Sibanye Stillwater Limited

Michael J. McMullen - Chief Executive Officer, President, Executive Director, Chairman of Technical & Ore Reserve Committee, Member of Audit Committee and Member of Health, Safety & Environment Committee Gregory A.

Wing - Chief Financial Officer, Principal Accounting Officer and Vice President

David Gagliano - Barclays Capital, Research Division Sam Crittenden - RBC Capital Markets, LLC, Research Division Sam Dubinsky - Wells Fargo Securities, LLC, Research Division Garrett S. Nelson - BB&T Capital Markets, Research Division Daniel McConvey

Thank you very much, and thanks, everyone, for dialing in. I'll be hosting this call today, and assisting me will be Greg Wing, our Chief Financial Officer; and Mike Beckstead, our IR Manager.

We have a presentation, which is out, and I will refer to that during the course of the call today. I'd like to, as a first step, just refer everyone to the forward-looking statements, and please ensure that everyone has read that at their leisure.

Moving on to Slide 3 on the deck. The first quarter highlights are our all-in sustaining costs for the first quarter this year were down 7% from the previous year to $788 an ounce.

A large part of that reduction came about through our corporate overhead reduction, which was down 53% year-on-year to just over $10.8 million. Our mine production, which we previously released, was up about 2.8% from the previous year to 130,700 ounces of PGMs.

That's really -- that good result was driven by very strong performance in our East Boulder operation. Our recycling volumes, as we previously announced, were down to 101,500 ounces.

We saw that decrease primarily as a result of the very severe winter weather we experienced here. We can say that our shipments have increased significantly during our Q2.

We finished the quarter with a very strong liquidity position, and our cash and investments totaled $474 million, in addition to which our accounts receivable went up by circa $20 million as well, which we received early in Q2. Moving to Slide 4, the table here, which runs through our first quarter results.

Again, if you look at the production, up slightly. Our total cash cost mined went up slightly as well.

However, we now focus much more on our all-in sustaining cost per mined ounce, which was down 7%, again, driven by a large reduction in corporate overheads. Capital expenditures were also down slightly, and overall, that was -- it was quite a good result, I think, for the first quarter.

We are making some substantial changes and improvements in the business. Not many of those have seen impacts in the first quarter.

We expect to see them in the following quarters. Moving to Slide 5.

We're disclosing some additional cost info now that we have not previously done before. If you look at our all-in costs on a cost-per-ton basis, and these are short tons, not metric tons, for the Stillwater Mine, you can see on the bottom line that our cost per ton has gone up year-on-year from about $229 to $275 a ton.

And that, really, has been driven by the mining cost going up and a lower recycling credit, to a large extent. And similarly, at East Boulder, we've seen a similar cost increase, although the magnitude is somewhat less.

But again, most of the cost creep has been in our mining area. Also, if you look at these tables, you will see that when we're looking at reducing our cost, our largest single cost area is our mining costs, and so that's the area that we're really looking to make significant improvements on.

Our milling costs have been fairly constant. Our downstream processing costs have been fairly good as well.

Admin has gone up slightly on a cost-per-ton basis at the site. And again, byproduct credits have been fairly flat.

Moving to the next slide, Slide 6. On a quarterly EPS basis, our earnings per share this quarter just finished was $0.15 a share.

You can see that the last 2 quarters, our earnings have been negatively impacted by impairments on our 2 foreign operations. But even compared to the same period in 2013, our earnings have gone up despite our realized prices being slightly lower.

We're approximately 2% lower on realized price for this quarter versus last year. But despite that, our earnings have gone up, which really is reflecting our cost control.

We see a lot of potential in this area. It is a work in progress, but we really are looking to drive our costs down, which brings me onto the next slide, which we've titled Securing the Future.

This is -- there's a lot of information on this slide. I'll spend some time on it.

This is a program that we're rolling out internally here, and it really is about securing the future of this business. The goal of this, and this is not a formal guidance, but it is a goal, is to reduce our all-in sustaining costs by around $100 an ounce from last year's levels.

And what does that mean? That means getting us back into the low $700 in terms of an all-in cost basis.

As a company, we're very focused on efficient allocation of capital resources here. We have seen some significant cost increases since 2011, and if you look at the graph that is sitting down on the right-hand side of that page, you will see from 2011 to Q1 of 2014, on our cash costs, you just saw a consistent increase quarter-on-quarter of our costs.

You see the same sort of trend in our G&A and you've seen a similar, but maybe not as marked, trend in our capital spending. We've also plotted on that graph our labor.

And if you look at the bullet points there, labor is the largest single component of all-in sustaining costs. Of our 2 operations, it's between 54% and 58% of our total cost of each site, depending on the site.

We're addressing that through operations and employee restructuring. We have commenced a restructuring of our personnel.

During 2014, so far, to date, we have restructured 48 salaried positions. 35 of those have been in Montana, 9 at Marathon in Canada and for 4 at Altar in Latin America.

We are also offering up to 50 voluntary separation opportunities for our hourly employees, and this is a process that is underway. The takeup of that will be anywhere between 0 and 50.

And we're recognizing second quarter restructuring costs in the order of $4.3 million for the salaried positions, plus the cost for potential voluntary separations. And again, that is a process that's underway.

We'll be able to quantify that in the Q2 numbers. During Q1, we incurred approximately $360,000 of restructuring costs.

Turning back to the graph that's on that page, you can see that our cash costs and similar trend for all-in sustaining were going up. The bulk of the restructuring has occurred after Q1 this year.

So the impact of these -- the lower headcount has not been felt in our cost numbers yet in terms of what we reported. We expect to see the benefit of that coming through in Q2 and onwards.

We are changing the culture here to be focused on returns for the business. We have a disciplined approach on cost in all areas of the business now.

And again, we are seeing that in our all-in sustaining costs coming down now. We're doing that.

We're not doing that by compromising our safety and environmental standards. Our social license and the safety of our people is absolutely paramount for us as a business.

We are very clear that we do not have a business in a long-term basis if we compromise our safety or social license. We've had a very good start to safety in 2014.

It is one of the best starts that the company has had. And we're working very hard to continue on with that.

The trend has been very positive in the safety area. We believe the productivity improvements and cost savings are essential to position this company in the lower portion of the cost curve.

Our goal, really, is to drive us back to the bottom quartile of the cost curve. Moving on to Slide 8, the Key Performance Indicators.

So we've started reporting all-in sustaining costs now for the first time last quarter. This is the measure that really has become the standard, particularly in the gold industry and, really, in precious metals industry.

We've adopted this. We think it's a better measure than cash costs or total cash cost to measure the health of the business and how we're actually doing.

So as we've mentioned earlier, our all-in sustaining costs quarter-on-quarter from last year to this year, we were down 7%, $57 an ounce. We achieved that despite production only being up slightly.

And I think from the graph on the top of that page, you can see that our production wasn't as high as it was in the previous quarter in December, but we still managed a very good result on our all-in sustaining costs. We are being very disciplined to our approach in capital deployment.

We're looking at operational efficiencies and how do we do things smarter. This is not a question of working harder.

It's a question of how do we change our business to do things much more efficiently than what we've done in the past. We have decreased our guidance for the all-in sustaining costs slightly to a range of $800 to $850 an ounce.

And as we've mentioned on the Securing the Future discussion, our goal is to reduce that all-in sustaining cost by around about $100 an ounce from last year's levels to the low-$700 range. If we look at the table, you can see here that despite our total cash costs actually going up from the previous year, we actually drove down our all-in sustaining costs by a fairly substantial reduction in corporate SG&A and admin costs and a little bit of benefit from the capital.

Moving to the next slide, Slide 9. As I noted earlier, we saw our recycling volumes were negatively impacted during the quarter by weather.

I believe that on the fourth quarter earnings call, I did mention we had a little bit of an effect of that in the fourth quarter of last year. I also mentioned on that call that the weather was still quite cold and we have a lot of snow here.

And quite simply, this issue is twofold. One is that when it's minus 30 outside, people tend to not want to go and get under a car and cut the catalyst off.

And similarly, we actually had significant weather impacts here from trucks physically not being able to get here. If you look at the graph, you can see our recycling material tons per day fed.

So January, we were low. You saw a bit of an increase in February.

You saw March increase. And by April, we're back about where we want to be.

So this was predominantly a seasonality issue. We are where we want to be now.

We really do want to continue to grow this business, and between April and January, we've seen about a 47% increase in our volume over that period. We're exploring quite a few avenues to expand this business.

We see this is a core business for us. We really would like to expand it, and we're exploring lots of different avenues.

Going over to the Slide 10. I just want to talk about our metal inventory.

During the last year, we've seen a buildup of just over 21,000 ounces of metal buildup with the inventory. And if you look at the graph, that inventory is broken up between our smelter, our base metal refinery, the BMR, and slag stockpiles.

We saw the slag stockpile grow by just under 8,000 ounces over a 6-month period last year. We identified some processing capacity issues at the Stillwater mill, where that slag is processed.

We've rectified those, and that's allowed us to move that slag through the circuit. If you look at that graph again, you can see that the slag has been reduced, the green line part of the chart.

But now we have to get it through the smelter, which we're doing, and then we have to get it through the BMR in order to turn it into finished product to sell it. We also had the slag cleaning furnace online in the last quarter, which contributed to about 5,000 ounces in smelter inventory.

The good news is that in the current quarter, Q2, we expect to see somewhere between 15,000 and 20,000 ounces of additional sales from inventory over and above production. So this material is sitting in inventory.

It's working its way through the system. We will see that hit our sales over the next few months.

We believe that our inventory levels should return to normal by the end of this year, maybe third quarter, I guess. We're often asked about what pricing we achieved for our product.

We're starting to give some guidance on this. So during the first quarter, the metals sponge that we sold -- we saw a premium in palladium.

That ranged anywhere between $2 and $8 an ounce during the quarter. Again, there is public information out there that people can track this down.

We had seen reports of high premiums. I think those premiums were for very small lots.

Typically, we're seeing in that range. We've seen a modest premium on the platinum price.

It is varied. And for Q1, our average realized price on our ounces from our mines was $907 an ounce and on our recycled material was $980 an ounce.

And the reason for the difference is there's a slightly different mix between platinum and palladium, in those 2 materials. As we sit here today, the basket price for our mined material is sitting at around about $945 an ounce.

So we had seen, over the quarter, a strengthening metal price, obviously, which we're getting the benefit for now. Moving on to Slide 11.

I just want to give some updates of some of the things and the projects we're working on to see how we can make this operation more efficient. At the Stillwater Mine, we had a historical, very minor electrical component value, which lead to reduced throughput through the mill.

And that also led to a buildup of slag because we weren't able to get that through the mill. We identified that issue.

It was repaired. The bottleneck was eliminated.

And as you can see, during -- on that graph, during the quarter, we can consistently increased throughput, and that allowed us to get that slag inventory through the plant so that we can now move it into the smelter and actually turn it into money. We were about 20% above budget for Q1 in terms of mill feed at that mine, and we're working to identify other opportunities.

This is but one of the opportunities that we can see in the operation to improve things. Going on to corporate governance.

We have obviously separated the roles of Chairman and CEO. We've redesigned our compensation structure to align management and shareholder interests.

If anyone cares to read the proxy, it's out in the public domain, but in summary, the long-term incentive plan is consistent of shares. A small component of it is time-vested.

The majority is vested based on a 3-year look-back. The metrics are 40% of that return is based on total shareholder return, which is split into 3 components, basically, how our share price performs against ourselves, how we perform against our peers and how we perform against the basket price of our metals.

There's 40% of that metric is based on the increase in our net book value per share, and 20% is based on increasing free cash flow. Very simple metrics.

We think that they're tied to things that shareholders care about, and the management incentive is, therefore, very closely aligned to shareholder outcomes. The proxy results that we had, we've had the general meeting yesterday, all 7 board members were reelected with an average vote in favor of 98.3%, which was a very pleasing result.

And also pleasingly, the advisory vote on the executive officers compensation, we had over 93% votes cast in favor of that. And you compare that to last year, where only 33% of the votes were in favor.

So we'd like to think that the compensation structure we've designed now works for shareholders. It works for management.

We think it incentivizes management to do the best they can for the business and to provide the right outcomes for shareholders. Coming on to Slide 13, up to our Montana projects.

We have 2 large projects that have been underway. The first one is Blitz.

This is a longer-term project. It's a 23,000-foot development to the east of the Stillwater Mine, effectively opens up a large area for further development and exploration.

It's currently slated for completion in 2018, and we're looking at ways that we can expedite that project. This is our main development project that's underway.

Graham Creek is the other project, which is at the East Boulder Mine. It basically opens up 3 miles of strike length of that ore body.

It's pretty well at completion. We're just in the process of putting the final support equipment in there.

We expect to see production out of this area in the third quarter this year. And what it does is that, one, it gets us into an area where we're mining on rail haulage or with access to rail haulage, so cheaper mining cost.

But also, it allows us to get more tonnage out, and so the East Boulder mill currently only runs 4 days a week. Once production out of Graham Creek comes on, it'll allow us to run an extra shift in that mill, which will drive a step change in production from that operation.

Going on to Slide 14, on the portfolio management update. We have 2 projects outside of Montana: Marathon in Canada and Altar in Argentina.

At Marathon, we have an economic study, which is ongoing. At current metal prices, this project does not provide adequate shareholder returns.

We have a very good joint venture partner there in the form of Mitsubishi, so between us and Mitsubishi, we're assessing ways to try and get this project to where it provides an adequate return that we can take in full. We do not expect a decision point on that project now until, really, mid-2015.

We've reduced our staffing there by 50%, and overall spending has been scaled back. And if you look at the graph there between the 2 projects, we've cut our year-on-year spend on these 2 projects by about 60%.

Altar down in Argentina is a non-core asset by virtue of the fact of its size and its commodity. Our core business going forward is profitable PGM business in low-political risk jurisdictions.

We have a minimum level of project activity down there. Our spend on that is likely to be in the order of $3 million this year.

We are looking at the best alternatives to realize value from it. We have reached an agreement with IPEEM, who holds some of the licenses down there, to the extend some of those mineral leases through to August of next year.

We've reduced our staffing there by 4 positions. And we are spending money on essential services, activities that are required to maintain tenure and importantly, the economic sort of scoping studies that we need to do to assign a value to this project and then determine the best way to optimize that value for the company and shareholders.

Going on to Slide 15. We've updated our guidance.

We've -- I guess you could say we've tweaked the guidance. We've left our production the same.

Based on our first quarter actuals, we think we're comfortable with that guidance. As I have said in the past, we are reviewing all of our mining stopes to ensure that all of the ounces we produce are profitable.

There is some opportunities potentially to reduce production in some areas, but conversely, we believe there's potential to significantly enhance productivity, which will drive production up. So we're leaving the guidance where it is for now.

We've reduced our guidance down slightly for our total cash cost. We've also reduced slightly our all-in sustaining cost per mined ounce down.

Corporate overhead, we've left where it is for now. We are working hard on that to see if we can reduce it.

The main change has been in our capital expenditure, both sustaining and project. We have reduced those down.

Again, there's a combination of both timing in this but also looking at how we do things and are there smarter or more efficient ways to use our equipment. And there has been some equipment dollars taken out of those capital budgets there.

It is a work in progress. There is a lot of work underway here, looking at how we do things, how do we do things more efficiently.

We will use every opportunity to drive our costs as low as we can, and we reserve the right to come back and update these guidance at various times during the year. So in summary, I think the first quarter of this year was a good start for Stillwater.

I think our employees are embracing change. I think that we've got people that are coming up with some very good ideas that we are exploring as to how we make this place more efficient.

We've seen some very good evidence of that in things like the -- getting the Stillwater Mill throughput up and getting the slag stockpile through, reducing our overhead significantly, looking at our capital budget. We are taking steps to secure the future of the company.

That is really what we're about here, is we want to drive our costs down so that we are in a very cost-competitive position. We are achieving progress in all of our strategic focus areas: our financial optimization, operational improvement, project management, corporate governance.

I think we've delivered on what I rolled out in January in terms of the vision for the company. We have delivered and will continue to deliver.

We are achieving very positive results on capital allocation and cost control. We think there's an improved outlook for both our total cash costs and all-in sustaining costs.

And finally, the PGM fundamentals remain very strong, driven by both the North American and Chinese ore markets and signs of recovery in Europe. And obviously, on the supply side, we're seeing continued supply disruption out of South Africa strikes and the issues with Russia.

So we think we're in a very good position. We will continue to strive to do better quarter-on-quarter, and we think this company has a very exciting future ahead of it.

That's all I have today, and if anybody's got any questions, I'm happy to take them.

I wanted to focus in a bit on the cost reduction, longer-term cost reduction goal of $100 per ounce over time. First question, what time frame are you thinking about in terms of achieving that target?

Well, I wouldn't like to be pinned down exactly on it, Dave, just in case someone took that as guidance. I think over the next 18 months, 2 years, this is sort of a broad goal that we have.

And again, if you look at where we are now, we're already part the way down that path. But obviously, the first $50 is much easier than the second $50 reduction.

So in that 18-month, 2-year period, broadly.

Okay, great. And then if you could just split the $100 target into the buckets in terms of how much do you expect in the form of lower sustaining CapEx per ounce versus lower mine costs versus lower SG&A.

Well, I don't think we can go into detail, but I think that's a -- it's a combination of all of those. We've already made the savings in the SG&A substantially, so I'm not so sure that there's significantly more that we'll be cutting out of that.

There will be a bit. I think the big buckets of cost that we clearly are looking at are our mining costs.

If you look at the table that's in there, you can see where our operating costs are really driven by mining costs. So it's very much in the mining cost and a bit of sustaining CapEx.

Okay, all right. And then I'm sorry, I'm going to keep going here.

I've got 2 more. The mining costs side of this, how much of that would be labor versus other things in terms of the targeted -- just a percentage or something?

Well, as I said, labor is about 54% to 58% of our total cost. So clearly, labor was a large proportion of that, hence, why we've been restructuring some positions here.

Okay. And then that ties to my last question.

Obviously, a long history here. Labor is key, obviously, to running these assets well, with unique mining process a bit.

And obviously, there is a history of labor-related issues. I think there's a contract coming up, I think, in '15.

So my question is, how do you think this cost-reduction initiative will be receive as you enter those negotiations?

Well, yes, labor is very important here, and I can tell you that the steps that we've taken have been after a significant amount of discussion with all of those parties that you've mentioned. And the salaried positions that we've restructured, I think it is really restructuring, looking at how do we change our business practices so that effectively, we can do more with less.

On the hourly separations that we're rolling out literally now, they're all voluntary. So these are not -- they are not forced layoffs.

And so again, this really applies to people that are -- it's a voluntary thing. If they decide that, perhaps, they might want to go off and do something else, this is an opportunity for them to take that.

I think we're not offering it to certain areas of the business as well, so certain areas where, historically, the company has been a bit tight on labor, miners, for instance, this is not applicable to that. This is more really around support staff is where we can see that we can do things a bit differently and not hinder or impact our production.

Yes, we do have a -- at the Stillwater Mine, we've got a contract which is up for renewal at the end of June next year and at East Boulder at the end of December next year. And I think it's important that we deal fairly with people.

We have made changes from the top. I think it's very important that everyone understands that starting with my contract, working down through the whole organization, we have restructured all of the compensation.

And so I think that's setting the right tone for those discussions.

Question on sustaining capital. You've obviously made some pretty big cuts here.

Is there a risk that that limits your flexibility in the mine in terms of access to certain areas and having enough working faces open? Just curious on how you've been able to make such a drastic reduction in your development CapEx.

No, I don't think so. I think we have ample faces available, and in fact, we possibly have too many faces available.

One of the things that we're working on is the -- we currently are spread all over this mine, almost like a shotgun approach. And we're looking at, is there a way to concentrate at mining fronts which would substantially improve our productivity per mine?

And these are some of the things that we're looking at. And so I have to say that at East Boulder, we see quite a bit higher productivity, and part of the reason for that is that is exactly what they do.

So no, I think the answer is no. We don't think that we've compromised anything.

We have a lot of flexibility in this operation. Really, it's just looking at -- this is a combination of 2 things.

One is timing. Just naturally, if you look at it historically, this company plans to spend a lot of capital at the start of the year and by the end of the year, doesn't actually manage to spend it.

And that is a pattern that's gone on for many years, Greg, I think it'd be fair to say.

That's true.

And the other is that we have cut some -- just cut some capital out. So it's a combination of those 2 factors.

One other point I might mention is although capital is down, if we look at the development spending within the mines, it's right on budget at this point. So we haven't really cut back the advancing of the mine.

Yes, that's right.

Okay. And then just similarly on the growth CapEx, which is presumably mostly related to Blitz, have you -- is it slowing the timeline, or are you just making optimizations to lower that?

Blitz is running a bit under budget, actually, at the moment in terms of dollar per foot advance. There was a little bit of underspend on Graham Creek from what we've budgeted.

And a couple of other -- some other equipment items that we actually decided we didn't need. So just to give people an idea of how much equipment we have at this operation, at the Stillwater Mine, we have over 600 separate pieces of wheeled equipment.

And that includes rail cars and everything. But we have quite a bit of equipment here, and so we're looking at how we rationalize whether we actually do need all that equipment and need to replace that every year.

Okay. And then you talked about improvements of the throughput at the Stillwater mill.

Is there going to be a corresponding increase in mining throughput to be able to fill that excess capacity?

Well, that's what we're looking at from productivity gains now. And I guess my approach is that when I look at these operations, as I look at the bottlenecks, and then you debottleneck it and move it onto the next bottleneck.

And so going back, last year, the bottleneck in that operation was the mill. We've now debottlenecked that.

Now we're looking to push the mine to deliver extra tons. So it's a work in progress, but we think there's some potential for that.

Whether we could fill it up, that's a different story.

Is the PGM content from slag processing, is that mostly pure margin? And also, are there any byproduct income credits associated with that slag?

And then I have a follow-up.

Well, let's just say that the revenue from the slag is certainly higher margin than the ounce -- per mined ounces because the mined ounces have got $180 worth of mining cost, a ton on them. And the slag was already -- had already been processed and had -- for the most part, the bulk of its costs are already spent.

So it was sitting in inventory. It would have had a cost assigned to it in inventory, but from a cash flow point of view, those ounces, when they hit our sales in Q2, predominantly, I expect they will have a low cost for those.

Okay. And are there any byproduct income credits associated with that, or is that just pure PGM content?

Very small.

Okay. And then besides extra tons from the mine, is there another process to gain share in recycling?

Is it a function of pricing, or is there any other way to gain new customers to scale that business? And also, as a corollary to that question, once it scales, do you think a potential spinout is in the cards for the smelting and recycling operations?

Well, let me address the first bit first because that's the easy question. There are multiple ways you can increase market share.

One, which we'll not be doing, is to obviously reduce your margin and effectively buy market share. We don't think that's a very good business model.

I think that where we've been successful is we have some very market-leading sampling and assaying technology here, where we can deliver very fast returns on assays for people and therefore, get [indiscernible] faster. I think that we have a -- we're a market leader there, and that's one area where we can grow.

We're also looking at markets where, traditionally, we have not had a big footprint in as a means of getting into. And I'm not going to go into the details on the call as to where those are, but we have been sourcing additional material from some of those markets.

And we're looking a little bit broader than where we've historically looked. So they're the main ways of growing the business.

And once we get that business up to capacity -- and let's be clear, we are a long way from capacity in terms of physical capacity. What we do with that business -- well, look, all options are on the table.

I think I've said before that we will look at all options that create value for shareholders, and that could be anything from doing what we do today to some sort of value creation or realization point for that business. But at this stage, my goal is to just maximize the business first, and then I'll look at how we determine the value for shareholders later.

Okay. And my last question is, given the South African issues and the Russian political issues, are any of your customers concerned about availability of supply?

I believe typically, your contracts tend to be pretty short-term in nature. Do you think that changes over the next couple of years?

I would think that it's a very -- I don't know how to put this. It's a very uncertain time in the PGM world.

I think for the most part, our customers are very concerned about locking up long-term metal supply. And I think that what we do on the sales side will be determined by what commercial terms are available in the marketplace on any given day and whether we decide that's the better deal than doing what we're currently doing.

I can't really go into too much detail on that.

Looking at the production guidance and the new cash cost guidance, do you have a breakdown you'd be willing to share of what's embedded in there for the individual mines? I mean, is it fair to assume higher year-over-year production at East Boulder with the Graham Creek ounces in the second half and flattish to maybe slightly lower volumes at Stillwater?

Can you just help us with how we should be thinking about your production and cash cost expectations at the individual mines?

Yes. We don't give guidance by mine, but that's probably a fair comment.

I think in terms of production. Obviously, East Boulder is going very well.

We don't see that dropping off. And as you say, once Graham Creek comes on and we add that third shift, we do see a bit of a bump in production towards the back end of this year.

And we are looking at ways to see whether or not it's possible to sort of try and advance that just given how well East Boulder is performing. And at the Stillwater Mine, fairly flat production, I think, year-on-year is probably about where we're looking, maybe up slightly.

But again, there is a big review process underway, as I indicated on the call, about looking at do we actually make money out of all the ounces we mine, are there better ways to concentrate at mining fronts, which might give us significantly higher productivity. So one of the issues we have with sort of giving guidance on a mine-by-mine basis today, there is a large amount of work underway, which may sort of change our thinking in the next few months.

Okay. That's great.

And then on Altar, I don't think you provided a timeline for a decision on that asset like you did for Marathon. Do you have any update there, or are you still considering all your options?

We're still considering all of our options, and the timeline there, to a large extent, will be driven by multiple things, but 2 of which will be the capital markets view of Argentina as an investment destination and the ongoing scoping work that we have underway now. The latter probably is a 6-month exercise.

It's a bit easier to tie down. The former, in terms of capital markets view of Argentina, that very much is a waiting game.

We are under no pressure or rush to realize our investment in Argentina. It has minimal holding costs.

It is in the top 20 largest undeveloped copper assets globally. We do think it has substantial value, and so we're under no rush there.

We think that we can realize some decent value out of that theme under the right circumstances. And I would say that based on many discussions I've had, the capital markets view of Argentina appears to be improving.

Still has some way to go, potentially, but certainly has come through worst of the world's view. So we think that Argentina will turn around at some point.

It is a very good project. It is just not a non-core -- it's a non-core asset for us.

I had a question on sustaining CapEx, but I think you've dealt with that one. For Marathon, what -- is there a rough price where the returns would be adequate?

Say, palladium was at $1,000 dollars, would that work?

Well, I'm not really going into the details, but let's just say that the price would need to be a reasonable amount higher than where we sit today. And we would need to be confident that that price would be around there sort of 10 to 15-year period to justify.

It wouldn't work for us if we just saw palladium spike to $1,000 an ounce, sat there for a month, and then we would push the button. It's not -- we would need to have some confidence that that price would be around for sometime.

And we'd also need to see copper prices strengthen as well because as you probably know, it's a PGM copper project, and so it is sensitive to the copper price also. There's a multitude of things we're working on on that project which may potentially get it to where it needs to be, and they are related to capital cost, mine life, some processing options, which could be interesting in terms of our core business strengths down here.

We obviously do have a PGM smelter, which does have some small copper capacity here. We don't currently have the ability to treat the Marathon material down here, but there are some interesting things that we're working on, which, if it works, may get that project to where it needs to be.

So we -- I don't really see it as just waiting for metal prices to get to a certain number, and then we push the button. I think there's a multitude of things we're working on, probably not one single one of which will be what drives this project forward.

It will be a combination of all of the above.

All right. Thank you very much, everyone.