Champion Iron Ltd

Good morning, ladies and gentlemen, and welcome to the Champion Iron fourth quarter and year end results for the fiscal year 2023 conference call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded today, Wednesday, May the 31st, 2023. And I would now like to turn the conference over to Michael Marcotte, Senior Vice President of Corporate Development and Capital Markets. Please go ahead, sir.

Thank you, operator, and thank you, everybody, for joining our call to discuss our fourth quarter and fiscal 2023 results. Just before we get going, I'd like to turn everybody to our website at championiron.com, where you can find the presentation link under the events and presentation section that we'll be discussing today. I'd also like to mention that throughout this call, we'll be making forward-looking statements, and you can read more about our risks and forward-looking statements in our MD&A, also available on our website. I'd also like to highlight that every number that we'll be discussing on the call today are going to be in Canadian dollars unless otherwise stated. And now with that said, I'll just introduce you to people in the room here with us. So David Catterford, our CEO, We're going to be going over the formal presentation today and the Q&A. Closing remarks will be held by our chairman, Michael O'Keefe. We also have other executives here in the room, including Alexandre Bello, our COO, and Donald Tremblay, our CFO. With that, I'll turn it over to David.

Thanks, Michael. Thanks, everyone, for being here. Very happy to be able to discuss this past quarter's results. If we look at the highlights for the quarter, I think the one element, as we had mentioned in the past, We got most of our mining equipment delivered and assembled as well. So we're starting to see the results from this and we managed to move quite a lot more materials in the mine and which allowed us to continue a ramp up and produce close to 3.1 million tons during the quarter. So another record that we've managed to hit and well on track to be able to reach our full nameplate capacity run rate by August of this year. Also happy that we're continuing our capital return strategy. and declared our dividend of 10 cents after the board meeting yesterday. If we look in terms of sustainability, another highlight I think is the fact that we had no major environmental issues since 2018. So all of the investments that were made at site and that we continue to make every year allows us to keep the site safe in terms of environment and allows us to have a great environmental record. Also, I would like to highlight the fact that the teams have done a fantastic job, even if there was the end of COVID and also a pretty heavy construction year with the phase two ramp up and also finishing all the work, which allowed us to have a very good safety record. So the teams did a fantastic job to make sure that we could keep everybody safe at site. In terms of community and sustainability, one of the highlights during the past few weeks is the fact that we hosted three Quebec ministers at site, the Minister of Economy, Minister of First Nations, and also Minister of Employment. So it's great to host one of our larger shareholders at site, the government of Quebec, and to continue to have their support as well. So interesting to see their perspectives and allow them to see all the great work that we're doing at Bloom Lake. In terms of ESG, also very proud to say that we've delivered and published our 2022 sustainability report where we align ourselves with the GRI, SASB and TCFD. So the team has done a fantastic job in making sure that we can disclose properly all the great work that we're doing in ESG. which allows us to have a great rating compared to certain of our peers and allows us to have a very good environmental and ESG record published. If we look at the market, you saw probably in the month of January, February and March the iron ore price rally. So it went up by about 27% for the P62 and 23% for the P65. And we also saw the freight rates decline by about 12%. So, freights have been at a pretty good price now, even if these were the winter months where it typically cost us more at Bloom Lake. But as you'll see, we managed to have a pretty good freight rate during the quarter. So, if we turn to our actual operations, as we mentioned, one of the highlights being the fact that we produced close to 3.1 million tons. continuing a ramp up to be able to be at full nameplate capacity run rate by August of this year. And also the fact that we moved 1 million tons more in the mine. So you can see that the mining equipment that was delivered and assembled is ramping up as well, and we're in good position to be able to move the material required to be able to hit our nameplate capacity. So the mine is in a healthy state. You probably saw our strip ratio also increase slightly. We're now pretty much in line with the targets for the year. We did have a small backlog accumulated in the past quarter, but that will be able to be smoothed out over the next years. and we do feel that the mine is in very healthy shape to make sure that we can continue our ramp-up and deliver after that our full nameplate capacity. In terms of Phase 2, as we mentioned, the ramp-up is continuing. The issues that we had were the delivery of mining equipment and also some work that needed to be done on the crushing facilities. If we just go back a few years, I think it's important to note that We did have a few quarters when we started phase one that we had more difficulty on the crushing side. If you remember, we had a chute that was not performing. We were not delivering the tons. And the team quickly found a solution, implemented the solution, and we've never talked about that since because that's behind us now. We're doing the same now with our phase two on the crushing facility for the phase two. So we did have some hiccups during the past quarters. the team has found the solutions to be able to solve this, have implemented most of them, and continuing to implement the others during this quarter now to allow us to hit our full, namely, capacity. And the final piece of the puzzle was the logistics. We do have some third-party logistics, either on the rail and at the port. And what we can say on this is the fact that the new stacker reclaimer is now operational, not at full capacity, but it's operational at the port of Setil. I was there last week, and it's a very impressive equipment to be able to see in operation, the largest stacker reclaimer in the eastern part of North America. So very great equipment that is just finalizing the ramp up now. And also, we had three locomotives that had to be delivered. These locomotives are now in Matan, just across the river from Setil, and will be delivered in the coming days. With all these elements, we're still pretty confident that we'll be able to reach full nameplate capacity run rate by August of this year. In terms of financial highlights, well, we generated quite a lot of revenue in the past quarter, which allows us to continue working on our growth strategies, and at the same time allowed us to declare a 10 cent dividend, continuing our capital return strategy with our shareholders. If we turn over to cost in terms of the financial elements, so you can see that our costs have pretty much peaked now in this past quarter. Realistically, we started seeing some benefits associated to the higher production that was produced at site, but we did have some inventory that was still at higher prices and that were sold during the quarter. So that's why you see a negative on that side and why our costs have increased slightly compared to the previous quarter, but as we continue our ramp up and as you've also seen diesel prices correct, we do feel that we'll be able to get our costs lower than what you've seen now and get them back in line to where we had expected in the coming months. So very confident we'll be able to continue reducing our costs in the coming months. In terms of provisional price adjustment, so we did see a positive provisional price adjustment we had forecasted about 130 bucks per ton, uh, delivered tons at around 136. So that gave a positive provisional price of roughly about 3.4 us dollars per ton. One thing to note though, is that at the end of the quarter on the 31st of March, uh, we had booked tons at $140 per ton. And since then the price has declined. So, uh, we can expect a negative provisional price adjustment in the next quarter. but keep in mind that a portion of those tons that were not sold are going to the Japanese market, so will be subject to backward looking, so that impact won't be as big as if we had all of our tons that were subject to forward looking. In terms of the average realized selling price, so as we mentioned, the freight rate, even if it was the more costly month, so January, February, March, where we typically have larger ice premiums, where we typically have higher costs for the shipping, we managed to secure all of our ships for an average of about 28 bucks per ton, and when you look at the Canadian net realized price, managed to reach about 150 Canadian dollars. If we look at cash, so your company's in very good health right now, we essentially doubled our cash in the previous quarter, going from $166 million to about $327 million on the 31st of March. That increase of cash, and if we also include the working capital, has put us in a net cash position. So we went from net debt to net cash. So you can see that the company is in very good health to continue our dividend strategy, but also to allow us to continue our growth strategy at the same time. If we turn our focus to growth, one of the highlights in the past quarter is the fact that the board has authorized an extra $52 million spend for the DRPF project. This allows us to keep our timeline of August 2025 to deliver our first tons of 69% material. Just to remind everyone, our target is to be able to take half of the tons of Bloom Lake, so essentially all of the Phase 2 tons, build a facility beside the Phase 2 or an expansion to the Phase 2 project and be able to increase the grade of 7.5 million tons to 69%, allowing us to sell into the DR market. Why is this important? Well, the DR market is one of the markets that's growing the most in the world right now. There's more projects that have been announced and are being built in the next years than what has been built in the last 20 years. So it's interesting to see that there's quite a lot of facilities being built to the extent that there is a deficit or a targeted deficit of more than 100 million tons by 2030. And every month we're continuing to see new DRI projects being announced, but we don't see any new supply. So that's very interesting to see this dynamic because we do feel that what we forecasted as premiums is conservative in terms of the DR market, and we do feel that's going to be an extremely accretive project for all of our shareholders. Another element that's interesting as well is that to be able to do the energy transition, there's quite a lot of steel that's required. Steel is one of the only metals that's required in any solution that you potentially have to be able to convert dirtier energy into clean energy. The study shows that there's over 3.5 billion additional tons of steel required by 2050 just for the decarbonization of the power sector. And one interesting fact as well is that in most developed economies, governments typically have a pretty big role in this power generation. And it's very difficult to imagine that these 3.5 billion additional tons that will be used to be able to decarbonize the energy will will be done with dirty steel. So more likely they will require greener steel to be able to build this infrastructure to make sure that it's not a hypocritical way to be able to do the energy transition. So this also potentially creates more demand on the cleaner steel by different government bodies around the world and different energy suppliers. Just to remind everyone as well, the interesting element is the fact that the tons that we produce allow the steel industry to decarbonize. So to the extent that for this project to be able to decarbonize the power sector, while it's over 7 billion tons of CO2 emissions that would be produced if we use the typical route to make steel, if we use the DRI-EAF route and using tons from Bloom Lake to be able to supply this, It's nearly half the CO2 emissions that could be reduced in this steelmaking to be able to decarbonize the world. It's always interesting to decarbonize elsewhere, but what's also important is the fact that at Bloom Lake we do have one of the lowest CO2 intensity iron ores in the high-grade space in the world. So very proud to say that the investments that were made at site allow us to be a leader in terms of CO2 emissions per ton of iron ore produced. And also finally, I think it's important to note as well that our two other main projects, either the CAMI project and the pelletizing facility in Pointe Noire, we are continuing our feasibility studies and still on track to be able to deliver the results by the end of this calendar year. So even if we are finalizing the ramp up of phase two, working on our DRPF project as well. We are continuing the other growth potentials within our company to be able to create more value for our shareholders in the future. With that being said, I would like to thank all of our staff and the teams to be able to deliver these results that you see in the document now, and I'm more than happy to answer any questions or comments from the people in the group.

Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question, please press star, followed by the number one on your telephone keypad. If your question has been answered and you would like to withdraw from the queue, please press star, followed by the number two. And if you are using a speakerphone, please lift your hands up before pressing any keys. One moment, please, for your first question. Your first question will come from Orist Wokada at Scotiabank. Please go ahead, sir.

Hi, good morning, and thanks for having the call. You made a comment earlier about Phase 2 reaching a targeted nameplate around August of this year. Does that include the ability to ship at that level, at the 15 million ton level? Because there's certainly some disclosure in the release about delays on the locomotives. impacting, I guess, some mismatch between production and sales. Just wondering how long you expect that mismatch to continue beyond August or at all.

Yeah, thanks, Oris, for the question. So our view is that this will be solved by August. So the fact that the stacker reclaimer should have been in operation, but it's not fully in operation yet, And the fact that we did not receive the locomotives that were supposed to arrive is the reason why that's been disclosed. Called it at the end of the 31st of March of last year. But now I think the positive element is the fact that the locos are just a few days away from the site. They're fully operational. It's going to take a few weeks just to get them to the right level and integrated into the site. But that should be completed before the end of June. and the Stacker Reclaimer, it's operational now. I saw it working last week, so I can say that it's fully operational, but it's not operating at its full target right now, so that's being ramped up gradually as well, but we do feel that by the month of August, that'll be solved, and we'll be able to have no disconnect between the mine and the logistics.

Oh, okay, that's perfect. And then just following up on the direct production pellet feed project, when you came out with the feasibility results, you mentioned that a final investment decision was contingent on securing additional power and non-dilutive funding. Can you give us an update on both of those in terms of where those sit?

Yeah, thanks for the question. So Donald, our CFO, is finalizing the work to be able to put the non-dilutive financing package in place. It's going to be a similar thing to what you guys saw for the phase two. So we might not even have to draw any of this. We do believe that we'll probably be able to pay this out of cash flow, but we do want to be on the conservative side and make sure that we have all the funds available in case we require them during the construction. So that we don't see any hurdles to be able to deliver that. And when you look at the power allocation, so in Quebec, They took a little pause to make sure that they can prioritize the different projects. That's been announced by the Minister of Economy. And they've also put a list out to make sure that when they allocate power, it needs to help decarbonization. It has to be in a productive manner, and it has to have significant returns for Quebec, while also having a link with local communities and First Nations. And the fortunate thing is that we tick all four of those boxes. When we look at the timeframe that the government's announced for a power allocation, they did mention that at the end of June, beginning of July, is when they would do the first round of allocations of power. So we should be able to update the market at the next investor call on that. But we feel pretty confident that we'll be able to secure the power required to be able to do this project, hence why the board has allocated an extra $52 million to maintain our timeline of August 2025.

Okay, that's perfect. And just as a follow-up on that, the $52 million, is that what you're committing to basically between now and the end of June? And how much was spent in the quarter that just finished of the original 10?

Yeah, not much has been spent. So the way that we do the allocation is that we commit more funds than we actually spend. And before we can actually commit, we want the approval from the board. So In the past quarter, very little has been spent, but we've committed to some engineering. And now with the $52 million, we're actually going to secure some long lead items and allow our suppliers to start building them. So that way they come on site at the right time to hit that target of 2025. But that $52 million allows us to go well beyond the summer to make sure that we have enough time to secure the power and also do the non-dilutive funding. That's where we're positioned right now on that project.

Thanks very much.

Thank you, Urs.

Your next question comes from Lucas Pipes at B. Reilly Securities. Please go ahead, sir.

Thank you very much for taking my question. Good morning, everyone. I wanted to ask a little bit about the DR-grade market, and I wondered if you could size up the market today and then You mentioned there's a lot of DRI, HBI capacity under development today. And I wondered if you could give some numbers around that, what you see under construction today. Thank you very much for your comment on that.

Yeah, thanks for the question. So what we're seeing now is there's quite a lot of projects that have announced some DRI facilities or that have announced EAFs and are now working on securing some DRIs. So the interesting thing is that we're seeing quite a lot of push out of Germany. We're seeing quite a lot of push out of the Middle East. Just in Oman, there's quite a lot that has been announced, over 10 million tons that is now being studied in the DR market. Mind you, the merchant market today is roughly about 30 million tons. So just an extra 10 million tons, pretty significant in the market. And it typically requires over 1.5 tons of high-grade iron ore for every ton of DRI that you want to produce. So there's quite a lot of demand that's actually coming. When we look at actual projects, we could, offline if you want, go through a list of all the different projects that are now being built. But I'd say the main regions where they're looking at this is in Europe, in the Middle East, and what we're also seeing is in China as well. So they're the main hubs where we're seeing the extra DR material being announced. But the new capacity under construction now is roughly about 100 million tons, or that has been announced and that will start being built short term, roughly about 100 million tons. That's two and a half times the current merchant market in terms of DR grade.

That is very helpful. Thank you for sizing that up. And as a follow-up, and excuse my ignorance, but you have lower-grade iron ore regions in the Pobara, for example. What would it take to beneficiate that material to be DR-grade? Is that technically feasible, or it's just not economical? I would appreciate your perspective on that.

Yeah, when we take a little step back and look at, let's say, the last 10 years, if you average out the premium just for the high grade, for the 65% material, it was high enough to sanction projects if they made sense. At least that's in my opinion. When you look at premiums in the order of magnitude of about $20 per ton U.S. for beneficiation, it well offsets the potential infrastructure cost to be able to do this. But if you take a step back, if you look at processing material that is so fine in terms of liberation and that have quite a lot of contaminants, it's not clear that this is actually something that will ever happen. Because if you want to do high grade, you need to permit tailings facilities. You need to have those tailings facilities built. You also have different kind of logistics because then you have to use quite a lot of water, and by using water, you need water treatment plants, and you also need to remove the water from your material. We're very fortunate that the Labrador Trough, especially where we operate from, we have very coarse liberation, which means that our concentrate is basically sand. Other areas around are sand-like size, so to remove water from sand, it's fairly easy. When you have powder-like material, which is pretty much what would be required in the Pilbara, Well, then to remove water is more complicated. To remove water from powder is more costly, more energy intensive, and much more difficult. So all in all, when you look at the tailings requirement, the power requirement to be able to grind down the material and then to process it, and then the more complicated logistics associated to it, it seems like a more difficult proposition to upgrade Pilbara material into a high-grade. And even if you'd be able to upgrade it to high grade, which is still blast furnace material, it's unclear if they would ever even be able to achieve DR grade. I mean, the Labrador trough is a unique type of material that allows us to get to a coarse DR grade material, which I think is key for us to generate returns in the future. And when you look at the contaminants that we don't have, while we combine aluminum and phos, it's not clear also they would be able to remove those from the concentration. So then you'd still be stuck with high aluminum and high phos in your material.

That's very helpful. You can change geology. A quick follow-up question. You have some peers in the region. Are they investing as well, or would you say you're a little bit unique in going against the grain? Just maybe given the broader macro headwinds on the iron ore front, I would appreciate your perspective on that.

Yeah, it's difficult to see a lot of potential expansions in the region. So when we look at one of our neighbors that has their own rail line in Quebec, They're pretty much constrained in terms of logistics, and we haven't seen any investments yet to be able to increase that portion. So we haven't seen any capacity increase come recently or in the past years. Unclear where it will be in the future, but mind you, there's quite a lot of room if they were to expand because it does seem like the right region where you want to produce this type of material from. Then when you go across the border to the other projects, We have not necessarily seen any expansions yet. Will there be some in the future? Maybe. But again, I think the important thing to highlight is the fact that we're looking at a 100 million ton deficit in the coming years. And even if there was some expansions, there's quite a lot of room to be able to take more tons from this region.

Very much appreciate the color and perspective. Thanks again and best of luck.

Thank you, sir.

Your next question comes from Craig Hutchison at TD Securities. Please go ahead, sir.

Good morning, guys. Hey, Craig. With respect to the pricing that you guys could ultimately receive for the DR premium, do you envision a scenario where you guys could receive some kind of carbon pricing premium on top of the price that you guys already assumed in your feasibility study?

Yeah, great question, Craig. So right now we've not priced anything associated to that. But if you just take a step back and you look at the amount of CO2 reduction that a project like what we're doing will allow steelmakers to benefit from, you're talking about roughly about 5 million tons of CO2 emissions for the current DRPF project that we're working on. You could put the carbon price that you want on that, but if you put a 100 euro carbon price on that, Well, you're looking at a pretty significant, I mean, €500 million increased potential in the market. Would we benefit 100% from that? I'm sure we wouldn't. But that does create significant upside scenario for 7.5 million tons. I mean, you can imagine us just getting a third of that, and just that is €20 increase on the revenues that we put in that feasibility study. So there's quite a lot of potential in the future. We've left that all as upside, but I do agree that there's quite a lot of potential upside in the future associated to carbon.

Thanks for that. And just given the demand you're seeing for DR material, do you envision a scenario, say in the next year or so, where you could possibly start the second expansion to take the full Bloom Lake up to DR material?

Yeah, definitely. So when we look at the potential that we have at Bloom Lake, it's the same material, the plants are similar. There's maybe a little bit more filtering required for that second DR pellet feed project, but it's definitely something that we have in the back of our mind because when we look at creating value for our shareholders, I do think that upgrading our material to 69% is where we'll create the most value for our shareholders. So The team right now is focused on just finalizing the different things we need to get a final investment decision for the first one. But the second one is definitely at the back of our mind, and we will start working on that pretty quickly because I do feel that's the next big potential that we have.

Great. Maybe one last question for you. Just on freight, you talk about the freight market. Are you guys locking in any vessels or any kind of future contracts at these prices or certain volumes that you're locking in?

Yeah, thanks for the question, Craig. So we definitely are trying to lock in some pricing now. There is a little bit of upside in terms of pricing potential, but realistically, if we lock in prices when the C3 is about $19, $20, I think it's a great thing. In the past few quarters, the market was reluctant to be able to secure pricing longer term. But now we've seen that shift a little bit, and we are working with some of our freight suppliers to be able to lock in some prices. We don't have much done yet, so it's tough to update the market on that. But we are in discussions, pretty advanced discussions with a lot of groups to be able to secure some vessels in the not only near, near future, but also medium-term future.

Great. Thanks, guys.

Thank you, Craig.

Ladies and gentlemen, once again, if you would like to ask a question, please press star 1 now. Your next question comes from Brian MacArthur at Raymond James. Please go ahead.

Good morning. So just following up on Craig's question, obviously you're getting much more positive about upgrading 69, maybe the second 7.5 million tons. Does all this change, I don't want to get too far ahead, but does all this change your thinking longer term about where Bloom Lake 3 might come in ahead of CAMI or the pellet plant?

Yeah, thanks for the question, Brian. So when we look at the future, Bloom Lake 3 or CAMI, we're looking at similar type materials. So these are some of the highest grade ore bodies in the world. CAMI is one of the best iron ore deposits, undeveloped iron ore deposits in the world. So a lot of people talk about Simandu, but I mean, it's still material that's targeting blast furnaces. It's not material that is the solution to be able to decarbonize the steel industry. So CAMI is definitely a great potential for us. And when we look at the next steps, I do feel that the DR pellet feed of phase one might be a little bit ahead of the pelletizing facility down in Cetil. I mean, it doesn't change the fact that we purchased the best site in Canada to be able to develop pellet plants. So I do feel that at some point this will be developed. I do think the market will need DR pellets, and we will have sufficient DR material to be able to benefit from those premiums. But shorter term, when we look at our current DR pellet feed project, I do feel there's enough pelletizing capacity in the world for us to sell that as DR pellet feed. And mind you, that's another advantage that we have when we look at the Bloom Lake material is that we can actually sell this as DR pellet feed and with a very low moisture content and be able to manipulate it fairly easily. We don't have the issue of having powder-like material that either we have to pelletize or becomes a nightmare for our clients when they unload it at their ports. and then have to manage the dust associated to this type of material. So I do feel that, one, the DR pellet feed is the best project. CAMI becomes extremely interesting as well because it can also deliver DR quality material, and the pelletizing facility is a great option for our shareholders but might come a few years down the line.

Right, but would Bloom Lake, you sort of say Bloom Lake Phase 3, if I call it that, and CAMI are similar. Is there any relative advantage of one over the other there, capital intensity?

Yeah, right now, I mean, we're obviously more advanced on the CAMI project than on the Bloom Lake Phase 3. Bloom Lake Phase 3 does have a challenge in terms of tailings facilities. and being able to make sure that we integrate all the sites. So it has the advantage of being on a brownfield site, but I think the CAMI definitely has some advantages as well that the Bloom Lake Phase 3 doesn't have. If you go back a few years ago, in the back of our minds, we thought Phase 3 is definitely a project that makes more sense versus CAMI. Now that we're advancing the CAMI feasibility study and understanding more the Bloom Lake Phase 3, I think they're closer and in the same range and maybe even the CAMI project might have some advantages that the Bloom Lake Phase III doesn't have. If you look in a few years' time, depending where the demand is, maybe both get developed, but I think that the main focus for us now is really the DR pellet feed, getting the results of all our feasibility studies, assessing the market, and making sure that we have a diligent capital allocation in the coming years.

Great. Thanks very much, David.

Thank you, Brian.

There are no further questions from the phone lines so at this time I will turn the conference back to Mr. Michael O'Keefe for any closing remarks.

Thank you very much and David thank you for that comprehensive update. It's interesting because a lot of the discussion really for our company is about the future and the future is green steel and there's been a lot of noise in the market recently coming from Vale and and how everyone's chasing to try and produce the feed that's going to supply these electric arc furnaces. And either we've got it seriously wrong, which I doubt, or the rest of the world is changing in a different way to where we think it's going. But electric arc furnaces are the future. And if you just cast your mind back to what built the Pilbara, it was really the growth in blast furnaces in China. And as we've heard today from David, you know, the world's not going to tolerate steel being produced from blast furnaces. Either there has to be a carbon capture or some other change in the way that steel is produced with blast furnaces, but it's going to be very difficult to see that going forward. So I believe we're totally right in our theory and the fact that both David and myself travel to customers, we talk to the steel mills about what their future is, we see the growth in the electric arc furnaces, we get our hands dirty looking at these things. So we understand it because it's our money and your money that's going into the future growth of this company. So we're very unique in the fact that we have available to us or that the beneficiation process can take us to a 69% FE, which is unique. So we're blessed with that, but it's no surprise that we've picked up Bloom Lake and all the territory around it, including Kami, anything else that may come our way, we'll consolidate into that area because A, we have the product, B, we have the infrastructure in the port, rail, and the berth, and also the people are experienced in how we take this material from a 30% in the ground to a 69% pellet feed material. So that is very unique, and for us, we see it as our future. Now, if I just... Think about that for a moment and look at it today. We talked about the market of being 30 million tonnes. The growth in electric arc furnaces is going up, but there's no feed for this. So people say, oh, well, we'll use scrap. Well, have a guess what? Most countries are putting bargo on scrap and the scrap is getting more and more difficult to acquire and the scrap price is going through the moon. So, you know, scrap's not going to be able to do that. So it's either blister or a DRI pellet. So DRI pellet comes from where we are. Blister comes from blast furnaces. So It's a pretty simple logic. So if we just look at the numbers today, and let's take, for example, our costs, FOB costs. We ran about 57 in the last quarter. David and his team, Alex and Co, are working on how we bring those costs down. But they're going to be numbers that bring us down $3, $4, $5. But the big ticket for us, if you look at it like this, today, for the 62 material, versus the 65, there's about a $15 premium. If you look at the 65 versus the 69, there's about a $25 premium. So you're talking about $40 US that we can add to what's produced in the pulver, for example. So you take that off the 57, we're down at $17 US a ton, FOB. So That's a compelling number because it just tells you what the upside is for this material. That doesn't include any carbon benefits we could capture at all. So the material, the infrastructure and the future of this material puts us in a very, very sweet spot going forward. Now, if you just go back to the operations and scene, I think For us, well, for you as investors, it's a proof in the pudding. We commissioned this Bloom Lake in March 2018, and a short five years later, we've managed to bring this phase one, phase two, and running this operation in such a way that we're getting the recoveries and the grade that we want. Now, I think that's a mighty thing in itself when you consider through that period we've had COVID. When you consider through that period, we paid $200 million plus in dividends. We paid $210 million to buy back the government share in Bloom Lake. And we spent another $700 odd million on upgrading the infrastructure. And we've all done that out of cash flow. And the last time we raised any money was in 2017 at $0.90 for any equity raising. You know, my hat's off to David and his team for an absolutely magnificent job in being able to achieve what we have. But I think for everyone to take away from this is the unique situation we're sitting on at the moment to be able to capture this growth in electric arc furnaces like no one else can. So thank you all for your investment and your patience with us to get in five years. I mean, I think five years is pretty quick, but I think the next five years are going to be very exciting and exciting. you know, the things that Brian was talking about, what projects should we have next. I think that's a fantastic situation to be in. But for sure, the short term is going to be take us all our tons to 69. There's CAMI, there's all of the other tenements that we have, and there's other potential, you know, for consolidation. So I just say watch your space and we'll continue creating value for your company. And thank you all.

ladies and gentlemen this does conclude your conference call for this morning