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Pasinex Webinar: Passion in Growth

May 1, 2018

English Transcription

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130%+ Growth Year-To-Date & Counting

August 16, 2017

View the corporate presentation here.

Video Transcription

Steve: So okay, I’m gonna go through the presentation now. And I said then after that we’ll go to questions. So High Grade Zinc. No, we got a little technical issue. Okay, there we go. Disclaimers we won’t go through. So basically, we’re a Zinc Play, a pure Zinc Play. And I gotta tell you, we’ll talk a lot more about the zinc price further on, and also one of the questions goes to the zinc price. Now is a really good time to be a good Zinc Play. And so we’re very happy to be a pure Zinc Play. Our objective is to build a mining company. And you do that step-by-step, you start with one mine and you go from there, and you go to the second mine, and the third mine, and go on. Ultimately, we’d like to go from a junior to a mid-tier. And so that’s where we’re going, that’s what we’re trying to do.

We own a 50% of what I think is a real world class mine called Pinargozu. That’s a zinc mine in the south of Turkey, and we’ll talk a lot about Pinargozu as we go through the presentation. Pinargozu is not only an operating zinc producer now, but also, and I’ll show you that as we go through the presentation. It’s also, I believe, a significant exploration upside. And so I’ll take you through that.

Why Pasinex? What differentiates Pasinex from other zinc stocks, other stocks in general? First of all obviously it zinc, so what differentiates us from the other zinc stocks? Already, we’re in production, and we’re profitable. That’s an immediate differentiation, and not just marginally profitable, but significantly profitable. And I think if you look at a lot of the Zinc Plays out there, a lot of them are just exploration, which there’s nothing wrong with that, that’s great. But there’s very few there in production and even less, I think with the only ones with the sort of profit margins that you can see that we’re starting to put off. Those are our first quarter profit margins. We’re selling our product now. It’s a direct shipping order, what we call a natural concentrate, about 32% zinc on average.

The good thing about that, we’re selling, we’re gonna talk about zinc price in a minute, but we’re able to capitalize on these high zinc prices. And there’s no better time than right now on the zinc price. We’re producing ultra-high grades. You know, what makes Pinargozu extremely unique is its grade. We have, in the oxides, we’re producing a product which we’re mining underground 32% zinc, that’s an oxide product. And, we’re also starting to mines in sulphides, and the sulphides are at 48% zinc.

Unheard of grades in terms of mining grades and, you know, that’s what we’re mining, and that’s what we’re shipping. And I hope to show you a bit further on but it doesn’t just run out tomorrow, it’s not some small isolated bit of tonnage, we have some resource. And I think the other thing is that this is a new discovery. Pinargozu is a new discovery but there’s still a lot of exploration upside. And I’ll take you through that. So why Pasinex? We’re profitable. We’re producing. We’ve got very unique high grade [zinc], and we’ve got exploration upside. That really differentiates us amongst other zinc peers.

This is the management board of Pasinex. I think a number of you would have already seen this. So I wanted to take you through the board. We are a technical, team rooted in mining technical knowledge, that applies to myself. Larry Seeley, John Barry, Jonathan Challis, are particularly technical people. But you know we also have other schools there, financial business management, marketing top schools.

But as well, I wanted to introduce to you all to new employees who have just taken on. We, as off a couple of weeks ago, we hired a new CFO to officially take over the role of CFO from September 1st, which is Wendy Kaufman. Wendy, 19 years with Inmet Mining. Vice President of Finance with Inmet Mining. And when she was in a role with Inmet, she also went to Turkey because they had a mine there in Turkey called Çayeli. And then Evan who I just introduced to you. And Mark is our new Manager Corporate Communications you can see that maybe the impact of Evan has enabled me to get onto this webinar. So you know, as well as a board, we’re starting to build a team in Pasinex.

Our operation in Turkey is a joint venture, and a lot of people question me about that. So I thought their way to address it upfront, and talk about, you know, why a joint venture? First of all, it’s important to say that our objective was always to build a mining company. And if you are going to be building a mining company, and you’re in some foreign country, you really should, I believe, have a local partner, for all sorts of reasons, political reasons, social reasons, where with all reasons. So it was clear to us going into Turkey that we should have a local partner and, you know, right from the get-go we went out to try and get a partner. We ended up with Akmetal which is part of a Turkish family conglomerate business, called the Kurmel Group.

It’s 50/50. That’s the other question people asked me, is why 50/50? The fact is, in Turkey, yes you can do other types of percentage businesses, but 50/50 is very common in terms of business in Turkey. So it relies on trust, communication, respect within the joint venture, and I believe we have that. It operates as a true, both parties contributing joint venture. There’s a board of six that control the joint venture. We have three seats, they have three seats. I’m actually the chair of the board of the joint venture. And we have, I believe, mutual complementary skills that we bring to the joint venture. Akmetal very much they’re mining company, they’ve been in mining for a long time in Turkey. So they have definite strength in mining and definite strength in terms of getting things done. You know if you need this, you need that, they know where to go to get it done.

What we bring, and it comes back to particularly our board, we bring strength in mining business, strength in technical, and strength in strategy. And I think those are very complementary skills that we have in that joint venture. There’s no question in my mind that, you know, where we’ve got to, now, you know, already producing, we acquired Pinargozu in 2013 to be already producing, it’s because we have a joint venture, because it’s a true partnership.

A little bit about Zinc, I won’t labour this for too long. People also asked me a lot about, you know, what is Zinc? It’s actually the fourth most consumed metal in the world, and it’s pervasive in its use. It’s used widely in society in construction, in buildings, in the infrastructure, it’s widely used. Its biggest use is galvanizing rust protection for steel. That uses about 65% of the world’s consumption of zinc, and that’s pervasive. And it’s very much tied to economic well-being, as we have economic growth, so we consume zinc. But also used [in] health, sunscreen. The thing that stops your nose getting sunburnt is zinc. Zinc oxides are used in the whole range of chemical uses, and die-casting particularly little electrical bits are made of zinc. But galvanizing is the single biggest use.

China is the major consumer. China consumes about 50% of the world’s zinc, followed by the United States which consumes about 25%. And that very much reflects, economic growth and just the strength of the economies in China and the United States. We’ll talk more about zinc prices as we go forward, but needless I have to say, there’s a lot of upside, I think in the bright future of zinc coming up. In terms of the next few years, I think certainly in the next couple of years we’re gonna have a strong, a solid zinc price. A bit further up, up to five years it’s hard to predict at the moment. Overall, if you take a long-term perspective, I think zinc has a solid future because it’s so tied to the economic growth of the world. But you know, obviously, like all metals it does have ups and downs. But we’re in a very bright period right now.

Zinc, like a few other metals, is also a metal that’s being looked at in terms of growth of batteries, there are a couple of technologies that use zinc in batteries, and that’s obviously a big, bright, new technology future. That could still take some time before we see that impacting on the zinc price. Here’s the zinc price. And I can tell you today, we in hit a new high. In U.S. cents per pound, the zinc price today hit $1.41 U.S. per pound, which is a significant breakout in zinc price at the moment. It’s for the Europeans on this call, that’s broken through the $3,000 U.S. per ton on the zinc price.

Why is it going up? It’s very simple, and it’s very clear in this graph, it’s due to stocks. What we’ve got in this graph is zinc price contrasted with the stocks, the LME stocks, and the LME stocks continue to go down, and down, and down. We are at very low stock levels right now, and there’s no question for the last week and a half there’s been a significant breakout on the zinc price, and it’s very much driven by the depletion of zinc stocks out there in the world.

Once you’re looking at there, is the LME zinc stocks, you need to be a little cautious to that because China also has stocks of zinc. So the LME stocks don’t give you the full picture. And we don’t really have transparency on the Chinese stocks. But clearly, based on what’s going on with zinc price right now, with the breakout, the LME stocks are still telling us the story. Right at the moment, and we’ll talk more about zinc price because it relates to some questions, we could see a very solid quarter three with the zinc price. There’s more upside yet on the zinc price.

Pinargozu is located in the south of Turkey, the southeast of Turkey. And the province called Adana. It’s what’s called the carbonate replacement type zinc. The important word there that I used was carbonate, which means it has to be in a limestone type province. On the map there, the pink area is showing the limestone province in the south of Turkey. And that’s fundamental to these types of zinc deposits. It’s also in that pink area, there’s what’s called the Taurus Mountains. So there’s major fault running through that part of Turkey, forms of mountains called the Taurus Mountains. So the combination of the faults and the tectonic plate movement together with the carbonate province give us these types of zinc deposits.

The extension of what I’m saying, is we got Pinargozu at the moment, we’re developing Pinargozu, and you will hear me say a couple of times, I think, that there’s a lot more I think, to be found here in this area. There’s no reason to believe that Pinargozu is an isolated event. I actually think that there are more Pinargozus potentially out there, and we’re certainly gonna go look for them.

Just a little bit more detail there, on the little map there, the little Google app map, you can see the white line is a road. Actually, the white line, the road pretty much follows the major fault. And then, just to the west, to the left of the white line is the Taurus Mountains, very much formed by the tectonic movement – tectonic plate movement. You can see where Pinargozu is down the south eastern corner of the Taurus Mountains. Right along that strike which is parallel with the road, the white line, I think is very opportunistic areas for potentially more zinc.

And the other thing I wanted to comment on this slide, and it goes to the question of Turkey. One of the questions of Turkey. One of the major advantages Turkey has is great infrastructure. We are one and a half hours from a major city, the city of Adana, and 2.2 million people. It’s the fifth largest city in Turkey. Then another add down the road from Adana is the Port of Mersin. It’s a major port on the Mediterranean Sea. That’s how we get our product out to the market. So we’re two and a half hours, that’s a major road. We didn’t have to put any of that infrastructures in, there’s also high voltage electricity available, water readily available. When it comes to infrastructure, Turkey is fantastic. It’s got all the infrastructure, it really has been important to us getting Pinargozu going in production as fast as we have done.

A little bit about Pinargozu, we’re doing a lot of underground development. We’ve now got three adits into the side of the mountain. And we’re in the process of building a fourth adit right at the very top of the mountain. But we’ve got three operating adit at the moment. We’ve already done over four and a half kilometers of underground development. And this year we’re doing a lot of underground development. There’s a lot of underground development going on as we talk. And that’s kind of open a lot more mining areas underground at Pinargozu. We now have over 200 people working for the joint venture. Predominantly people working underground.

Another big question that people ask us is, “Okay, Steve, you know, I see you’ve got, you know, mining and you’re producing, but we haven’t seen the resource.” There was historical reasons for why we, up to this point, didn’t do a resource, maybe I’ll quickly touch on that. But the biggest reason why is that, as I think most of you are probably aware, the mining industry went through some really tough times the last few years, and, in our case, getting through the tough times meant one thing. And that was focusing on building Pinargozu the mine. And so that’s what we did. We focused on the mine development, we focused on, putting all the money back into drilling and into mine development, into equipment. We started buying some equipment to build the mine. And that included deferring other costs. Things like, marketing, or a whole host of ministry of things, but also things like, unfortunately, the resource. We deferred that for a couple of years just because, money was tight, and it was better to focus on just building the mine.

That situation has changed now. We’re in a much stronger position. We’ve already seen a quarter one financial results, and they were very positive. And so I think with that, with that changed environment, we said, “Okay, now it’s time to do the 43-101.” So as of a couple of months ago, we hired a group called CSA Global, they’re working on doing a 43-101, will be the maiden 43-101 resource for Pinargozu. And we will be completing that in quarter three, and issuing it to the market in quarter three. We will then follow up after we’ve issued this will be a resource that we will follow up with a technical, economic study, what people would call a PEA. It’s not really PEA because we’re already in production. So it will be based on real costs. But we will put out a technical economic study based on the resource, once we publish the resource. I can’t say much more about that because it’s in process. But I fully expect that we will complete that commitment we’ve made there to have this out in quarter three of 2017. And that will take care of clearly demonstrating, to the market that we have some significant tonnage in front of us.

I don’t want to spend all the time in this next slide. This is a conceptual geological model of carbonate replacement type zinc, which is the type of zinc that we have in Pinargozu. What I would say, is you can see these arms coming out from the central core, these are called chimneys and mantos. That’s actually what we’re into and exploring on, and mining on right at the moment, is one of these big arms of, chimneys and mantos. But what I can say, if you look at the scale on this conceptual model, this is by a guy called Peter Megaw, who actually visited Pinargozu by the way. You can see that these chimneys and mantos on other types of carbonate replacement zincs can run kilometers. They can run three, four, or five kilometers of chimneys and mantos. And that’s what we’re hoping. We don’t know whether we ultimately do, or do not yet have a three, four, five kilometers of chimneys and mantos, but it’s certainly what we’re hoping. And it’s certainly a big part of the exploration upside that we think we can go after.

The other thing to show you is the little red box, is showing you just to give you an idea of where we’re at. We’re actually down about 300 meters at the moment from the top of the deposit. The top of the deposit, we know exactly where that is, we drew that out. And we’re down about 300 meters from the top of the deposit. The word I use is I regard us as being very early on in this opportunity, we still got a long way to go. There’s a lot of drilling that needs to be done, but I think that the opportunity is there. I think that’s all I was gonna say on this model. If you wanted to ask we have questions later and I’d be happy to answer to those.

So just where are we going with exploration? First of all, Pinargozu, I was just showing you the model of the carbonate replacement type of zinc. A big focus of ours is to continue to follow the chimneys and mantos as they go deeper. At the moment, we see every indication of it continuing to run deeper, and basically, our drilling is focused on what we call, following the noodle, following the mineralization as it goes deeper. And so that’s a big part of our focus. We continue to run two drills pretty much constantly on the project, and it’s very much about, following the noodle as the mineralization goes deeper. So that’s priority number one in terms of exploration. And priority number two, also relates to what I talked about a bit earlier which is, there’s a much bigger carbonate province here. There’s a big fault system, the faults provide the plumbing system for the mineralization. So we think there is the opportunity to potentially find more Pinargozu type deposits within that region. So there are two priorities. We have in terms of exploration and we think there’s a lot more upside here. Firstly, growing the resource of Pinargozu, and there could be a lot more to be found. And secondly, looking for more Pinargozus within this region.

This is the resource wire frame. Our model of the resource about a year ago, actually, that you’re looking at here. One of the questions coming up, asked us well, you know, “If you haven’t published the results, how come you’re able to mine? How do you know where to mine?” Well, we’ve been doing a lot of drilling. We’ve been drilling pretty constantly since 2013. We’ve been running two drills pretty much full on since then. And so this is what we’ve defined as a resource. And now what CSE Global are doing, is they’re going in and testing what we regard as our internal resource, they’re going in and testing it, and determining whether they agree with it, and then it will become an official independent resource. But meantime, we got our own internal resource, which we had to have because that’s guided us as to where we go in terms of mining. How we know where to do our mine development, we know because we’ve been drilling and we’ve been able to define where we think the mineralization is. So that’s what you’re looking at there. The red blobs, our internal resource. As I said this is not independent yet, and we have to wait for CSE Global to finish that 43-101. But that’s how we know where we’re going to mine.

The next slide is not really adding much. The current production rate is around 160 tonnes of direct shipping ore per day, which is giving us an annualized rate of about 60,000 tonnes of direct shipping ore this year. We started the year, I think the first quarter we were down around 140 tonnes per day on average. I can tell you now that we’re at the rate of 160 tonnes per day. And we’re continuing to open up more mining areas with the mining development. So there is some upside on the tonnage.

That’s our production growth. We’ve started sort of scratching some rocks in 2014, and each year since then, we’ve grown significantly. The big jump from 2016 and 2017 was the addition of the third adit that we added in August- September of 2016. And that made us, or enabled us to increase our production significantly. The other important thing about that third adit it’s the lowest down adit, so it also enabled us to start to mine some sulphides. So up to then, previous years we’re all oxides which is lower grade than 32% zinc. Since then we’ve started to be over the mine some sulphides at 48% zinc. So we think this is a tremendous story back to differentiation. What makes Pasinex different? It’s that incredible growth in production of direct shipping ore.

Just a bit conscious of time, so I’m gonna speed up a little bit here because I’m really at the end of the presentation, but I’m gonna speed up a bit. I think most of these numbers I talked about, Pasinex’ sales and income statement. These are our budgeted numbers for 2017. But we budgeted for the joint venture to be producing and selling around 25 million U.S. in product this year, which means 12.5 million equivalently of sales to Pasinex. You can our assumptions of zinc price. And base on today’s zinc price, we’re on the low side in terms of current zinc price on their assumptions. We’re spending some capital this year, we’re buying some equipment. We’ve buying in mine some use scoop trams, and some pumps, and ventilation fans and things like that, all for underground development. We’re also continuing to spend money on drilling. As I said earlier, have two drills constantly running.

So I think that’s where I’ll wrap it up. We’re a zinc production company. We’re in production. We’re already very profitable. We got an existing results which we’ll be putting up to the market in Q3, but with a lot more exploration upside both in terms of expanding the resource of Pinargozu and more opportunities in the region. And as I’ve said several times, this couldn’t be a better time to be in zinc right at the moment.

The last slide, I don’t think I’ll go through, people ask us about Turkey. So we put together some information on Turkey there. This presentation will be going up to the web, so I might leave this slide, because I’m conscious of time, and let you read it. But Turkey is a strong economy, great infrastructure, well-educated people. It’s a really good place to be doing business. So I think that’s where I’m gonna stop. And I went for a little longer than I was hoping, and I’m apologizing for that.

So now we go to the questions. And I said you can use the chat to send any questions, but some people have sent in some questions in advance of the meeting. So I’ll just go through those questions. The first five questions I have here came from Peter Kep, and I think Peter is online, was a bit earlier. So thanks for sending your questions in Peter. So I’ll just read the questions out, and then I’ll answer them. So the first question for Peter was, “Zinc price increase to top of $1.30 U.S. per pound, zinc. What is Pasinex expecting in terms of the zinc products in the next few years?” Well, I think I have pretty much already have answered it, and, there’s no question in my mind anyhow, that certainly this next quarter is gonna be very strong for the zinc price. We hit $1.41 this morning. And I think there’s still some upside on the zinc price, and I think we could be, you know, by November, December, we could be more than $1.50 U.S. per pound on the zinc price.

So I’m bullish on is the zinc price, on the short-term. And I think the zinc price is gonna hold there, at least for the, not necessarily $1.50 but certainly, let’s say a dollar to $1.50 range over the next couple of years. There is the possibility that there Glencore could bring back production, but even if they chose to do that, that would take them some time to do, and would take some time for that to influence the zinc stocks. So I think we’ve probably got, I think at the moment, at least two years of strong zinc price. Beyond that, it’s a little harder to see. Inevitably there will be some coming off of metal prices, there always is, but not quite sure when. But certainly, for the next couple of years, we’re in good territory for the zinc price. I’m bullish on the zinc price.

Next question from Peter was, “Are there any further mines that will close for the next five years?” That’s a tricky question. I’m not aware of any further closures. Quite the opposite, I think, Peter. As I already mentioned there is a possibility that at a certain point, Glencore could bring some production back in, it would take him a bit of time to do that, maybe up to nine months or something to bring back the mine. But I think, the sort of closures that had a big impact on the stocks coming down, I think we’ve had those closure now, so I don’t think that there’s any more that we’re aware of.

Okay. The next question from Peter, “For sure the next milestone is releasing the results in the 43-101. What next step will let Pasinex for the long-term goal of becoming a mid-tier zinc producer?” Yeah, There’s a couple of things to say on that question. First of all, I think I already indicated to you that we think there’s a lot more upside in terms of zinc exploration in Turkey. We’re obviously looking to try and build the resource at Pinargozu following the noodle deeper, and secondly in looking at the opportunities regionally. So those are top exploration priorities for us. And our objective is to build our zinc resource in the company and, ultimately to hopefully get to another mine. Beyond that, you know, we got our eyes open for other opportunities elsewhere. And we’re looking, I can’t say much more than, but our objective is to build the company. And you build that project-by-project, exploration opportunity by exploration opportunity, and ultimately mine-by-mine. And that’s what we’re about. That’s where we’re gonna go.

Next question from Peter, “How is it possible to operate a mine without a reserve? How do you know where the zinc is and what bulk you can mine?” Well, I hopefully I already answered that question actually. We’ve been drilling for quite a long time, we had our internal resource, and that’s been very much guiding us in terms of the mine development we’ve been doing. And yeah, it’s been working because we’re finding the zinc where we expect to find the zinc. So the real question is not that we didn’t have it, we only had it internally. We hadn’t released it to the market, and we’re now doing, we’re in the process of doing that with CSE Global. But we always had, based on drilling, our own internal resource. And that’s how we’re able to build the mine.

The last question from Peter, “What is required to attract institutional shareholders?” Yeah, more of the same, I think, Peter. I think, it’s a question of focusing on anything. I’d like to think we’ve been successful in what we’ve done, and we’ve built what I think is a really great mine in Pinargozu. And there’s more to be built in terms of Pinargozu. We are producing, we will be putting out our financial results, and if we hit our targets, our budgets, those results will stand for themselves. They will be in a strong and positive, and they’ll reinforce our story. And I think at a certain point that should attract other investors and other institutional investors.

Okay. The next question came from Martin Lagriox. So I’ll read Martin’s questions. First question from Martin was, “Does Pasinex plan on moving up to the TSX-V?” Okay. First of all, I would’ve said moving up to the TSX-V was necessarily moving up. But what I would say is, the whole question, you know, and again, this is the question I get quite commonly. The whole question of the market we’re on and, you know, the CSE, and people saying, “Well, you know, they’re in their view, stronger and better markets.” That’s their view. So that question is clearly on the table for us, that question is something that, we’re conscious of, we’re conscious that people question us, whether we should move past the CSE. We’re looking at that question. It’s a bit premature yet. It comes back to my answer to the last question from Peter which is, right at the moment our focus is on building our story, showing to the market that we can achieve our budgets, and that we are a strong, profitable, producing company, and demonstrating that, continuing get the 43-101 done. Demonstrate that the resources os there. Demonstrate that we can continue to grow the resource. With those things that opens our ability to look at other markets, other stock markets. I can’t really say any more than that, but it is a question that’s on the table.

Going forward. “Assuming continued profitability, if the market does not recognize the value in the company, continually share price, is Pasinex’s open to the idea of the special dividend for current shareholders?” Yeah, also a good question. And a question that I commonly get. You know, I think the first thing to say is up to now, and I made reference to this in the presentation, up to now the priority was to build Pinargozu. We clearly saw that the way that we could build the company, the way we could fight through the tough times was build Pinargozu. So it was very much, take the money, put it right back into drilling and mine development and equipment. That situation is changing this year. I think if we achieve our budget, and we continue to be profitable, I’m optimistic that we can have a strong year this year.

The question on a dividend. Again, I can tell you the board is conscious to that question, and we have not made any decision because it’s still a bit premature. But the board is conscious to that question, and the board is looking at that. The only thing I would say is that we also want to build the company to that from a junior to a mid-tier. And so we want to not just take money, we’re gonna need money for future opportunity. And so we need to look at that and balance that, those needs again also, dividend and what we consider for a dividend. But, the question is on the table.

“What are the plans to increase the resource size?” Okay, drill. We’re drilling now. I mean, it comes back to what I said a bit earlier with regard to the carbonate replacement type model and the chimneys and mantos. We think there’s an opportunity that mineralization continues to go depth, it can run for, you know, quite some distance, and so that’s a major priority in terms of that drilling. And as we do that, you know, if we continue to be successful with the drilling, we are growing the resource.

Okay. So the last set of questions came from Dennis Widmer. So I’ll go through Dennis’s questions. Okay, Dennis’ first question was, “How much do you get for one ton of oxide/sulphide mixed for given zinc price of 1.20 U.S. per pound revenue after smelter, transportation etc.” Okay. Well, outside, I can’t give specific numbers, Dennis, because that would be giving like commercially delicate information, but I’ll give you general numbers. Our oxide side is around $400 U.S. per tonne, tonne of product, and our sulphide is running around $950 U.S. per tonne. There’s a couple of reasons for the significant difference between the value of oxide and a suphide. First of all, the grade is different, the oxide is running around 32% zinc, the sulphide is running around 48% zinc. So there’s an immediate effect of that. I should also mention that in the sulphides, we get a bit of payable silver, which we don’t get in the oxide. So there’s a gain for silver. The payable terms are stronger for a sulphide product than for an oxide product. The mixed depends on what it’s mixed, and the mix ends up somewhere in the middle, I guess as far as the big question on that. And that’s NSR net smelter return after transportations, but those are indicative numbers. Those are not precise numbers because I can’t give away precise numbers.

Next question from Dennis was, “How did revenue per term develop over the recent quarters?” Yeah, getting better! If you look at the last nine months, the zinc price has been going up, and that has had a couple of effects. The first effect is just the effect that, you know, contracts are struck on LME. We sell spot, so the strike on the LME price at the point of sale. As the zinc price is going up, it has improved the value of that product. And secondly, there’s also effect of the zinc price on the terms in the contract. That is as the zinc price strengthens so the terms get better. For those of you who know zinc markets, you would be aware that the things go to treatment charge which is the smelters and refiners take on the product that they buy. And if you go went back a couple of years treatment charges, we’re running $200 to $250 U.S. per tonne. Whereas, now they’re under $100 U.S. per tonne on the current zinc price. And that very much reflects the tightness of the market, and the demand from smelters and refiners for zinc. So there’s a double whammy. As zinc price goes up you get an immediate effect with zinc pricing, you also get an effect on the change of terms.

The third question from Dennis was, “What are your current production costs?” We actually give those numbers, Dennis in our financial analysis in the MDNA. It’s running around to $120 U.S. per tonne, approximately. But as I said, you can get the exact numbers from the MDNA.

Question number four from Dennis, “How did production cost per ton develop out of the recent quarters?” Well, clearly, as we’ve increased production, our production costs per tonne have come down. We’re still doing a lot of development. There’s a lot of development, mine development, going on this year, and that’s all being put into our operating costs. We’re not capitalizing the mine development costs. So it has come down, but not as rapidly as the increase in production and the reasons hasn’t come down as rapidly as the increase in production is because of the money we’re spending on mine development.

And the last question from Dennis was “The production statistics you show on the slide, 13 of the current corporate presentation are actually, the sales statistics not production. You’re not taking inventory into account. Could tell us something about a true production.” Okay, that’s pretty simple because it’s direct shipping ore, so on average, our production is our sales. We are selling spot, and there’s big demand for our product, we have a lot of people chasing us, we’ve had about 40 people, 40 different group’s approaches to buy our product. So there’s no issue selling our product, there’s a big demand.

So we don’t build a lot of inventory, we have a stockpile or warehouses in Adana, in the city of Adana. But we don’t build big stock piles because normally the product is moving out fairly quickly. So on average, production and our sales do equate. It can be small variations on that, it depends on shipping. Typically boats are 5,000 tons or 10,000 tons. If we’re building to fill a boat then, you know, we have to build the stockpiles sometimes to fill a boat 5,000 tonnes to 10,000 tonnes. But again, once the boats fill, it moves out. So overall, we don’t build stockpiles, we would only do it in case of having to meet a boatload of our sale. But a lot of that stuff is also not being sold per boat, some of that’s being sold by truck and rail, and not by boat. So that stuff moves out fairly quick. So on average, Denis, our production, and our sales are one of the same. Okay. I think I answered those questions. Are there any other questions on chat yet?

Evan: There are not. If you have any other questions now just please enter them in the chat.

Steve: If anybody wanna put any questions in on the chat there? Nope. Not seeing anything here.

Evan: Okay. I think we can wrap it up.

Steve: Okay. Well, if there’s no questions coming in on chat, one of the things I’d appreciate, maybe we’ll get Evan to circulate around to you all, is your feedback. You know, it’s just useful. I hope it’s useful. And if it is we’ll be happy to do more of these, I’d like to do more of these.

Any comments on things that perhaps we can improve on? You know, please, you know, feel free to give us that feedback. And we’ll try and circulate around to the bits in this, and get your feedback. Other than that, thank you very much. Very much appreciate you all logging in, and appreciate taking time and listening to us. Thanks a lot.

Evan: Bye everyone!