Hecla Mining Company

Ladies and gentlemen, thank you for standing by. And welcome to the third quarter 2020 Heckler Mining Company earnings conference call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Russell Lawler. Please go ahead.

Thank you, operator. This is Russell Lawler, HECLA's treasurer. Welcome, everyone, and thank you for joining us for HECLA's third quarter 2020 financial and operations results conference call. Our financial results news release that was issued this morning before market open along with today's presentation are available on HECLA's website. On today's call, we have Phil Baker, Heckler's President and CEO, Lindsey Hall, Senior Vice President and Chief Financial Officer, Lauren Roberts, Heckler's Senior Vice President and Chief Operating Officer, Kurt Allen, Director of Exploration, and Keith Blair, Chief Geologist. Any forward-looking statements made today by the management team come under the Private Securities Litigation Reform Act and involve risks shown on Slides 2 and 3 in our earnings release and in our 10Q and 10K filings with the SEC. These and other risks could cause results to differ from those projected in the forward-looking statements. Reconciliations of non-GAAP measures cited in this call and related slides in cautionary language for our use of the term resource instead of reserves are also found in those documents. With that, I will pass the call to Phil Baker.

Thanks, Russell. Good morning, everyone, and thank you for joining our call. I'm going to start on slide four, and I want to start by commending our management and workforce to their resiliency and commitment to operating safely. including the way they've dealt with the exposure to COVID. This resiliency and commitment has really allowed HECTA to deliver very strong operating financial results this quarter. So strong that in our history, we've never generated as much EBITDA. This was $75 million this quarter. And only four times in our history has the free cash flow been higher. This reflects the quality of our silver mines, particularly Greens Creek. Part of the reason we generated so much free cash flow is that our capital requirements are generally low. So with the $50 million of free cash flow, we used that to repay our revolver. We put cash on the balance sheet, and we announced a 250% increase in this quarter's dividend. That's a 50% increase in the base, and the rest is the fact that we triggered the new levels for the SilverLink dividend. Before I hand it over to Lindsay, I want to highlight two of our ESG programs that focus on the social element of ESG that supports our communities. Nothing is more important than that support because, frankly, HECLA has been part of these communities for decades. The first program is something we call Hecla Bucks, where we support local business by giving employees vouchers that they can spend with the businesses that are in a local business organization. Most of them are Chamber of Commerces. It's been a big success by providing an injection of spending into the local economy as they deal with the pandemic. The second program, which we are doing with Coor Mining, is bringing COVID-19 lab that does PCR testing to Juneau. You know, it's surprising that the capital of Alaska doesn't have adequate testing, but they don't. When you get tested, the test has to go to the lower 48, so it takes three days to know the results. So we have brought a lab to Juneau. In addition to testing our employees, which is going to allow us to shorten our quarantine time, We are offering key government organizations like first responders the opportunity to get one-day turnaround. And this is going to be critical when the legislative session starts in January. I think we're making a real difference over and above being the largest private employers in these communities. And with that, I'm going to pass it over to Lindsey. Go ahead, Lindsey. Thanks, Phil.

And good morning, everyone. Starting with slide six, during the third quarter, our assets performed quite well. We recorded some $200 million in revenues for the quarter at a realized silver and gold price per ounce of just over $25 and $1,929. So we capitalized on the favorable precious metals environment we found ourselves in, capturing much of the increasing margins this quarter. Led by Greens Creek, we produced consolidated free cash flow of $49.7 million, resulting in our cash position of just less than $100 million at the end of the quarter. Solid cash generation and a record high adjusted EBITDA combined to also reduce our net leverage ratio to less than two, while providing a liquidity position of nearly $350 million. As Phil mentioned, our silver price linked dividend was triggered and our declared quarterly dividend increased by 250%, returning some of these cash flows to our investors. Turning to slide seven, all of our assets generated positive free cash flow this quarter with the exception of Lucky Friday, which was expected given its ramp up activities. The Lucky Friday ramp up is ahead of schedule and we expect to see positive free cash flow generation in the fourth quarter. This is important to us financially because in the first nine months of the year, cash flows from Lucky Friday were a negative $24 million. Net income for the third quarter was $13.5 million, driven primarily by improved gross profit at all our assets, except Casabarati, which was impacted by longer-than-planned nil downtime early in the quarter for major maintenance activities. Combined, our operations generated 53.5 million gross profit, with our low cost profile enabling us to capture growing margins in this rising commodity price environment. Cash provided by operating activities was approximately 74 million for the quarter, and we spent some 24 million in capital expenditures as we continued to invest at our mine sites. With no large capital expenditures in sight, low cash costs, and a positive precious metals environment, We expect to continue to generate significant free cash flows, further deleverage the balance sheet, invest in our assets and exploration properties, while returning an industry-leading silver dividend to our shareholders. With that, I'll turn the call over to Lauren to go through our operations.

Thanks, Lindsay. First and most gratifying is that our safety performance continues to be exemplary, despite the distractions caused by the pandemic. As you can see on slide 9, we have a year-to-date all injury frequency rate of 1.02, which is a 78% reduction over the past six years and a 14% reduction compared to the same metrics last quarter. I am very appreciative of the hard work and focus from our operations teams that delivers these results. At the Greens Creek mine, we saw silver production of 2.6 million ounces and 13,000 ounces of gold at an all-in sustaining cost of $7.84 per ounce. As shown on slide 10, that generates a margin of 223% when compared to the realized price of $25.32. As Phil mentioned earlier, we partnered with a COVID lab to provide real-time testing services for our employees. We expect this service to shorten the quarantine period, save money, and reduce the burden on our employees. We envision this being a short-term solution until local testing capacity increases. This will be the first commercial laboratory established in Juneau, and while the capacity is dedicated to HECLA, there is room in the agreement to work with local authorities to address community needs as well. I'm pleased to announce that ramp-up activities at the Lucky Friday continue to be ahead of schedule, and we anticipate hitting our full production rate in the fourth quarter. At this pace, we expect production in excess of 3 million ounces of silver in 2021. Grade is expected to improve as we mine deeper, increasing the projected production to around 5 million ounces annually over the next three to five years. The best part is that no significant planned capital outlay is required to achieve this goal. In addition, we were looking at various mining method changes and other initiatives to improve safety while increasing the productivity of the mine. At the Casa Brardy mine, we saw a production of 26,000 ounces of gold at an all-in sustaining cost of $1,868. Lower gold production and higher costs in the quarter were due to planned mill maintenance activities and delayed access to two high-grade underground stopes. Work to improve the reliability of the mill was in full swing throughout the quarter. In July, we took about 12 days to conduct planned heavy maintenance on both of the grinding mills. The work was scheduled for about nine days but ran long, primarily due to some complications with the in situ machine work and night shift coverage from some of the support contractors. As you can see on slide 12, the work was extensive. It included machining the feed-in trunnion flange and replacing the trunnion on the sag mill, replacing babbit bearings and seals on both mills, maintaining the gear sets, and related work best conducted while the mills aren't operating. Work was conducted in parallel on the crushing and conveying systems, the CIL train, and the detox system. As we said before, this is not a short-term exercise, but it is an important one to set ourselves up for the future. We're through the biggest jobs, and we're starting to realize the fruits of our labor. In October, the mill delivered 90% availability, including scheduled maintenance outages. Gold production also was impacted by geotechnical challenges that delayed several high-grade stoves in the west mine, which now will be produced in the fourth quarter. To mitigate this risk in Q4, we redirected development resources to focus on stope development to have more stoves available to secure the underground production. High grades also are anticipated from the east mine for the balance of the year. Stripping is underway and progressing well at the new 160 pit. Initial ore production is expected from the pit late in 2021. Unfortunately, the permits necessary to start were received about a month later than expected. We utilized a contractor to strip the extension of EMCP pit during this time, which resulted in higher operating expenses compared to budget. At San Sebastian, mining concluded in the third quarter, and we anticipate the milling to be complete in the fourth quarter. San Sebastian, with its very low capital demand, has been a successful operation for HECLA, and I want to take this opportunity to thank the San Sebastian team for a job well done. In Nevada, we have substantially completed mining of the developed oxide ore and currently are mining the refractory ore bulk sample, which we anticipate delivering to a third party for processing. I'm happy to report that the mining has progressed well with the ground conditions, water inflow, productivity, and cost all being better than planned. The ore is more structurally controlled and less disseminated than modeled, which we view as positive. We anticipate recognizing this mined ore as produced in 2021 once it is processed. Both San Sebastian and Nevada provide rich exploration opportunities. I'll now turn the call over to Phil to give more detail on how these exploration programs are progressing.

Thanks, Lauren, and we'll turn to slide 15. Now, we've increased our guidance for expiration to $16 million for the year, with about $8 million of that being spent in the fourth quarter. And $16 million is about what we had intended to spend at the start of the year but backed off because of COVID. So in the fourth quarter, we'll spend about $1 million at CASA, $1 million at San Sebastian, and San Sebastian we're following up on the new veins that have been discovered with ore-grade mineralization. You can see that on the left-hand part of the slide that shows San Sebastian. And you can see that it's not very far from where we've been mining. Now, more than half of the fourth quarter spending will be in Nevada, and with the majority of that being at Midas, which is shown on the slide on the right. We can easily drill the Midas targets from surface, so that's one of the reasons why it's been prioritized. We've already started drilling to the north and the south of Colorado Grande vein, where most of Midas' production has come from. And we've expanded the plan of operations so we can drill the East Graven Corridor, which has never been explored. So now looking to slide 16, this is our update on guidance. And this shows this a little differently than press release because here we're comparing the current guidance to what our guidance was before the pandemic. Because our silver assets are in the United States, we've never had to shut them down. And with the better grades at Greens Creek and the strong performance at the Lucky Friday, we're producing about a million and a half more ounces than we thought we would at the beginning of the year. Costs are slightly higher because of COVID, but the volume more than covers it. Gold is about 10,000 ounces less, about what we lost with the Quebec shutdown, and costs are about $100 per ounce higher. And capital is down for the year, but up from last quarter's guidance. Overall, I'm very, very happy with the progress we've made this quarter, the results that the company has achieved. You know, it just reflects that. And I expect the fourth quarter to be similar to the third quarter with more gold production and about the same level of silver production. With that, I'd like to open the line for questions.

At this time, if you would like to ask a question, please press star, then the number one on your telephone keypad. We'll stop for a moment to compile the Q&A roster. Our first question comes from the line of with HC Wainwright. Your line is now open.

Hey, guys. Thanks for taking my questions, and congratulations on progressing through all this pretty well.

Thanks.

I guess part of that is also a comment, but just building a little bit on what Lindsay said earlier in regards to pricing. I noticed your average gold and silver prices year to date through September are 1972 and 1745 an ounce as per page five of the 10Q. Both of those prices are obviously well below what we currently trade, even with today's COVID vaccine decreasing prices. You do have some hedging in place, and your queue lays out pretty well what it is. But just thinking ahead, should we expect more hedging in your future and building on that? Has your willingness to hedge increased given the high volatility we faced this year?

Well, the short answer is, Heike, we've had a hedging program in place for lead and zinc since 2009. And we've been very consistent with that program, and I don't see any major change happening in that program. We've also consistently hedged the shipments when they're leaving Greens Creek in order to take the revenue that has been booked and make sure that we don't lose that revenue should we have a drop in the future. The thing that we've done just for a short period of time was the purchase of puts for gold and silver. We started that in 2019. We did it in anticipation of the need to do the refinancing. We did that refinancing, and we have not put in really any positions since the second quarter of this year. so i is it possible that we'll put in more puts in the future it's possible but the volatility on the precious metals is quite high so the cost of those puts are very high so uh it's uh it's not a fundamental piece of our strategy it is something that we will do if we see a need but you know realize heiko we don't have big capital outlays we've got low costs we've got cash on the balance sheet We have an undrawn revolver, so we have a lot of financial flexibility now that we didn't have when we put these pits in place a year ago.

Right. That makes a lot of sense. I can't help myself to ask another question related to COVID. Assuming a vaccine starts getting distributed in the next whatever it is, 90, 120 days, Will this do anything to your outlook at any of the sites on an asset-by-asset basis? I mean, this whole topic dominates news. It dominates politics even. What impact do you think we'll see asset-by-asset, please?

Well, I don't think there will be much impact from a production standpoint. I think we've been very, very successful at putting in protocols that work I think where we will see some benefit is a reduction in costs. We won't have to incur all of the, you know, for example, the quarantine process that we go through at Greens Creek. You know, at this point, we have people that are having to quarantine for a week, and, of course, they get paid during that quarantine period. And so that would be a cost that would be eliminated. Lauren, anything to add to that?

No, the most significant cost is that at Greens Creek, and there are also some management costs at CASA, but it would be a pleasant reduction in cost. But I think basically the only other thing I would add is that it de-risks our business a bit more.

And arguably, it's the whole world a little bit. Sorry, go ahead.

Yeah, no, I just – any other questions, Taika? Okay.

Oh, no, that was on my end. Thank you very much. Stay safe. Thanks a lot. Appreciate it.

Our next question comes from Trevor Turnbull with Scotiabank. Your line is now open.

Hi, Phil. Hey, Trevor. I just wanted to ask about a little bit of a follow-on on what Heike was asking with respect to costs. In your press release, you had a nice breakdown of your 2020 cost outlook for cost of sales by asset in millions of dollars, and that's actually very helpful. So when you look at something like Greens Creek going forward, you were budgeting, I guess, $215 million this year. I'm just wondering, say in a year without coronavirus, what does that number look like going forward? I mean, have you seen something like five, 10% of your costs attributable to what you've had to do to mitigate the virus? Or kind of, can you just speak a little bit to that 250 number and how that looks, say, going forward into the future?

Sure. Lauren, why don't you answer that?

Sure. Thanks, Phil. Trevor, so at Greens Creek University, I think one way to look at this is it's round numbers, about $1 million a month for us to manage COVID the way we're managing it, additional costs. And at Casa Verde, it's around $300,000. You lump in the rest of the mines, there's probably some knock-on effect. Call it $1.5 million a month. This should come out of the cost structure. I think the only other thing I would add is that it does – impact our ability to operate as flexibly as we like. So I think once the restrictions are removed, you'll see us be able to capitalize on opportunities more effectively.

Okay. So then just looking at that, like say you take Greens Creek, which seemed like it had a pretty normal year other than having to introduce these protocols and CASA. Are those numbers fairly steady? I mean, are they a good proxy looking forward to think about for run rates?

Yeah, I mean, in fact, if you go back and you look at us historically, the cost structure in terms of the dollars that we have spent has been pretty consistent in the aggregate, including everything, and capital, the whole ball of wax. And, Russell, you can help me with this. It's roughly around half a billion dollars is what we have spent. Yeah, that's correct. Yeah. Okay. So I think you can anticipate it's going to be something in that range in the future.

Okay, and I appreciate you're trying to speak a little bit high level and not get too granular, but maybe just one last question on this. It looks like, kind of backing into your guidance and what's left to spend in Q4, that Lucky Friday seems like it's about $17 million or so for Q4. Is that number kind of move around as you get to the full run rate in terms of having to bring on more people or anything, or is that a pretty good number as well for the Q4 number for Lucky? Yeah.

You know, we have a bit more capital than we would typically have in the quarter, and we have just maybe slightly less production than we would typically have. You know, we're still, while we're up to sort of historic levels of production, I mean, we'll be somewhere around 700 to 800 tons per day. You know, we can probably get to 800 to 850 tons a day, you know, in the future. And what happens is we get these sand cycles where we don't have the sand availability to do the backfill, which slows down the production. And so we experienced that in the fourth quarter. And it takes a bit of time of being in operations for that to smooth out. We always have a little bit of that, but it's exacerbated when you restart.

No, understood. Okay, that's all I had. Thank you, Phil.

Sure, Trevor.

And as a reminder, ladies and gentlemen, please press star 1 on your telephone keypad if you would like to ask a question. Our next question comes from the line of Mark Monwich with RBC. Your line is now open.

Hi, thanks. Good morning, guys, and a nice quarter out of you, I guess. First off, can you kind of walk us through how you're thinking about the longer-term potential at San Sebastian and in Nevada? Obviously, you're kind of expanding the exploration programs now. When do you think we could get an update on potential research at both of those operations and kind of how you're thinking about them in the medium term?

So with respect to San Sebastian, it's much like where we were before. 2013-14 where we're in an expiration phase. We have a base of known resource, but we don't see it being economic enough to move what we know forward. So we're going to add more to the base. And how long that will take is unclear. Certainly the vertical RC drilling that we do where we go through the first 10 to 30 meters of topsoil and hit the bedrock and sample it. We're identifying veins in a way that we were not able to do five years ago. Those veins that have been discovered have been discovered just in the last quarter, quarter and a half. We're optimistic that we'll find more mineralization. With the drilling that we've done, there's been ore grade hits, but we've not been able to piece together something that is optimal. an ore body, so give us time, but we think it'll be faster than it was the last time we went into the exploration mode there. With respect to Nevada, we haven't stopped mining there. We're continuing to mine the Type II ore. We've got the stockpile. It's now ready to go to nevada gold mines we're working through the process of doing that we would anticipate that that material will be shipped before the end of the quarter and we'll be testing we'll get the results of it we'll have another shipment that will be prepared to to ship in in 2021 and we'll see where we are once we we do that we're also doing there is some continued expiration that's occurring We've got some development to do to be able to really put ourselves in position to the exploration that we need to do at Fire Creek. So just stay tuned. If we knew what the future would be with this Type II ore, we would tell you, but it's still open. We've got to see what the results are of actually processing the ore before we make a commitment as to where it's going. Okay, perfect. In the meantime, we'll continue to mine it and stockpile it. There's some risk associated with that, but it's not a huge risk.

Yeah, no, that makes sense. And thanks for the color on that. I guess just kind of digging into the San Sebastian a little bit more, Kenneth, how do you see, like, obviously you were able to, bringing the initial operation back in for very limited capital of the coal milling strategy that you employed there. How do you see that? Do you think that's still a viable alternative? Are the mills starting to fill up given where the gold prices are and the bar might be a little bit higher because you need to invest in your own infrastructure? Or do you still think that that would be the preferred alternative?

I think it's very viable. There are a number of mills that need feed. There's, you know, you double the prices. Maybe it's a, you know, I don't know what the number is, but you increase the prices. Maybe you do get to that point, but we're a long way from that point with the mills being filled.

Okay, perfect. And then moving over to CASA, Obviously, you know, pretty big maintenance going on through the quarter. And then obviously with some of the scope issues kind of, Are you confident that the changes you've made now are going to get over the hump in terms of both getting a little more consistent throughput and both through the mill and making sure you've got good stope availability? Obviously, you're also moving into the east mine, so should we really see a big inflection in Q4 or is that a Q1? How should we think about that in the near term?

Well, certainly, we feel confident that we'll hit our guidance that we've given We've certainly seen a very strong October, but an October doesn't make a year. Let's give it some time to see the performance and make sure that we've made the modifications that need to be made to have the consistency. And that's been the real issue with CASA. It's never been a drag on cash flow, but it's inconsistently provided the positive cash flow. There's been a few years where it's rivaled Greens Creek, but for the most part, it has not delivered the cash flow that we would expect. And we think that by doing these things, we're increasing the potential for that to happen. And we think it could happen in 2021, but let's wait and give it some time to prove itself. Lauren, anything to add?

No, Phil, I think you captured it well.

okay and then just the final one for me uh just down at lucky friday nice to see the the operation uh coming along and kind of ramping up better than you were expecting kind of how how are you thinking about the uh remote remote vein minor now is that still part of the medium term plan or and kind of what's the update there well with covid we've not been able to have people on the ground to see the work that that's been done and with covid

Thank you. the Swedes have really cut back their work schedule. So their amount of activity has been less. So we are not pushing that. We'll wait for things to kind of clear so that people can get over there so they can get their work done. And I would anticipate in 2021 that will be completed and we'll be able to bring it over and then start testing it at the Lucky Friday. But in the meantime, We're testing alternative mining methods at the Lucky Friday that could, on its own, make an improvement and could also be beneficial to the RBM when we bring it over. Lauren, anything to add to that? No, that's it.

Okay. Yeah, perfect. Thanks. That's it for me.

Okay, thanks, Mark.

Our next question comes from the line of Lucas Pice with eRiley Securities. Your line is now open.

Hey, good morning, everyone. Very good job. And we wanted to ask a little bit more about the capital allocation policy and very good to see the increase in the dividend and also the silver price linked dividend on top of that. But kind of going forward from here, how should we think about your capital allocation priorities? Is it returning more capital to shareholders? Is it for the due leveraging? And of course, you've done progress there too. Could there be room for M&A? We just really appreciate your thoughts on this. Thank you.

Sure, Lucas. So the What you have seen over the last quarter is, I think, what you will see. The last quarter and what we've guided for the fourth quarter is what you'll see in the future. We'll put more cash on the balance sheet. If you think back of HECLA over the last decade, we have on average, I don't know, had $150 million, $250 million of cash on the balance sheet. I think you can anticipate us having something in that order of magnitude. We've now gotten to just at $100 million. That's kind of our minimum level that we like to have. We have the revolver undrawn. We don't like to utilize the revolver. So anticipate that. Number two, we've got these dividends that we've announced. We'll, you know, hopefully see that SilverLink dividend continuing to pay. And, you know, maybe in the future you'll see even more. As Lucky Friday ramps up, if CASA continues to improve, if we see Nevada working, maybe you'll see us be able to increase the dividend even yield that we provide. You're going to see us expand the expiration spend. We're now back to about what we thought we would have at the beginning of the year. I think you can anticipate next year a bit more expiration spend. Capital will get a piece of things, but the reality is we don't have big capital needs at any of our operations. Don't expect huge capital spend. As far as M&A goes, we're certainly always considering it, but frankly, we've never had as many opportunities within our own portfolio as we have today. So it's not the highest of priorities.

Very good to hear. Thank you for that additional color, Phil. And then you touched on exploration. That's my second question. You mentioned you have quite a few opportunities internally. If you had to rank the exploration opportunities, either at existing operations or non-developed ones, can you do that? We'd really appreciate your thoughts on that. Thank you.

I'll just say that we've got the challenge of having a number of things that are almost of equal attractiveness to us. We're fortunate in the exploration that we have at our existing operations. are building off of existing infrastructure. And so those are attractive for no other reason than the capital efficiency is so high. But why don't I let Kurt respond from, I guess, a geologic perspective.

I think from a geologic perspective, Nevada obviously ranks high. Its location, whether it's Midas, Fire Creek, Hollister, and even Aurora, San Sebastian is located right in the heart of the Mexican Silver Belt, and geologically it is very exciting, and some of the things that we've been finding are going to go forward in the future. Casa Berardi's got fabulous exploration potential to build on the Casa Berardi deformation zone. So I think, you know, we've got some really good exploration projects. Some are near mine and some are more grassroots.

And the last thing I'll mention, Lucas, on the exploration is we're anticipating receiving the authority to be able to go underground at Rock Creek in Montenor, or really on the Montenor side. And if that occurs, then what you'll see us do is develop... the incline to allow us to do the drilling there. And while you might not view that as pure exploration because it really is moving a resource into reserves, I just think we'd be remiss not mentioning that.

That's good to hear and appreciate that. Everybody, best of luck and keep up the good work. Thanks, Lucas.

Our next question comes from Howie Finkler with Flinker and Company. Your line is now open.

Hi, Phil, Lindsay, Lauren. I have a question and then two comments. What did you say about CapEx at Casa Berardi? I didn't hear it clearly.

What did I say? I didn't say anything specific about CapEx at Casa Brardy, but all of our operations have a pretty minimal amount of capital expenditures in the future, including Casa Brardy.

Okay. And two comments. One I picked up from a conference call before you of a fertilizer company called Mosaic. And they had a shot for $100 million of savings and expenses. They got so many useful suggestions from their employees that they're not only going to overshoot the $100 million. For the next two years, they think they can find another $200 million. So my point is, ask your employees at Casa Berardi for some ideas. You'd be surprised. They said these things have very little or no capital costs. You might be surprised by, in fact, I know you'll be surprised by what the employees suggest to save money at Casa Berardi. And the second is as to hedging gold and silver. When it goes down, after the fact, people ask why you didn't do it. And then if you did hedge, people ask, well, why were you hedged? You missed all the upside. So don't be sensitive to second-guessing questions about hedging. Either you do or you don't. You can't have it both ways.

So let me respond to the second thing first, and that is that we do not sell upside on our – Full stop, we just don't do it with the exception of stuff that's on a ship. Otherwise, there is no real hedging where we sell.

We don't do a costless collar.

We don't do a costless collar because it's not costless. It is not. If prices go up, we don't sell forward the precious metals. So that's number one. Number two, with respect to asking the employees and improvements at CASA, we certainly do that. And, in fact, we have a very structured program that we're still, I don't know, we're probably halfway through the implementation of it. And, you know, we'll see what we conclude the results will be, and we'll inform everyone of that in the next, if not next quarter, the following quarter, I would expect, or next year, one way or the other.

Correct. There'll be lots of little suggestions that don't have to be massive, but when they add up, the way these people at Mosaic said, you'd be surprised. They were surprised. And none of them requires a big CapEx. So it sounds like a double win for you guys when these people are incentivized.

Yep, we've got that.

Thanks, Howie. You're welcome. Thanks, guys.

If there are no further questions, thank you at this time. I'll turn the call back to Philip Baker, Jr. for closing comments.

okay well thanks everybody for participating on the call as i said this was a very good quarter for the company i anticipate the fourth quarter um to look uh similar to this quarter and uh and so i so with that i'll obviously be very pleased to uh to be talking to you again at the end of the quarter uh to to announce that so uh thanks very much for your participation and if you do have any questions feel free to give me a call or Russell a call, and we'd be happy to walk through things. Thanks, everybody.

This concludes today's conference call. You may now disconnect.