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spk08: Good afternoon, and welcome to the AMARC Precious Metals conference call for the fiscal third quarter ended March 31st, 2023. My name is Kelly, and I will be your operator this afternoon. Before this call, AMARC issued its results for the fiscal third quarter 2023 in a press release, which is available in the investor relations section of the company's website at www.amarc.com. You can find the link in the Investor Relations section at the top of the homepage. Joining us today for today's call are AMARC CEO Greg Roberts, President Thor Gerdrum, and CFO Kathleen Simpson-Taylor. Following their remarks, we will open the call to your questions. Then, before we conclude the call, I'll provide the necessary cautions regarding the forward-looking statements made by management during this call. I would like to remind everyone that this call is being recorded and will be made available for replay via a link available in the investor relations sections of AMARC's website. Now, I would like to turn the call over to AMARC CEO, Mr. Greg Roberts. Sir, please proceed.
spk01: Thank you, Kelly, and good afternoon, everyone, and thanks for joining us on our call today. As we reported in our earnings release just a few minutes ago, the third quarter marked another period of solid financial performance for AMARC. highlighted by 35.9 million of net income and diluted EPS of $1.46, yielding a quarterly return on equity of 6%. These results further demonstrate the effectiveness of our fully integrated platform, particularly in times of macroeconomic uncertainty and increased market volatility. Our integrated capabilities allow us to optimize access to inventory, providing us with a consistent source of supply during periods of increased demand, which contributed to quarter-over-quarter increases of 19 percent in revenue and 18 percent in gross profit during the third quarter. Our direct-to-consumer segment continued to contribute significantly and impressively to our overall results, generating 57 percent of our consolidated gross profit for the quarter, driven by a 124 basis point increase in the segment's gross margin percentage compared to the third quarter of fiscal 2022. We remain active in our pursuit of investment opportunities that align with our strategic vision and to expand our geographic footprint. Our minting business remains a consistent contributor to our overall performance with production output currently near record levels. The mint is consistently producing over 1 million ounces per week. During the third quarter, Silvertown Mint achieved ISO certification in recognition of the facility's high standards for quality management. The certification not only reaffirms the Mint's longstanding reputation as a leading manufacturer of silver bullion products, but also allows its products to be accepted into individual retirement accounts or IRAs, further expanding AMARC's strong customer base. Jamie Meadows and his team have worked tirelessly to achieve this and we congratulate them. Finally, I'm pleased to report that the company purchased 335,735 shares of its common stock during the quarter for an aggregate value of $9.8 million. We view our share repurchase program as an attractive investment opportunity for the company and another way to deliver value to our shareholders. Now, I'll turn it over to our CFO, Kathleen Simpson-Taylor, to walk you through our financials in more detail. Then our president, Thor Jerdrum, will discuss our key operating metrics. Afterwards, I will provide a further update on our business and growth strategy and take questions. Kathleen, take it away.
spk09: Thank you, Greg, and good afternoon, everyone. Our revenues for fiscal Q3 2023 increased 10% to $2.3 billion from 2.1 billion in Q3 of last year. Excluding an increase of 312.5 million of forward sales, revenues decreased 104.5 million, or 6%, which was due to a decrease in gold ounces sold and lower average selling prices of silver, partially offset by an increase in silver ounces sold and higher average selling prices of gold. The DTC segment contributed 23% of the consolidated revenue in fiscal Q3 2023 and 28% of the consolidated revenue in Q3 of last year. Revenue contributed by JM Bullion, JMD, represented 20% of the consolidated revenues for fiscal Q3 of 2023 compared to 26% in Q3 of last year. For the nine-month period, our revenues increased 2% to $6.2 billion from $6.1 billion in the same year-ago period. Excluding an increase of $596.1 million of forward sales, our revenues decreased $498.3 million, or 10%, which was due to a decrease in gold ounces sold and lower average selling prices of gold and silver, partially offset by an increase in silver ounces sold. The DTC segment contributed 23% and 27% of the consolidated revenue for the nine months ended March 31, 2023 and 2022, respectively. Revenue contributed by JMB represented 21% of the consolidated revenues for the nine months ended March 31, 2023, compared to 25% in the same year-ago period. Gross profit for fiscal Q3 2023 increased 5% to $75.5 million or 3.26% of revenue from $72.1 million or 3.42% of revenue in Q3 of last year. Excluding the $312.5 million increase in forward sales, gross margin percentage increased to 4.5% of revenue from 4.0% of revenue last year. The overall increase in gross profit was due to higher gross profits earned from both the wholesale sales and ancillary services and direct-to-consumer segments. Gross profit contributed by our DTC segment represented 57% of the consolidated gross profit in fiscal Q3 2023 compared to 58% in the same year-ago period. Gross profit contributed by JMB represented 47% of the consolidated gross profit in fiscal Q3 2023 compared to 48% in Q3 of last year. For the nine-month period, Gross profit increased 11% to $216.1 million or 3.5% of revenue from $194.0 million or 3.2% of revenue in the same year-ago period. Excluding the $596.1 million increase in forward sales, gross margin percentage increased to 4.7% of revenue from 3.8% of revenue. The gross profit increase was due to higher gross profits earned from both the wholesale sales and ancillary services and DTC segments. Gross profit contributed by the DTC segment represented 56% of the consolidated gross profit in both of the nine-month periods ended March 31st, 2023 and 2022, respectively. Gross profit contributed by JMB represented 48% and 46% of consolidated gross profit for the nine months ended March 31, 2023 and 2022, respectively. SG&A expenses for fiscal Q3 2023 increased 16% to $23.8 million from $20.5 million in Q3 of last year. The increase was primarily due to an increase in compensation expense, including performance-based accruals, of 2.6 million, higher advertising costs of 0.5 million, an increase in computer-related expenses of 0.3 million, and an increase in insurance costs of 0.2 million, partially offset by lower consulting and professional fees of $0.5 million. For the nine-month period, SG&A expenses increased 12% to $62.4 million from $55.9 million in the same year-ago period. The increase was primarily due to an increase in compensation expense, including performance-based accruals, of $5.1 million, higher advertising costs of $2.4 million, an increase in computer related expenses of $0.8 million, and an increase in insurance costs of $0.4 million, partially offset by lower consulting and professional fees of $2.5 million. Depreciation and amortization expense for fiscal Q3 2023 decreased 56% to $3.3 million from $7.5 million in Q3 of last year. The decrease was primarily due to a $4.3 million decrease in amortization of acquired intangibles related to JMB. For the nine-month period, depreciation and amortization expense decreased 59%. to $9.8 million from $24.1 million in the same year-ago period. The decrease was primarily due to a $14.4 million decrease in amortization of acquired intangibles related to JMV. Interest income for fiscal Q3 2023 increased 14% to $6.1 million from $5.3 million in Q3 of last year. The aggregate increase in interest income was primarily due to higher other finance product income, partially offset by lower interest income earned by our secured lending segment. For the nine-month period, interest income increased 0.3% to $16.2 million from $16.1 million in the same year-ago period. The aggregate increase in interest income was primarily due to an increase in other finance product income partially offset by lower interest income earned by our secured lending segment. Interest expense for fiscal Q3 2023 increased 70% to $9.2 million from $5.4 million in Q3 of last year. The increase in interest expense was primarily driven by $3.1 million associated with our trading credit facility and the AMCF notes, including amortization of debt issuance costs and $0.9 million related to product financing arrangements, partially offset by a decrease of $0.3 million of loan servicing fees. For the nine-month period, interest expense increased 39% to $22.6 million from $16.3 million in the same year-ago period. The increase was primarily driven by $4.9 million associated with our trading credit facility and the AMCF notes, including amortization of debt issuance costs, $1.8 million related to product financing arrangements, and $0.4 million in interest associated with liabilities on borrowed metals, partially offset by a decrease of $0.7 million of loan servicing fees. Earnings losses from equity method investments in Q3 2023 decreased 104% to a loss of $0.1 million, compared to earnings of $1.6 million in the same year-ago quarter. The net decrease was primarily due to lower earnings of our equity method investees. For the nine-month period, earnings from equity method investments increased 69% to $7.3 million from $4.3 million in the same year-ago period. The net increase of $3 million was primarily due to our additional 40% ownership interest in SilverGoldBull, which was acquired in June 2022. Net income attributable to the company for the third quarter of fiscal 2023 totaled $35.9 million, or $1.46 per diluted share. This compares to net income attributable to the company of $37.4 million, or $1.53 per diluted share, in Q3 of last year, adjusted for the effect of the two-for-one stock split in the form of a stock dividend in June 2022. For the nine-month period, net income attributable to the company totaled $114.5 million or $4.64 per diluted share, which compares to net income attributable to the company of $95.2 million or $3.92 per diluted share in the same year-ago period, adjusted for the effect of the two-for-one stock split in the form of a stock dividend that occurred in June 2022. Adjusted net income before provision for income taxes, a non-GAAP financial performance measure which excludes acquisition expenses, amortization, and depreciation for Q3 fiscal 2023 totaled $49.2 million, a decrease of 10% compared to $54.3 million in the same year-ago quarter. Adjusted net income before provision for income taxes for the nine-month period totaled $156.9 million, a 9% increase from $144.4 million in the same year-ago period. EBITDA, a non-GAAP liquidity measure for Q3 fiscal 2023, totaled $52.3 million, a 2% decrease compared to $53.6 million in Q3 fiscal 2022. Dividends for the nine-month period totaled $163.1 million, a 14% increase compared to $143.7 million in the same year-ago period. Now turning to our balance sheet. At quarter end, we had $78.1 million of cash compared to $37.8 million at the end of fiscal year 2022. Our tangible net worth at the end of the quarter was $396.9 million, up from $321.6 million at the end of the prior fiscal year. Finally, as we announced in a prior press release, AMARC's Board of Directors reaffirmed its previously announced regular quarterly cash dividend policy of 20 cents per common share, which the company paid in April. It is expected that the next quarterly dividend will be declared and paid in July 2023. The declaration of regular cash dividends in the future, including the next quarter, is subject to the determination each quarter by the Board of Directors based on a number of factors, including the company's financial performance, available cash resources, cash requirements, and alternative uses of cash and applicable bank covenant. That completes my financial summary. Now I will turn the call over to Thor, who will provide an update on our key operating metrics. Thor?
spk02: Thank you, Kathleen. Looking at our key operating metrics for the third quarter of fiscal 2023, we sold 659,000 ounces of gold in Q3 fiscal 2023. which was down 9% from Q3 of last year, but was up 17% from the previous quarter. For the nine-month period, we sold 1.9 million ounces of gold, which was down 9% from the same year ago period. We sold 36.9 million ounces of silver in Q3 fiscal 2023, which was up 7% from Q3 of last year, but was down 3% from last quarter. For the nine-month period, we sold 111 million ounces of silver, which was up 17%, from the same year-ago period. The number of new customers in our DTC segment, which is defined as the number of customers that have registered or set up a new account or made a purchase for the first time during the period, was 64,700 in Q3 fiscal 2023, which is down 40% from Q3 of last year and was down 51% from last quarter. It is important to note approximately 55% of the new customers in the previous quarter were attributable to the acquired customer list of BGASC in October of 2022. For the nine-month period, the number of new customers in our DTC segment was 244,900, which was up 35% from 182,000 new customers in the same year-ago period. Approximately 30% of the new customers in the nine-month period were attributable to the acquired customer list of BGASC in October of 2022. The number of total customers in our DTC segment at the end of the third quarter was approximately 2.3 million, which was a 15% increase from the prior year. The year-over-year increase in total customers was primarily due to organic growth of our J&B customer base, as well as the acquired customer list from BGASC in October of 2022. The DTC segment average order value, which represents the average dollar value of third-party product orders, excluding accumulation program orders delivered to DTC segment customers during Q3 fiscal 2023 was $2,452, which was down $266 from Q3 fiscal 2022. For the nine-month period, our DTC average order value was $2,394, which compares to $2,458 from the same year ago period. For the fiscal third quarter, our inventory term ratio was 2.4, which was a 23% decrease from 3.1 in Q3 of last year. For the nine-month period, our inventory turnover ratio was 7.0, which was a 27% decrease from the nine-month period of last year. Finally, the number of secured loans at the end of March totaled 963, a decrease of 8% from December 31, 2022, and a decrease of 64% from March 31 of 2022. The dollar value of our loan portfolio at the end of March 2023 totals $96.9 million, which is down 5% from the end of December and down 34% from March 31, 2022. That concludes my prepared remarks. I'll now turn it over to Greg for closing remarks. Greg?
spk01: Thank you, Thor and Kathleen. The exceptional market conditions that we experienced in the latter half of the third quarter post-bank crisis have continued. keeping us optimistic about the outlook for AMARC as we close out our fiscal year. Looking ahead, we continue to evaluate growth opportunities to further expand our customer base and our geographic footprint. We continue to invest in our minting business and are currently in the process of expanding the size of the facility and acquiring additional equipment to further increase minting capacity. We remain optimistic that our proven business model and integrated platform will allow us to realize growth and profitability over the long run. This concludes my remarks. Kelly?
spk08: Certainly. The floor is now open for questions. If you have any questions or comments, please press star 1 on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on a speakerphone to provide optimum sound quality. Please hold just a moment while we pull for questions. Your first question is coming from Thomas Forte with DA Davidson. Please pose your question. Your line is live.
spk05: Great. Thank you. So, Greg, Zora, Kathleen, and Steve, congrats on a fantastic quarter. Had three questions, but they're pretty quick ones, so I'll go one at a time. So, Greg, can you give your current thoughts on capital allocation, including dividends, one-time dividends, and buying back shares? I see you bought back shares in the quarter.
spk01: Sure. I think that post this quarter, we have added to our capital, added to our tangible net worth. I think that the company had a buyback plan in place, which we've had for a while. We felt in this last quarter that There was an opportunity to deploy capital in a good way. I think the average purchase price for the 335,000 shares was around $29 a share. And so we saw that as an opportunity. I think that we continue to have a good pipeline of acquisition targets. In fact, it's fairly robust right now, so we're very careful about how how we're going to deploy capital in that way. Very comfortable with the quarterly dividend. And as we have said before, depending on where we are after the fiscal year, we usually take a close look at a special dividend, really depending on all the factors I just discussed and what we think is the proper amount to return to shareholders at that time. So I think all of those things we look at regularly and pretty comfortable right now that we're in a position to be able to make these decisions and return capital or do things that we think are good for shareholder value.
spk05: All right. You've touched on this twice already, so I don't know what more you can add. But on the strategic M&A front, including international direct-to-consumer expansion, Is there anything you want to add above and beyond what you've already said so far?
spk01: Not really. I mean, I think it's the same. I think, you know, at the moment, we feel very good about the pipeline and we have a lot of opportunities that have developed. You know, no guarantee any of them will happen. We're in the early stages on a few things we're looking at. But optimistic that we can continue to do acquisitions and do, as we have done in the past, accretive for the company and the shareholders and that we feel we have a good formula and we're finding opportunities that we believe will be good for those, whether that's in the DTC segment or the minting business or the wholesale trading business. I think we're always, you know, we're always open to, you know, acquisitions and opportunities that make sense, like what we've done historically.
spk05: All right. And last one for me. I think that investors may not fully understand this, which is why I wanted to ask. So for those investors who may not be familiar, how does a sustained period of elevated gold prices impact your business?
spk01: I mean, I've talked about this, you know, almost every quarter for the last 10 years. The price of gold is a little bit less important to our activity level as is the circumstances behind the price of gold. What we saw in the month of March and the month of April was a panic flight to safety And the price of the metal really didn't matter, particularly in the last three weeks of March. People just were taking money out of banks and people were buying safety. That is a behavior that our customers have not really exhibited in the past short term. It was a different feel. It was a different behavior by the client. but there was a tremendous amount of volatility and a tremendous amount of fear of missing out, I believe, at the end of the quarter we're reporting on. So the price was very strong and neared new highs, and the sentiment of missing out was evident for us. Historically, we've talked about drops in price, that really stimulated interest. We still expect to see those in the future. But the macro environment right now is such that there is a belief that there are more crises to come. There's more uncertainty. There's more volatility. The world seems to be somewhat uneasy right now overall. And that that particular sentiment and the environment that we're seeing is favorable to us. And it's a good thing for us. Generally, our slowest periods happen when the price of gold and silver is very tightly range bound over a long period of time. And we just aren't seeing that right now.
spk05: Thank you, Greg. I really appreciate that.
spk08: Your next question is coming from Lucas Pipes with B Reilly Securities. Please pose your question. Your line is live.
spk06: Thank you very much, operator. Good afternoon, everyone. And Greg, you touched on it just there a bit in the prior question, but I wanted to ask a little bit more about the trends since quarter end. You mentioned the uncertainty around the debt ceiling right now that That's an issue a lot of folks are seemingly concerned about. So what have you seen in terms of volume, customer acquisitions, the margin on the product in the DTC segment? Would appreciate maybe some additional color on that and then how it may shape your outlook for the end of the year. Thank you very much.
spk01: Sure. It seems like I should be asking you that. I saw your last report and it seemed like you did your homework and you were very attuned to the premiums and what has happened pretty much since the middle of March or the first week of March. This quarter for us was really like night and day. We reported on our last quarter that December and January had started off fairly slow for us, and there were a number of factors to that. A lot of it was inventory availability, and again, there were some tight range-bound periods. February continued to be fairly slow. The week before the SVB crisis, we saw activity pick up, and we saw just a little bit different behavior from our customers, and then The last three weeks of March were, for all the reasons that you mentioned and the panic that seemed to ensue, it was extremely good for us. And all aspects of the business performed just as we would expect them to. And there was a new level of just what seemed like fear and just flight to quality. that we hadn't seen compressed into such a short period of time before. I attribute all of the work that everybody here has done to the success and being prepared so that we could take advantage of it. We had plenty of inventory. Our DTC businesses took full advantage of the increase in demand. And we have seen the level of activity continue in the first part of this quarter. April was very active for us. And I believe the overall crisis and the overall uncertainty in the market right now and just really kind of a fear of what comes next. It seems like every Sunday afternoon or every early Monday morning, there's a new event that the I think that bodes well for our part of the economy or our part of the world, so we feel like we're well positioned and we're seeing some good activity right now.
spk06: Thank you, and also congratulations for being in a position to take advantage of that market opportunity. I wanted to touch on the mint expansion really quickly, and I wondered what sort of capital outlays the expansion requires, what payback periods you're looking at. And then I saw that you obtained the certification that qualifies the Mint, I believe, for IRA investments. How does that work, and what's the market opportunity on that front? Thank you very much, Greg.
spk01: Sure. As it relates to the expansion, we've had an opportunity to acquire some new equipment that will expand a certain product line that we are very active in right now. It will require a small construction build, and then we expect the machiner to be online probably in September. The overall capital expense for this small expansion is probably less than $2 million. So it's not a ton of money. As it relates to return on investment, it's going to depend a little bit on where the demand goes between now and September, October, November. But if we're anywhere near the activity level we have right now, this new machine and this expansion could have a one- to two-year payback. If the market is super active, it could be quicker. But somewhere in the one- to two-year range on this is what we would be shooting for. As it relates to the ISO certification, it allows Silvertown product to be accepted by most of the IRA trustees. It's a very It's a very arduous process, and it took quite a bit of time. But now, as long as any of our products have either the Silvertown name or the pickaxe, which is our logo, on the product, anywhere on the product, it will be accepted by the majority of the trustees for IRA inclusion in their ecosystem. So it's something... Jamie and his team and Brent had worked on for a long time. It's a testament to only the highest quality mints are certified. Our other, the mint that we have a minority interest in, Sunshine, they too are certified. And, you know, we look at it as a big accomplishment.
spk06: Greg, that's super helpful. Really appreciate all the color and continued best of luck to you and your team.
spk08: Your next question is coming from Andrew Scott with Roth MKM. Please close your question. Your line is live.
spk03: Good afternoon and congrats on the strong quarter. Just kind of going off of some of the questions here regarding the inventory build. You guys had some healthy build in the June quarter and March quarter and you touched on kind of a opportunistic June quarter here to liquidate some of the inventory. Can you just kind of touch on your guys thought process behind inventory management and when you may build or when you may liquidate depending on market conditions?
spk01: Well, the demand really dictates where our inventory will be and how fast the inventory turns. You know, we're currently pretty booked up through the end of June. for both Sunshine and Silvertown products. The Royal Canadian Mint continues to be on allocation, and we're not getting enough Royal Canadian Mint product. The U.S. Mint is continuing their allocation program, and we're not getting enough of that product either. So I guess the inventory buildup, it depends a lot on the product. A lot of times you'll see our inventory build up dollar-wise, and it might be 400-ounce gold bars or 1,000-ounce silver bars that are very low margin for us. So it really depends about the composition of the inventory and how much of it is fabricated product that will sell through our DTC and how much of it is industrial-sized bars that will sell to manufacturers or institutions. So it's not... It's not just as easy as saying how we will build up or what we will build up in. Right now, it would be very difficult for us to build up inventory because we're pretty much selling everything we can make, and the demand is driving that. As I mentioned on the last call, towards the end of November and December of 22 and through January and February, we had a significant slowdown in demand And we were able to take that opportunity to build up inventory and have it live on the shelves. And that was opportunistic for us, and it played out very well as we saw a spike in demand the first and second week of March. And the demand has continued through the first part of this quarter. But just going by what our inventory is and what And what it says on the balance sheet can be a little bit more complex than that. It has a lot to do with the makeup and then, you know, strategically what the company decides we want to build up for some promotion or some opportunity in the future. So, you know, it's just a little more complicated than just what the line item is on the balance sheet.
spk03: Great. Thank you for the detail there. That was very helpful. And last, just a quick one from me, the So I see the healthy, you said 124 basis point expansion in direct-to-consumer. Can you just unpack that a little bit? Was that driven by spreads and the increased volumes at the end of the quarter, or is there something else to unpack there?
spk01: No, I think it was just our ability to be prepared and to be able to sell a lot of product when our competition in the DTC segment seemed to be a little less – prepared or didn't have as much inventory. So I think that, you know, when we're taking market share and when we're taking customers and there's less product available, you know, the market is going to naturally price product a little bit higher. And I think, you know, we were able to take advantage of that, you know, and it was It was good for us. We not only saw some increase in margins, we had the product to sell, and I believe our new customer counts and our ability to find new customers and service those customers was very good towards the end of the quarter and is reflecting very strongly for the start of the new quarter.
spk03: Greg, I appreciate the feedback, and congrats again on the strong quarter. Thank you. Thank you.
spk08: Your next question is coming from Greg Gibbous with Northland Securities. Please pose your question. Your line is left.
spk07: Hey, Greg, Kathleen, and Thor. Thanks for taking the questions. Congrats on the strong results. Thanks, Greg. Most of my questions have been answered here, but I wanted to follow up on the expansion of the facility at Silvertown Mint. You kind of covered a little bit regarding timing and everything, but wanted to get a sense of maybe the magnitude of the expansion or I guess the level of production volume that you're kind of seeking to maybe match the demand. I know your comment was we're really selling everything we can make. So just wanted to get a sense of what, you know, the degree to the expansion there.
spk01: Right. And there's two, we've talked a little bit before that we've, we've bought some property in Winchester, Indiana that, that Jamie Meadows was able to acquire for us, and there's a long-term plan for a much bigger expansion, but that's going to take some time, and I would say that's much more long-term as it relates to expansion. As it relates to what I described earlier, this was a specific set of machinery that had been on order with another company, and the the machinery, the company decided not to take delivery of the machinery. And so we were able to jump in and get the slot, which is why we're going to be able to take delivery of this set of machinery, you know, hopefully in August or September and get online very quickly. Generally, you need to plan on 12 to 18 months lead time for some of this equipment. So this was a real opportunity for us to kind of jump to the front of the line. and get something that we really think we need. You know, it's my understanding that when we get this fully online in October, it's likely to add 500,000 plus ounces a week. I mean, I'm sorry, 500,000 ounces plus a month of additional capacity for us. So a very fair, a very, very nice jump. And, you know, we're We're looking forward to getting it online for products right now that we actually can't make enough of. This piece of machinery fits a product line that we're having trouble keeping up with. So it worked out very well for us, and it's exactly what we needed, and we're going to be able to get it quicker than we normally would. So very, very happy with the progress we're making on this project.
spk07: Got it. That's great to hear. Appreciate the color there. And I did want to ask you, you know, I've asked you in the past, but sometimes I feel like you have some pretty good insights into the supply dynamics from the U.S. Mint and how that will trend going forward. I'm curious if you have any comments on where you expect that to trend.
spk01: Yeah, I don't really. I mean, it's, you know, from what I can tell right now, the trends of limited production are is continuing. I think certainly if you look at the premiums on U.S. mint product, particularly in silver, not so much in gold, but particularly in silver, the premiums continue to be at an elevated level. And that's just a combination of supply and demand. And right now, the premiums would indicate there's not enough supply coming out of the mint for the demand. And That's a good thing for us. We're not going to complain. We'd always like to have a little bit more product, but I think that the continued lack of filling the demand that's there really long-term plays out well for AMARC in our private mint products, particularly Silvertown and Sunshine, that the longer this persists, the longer our customers are going to favor and want to buy Silvertown and Sunshine products and the acceptance level of those products and the quality of the product that Sunshine and Silvertown are manufacturing rivals a lot of sovereign mints right now. And we've come so far and the product is so good that you know, the brands are stronger than ever. And the ISO certification really, you know, really illustrates that. So, you know, the Mint is making a great product. We love their product. We could sell more of it if we had it. And, you know, we'll see what happens. But I don't anticipate right now that there's any, is going to be any significant or material change in what they're able to produce every month.
spk07: Sure. That's helpful, Greg. You know, I think you already kind of answered my questions regarding M&A opportunities there, so I'll leave it there for now, but appreciate the help. Great. Thank you.
spk08: Your next question is coming from David Sebastian with Kingen Capital Advisors. Please pose your question. Your line is live.
spk04: Hi. Thanks for taking my question. I was curious if you could talk a little bit about counterparty risk when it comes to your hedging on your gold and silver with all the bank runs that have been going on lately.
spk01: Yep. I mean, we lived through the 08 crisis, and we've been there, and we've lived through the MF Global crisis as it relates to large counterparties. We have what I believe is one of the best risk management strategies in the marketplace. We have not seen any counterparty disruption throughout the last eight weeks. Our philosophy really, like most people in the country, is we'd like to be engaged with banks and institutions that we believe fall in the too big to fail category. And we have positioned ourselves over the last 15 years to to continually have our largest counterparty positions with institutions that we believe are too big to fail. And we've really tried to avoid having positions or having counterparty risk that we deem material in this area with any of the mid-level or smaller counterparties that we could deal with. And I think that's just part of our risk management. you know, we, we feel, we feel like we do a really good job on this. And I think, you know, how, how we've, you know, particularly Thor and I have managed this in the last 18 years or 19 years is, you know, is, is we, we feel pretty good about that. Um, you know, you, you can always, you always know that a black Swan event is out there and you always know that, you know, you need to prepare for the worst and hope for the best. Um, but I believe that in our case, um, You know, we've been doing this for quite some time, and our philosophy really hasn't changed since, you know, since 08, 09, where we really moved away from, you know, what we felt at the time were higher risk counterparties. And we've, you know, we've focused on, you know, on doing most of our business with high level institutions.
spk04: Got it. Thank you. Very helpful. Do you have any commentary on where sales are trending, especially on the DTC side for Q4 versus what you saw in Q3?
spk01: I feel like the businesses, all segments of the businesses were really excelling at the end of Q3. I feel like everything really worked together. Everything was there. We really took advantage of it. generated a tremendous amount of gross profit in the last month of the quarter. I think that what we're seeing right now through five weeks of Q4, we're very optimistic, and I can say that the business continues to exceed my expectations as it relates to just the seamless growth You know, the seamless operations that all of our divisions are working together, rowing in the same direction, you know, from getting raw metal to delivering 10 ounces of silver to somebody's doorstep. You know, it's a very complex and intense process. You know, throughout the spikes in demand that we saw yesterday, you know, particularly over a couple of weekends in March towards the end, you know, our delivery, our ability to give products to DTC customers in a very, very short period of time when people were really panicked and just really wanted anything in their hands as opposed to, you know, in a brokerage account or in a bank account, our team, you know, really overachieved. So I, you know, I don't know what's going to happen next week. I can just comment on what I've seen so far, and we feel really firing on what I would say are 12 cylinders right now. Got it. Thank you. That's all for me.
spk08: At this time, this concludes our question and answer session. I'd now like to turn the call back over to Mr. Roberts for his closing remarks.
spk01: Thank you, Kelly. I'd like to thank all of our shareholders that joined our call today. Thank you for your interest and continued support. I'd also like to thank all of our employees for their dedication and commitment to AMARC's continued success. We look forward to keeping you apprised of AMARC's progress. Thank you.
spk08: Before we conclude today's call, I would like to provide AMARC's safe harbor statement that includes important cautions regarding forward-looking statements made during this call. During today's call, there were forward-looking statements made regarding future events. Statements that relate AMARC's future plans, objectives, expectations, performance, events, and the like are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Future events, risks, and uncertainties individually or in the aggregate could cause actual results to differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ include the following. The failure to execute the company's growth strategy as planned. Greater than anticipated cost incurred to execute the strategy. Changes in the current domestic and international political climate. Increased competition for AMARC's higher margin services, which could depress pricing. the failure of the company's business model to respond to changes in the market environment as anticipated, general risk of doing business in the commodity markets and other business, economic, financial, and governmental risk as described in the company's public filings with the Securities and Exchange Commission. The words should, believe, estimate, expect, intend, anticipate, foresee, plan, and similar expressions and variations thereof identity certain of such forward-looking statements which speak only as of the dates on which they were made. Additionally, any statements related to future improved performance and estimates of revenues and earnings per share are forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Finally, I would like to remind everyone that a recording of today's call will be available for replay via a link on the investor section of the company's website. Thank you for joining us today for AMARC's earnings call. You may now disconnect.
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