein system and also the disseminated ore body. We will be mining the last reserve this year and probably a couple of months next year of San Julian disseminated ore body. Let's recall that the disseminated portion of San Julian produces approximately 7 million ounces of silver, and running out of reserves for 2025 and 2026, which we would not be producing out of this old body, we will have that lower silver production. That is very much the impact. One year, it's San Julián disseminated old body. I don't know if you were asking the same for the gold production, but back in 2026, of course, we are not forecasting any production out of Nochebuena. a bit softer production out of Herradura, as well is reflected there.

Okay, thanks. And then my second question was just on M&A. It gets mentioned a couple of times in the statement. Could you talk to us about what you're thinking about on the M&A front, please?

Yes, thank you. That's another way, of course, in our growth strategy, something that we are doing more formally and systematically now. I mean, we have not found anything that would fill the requirements that we are looking for in terms of cost, of jurisdiction, and, of course... near production to cover what we're looking for. But what Mario mentioned in terms of the credit facility that we have and also the cash in our balance sheet, of course, just to be ready with any opportunity that may be present.

Okay. So I guess just to clarify a little bit on that, you're looking at... you know, jurisdictionally, presumably within Mexico and, you know, project level companies, you know, which way you can take it into production.

Well, with the difficulties that we have in the environment to operate mining in Mexico, there are some opportunities present that we are also kind of spotting. But that wouldn't comply. I don't want to mention that we're not pursuing or just looking at those. But, I mean, it's not something that we – will be in our priority list. We do have projects to develop our own in Mexico, but better probably another jurisdiction in order to lower country risk.

Great. Thanks very much. Your next question comes from the line of Christian Agarwal from Citigroup. Please go ahead.

Hi, thanks a lot for taking my question. You mentioned that, Mario mentioned that there are cost initiatives the organization is taking in terms of reviewing the contractor cost and the fixed cost structure and also some of the operating materials in the region. Is there any way can you help us quantify the internal target for the cost reduction from such initiative? That's my question number one.

Can you say that again?

Sorry.

I think we didn't catch quite clearly your question.

Yeah, thank you.

cost reduction initiatives. Can you talk more specifically about those, Tomas? The value? What are the expected values in terms of ranges?

Ranges say... Yeah, for example, the preview of the cost unit on the contractors, around $20 million there initially, although we are in the first stage of the analysis. Reagent and operation materials, another $10 to $15 million there. in the project, basically. I'll say 40 to 50 million in the projects there that we have supported so far. And that's to be achieved during the year. And I'm talking about, you know, For instance, the contractor review will be one-time impact, federal impact. The reduction on operating materials and the rest of the projects will be ongoing.

Yeah, and in some of the fronts as well, of course, we are looking at our corporate and administrative expenses, of course, trying to maintain the same but even decrease those. I mean, the first one would be a reduction in terms, but I mean also looking for a reduction in all of the fronts, in all of the fronts. Yeah.

Yeah, yeah. I think that was very clear. The second question is more of a clarification. Mario mentioned that there was 82 million of cost out from Nacho Buena in 2023. Just to clarify, is there any further cost you can take out from Nacho Buena using the operation, or the bulk of the cost out is already done from that operation? Okay.

I wouldn't expect more reductions given that the mine has already stopped. That's what is reflected there. And going forward, it shows the extracting cost of the remaining inventory in the heapage path. And that's it.

Okay, very clear. Thanks a lot.

Thank you.

I will now hand back over to management for further questions in the room.

Hi, Dan from UBS, couple of follow-ups. The first question on Cernak, I think I might have asked this question in the summer or last year. I mean, you're all in sustaining cost over $3,000 an ounce. Doesn't appear that you're communicating that there's a dramatic cost reduction planned. The grade is actually lower this year. Why are you still operating the asset when it's cash negative?

Yes, thank you, Daniel, and you're absolutely right. I mean, just glad to report we were to see the financial performance of Cienega quarter by quarter. We could realize that quarter three was okay, but quarter four this year was much better, turning point to Cienega. The management team there, the general manager overseen by, in this case now, but But Tomas last year and now Daniel are doing a good job. And what we have forecasted for this year is a different Siena, not on the red side, but I mean back on the black, of course. something that we will continue to do. That was one of the main aspects that we had in our plans. And let me tell you that not only Cienega, but also San Julian. In San Julian, going from a two different process with a higher fixed cost, of course, and running our reserves in one of those ore bodies. We will need to review, and we are doing it, and glad to report that we see a way forward with a much lower fixed cost than just operating out of the main systems.

Okay, thanks for that. Just one other one back on the project pipeline, et cetera. There's been various reports of no new open pit mining concessions being granted going forward in Mexico from the president. How does that impact your thinking about... your project pipeline and where you're allocating exploration dollars. It doesn't seem that there's a huge amount of opportunities in the open pit segment. When I look at slide 30, how does that impact your plans and where you're looking to explore as well?

Yes, I will start, and then I will ask Memo to complement my answer. Absolutely right. I mean, the 1.5 million hectare of exploration ground is in very good prospecting areas in Mexico. When we first had the view of the initiative for the mining reform, We were very concerned about being able to explore those land concessions. Now I can confirm that we will be able to do the exploration there, at least for those that we had. The new ones, we have more difficulties, but at least that land package is still viable. What comes as a negative effect is the permitting process right now. For exploration, you need to do some initial permitting, something that is proven to be a bit more difficult, and that's why we are extending, in a way, the... the permitting process in our projects. But we will have enough concession to explore. And do you want to talk a bit more about this?

Well, our claim package in Mexico is a very significant one, 1.7 million hectares, which are located in the best precious metal belts of Mexico, which are the Sierra Madre Occidental and the central Mesa. along with most of the epithermal and historic high-grade precious metal deposits, along with the northwestern part of Mexico, where these herradura type of deposits can be found. So it still remains a significant exploration potential still to be, that we can look for in these concessions.

In terms of Europe, I would say we could have exploration activity with that land package for the following, what, 8, 10 years? At least. At least, yes.

My question was, I thought that no more operating permits for open pit mines would be granted. So if you find something and you can't build a mine, why are you exploring?

Yeah, that has come into the mining space in Mexico. What I can tell you, we continue to dialogue with the administration at all levels, federal, through the mining chamber of Mexico, with the Secretary of Economy, which heads the mining industry in Mexico, but also at the state level, and very productive dialogue there, and also at the municipal level. We... belief that comes at a point in time in Mexico along with the election as an election factor. So we will see. And having so many years of mining experience in Mexico, we will continue the dialogue with whoever heads the federal administration after the elections, of course. Given the fact of the contribution of mining in Mexico... And in some states, the relevance of the open pit mining is very large. For example, in Sonora, in Zacatecas as well, Durango, as we mentioned, Chihuahua. We believe that the country and the specific areas are better off with mining, the current standards we have, international standards for mining, than without mining, even the open pit supports.

And it's a proposed change in the legislation. It has not been approved, so... Okay. All right.

Thanks. Hi. Patrick Jones, JP Morgan. Given St. Julian, DOB, and Notre-Dame are coming to the end of the mine life, you'll have some closure costs to do. Can you comment whether those will be significant at all? If so, can you quantify that over the next couple of years?

Can we count the closure costs?

Yes. You know, we've recognized certain reserves accounting-wise based on studies that have been done by outside advisors. And based on that, we have been reserving for provisioning for the closure of mines. So that has already been considered, yes. In terms of the amount of money for the closing, do you have an estimate for Noche Buena?

I can't tell you from the top of my mind, but we'll get back to you on that. I don't have a figure from the top of my mind. Thank you.

Okay. Thank you very much. We will continue to describe the process. And as I mentioned, I mean, it's about focusing on controlling and being more efficient on the current operations and at the same time developing the best way we can and the projects we have on the pipeline. Thank you very much. Thank you all.

Thank you. Thank you.