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spk01: Ladies and gentlemen, thank you for standing by. Welcome to TECC's fourth quarter 2021 earnings release conference call. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session. This conference call is being recorded on Thursday, February 24, 2022. I would now like to turn the conference call over to Fraser Phillips, Senior Vice President, Investor Relations and Strategic Analysis. Please go ahead.
spk06: Thanks very much, Patrick. Good morning, everyone, and thank you for joining us for TEC's fourth quarter 2021 results conference call. Please note today's call contains forward-looking statements. Various risks and uncertainties may cause actual results to vary. TEC does not assume the obligation to update any forward-looking statements. Please refer to slides two and three for the assumptions underlying our forward-looking statements. In addition, we will reference various non-GAAP measures throughout this call. Explanations and reconciliations regarding these measures can be found in our MD&A and the latest press release on our website. Don Lindsey, our President and CEO, will begin today's call with full year and fourth quarter highlights. He'll be followed by Jonathan Price, our CFO, who will provide additional color on our financial results. We will conclude today's session with a Q&A period to address any remaining questions. With that, I'll turn the call over to Don.
spk05: Thank you, Fraser, and good morning, everyone. Well, 2021 was a great year for tech. We are pleased to close out the year by setting a number of financial records despite what was a very challenging backdrop. Solid operational performance and strong commodity prices drove $6.6 billion in adjusted EBITDA in 2021 and the highest ever quarterly adjusted EBITDA of $2.5 billion in Q4 2021. which was more than triple last year's level. I am incredibly proud of the tremendous resiliency demonstrated by our team all across the company who've continued to operate our assets safely and sustainably through heat waves, a heat dome, I'd never heard that term before, wildfires, incredibly heavy rains, deep freeze, freezing temperatures, record cold temperatures, and the continued impacts, of course, of the global pandemic. Unprecedented floods, brought on by three atmospheric rivers, a term I also hadn't heard, three of them in four days in the fourth quarter, tested the resiliency of our steelmaking coal supply chain in British Columbia. And despite major rail and infrastructure damage caused by what is now referred to as one of the worst natural disasters in Canadian history, there was no material impact on our production. We reached multi-year collective agreements at Antamina, QB, Fording River, and Elk View in 2021, and also at Highland Valley subsequent to your end. So we now have long-term stable agreements at our three largest mines. We continue to advance our priority projects in the fourth quarter, and overall progress at our flagship QB2 copper project has reached 77%. We are focused on delivering on the project's key milestones, including the commissioning of systems as they are completed. We continue to expect first production in the second half of this year. You know, tech is already one of the world's lowest carbon intensity producers of each of copper, zinc, and steelmaking coal, but we are taking further action to support global efforts to combat climate change. We continue to reduce the carbon footprint of our operations as we progress towards our target of net zero by 2050. And in November, we announced an agreement with Oldendorf carriers to employ energy-efficient bulk carriers, which is expected to reduce our Scope 3 emissions on a portion of our steel and coal shipments by up to 40%. The estimated savings can be up to 45,000 tons of CO2 annually, which is the equivalent to removing nearly 10,000 passenger vehicles from the road. In January, we announced our partnership with Caterpillar to deploy 30 zero-emission large haul trucks at our mining operations. And this is exciting progress because the decarbonization of our fleet represents the single largest opportunity to reduce our scope on emissions. And overall, we're very pleased to see our continued efforts in ESG are being recognized by the industry. So for the third year in a row, we are ranked number one in the metals and mining industry on S&P's corporate sustainability assessment. We're also ranked number one among North America's metals and mining companies by Moody's ESG, We're number two in diversified metals by Sustainalytics and rated AA by MSCI for our ESG performance. Turning to slide five, annual adjusted EBITDA of $6.6 billion in 2021 was a record, reflecting strong contributions from each of our copper, zinc, and steelmaking coal business units. And importantly, our record profitability enabled us to deliver meaningful cash returns to shareholders. Yesterday, the Board approved an amended dividend policy and declared a dividend and authorized the repurchase of up to $100 million of Class B subordinate voting shares in 2022. Under the new dividend policy, the annual base dividend has been increased from $0.20 a share to $0.50 a share. And in accordance with the new dividend policy or capital allocation framework, the Board declared a dividend of $0.62.5 per share, consisting of $0.12.5 of a quarterly base dividend and a supplemental dividend of $0.50 per share. In addition, the Board authorized annual share buybacks up to $100 million, and additional buybacks on top of that will be considered regularly. Taking into account the new annual base dividend in 2022 and the supplemental dividend, and assuming the $100 million in share repurchases, these initiatives represent a total of approximately $635 million in aggregate of dividends and share repurchases. Our ability to deliver a supplemental dividend in 2021 and the increased annual base dividend and the new annual share buyback demonstrate both our confidence in the outlook for our business and our commitment to balance growth and returns to shareholders. So turning to our operations on slide seven, fourth quarter EBITDA for our copper business unit increased by 64% compared to last year, supported by copper prices, which reached an all-time quarterly record. Production was in line with plan, although copper sales were impacted by heavy rains and extreme winter conditions, which affected rail service and shipment schedules. Net cash unit costs after cash margins for byproducts were $1.52 U.S. per pound. That's 25 cents higher than last year. We continue to experience inflationary cost pressures, and we also are seeing increases in our profitability-based payments at Antamina. and that's included in that 25% increase. And as I've already noted, we are pleased to have reached multi-year collective agreements in Antamina, Cladoblanca, and subsequent quarter end at Highland Valley. So looking ahead, we expect strong performance from all of our copper operations in 2022. Moving on to zinc in slide eight, our zinc business generated $290 million in EBITDA in the fourth quarter, and that's an 80% increase compared to last year. The increase was driven by higher zinc prices and partly offset by higher royalty costs related to profitability at Red Dog. Lower Red Dog zinc and concentrate production was primarily due to lower mill throughput and recoveries as a result of unplanned maintenance, which is now behind us. Refined zinc production at our trail operations was 11,800 tons lower than a year ago due to issues we encountered in the commissioning of new equipment as well as unplanned maintenance. Looking ahead, Trails 2022 production will be impacted by major maintenance activities from September to November, when the Kivset furnace hearth and the dome in one of the zinc roasters will be replaced after 25 years of operation. And our Red Dog royalty will increase to 40% in October from 35% currently, based on our operating agreement with NANA, which outlines a 5% increase every fifth year to a maximum of 50%. In 2022, we expect a significant increase in zinc production at Red Dog and a decline in total cash unit costs before byproduct credits, despite ongoing cost inflation pressures. Turning to slide 9, our steelmaking coal business unit had a record fourth quarter, generating $1.7 billion in EBITDA in the quarter, and that compares with $118 million last year. Realized prices averaged $351 U.S. a tonne, which was $244 higher compared to a year ago. And to capitalize on this premium pricing, we maximized available processing capacity to meet additional sales opportunities to China in the fourth quarter. Thanks to our Neptune facility, which had ramped up and was exceeding design capacity during the quarter, we entered the first half of November with historically low levels of clean coal inventory at the mine sites. This allowed us to continue operations with minimal production impacts despite the logistics disruptions that occurred in the latter half of the fourth quarter. Sales in the quarter were 5.1 million tons, which was slightly below our revised guidance. We sold 1.8 million tons of steelmaking coal to customers in China in the quarter. That was pretty similar to the three previous quarters. And annual sales to customers in China totaled 7.6 million tons, or approximately 30%. of our annual sales volumes. Sales to our customers in China are, of course, at CFR China prices, which reached a record high of more than $610 US during October. And although the steelmaking coal price in China decreased quite a bit during the fourth quarter, the average CFR China price for the quarter exceeded FOB Australia price assessments. The remainder of our sales were sold based on the FOB Australia price, which also averaged at a record level through the fourth quarter. And fourth quarter adjusted site cash cost of sales of $72 per ton were higher due to inflationary pressures, including higher diesel prices, profit-based compensation, and our investment in Race 21. Our annual adjusted site cash cost of $65 per ton was within our previously disclosed guidance range of $64 to $66. Fourth quarter transportation costs of $49 per ton reflect the extraordinary vessel demurrage in the quarter as a result of port service disruptions and higher rail fuel surcharges. And the higher costs were partially offset by lower port costs as higher volume of sales went through Neptune. And as a result of prolonged supply chain disruptions, we entered 2022 with very high mine site steel making coal inventories. With CN and CP rail making progress toward fully restoring rail service to our coal terminals, we expect to be able to largely recover delayed fourth quarter sales within the first half of 2022. Assuming full recovery of the rail network, we expect sales to be between 6.1 and 6.5 million tons per Q1. We expect 2022 steel making coal production between 24.5 and 25.5 million tons. Our 2022 production estimate is reflective of potential production curtailments in the first quarter due to high inventory levels. So we see that risk starting to decline now, and it made some good progress recently. Further, while the recent surge in Omicron cases has not had a major impact on productivity to date, continued absenteeism has the potential to have a negative impact on our operations. So despite unprecedented logistics challenges and continued inflationary pressures, our steelmaking coal business unit delivered record financial results in 2021 and is well positioned to deliver very strong financial performance again in 2022. And I note that Australia FOB prices are up again today and they are currently over $450 per tonne, back closer to $459 per tonne, up about $18 in the last three days. Turning to our energy business unit on slide 10. Our results improved from the fourth quarter 2020, largely due to the 88% increase in the Western Canadian Select oil price, which resulted in a positive operating netback. In the fourth quarter, the focus was on ramp up to full rates. We were pleased to see Fort Hills safely and successfully resume to a two-train operation in December. The facility is expected to operate at an average utilization rate of 90% throughout 2022. The midpoint of our guidance, represents an increase of approximately 85% compared to 2021 for our share of the annual production. And with higher production and productivity, adjusted operating costs are expected to come down by approximately 40% to between $26 and $30 per barrel in 2022. Underpinned by strong global energy prices, we expect to see a meaningful improvement in Fort Hills EBITDA in the first half of 2022. I note that WTI is $97.33 as we speak, and with differentials fairly stable, that means that we have a Western Canadian select price in the mid-80s U.S. or well over $100 Canadian. Moving on to slide 11, as I mentioned earlier, we continue to advance construction at QB2 with overall progress now having reached 77%. We were very proud of Q4, by the way, because we achieved 11% completion in that quarter, and 35% for the whole year. We are proud of this achievement, especially in light of the challenges that we have faced around COVID-19. The number of cases in Chile rose very rapidly in January and early February, so we weren't able to continue the rate of progress that we were making in Q4 during that time. We are continuing to aggressively mitigate the impact of the pandemic on QB2, and we believe that we're past the peak there, and it has improved quite significantly from the worst of it. Construction continues to progress, and we remain focused on delivering key systems as we position for first copper later this year. We have completed more than 90% of the water supply pipeline welding, and the tailing starter dam is more than 85% constructed. We've also energized the port area substations, and we are continuing with our preoperational testing of the desalination plants. Our operations and commissioning teams are working in close collaboration with the construction teams and our busy commissioning systems as they are completed and handed over. And this includes commissioning the port substations, the mine electrical loop, and the first two electric shovels. We've also completed commissioning and testing of the autonomous haul truck system, and these trucks are now doing productive work in the mine area, and I was able to visit and see them in action in December. A number of us will be going again next month. Turning to slide 12, it shows the testing and commissioning of the electrical systems associated with the mine electrical loop. Energization of the mine loop was an important step in completing commissioning of our mining fleet. With the mine loop energized, you can see the two new electric shovels that we've commissioned on slide 13, and these shovels will be used for pre-stripping mining activities. Slide 14 is a view of the 15-story high ore stacker structure, which transfers ore from the crusher to the ore stockpile. And you can also see the commencement of the erection of the ore stockpile dome in the center of the photo. Slide 15 is showing the grinding building where we have all the mills in place. We're working on the mechanical and electrical systems, and we've commenced installation of the sidings. The next slide, slide 16, shows one of the 85-meter diameter tailings thickeners where we are completing the installation of the internal mechanical components now. And from here, slide 17, we go to the starter dam at the tailings management facility where we continue to make excellent progress and are now over 85% constructed. The tech mine fleet has done a great job in providing materials for construction. And on the right of the photo, you can see the pond liner which is in place in preparation for receiving water. Work on the main jetty is progressing well. It will support both the ship loader and the seawater intake system, and the sub-sea work, including the 440-meter-long brine outfall pipe and the first to two water intake pipe systems, are now in place in preparation for seawater extraction. As we head back onshore, you can see we've energized the four substations there on slide 19. and this energization is an important step towards commissioning of the infrastructure at the port area. And finally, slide 20 shows the roof structure in place for the 75,000 ton capacity concentrate storage building at the port. So in summary, we continue to be very pleased with the progress that we are making and we are excited about building on our construction successes to date with a focus on delivering to the project's key milestones. I'd encourage you to visit the investor section of our website to watch a video of the project and view our latest quarterly photo gallery. So with that, I will now pass it over to Jonathan to discuss our financial results.
spk00: Thanks, Don. Profitability in the fourth quarter improved significantly from a year ago as a result of higher prices for all of our principal products as shown on slide 22. Copper prices reached an all-time quarterly record of US $4.40 per pound in the fourth quarter, up 35% from last year, while zinc prices increased by 29%. Western Canadian Select, the heavy oil benchmark price, was 88% higher compared to the fourth quarter last year and has continued to increase through the first quarter of 2022, as Don outlined. Similarly, we benefited from record high steelmaking coal prices. Realized prices in the fourth quarter were US$351 per tonne, more than a threefold increase from $107 a tonne a year ago. As Don noted, high realized prices reflected our strategy to increase our sales to customers in China in 2021, which was priced at a premium to FOB Australia price assessments. The large increase in steelmaking coal prices from Q3 to Q4 resulted in pricing adjustments of approximately $69 million in the fourth quarter or $44 million on an after-tax basis. Now we've outlined the key drivers of our record profitability on slide 23. We generated $2.5 billion of adjusted EBITDA in the quarter, an increase of more than $1.6 billion compared to the same period last year. This was largely driven by higher prices across all of our principal commodities, partially offset by lower sales volumes, higher operating costs, and the strengthening of the Canadian dollar. It was also impacted by asset impairment and impairment reversal related to Fort Hills and Carmen de Andacoyo respectively in the quarter. We continue to experience inflationary cost pressures, notably in diesel prices, mill steel, and replacement parts, driven largely by price increases for underlying commodities such as steel, crude oil, and natural gas. The inflationary pressures reflected in fourth quarter operating results across our business are expected to continue in 2022. Cash flow from operations in the fourth quarter was $2.1 billion, compared with $594 million a year ago. Our capital investments in the quarter totaled $1.1 billion, including $715 million on QB2 and $300 million in sustaining capital. Capitalized stripping was $186 million, primarily related to the advancements of pits for future production at our steelmaking coal operations. This was higher than a year ago, primarily due to decreased stripping activities in Q4 2020 as a result of COVID-19 restrictions. Debt proceeds were primarily driven by $303 million from our US $2.5 billion project financing facility in the quarter. Net-net, we also repaid $268 million on our revolving credit facility, bringing our balance on this facility to nil. Including these and other minor items, we ended the quarter with cash and cash equivalents of $1.4 billion, an increase of approximately $1 billion as compared to the end of the last quarter and the same period last year. Now, turning to slide 25, we're pleased to have enhanced our already strong financial position. Our solid operating performance combined with strong commodity prices resulted in a 49% adjusted EBITDA margin and $6.6 billion in adjusted EBITDA for the year. Our net debt to adjusted EBITDA ratio was one times. During the quarter, we converted our US $4 billion committed credit facility into a sustainability-linked facility with zero amounts drawn at this time. Subsequent to the end of the quarter, on January 18th, 2022, we redeemed US $150 million of our maturing 4.75% term notes. As of February 23rd, we had $7 billion of total liquidity. Importantly, our strong financial performance enabled us to return meaningful cash to shareholders. Applying our capital allocation framework on slide 26, to our cash flow from operations of $4.1 billion in 2021, we deducted sustaining and committed growth capital of roughly $3 billion net of QB2 project financing and partner contributions, $106 million of base dividends, and $335 million for debt repayments to improve our capital structure. This left us with over $730 million of available cash flow. As you know, the first 30% of any available cash flow is automatically returned to shareholders, and this totaled approximately $220 million. According to our framework, the balance of 70% can also be returned to shareholders or otherwise used for investment in growth or debt reduction or a combination of these. As Don noted at the start of the call, the board made the decision to pay a supplemental dividend of 50 cents per share or $267 million representing 37% of available cash flow, above the minimum stipulated in our capital allocation framework. And going forward, the Board approved a 150% increase in the annual base dividend to 50 cents per share per year from 20 cents per share, and authorized an annual share buyback that allows us to repurchase up to $100 million. Additional buybacks will be considered regularly. The increased base dividend is indicative of our confidence in the outlook for tech, reflecting both the near-term strong cash flow generation of our business units and our anticipation of the transition of QB2 from construction to operations. The annual share buyback provides management with the discretion to repurchase our Class B shares, such that we can offset the impact of dilution created by issuance of shares resulting from the exercise of employee stock options, as well as ensuring the flexibility to time repurchases in the context of market conditions. As shown, we have amended our capital allocation framework to reflect this additional regular return mechanism, with the cash used for share repurchases during the year to be deducted from our calculation of available cash flow. Slide 28 outlines our guidance for capital investments for 2022 and our outlook for a dramatic decrease in spending in 2023. We are approaching a major cash flow inflection point in 2023, driven by the completion of QB2. Sustaining capital spending is expected to increase in 2022 relative to 2021 levels due to one-time projects including the HARMA project to relocate maintenance and office facilities at the Elk View steelmaking coal mine to allow access to the next phase of mining, a major smelter turnaround at Trail, a haulage truck rebuild program, and the inclusion of sustaining capital for QB2 for the first time. In total, we expect these factors to increase 2022 sustaining capital by approximately $500 million over 2021 levels. We expect to spend, in Canadian dollar terms, 2.2 to 2.5 billion of QB2 development capital on a consolidated basis in 2022. With the completion of QB2 and a normalization of other categories of spend, such as capitalized stripping, we expect our total capital expenditures to decline by roughly $2 billion into 2023. And with that, I will pass it back to Don for closing remarks.
spk05: Thank you, Jonathan. So as you can see, this is an exciting year for tech. This is the year of transformation where we rebalance our portfolio and really start ramping up our copper production. We are months away from the startup of QB2 in the second half. We are particularly excited by this position because we find ourselves as QB2 ramps up to full capacity, we expect to shift from a period of significant capital investment to what will be a period of significant cash generation. And at between US$3.50 a pound and US$4.50 a pound copper prices, with QB2 at full production, we believe that we can generate somewhere between $6 to $7 per share of what we call available cash flow for shareholders, which we can use to grow our copper business while returning significant cash to shareholders at the same time and also maintaining a strong investment-grade balance sheet. And as a result of TEC's long-term and consistent commitment to seek out high-quality, long-life base mill resources, we have a portfolio of high-quality growth options that is the envy of our peers. And after carefully assessing multiple configurations for the further expansion of QB beyond QB2, we have determined that the next phase of development will be the QB mill expansion, or as it will be known, QBME. And the mill expansion is expected to increase concentrated throughput by 50%, with the addition of one identical semi-autogenous grinding line. That's one sag mill and two ball mills. We believe this configuration optimizes the timeline to obtain approvals, the permitting process, and to progress the development of this world-class lower body while leveraging the existing infrastructure that we're building right now for maximum capital efficiency. The QBME Previsibility Study has already started, including all of the environmental baseline activities. and with completion target for the fourth quarter of this year. And QBME will be a significant contributor to our medium-term copper growth portfolio. At the same time, we are also continuing to progress the project satellite assets. At Zafranel, a feasibility study has been completed, and we have now received confirmation of our CEA admissibility in Q1 2022. So that's a very, very important milestone. At St. Nicholas, we've commenced work on a pre-feasibility study, and that was in Q1, and we're completion targeted for Q3 of 2023, and we are deeply in partner negotiations right now. At Galore Creek, Bloor has been appointed to undertake a pre-feasibility study starting in Q1, with completion targeted in the first half of 2023. So that's another notable step with our partner, Newmont. Finally, strategic, technical, and commercial assessments for the advancement of Nuevo Niño, Mesaba, and Shaft Creek are ongoing. So in closing, we're pleased with how tech is positioned to drive long-term shareholder value. There are meaningful opportunities ahead as global growth and the transition to a lower carbon economy drive new copper metal demand. And as a result of tech's long-term and consistent commitment to seek out high-quality long-life base metal resources through mineral exploration, discovery, acquisition, partnership, and development, we have a portfolio of high-quality growth options that is the envy of our peers. And as we move forward, we'll rebalance our portfolio to copper while reducing the proportion of carbon in our overall business. The strong performance in the commodity prices over the last few months has accelerated our ability to return capital shareholders. And looking ahead, we have the ability to generate even greater cash flow and returns. And as we've always done, We'll continue to strengthen how we operate, both through cutting-edge innovation to improve productivity and through our leading ESG performance. And with that, I'll turn the call over to our operator to open up for questions. And I should say that we're all doing this call remotely, and so we have people in different time zones on lines all over the place. So after your questions be asked, it may take a moment or two until we sort out who's going to answer it. Operator, over to you.
spk01: Thank you. You may press star one at this time if you have a question. The first question is from Greg Barnes from TD Securities. Please go ahead.
spk04: Thank you. I didn't see any commentary about coal sales into China in 2023 as you had last year.
spk05: Okay, and congratulations, Greg. First question, usually someone else will know well. Yes, it is. You surprised us all. Good for you. So I'll turn that question over to Rial. We've done a lot of thinking about it. And as you know, the CFR price and the FOV price do not necessarily move in sync. Sometimes one side or sometimes the other side. But Rial, over to you.
spk03: All right. Thanks, Greg. So, overall looking at 2022, we're expecting our sales distribution to be similar to 2021. As we've discussed previously, we're continuing to maintain our supply to our ex-China customers, because those are long-term relationships. And we're confident as well in China as the steel production recovers. Actually, we've seen steel production already come back very strongly right after the Olympics. So we see that as continuing to support CFR China pricing as China continues to be short hard cooking coal. And the last point is we keep a portion of our book for spot sales. And of course, these spot sales will be placed in markets where we achieve the highest returns for tech.
spk04: Thanks, Raoul. Follow-up question again for you, Don, on coal. You're thinking around the near-term future of coal in your portfolio seems to be evolving. Can you talk about how you're positioning the business in your mind from this point forward?
spk05: And when you say the business, do you mean the overall portfolio? Yeah, coal in the overall portfolio and how you see that evolving. Nothing has changed from what we've said before that we're on the journey to rebalance our portfolio so that carbon, both coal and oil sands will be a lower percentage of the portfolio, whether you measure it in terms of revenue or EBITDA. And this is a big year of transformation for that because we double the consolidated copper production with QB2. But as we're going to start featuring throughout the year, The other projects in our portfolio are probably coming a little sooner than people might have expected. We hope to announce the partner on St. Nick in due course. It's taken a little longer than we thought, but we're certainly deep into it. We're giving more information today and in the next few weeks on QBME and moving that at pace. The coal part of it will reduce in proportion naturally as copper grows. We still have the same position on oil sands on the Port Hills project that I've talked about before, so nothing's changed on that. We're in the midst of our first quarter of it operating with two trains running. That was a long time in coming, but it's up and running now. It was tough in the first couple of weeks of January when temperatures were so cold and so on, but but seems to be going smoothly now. So that'll give us some financial results and allow us to move forward on whatever strategic action we take on that. So we believe that the carbon part of portfolio will be reduced in that step. And then we'll take a look and say, well, can we get down to a level that shareholders find acceptable by keeping the whole coal business, or do we need to reduce our exposure there somewhat? We love the business. As you can see, it's a tremendous cast generation business. And I just want to give a shout out to our whole team that works in the coal division because there's a lot of ESG pressures and so on. But man, they are so dedicated, so determined and innovative in addressing issues. We've now got tremendous water treatment capacity up and running in the highest selenium concentrated areas. It's really going well. Fish population has been increasing and so on. So I'm just so proud. of everything they do there. So I call it one of the best mining businesses in the world. And I say that frequently to other people. I should say it publicly too. That said, we know that with all the different ESG pressures and movements, there's a lot of people that shy away from anything called coal, even though it's the good coal, steelmaking coal that the world absolutely needs for a low carbon future. And so we have to take that into consideration. But the board's been studying this intensely for a couple of years and even more intensely recently. But whether any specific action is taken in the next few months, I don't know. Nothing is imminent, that's for sure, but we sure look at it a lot. I do want to say that our coal, our steelmaking coal, is amongst the highest quality in the world. And if you produce a ton of steel with our coal, there's between 5% and 30% lower carbon emissions than the coals from the U.S., Australia, Mongolia, and so on. So it's a very valuable business, and it's certainly doing extremely well, especially with coal prices having jumped $18 a ton in the last three days. Sorry that's a lot, Greg, but that's how I'm thinking about it.
spk04: That's great. Thanks, Don. I just wanted to clear that up, and I'll pass it on.
spk01: Thank you. The next question is from Oris. Good morning.
spk07: A couple of questions for me, if I could, Don. First one, I've noticed that the languaging around the share buybacks seems to suggest that the board may consider buybacks a lot more often than just annually. Is that the right way to interpret it, that we could actually see something reviewed quarterly?
spk05: We didn't say quarterly, but we said regularly, but the direction of your question is correct. Where we're at now, we're 77% complete of QB2, but there's still a lot of capital this year, and so we're taking a prudent, measured approach. We wanted to increase the base dividend. We wanted to implement the capital allocation framework, and we put in a pretty decent supplemental dividend on top of that, which in total gives you $1 for the year. and then start the buyback. We wanted to have the approvals in place so that if events in the world happen, as they seem to be happening in the last 24 hours, and there's moments of weakness, we can be ready and we can start any time. But we didn't want to go too far right now until we get further on in QB2. But if you roll the clock forward a quarter or two and we're over 90% or something and there's no particular disruption, and we're generating the kind of cash that these commodity prices can generate, then why would we wait all the way till next February or something? So we wanted to signal that the board is very attuned to this issue and it'll be a subject of discussion frequently as cash is generated. But month by month, these prices makes a huge difference to this company. Like every month, there's a lot of cash that comes in. we would look at how best to deploy it. And I think when you see QBME and how that would be financed and St. Nick and how that would be financed, you'll see the ability to still grow copper while generating a lot of cash that's available for return to shareholders will start to unfold more, and then the board can make those decisions in that context. Good to hear from you, Oris. Sorry you missed the first question, but I'm sure you'll keep connecting.
spk07: Thanks, Don. Just as a follow-up on QB2, you gave us a fair amount of status updates on the key pieces, but what about the concentrator? Where is that at with respect to completion, and is that now the critical path to start up?
spk05: Very good question, and I look at pictures of it every day. So I'm going to ask Red Conger to take that question, and he may work with Alex Christopher as well. But Red, over to you.
spk02: Good morning, Oris. Appreciate the question. Yeah, it's been a busy time for us on the project, and we're pleased with progress, as Don had mentioned. Just specifically on the concentrator, when we talk about critical path through grinding line
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