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00:40 Thank you, operator. Thank you everybody for joining our second quarter [Technical Difficulty] Operator?

00:55 Okay. I think we're back online now.

Apologies for all that everyone. Thank you, again Operator, and thank you everyone for joining our call to discuss our Q2 fiscal twenty twenty two results.

01:06 Before I get going, I just like to point you to the presentation, which we'll be using this call, which is available on our website at championiron.com under the Investors Section. And I’d also like to turn you over to the disclaimer page and also to our MD&A, which is also available on our website, as our team might be making forward-looking statements throughout this call.

01:31 Joining me today on this call is our Executive Chairman Michael O’Keeffe; our CEO, David Cataford; our CFO, Natacha Garoute; and our COO, Alexandre Belleau. 01:44 With that, I'll turn it over to David Cataford do the formal presentation of the call.

And then after that, we'll open up to Q&A thereafter. David?

1:52 Thanks, Michael. Thanks everyone for taking the time this morning.

Very happy to be able to discuss the results of the past quarter and also a few of the elements that just happened in the past month. The main highlight for the quarter is the fact that we're continuing to operate over nameplate capacity, we had another quarter of just over two million tonnes of high-grade iron ore that was produced.

This is during a time where we're advancing quickly all the Phase II projects. So you can appreciate there's quite a lot of people at site working on different projects, different times between Phase II and Phase I and the COVID situation which is still ongoing here in Canada.

But despite that, we managed to produce over two million tonnes during the quarter and also generate just over two hundred million dollars of EBITDA during the quarter. 02:47 If we look at health and safety, well, as you know, we have a fully operational COVID lab at site, which allows us to keep everybody safe.

And at the same time, our workforce is vaccinated pretty much in line with what we're seeing in the Quebec population close to about eighty percent of our workforce that is fully vaccinated and this is increasing every week. 03:13 Happy to report also that during the quarter, there was no major environmental issues.

There was no serious injuries that were reported either, so we managed to continue the work on our expansion, do all of the sustaining capital work at site and have a two million tonne quarter in operations, doing this in a safe way by keeping everybody safe at site. 03:40 In terms of sustainability and community relations, in Canada, here there was a new holiday on the thirty of September, which was the Truth and Reconciliation.

We participated and help finance one of the events that [indiscernible] our main First Nation partners we're doing, further strengthening our relationship with the community. We also named a new manager of First Nations, who's working with the different groups within that community to be able to help build new companies within the community to be able to service our mining operations and the mine operations in the region, again further strengthening our relationship with the First Nations Group.

04:29 If we look at the industry, it's been a bit of a volatile quarter, but I think what's important to note is that some of that volatility that was happening in China has been picked up in other steel producing markets. So we saw China announced that they wanted to reduce their steel output to be in line with last year's results.

But realistically, when you look at the demand for steel around the world -- that has not declined. So even if China reduced by about fourteen percent their crude steel output in the period, we saw the markets ex-China increased by about twelve point six percent year-on-year.

So, all-in-all, we see that whatever tonnes that will not be produced in China, the demand is still there. So markets outside of China will be able to pick up that steel output.

05:21 The benefit for us is that China is pretty much the furthest client that we have. So anybody producing in Europe, Middle East, U.S., India, there are all markets that are closer to home, which reduces the freight impact that we have shipping to those different areas.

05:42 The second positive element of adding more tonnes outside of China is even if China is consuming quite a lot of high grade material, the market outside of China typically have more electric arc furnace production and they consume more high grade iron ore. So every tonne of steel that is produced outside of China is beneficial for a project like the Bloom Lake Mine.

06:09 In terms of operational result, as we mentioned, quarter of over two million tonnes produced of high grade iron ore maybe bring your attention up to the strip ratio that was a little bit higher, but in line with what we predict with our Phase II project. What we're doing now at site is making sure that the mine is prepared and ready to be able to service the Phase II project, which will touch base in a few slides.

06:35 Secondly, you'll see that the head grade has reduced a little bit. This is in line with our mine plan, so there's nothing that was not expected in this number.

And also what's very interesting is the fact that the investments that we've made on infrastructure at site have allowed us to continue producing at a run rate of eight million tonnes per year even if the head grade is lower than previous period or last year. So, our head grade is closer to where it's going to be for the life of mine, and we see that the modifications that we've done inside of the plant and the infrastructure surrounding the plant allow us to keep operating over our nameplate capacity.

07:18 In terms of financial results, as we mentioned, EBITDA of two hundred million, we still have significant margins as well and we'll be able to touch base a little bit on our all-in sustaining cost that was a little bit higher during the period, but was mainly due to some non-recurring work that we did on the tailings infrastructure. But again, very strong quarter with zero point two three dollars of EPS and two hundred million dollars of EBITDA.

07:50 In terms of the all-in sustaining cost, it was impacted by roughly about a twenty million dollars work project that we did in our tailings infrastructure As you know, we're working and advancing very quickly our Phase II project to double the production at Bloom Lake. And by doing so because we operate in a very conservative way, we re-audited all the tailings infrastructure that we have at site.

08:14 And what we noticed when we did that audit is that we had a few types (ph) that were not build as per the construction plans that we had on file. So we noticed that well in advance of any potential issues associated to that.

There was no short-term risk, but we decided to make sure that we fixed all of these infrastructure to be ready to continue our growth initiative and not have potential issues in the future. 08:42 So all in all that result in about a twenty million dollars spend.

We can announce now that apart from one project that will be finished in the next few weeks, all the work associated to those to that audit has been completed. And now one hundred percent of our infrastructure at site on the tailings has been brought up to standard and we don't see that as a recurring work in the future.

09:07 In terms of provisional price, we had a small negative provisional price adjustment at the end of the quarter, roughly about ten million U.S. dollars, which relates to roughly five dollars per ton associated to the two million tonnes that were sold during the quarter.

If you remember the provisional price that had been booked the end of last quarter was two hundred and forty six U.S. dollars per ton and the realized price that we got was two hundred and thirty seven.

That price is higher than the average for the previous quarter, but that's because most of the tons that were subject to provisional price landed in -- at our customers in July and early August, so allowing us to fully benefit from the higher iron ore prices and not necessarily prices reflected in September. 09:57 If we look at the provisional price that was booked for the eight hundred thousand tonnes that are on the water at the end of this quarter or the quarter ending at September 30th.

What we saw that we booked those tonnes at one hundred and forty one U.S. dollars per ton.

So when you look at this slide here, the P65 index the average for the quarter was roughly about one hundred and ninety U.S. dollars per tonne but you see a gross realized price of one hundred and seventy five U.S.

dollars per tonnes. That's mainly due to the fact that we had eight hundred thousand tonnes that we're still on the water and that were booked at a price of one hundred and forty one U.S.

dollars per tonne. So that's lower than the one hundred and ninety U.S.

dollars per tonne that you see here and that's the difference between the P65 index for the quarter and our gross realized price. 10:51 I want to reassure everyone that we do not have discounts for our high grade material.

There's no penalties. We fully benefit from the P65 index.

The only issue here is a timing issue. But our material is in very high demand and as we mentioned a little earlier, because of production being slightly reduced out of China and picked up in the rest of the steel producing countries, well, this has increased even the demand for the high grade type material.

So, we're not getting penalties as we mentioned and we fully benefit from that P65 index. 11:29 In terms of stability, we mentioned this at our AGM, but we managed to buyback the preferred shares, one hundred percent of the preferred shares at par from the Caisse de depot.

So during the quarter, we bought back one hundred and twenty five million CAD worth of preferred shares, which has fully bought back all the preferred shares with Caisse de depot here in Quebec. This was subject to a coupon of nine point twenty five percent.

So by paying this back, we've reduced significantly our cost of capital allowing us to work on future growth project and capital redistribution strategy. 12:05 Also one of the highlights for the quarter is that we managed to secure a twenty two million CAD grant from the Quebec government.

This grant is for work that we're doing to reduce greenhouse gas emissions that site and also reduce energy consumption at Bloom Lake. We do use around seventy percent of our energy by hydroelectric power.

So these initiatives here are to continue working on the remaining thirty percent of fossil fuel energy that is at site. So you could see that the company is fully dedicated to continue reducing our CO2 emissions even if we've already reduced by about forty percent the CO2 production our emissions at site.

12:48 Finally on the slide, it's interesting also is that we've managed to secure premium over the C3 index for next year's vessels, allowing us to reduce the cost of our shipping to our major clients. So what we've done essentially is booked twenty percent premium over the C3 index and typically our yearly average is about twenty five percent over that C3.

So this allows us to reduce the cost of our vessels into twenty twenty two. 13:23 In terms of cash, well, the cash on hand has increased by about one hundred million CAD in the period.

Things to highlight is that we had a change in working capital of around two hundred and forty five million CAD. Investment in Phase II of about one hundred and twenty CAD and also the preferred shares that we bought back at one hundred and twenty five CAD.

So company is in very good financial position and allowing us to continue working on our Phase II expansion to double production at Bloom Lake with our own cash flow and not requiring any consumption of the debt or any more debt that we have on hand. 14:05 So the balance sheet in very good position, we have a net cash position of around one hundred and eighty three million CAD and remaining project for the Phase II just over two hundred million CAD.

So fully prepared to be able to finalize that Phase II project with cash on hand and cash that will be generated in the next quarter. 14:28 If we look at our growth projects, well, one of the highlights is that we're now at ninety seven percent detailed engineering completion.

So the potential surprises are behind us. We've now got pretty much one hundred percent of the plan on paper, everything is being delivered at site.

The work is continuing and advancing very well. Again, even if there is the current COVID situation and a lot of noise, we saw also some reports from neighboring production in Canada, stating that there is an issues with labor and equipment availability.

We have not been subject to that at Bloom Lake. There are some challenges, lie to you, but all-in-all, we're able to work through those challenges and continue not only getting our operations over nameplate capacity, but also advancing our growth initiatives on timing and on budget.

15:27 In the past quarter and the past month, we finalized some very critical elements at site to look at that slide on the right, maybe as an engineer, it looks a little bit more impressive, but what we did essentially is lift two hundred and twenty thousand pound structure roughly about thirty seven meters in the air. This structure is close to fifty meters long, a very complex tie-in between the Phase I and the Phase II to allow the crusher from Phase I to feed the Phase II plant.

This was one of the most critical items that we had to do at site in our Phase II project. 16:04 We had told the market that we were doing our tie-in project at the shutdown that was in October this year, and I'm happy to report that we completed this tie-in with no hiccups.

We did it safely, not injuring anyone, no impact on the environment, and also in line with the budgeted time that we had to do this. So by completing that project and other critical work in this quarter, we're happy to announce that we're going to advance the schedule for the Phase II project.

We had flagged that we wanted to deliver Phase II by mid twenty twenty two. 16:42 Now with these critical works completed and the advancement of the Phase II, we're expecting a startup up early Q1 fiscal year twenty twenty three.

So essentially sometime in April of next year, we'll be able to deliver the Phase II project. So very proud of what the team has accomplished during the past quarter and this past month, allowing us to advance our expansion project ahead of schedule.

17:09 If we look at where the market is going, well, one, very confident that the tonnes of Phase II will be able to be sold at a premium. We have all of the major steel producing companies in the world that have targets to reduce their CO2 emissions by twenty percent to forty percent by two thousand and thirty.

To be able to achieve that, we're seeing some small investments and partnerships being done between iron companies and steel companies, but million dollar projects to be able to evaluate new technologies, but realistically, the only known way to reduce CO2 emissions by twenty thirty is to use higher-grade material. 17:52 Initially, we had expected that most of this DR grade type material or high grade material would be targeted for the electric arc furnaces.

But what we're seeing today is that even blast furnace operators are looking for higher grade type material to allow them to reduce their CO2 emissions by twenty thirty. So the demand for our type of material is going to increase in the coming years.

So even if there's short-term volatility in the price, we still expect the premium for the high grade material to continue to be strong in the coming years. 18:28 What's very telling also is the fact that we're working on a feasibility study to allow us to produce sixty nine percent or over sixty nine percent DR grade pellet feed.

We do see the market shifting towards more pellets versus sinter product and we want to make sure that we're ready to be able to service that market So the company is working on a feasibility study to have a plant that would be able to take roughly about eight million tonnes of either Phase I or Phase II and process that into a sixty nine percent pellet feed material. 19:03 It's a fairly simple plant.

What we're looking at is just a grinding mill with some flotation columns and a little bit of filtering after that. So fairly simple project flotation is a technology that is well known in the world and specifically well known in Quebec.

So it's not a complicated technology to install or to be able to operate as well. So the team is working on that and we'll be able to deliver the results of that feasibility study next year, and this is going to allow us to be ready for what we see as potential increased premiums in the high grade market as the world evolves closer to twenty thirty with the CO2 reduction targets of our clients.

19:48 What's telling as well as when we look at who can actually produce this type of material, you can see that the bulk of the iron ore market is between the fifty six percent and sixty two percent iron ore content. When we get into a territory of around sixty four percent to sixty five percent fifty you get around a third of the material that's produced, which is typically more the high grade market, but closer to the sixty eight percent, sixty nine percent material, there's very few projects that are being done around the world.

20:17 What's interesting as well as when you look at the capacity for the steel mills to pay for higher grade type material, well, an increase in two percent of iron ore in the -- for our clients equates to around the twelve U.S. dollar per tonne saving in their operating cost.

So not only does this make sense on a CO2 reduction front. It also makes sense in terms of productivity and we can see that it also reduces their operating cost to use higher grade type material.

So, we can see that not only for carbon credits or carbon taxes is this material going to be in demand, it also allows our clients to reduce their operating cost. So they will be fully incentivized to be able to use and pay premium for this high grade type material.

21:07 Finally, one of the projects that we are working on is a drill program that we're doing with Caterpillar. We're very happy to announce that Caterpillar has chosen Bloom Lake as their partner to be able to complete and finalize this technology.

They could have chosen any project around the world, but because of the skilled workforce that we have at Bloom Lake, the high quality equipment that we have at site and the partnership that we have with Caterpillar they selected our site to start working on a drill to mill strategy. 21:42 Essentially, what we're doing is that we're using artificial intelligence and automation to be able to have the drill learn about the way that it's drilling, and this will allow us to have specific recipes for each hole in terms of the explosives that we use.

Why is this important? It allows us to reduce the CO2 emissions associated to blasting and it also allows us to use less explosives, which essentially is going to reduce our operating costs associated to the drilling portion.

So a very beneficial project for the site and very happy that Caterpillar has chosen us to be able to implement this technology at site. 22:24 So, all-in-all, very proud of what the team has been able to achieve in the past quarter.

We have very strong operational results, a very good news on our expansion project, which is going to be delivered ahead of schedule and on budget. So all-in-all a very good quarter for us and more than happy to answer any questions that you might have.

22:54 Operator, I think we can turn over to question at this point.

23:39 Thanks. Thanks for taking my question and good morning, everyone.

I wanted to follow-up on the acceleration of development for Phase II that you mentioned. So I think I heard you say, you now expect it to be completed and to start ramping up beginning around May twenty twenty two or in Q1 fiscal twenty twenty three?

Is there anything specific that's driving this or just all around execution, and can we expect any impact on CapEx from accelerating this in terms of any additional CapEx that's required? Thank you.

24:08 Yeah. Thanks for the question.

Right now, we're not expecting additional CapEx, if there is, it's going to be marginal and what you heard is correct. We're looking at accelerating the Phase II project in Q1, so early Q1 of fiscal year twenty twenty three.

It's an overall sort of achievement. The team has been more productive than what was planned And if you remember, also one of the elements that we needed to work on was to make sure that we're not only producing the tonnes at site, but that we can actually get those tons to market.

So, we worked very well with the port to find creative ways to make sure that we're able to get those tonnes to market and we feel very comfortable now that not only the mine will be able to be ready, but the port will be ready as well to deliver those tonnes in late April of next year.

25:02 That's great. Thank you very much.

25:05 Thank you, Daniel.

25:15 Hello, everyone. Thanks for taking my question.

Could you talk more about your direct reduction production in terms of potential volumes for Phase II and where you're generating the most interest for the product?

25:29 Yeah. Thanks for your question, Gordon.

So what we're seeing right now for the DR grade type material, most of the demand is coming from the U.S., the Middle East and Europe, and also from Japan. So, we do expect in the future that China and India will also increase their demand.

But right now those are the markets that we are seeing the most excitement for this type of material. Why I’m using the term excitement is because there's very little projects around the world that can actually produce this type of material.

And it's very beneficial for our clients in terms of operating cost and CO2 reductions. What we're doing now is a feasibility study to be able to process eight million tonnes per year of material that we're producing, so essentially half of the production of Bloom Lake once Phase II is up and running.

Would it come from Phase I or Phase II that's still being discussed, but the first step that we're looking at is eight million tonnes per year.

26:33 Okay. That's great.

Thanks very much. And for the Kami project, do you -- plan on including various scenario analyses for standard production versus direct reduction quality and also pellets if that research pans out?

26:51 Yeah. Thanks for the second question, Gordon.

So what we're looking at with Kami is to increase the grade of the material that's one of the elements that we're doing. The feasibility study done by the previous owner had the product at around sixty five percent FE.

We feel that the ore body can do much more than that so that's what we're working on. And our view is that there's going to be an increased premium for the higher grade type material.

And we separate the 65 index, to what we call higher DR grade market. And we do feel that in the future, there's a good possibility that there's an increased premium for the sixty eight percent, sixty nine percent type material.

So we want to make sure that Kami is able to deliver into that market into the future.

27:37 Okay, That's excellent. Thank you.

And just one more if I may. So are you still producing a couple of hundred thousand tonnes of direct reduction each quarter?

27:46 We have not produced this year any DR material. It's not because the demand is not there, but we're fully sold.

So if you remember last year, we had an opportunity to produce a few vessels of this type of material because we had clients that shutdown some operations or reduced operations during the COVID or initial months of COVID. So that allowed us to not only prove on a pilot scale, but also fully commercial scale that we can produce that material, but those clients this year are producing at close to one hundred percent.

So we were fully sold out. But for the future, once Phase II gets into production, we'll be able to sell more into that DR grade type market.

28:26 And just to give a bit of color also on our contract. We don't have typically very long-term contracts in terms of the quality that we sell.

And most of the clients to who we sell today have hinted that they would be willing to look at higher grade type material in the future. So we're not locked into the sixty six percent material long-term, if we see an opportunity in the future to produce higher grade material, we'll be able to service that market debt.

28:58 Okay. That's excellent.

Thank you very much. I appreciate it.

29:01 Thank, Gordon.

29:10 Hi. Good morning, guys.

You mentioned just the technology to be used to generate the sixty nine percent DR material is fairly simple rough of flotation to regrinding. Is it fairly minimal capital investment too or is this a fairly significant capital investment?

29:31 Yeah. Thanks for the question, Craig.

When we look at a flotation plan like that, we're not looking at billions of dollars of investment. This is – and the order of magnitude of a few hundred million dollars.

Obviously, once we get the feasibility study, we'll be able to inform the market on the real price, but it's fairly small CapEx compared to let's say, full expansion because you're not investing at the mine, you're not investing in infrastructure, it's basically just a box that has a grinding mill flotation cells and some filtering capacity. And as you know because we get power at very competitive prices around four point five CAD per kilowatt hours.

And there's a lot of available -- there's a lot of available power here in the Quebec that reduces significantly the CapEx associated to a project like that.

30:21 And you guys still thinking about the cold pressed pellets that you guys discussed at last quarter?

30:28 Yeah. We're working actively right now to pilot that.

So, as you know, the first steps were to be able to deliver the results in the lab. We got fantastic results that are showing similar characteristics from our pellets compared to a fired pellet.

And right now the team is working on the pellet scale project to be able to supply our clients. We've gotten significant demand for this type of material.

And we also saw other companies start announcing that the working on this cold bracketing (ph) technology. The advantage of ours is that it's got a very strong tumbling factor, which allows us to not only produce them, but ship them and having them arrive in one piece at our clients.

So we're very, very dedicated to getting that scaled up though.

31:25 Okay. And would that be some of you guys include in your feasibility study or is that separate?

31:29 That will be subsequent to the sixty nine type material. So the team is working on that right now to be able to -- I think we'll deliver the sixty nine percent plant feasibility ahead of getting the final results for the cold pelletizing.

Once that is complete, we'll be able to continue working on that.

31:53 And obviously, it's great to see you guys accelerate the Phase II construction. How long you think it will take to get to kind of full production once you guys are finished the build?

32:05 Well, we'll be able to show that once we deliver the results. But realistically, what we're doing is we're taking people from operations, putting them on the Phase II project already.

This is part of the team that had already delivered the Phase I startup up and ramp up. So we're putting all chances on our side to get the quickest ramp up as possible, but very difficult to say right now.

We have in our feasibility study is roughly about six months to reach commercial production, but we're hoping we could do a little bit better than that.

32:40 Okay. Maybe last final question for me, just maybe an accounting question.

You guys had a large buildup in the work capital this quarter. I know some of that was due to the boats that were shipped but they hadn't received the cash.

Do you expect some that to reverse this quarter? I mean you could just talk about why or so large this quarter.

33:02 Yes. This is Natacha.

Thanks for the question and thanks for paying attention to our working capital. I don’t expect that this is going to continue the positive working capital injection.

This quarter was really as stemming from the eye accounts receivable at the last quarter. And this quarter, we've cashed all of these accounts receivable and now there are more at the regular level.

And also last quarter, there was a big -- in Q1. I mean there was a big payment for the income tax.

And now we're just back reverting to the installment. So you're not going to see this positive working capital for Q3.

33:45 Okay, great. Thank you, guys.

33:47 I'd like to follow that we were told that people can no longer hear us. Operator, can you confirm the sounds coming through, okay.

34:02 Okay. Perfect.

Let’s carry on.

34:10 Hey, guys. Thanks for taking my question.

Just in terms of capital returns, I know it's so many guys have talked to doing in the past, I'm just curious, if there's some conditions that you might need to see before making an announcement on that and if there's maybe an estimate on when those conditions might be met now considering that the ramp up of Phase II or the commissioning Phase II has been moving forward? Thank you.

34:31 Yeah. Thanks for your question, Alex.

So we've already started our capital return strategy by buying back all of the preferred equity that we had in the company. So we did that few months ago.

And now we're fully committed to finalizing our Phase II project once the project is completed, then as we've announced in the past, we're working on a capital return strategy to be announced in the near term future.

35:00 That's helpful. That's all for me.

Thanks guys.

35:02 Thanks, Alex.

35:16 Hi. Good morning.

I just want to go back to the DR project you talked about potentially doing eight million tonnes at the beginning. Is that market driven?

I just want to make sure there's nothing technically that would prevent you from going to sell everything all sixteen million tonnes of the expansion of the higher grade material if you can produce so?

35:37 Yeah. Thanks for the question, Brian.

So there is absolutely nothing technically that would hinder us producing one hundred percent of that. So it's going to be market driven and our own internal view is that in the future, the demand for this is going to be very, very large.

So we do expect potentially to produce more of that DR grade type material.

35:58 Great. Thank you very much.

36:01 Thank you, Brian.

36:09 Thank you very much and good day, everybody. I also had a question on the DR grade project and I wondered how quickly would you expect the feasibility study to come forward and then you commented on the capital intensity earlier, what will be your return expectations for this project?

Thank you.

36:27 Yeah. Thanks for the question, Lucas.

So the team is working on finalizing that feasibility study roughly for third quarter calendar year of next year. So, we'll be able to come back to the market with those numbers once we deliver.

But the good thing about this project is that we're not looking at a very high CapEx compared to let's say, Greenfield that project coming on. This is just the addition of a new plant and the operating cost associated to a project like this are fairly small as well.

So, we expect to have a better view on the premiums as well associated to DR material next year. So that will allow us to be able to take a good decision in terms of the next step once the feasibility study is completed.

37:12 And on those premiums, you comment there, you've comment a few times on how strong demand appears from various markets around the world. How do you think these premiums still evolve over time do you take a few look they will people stay at kind of current levels, they will continue to increase, what's your expectation on these premiums going forward?

37:39 It depends on your view on where carbon taxes are going to go, but if you look at where Europe, Canada and potentially the U.S. are going, carbon taxes are not going down.

They're actually going to increase and the advantage of our material and the sixty nine percent material is not only does it allow the steel mills to have higher productivity and lower their operating costs, but it allows them also to reduce their CO2 emissions, which I think is going to be one of the main drivers in linking the premium in the future. So as these carbon taxes evolve, I believe that there's going to be a higher premium for this type of material.

38:15 Interesting and this analysis would find its way into the feasibility study as well?

38:21 Correct.

38:24 Appreciate it. Thank you very much and best of luck.

38:27 Thank you, Lucas.

38:43 Hey. Thanks very much, everyone for taking my follow-up.

Just a quick one on the Kami feasibility study. We noticed this was pushed back slightly either to the second half of the next year as opposed to the middle.

Was there any reason for that? Are you maybe prioritizing the DR study?

Thanks.

38:59 Yeah. Thanks the question, Daniel.

So essentially what the team has done is really dedicate all of their focus on Phase II. As we just announced, we managed to accelerate this schedule on that, so all of the team was focused on getting that detailed engineering finished and be able to accelerate that timeline line with the Board.

That's been delivered now. So that as you mentioned is pushed back a little bit the county.

But in my opinion, this is much more accretive for all shareholders to get Phase II up and running a little bit quicker and having a few months delay on the Kami feasibility.

39:35 Yes, perfect. That makes sense.

Thanks very much.

39:52 Good morning, well, good evening in Australia. Good evening, guys.

Thank you for the – that call has been great. Just have two questions.

Firstly, just wanted to ask about the underlying assumptions on your original price adjustment, I see for Q3 FY twenty two, you used an average expected price of one hundred and forty five -- one hundred and forty one point five CAD a tonne. I noticed it’s based on a 365 index forward price and anticipated a 365 premium.

Are you able to go into a bit more details on those values you used in that assumption?

40:29 There's no real detail. I think you've hit that correct.

At the end of the quarter, we have to use a forward price associated to the available data that we have. So there is no assumptions on our side.

We just use the forward price and when the -- we expect the tonnes to be delivered at our clients, and this is the way that we settle that provisional price.

40:57 Thank you. Appreciate that.

And second question, just if I can talk -- touch back on the previous question on regards to capital returns to shareholders. Appreciate that obviously you're well on track on your capital return schedule and factor that in with the preferred shares.

I noted on the last call we had in the last quarter, the Chairman sort of hinted that there would be no reason why dividend return to shareholders wouldn't be possible in the next quarter. Is there any sort of other than I guess the iron ore markets and things like that, but is there any specific details you can refer to us to why that wasn't achieved in this quarter and has been pushed back into later quarters?

41:43 Yeah. Thanks for the question.

I just want to make sure that we go back to the Chairman’s comments in the previous quarter. What Michael had mentioned is that the team is going to be -- start working on a capital return strategy in the next quarter.

Once the Phase II project has advanced a little bit more, and once we've completed all of our tie-ins between Phase I and Phase II. But there's still some other steps that we need to be able to get authorized with our financial partners to be able to go towards the potential dividend and still need to have that strategy defined.

So what was announced was not that there would be a dividend in the next quarter. It was -- that the team is working on that, but what we're very proud of now, is being able to announce that we're advancing the Phase II schedule that's going to be delivered ahead its time, and that's the most accretive project for all of our shareholders right now.

42:45 Thank you. I really appreciate it.

42:49 Thank you, sir.

42:53 So I'd like to pass it over to Michael O’Keeffe for a final remarks.

43:00 Thanks, David and thanks to the team. Look, sitting here as a Chairman of the company, for me, I couldn't hope for a better results with the team and how they've operated as a shareholder, as a major shareholder over the moon with the result.

And if you look at a six hundred million CAD EBITDA so far for a half year, heading towards a one billion CAD and market caps just over two billion CAD, I'm puzzled that a lot of investors are potential shareholders see it differently. 43:37 It seems that the world's run on motion this day, whether it's green or whether it's power, I sit here smiling looking at the UK, gas prices going through the roof because they believe that twenty five percent of their power generation is going to come from wind power.

The wind doesn't blow as five percent and neither using gas. Strangely enough, the world is driven on a motion, stop looking at a lot of facts sit behind us.

Dave has talked about us going green. We're already green.

The Board had a strong debate last night about this particular issue. 44:13 And it's -- every Boards and every government have green they can be, and how many electric cars we can use, but no one has thought about the process of getting there.

And what concerns me is I believe some governments of the world again to bankrupt the world with their drive towards some of these stupid targets that they're setting and it's just not possible to achieve. I mean the latest announcement was Biden with all these wind farms all around the coast of the U.S.

And the amount of rare risk that's going to take we're not going to produce in the next twenty years. So I just wish people would sit down and take a look at things and take a quick facts that are happening.

44:54 But our workforce has been exceptional. And to me, or David is on the phone to me at night talking to me about the tie and he's up there with our COO sitting there at the operations watching these things happen.

And it happened seamlessly. And the world doesn't see any of what we see and how that workforce operate through that process.

And I can tell you it's absolutely amazing the achievement that to be where we are today talking about delivering Phase II in April. I mean, all of the estimates where we'd be lucky to have it by June next year and it wouldn't be ramped up until twenty twenty three.

Well, we're looking well truly ahead of that. So you reflect that on some of the EBITDA.

45:45 I suppose to question mark for everyone is where iron ore prices is going and where is steel demand? Again, the world's run on a motion and all you need is something that happen in China and Champion shares dropped zero point twenty CAD, zero point thirty CAD at a time overnight on a emotion, nothing to do with the facts of what's happening.

That drives us crazy, but we know what we're doing as a team. We know what we're delivering.

46:12 If you look at our operation in Phase II, we're struggling to get pipes, steel pipes and we're racing around to try and fill those orders to make sure we there in April. Now, what does that tell you?

Tells you that the steel demand is still going through the roof. But all of the sudden the market believes that we're falling into this great hole of lack of demand.

Well, China is the emotion. China has been cutting back on their steel production.

They're focusing on their Winter Olympics as they always do, but have you guessed, what the rest of the world is picking up that demand that they're losing. And there's very strong demand out of the U.S.

and India and the supply is picking up in those places as well. So all-in-all I see a very robust market going forward.

47:08 Again, there's going to be a lot of the motion that we all have to try and live with. But that's the best way of the world today and the way communications are, and the way the herd mentality is of a lot of these people that sit and making decisions and also releasing news on what they believe is how the world's is going to turn.

So we'll sit back and accept that. We'll keep driving forward in what we're doing and it's probably worth worthwhile me mentioning and just supporting David's comments on dividends.

We had to get to a point for this time, which was critical. That only happened nights ago.

So it'd be very difficult for us to be talking about dividends in this quarter when where commitments to the banks. And as David said our financial partners, not only the banks is that we had to get partially certain milestones, which we have achieved and now we can focus on this.

And David said the team is focus on delivering an early Phase II, which is so accretive to us, it's mind blowing. But look, thanks to all of those long term supporters that have been there with us.

I think they just as frustrated as what we are on the way the share price is going that the company is in very good shape and we are a great team of people that can deliver to you very good returns. So thanks again to all those support of shareholders and also publicly thank my team for their huge efforts in being able to achieve what we have today.

48:50 Thank you, operator. I think at this point, we can disconnect the call.