Copper Mountain Mining Corporation. (OTCPK:CPPMF) Q2 2022 Earnings Conference Call July 25, 2022 10:30 AM ET
Company Participants
Gil Clausen – President and Chief Executive Officer
Don Strickland – Chief Operating Officer
Rod Shier – Chief Financial Officer
Letitia Wong – Executive Vice-President, Strategy and Corporate Development
Conference Call Participants
Orest Wowkodaw – Scotia Capital
Shane Nagle – National Bank
Stefan Ioannou – Cormark
Pierre Vaillancourt – Haywood
Operator
Good morning. My name is Michelle and I will be your conference operator today. At this time, I would like to welcome everyone to the Copper Mountain Mining Corporation Second Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session [Operator Instructions]
Please note that comments made today that are not of a historical factual nature may contain forward-looking statements. This information by its nature is subject to risks and uncertainties that may cause the stated outcome to differ materially from actual outcomes. Please refer to Slide two of today’s presentation and Copper Mountain’s second quarter 2022 Management’s Discussion and Analysis for more information.
I will now turn the call over to Gil Clausen, President and CEO of Copper Mountain. Please go ahead sir.
Gil Clausen
Thank you. Good morning everyone. And thanks for joining us today. Turning on Slide three presenting with me today are Don Strickland our Chief Operating Officer, Rod Shier our Chief Financial Officer and Letitia Wong our Executive Vice-President, Strategy and Corporate Development.
I’ll begin with a summary of our second quarter; Don will follow with further details on our operating results and an update on our plant improvement projects. Rod will present our financial results and Letitia will then provide an update on our guidance for the year and growth projects. Finally, before we open the call to questions, I will review a few of what we have as upcoming catalysts that we expect to deliver for the remainder of the year.
Turning to slide four, production is always expected to be back — later this year with stronger second half results for a number of temporary challenges that we faced during the second quarter that impacted us more heavily than anticipated. These challenges contributed to production results that were lower than we had initially expected and, and we’ve now turned the corner with many of these behind us. And we’re looking forward to delivering higher production and lower costs for the balance of the year and into 2023.
The impact to production during the quarter was primarily from lower grade ore and lower throughput specifically with respect to the crushing circuit. The mining of the last benches of Phase 2 from a lower grade area and the top cuts of the new North Pit, which was lower-grade and oxidized with some high clay content zones, created a sticky feed that impacted the crushing circuit performance with clogged chutes and crushers plugging. Further, we got behind a delay in the release of higher grade clean ore into Q3 and Q4 this year.
Post quarter end, we started seeing the release of the higher grade ore from Phase 4. We expect to see higher production from the balance of the year which will largely be driven by a few factors. First, we finished mining through the bottom of Phase 2 and worked through the top oxidized benches of the North pit. We will advance the clean ore in the North pit and Phase 4 of the main pit which will allow for higher recovery and support processing at our full design capacity.
Second, we expect grades to average around 0.30% Copper for the remainder of the year as we mine mostly higher-grade ore from Phase 4. And third, copper recovery is expected to increase further with the completion of our plant optimization and improvement projects. With increased grade, recovery, and throughput, we expect strong production in the second half of 2022, with the fourth quarter being the strongest quarter, and we will carry that operational strength through 2023 and 2024.
I’ll turn the call over to Don now who will provide additional detail on our operating results and development projects.
Don Strickland
Thanks Gil. Starting with Slide number five. The second quarter production level was similar to the first quarter with £13.3 million of copper produced. As Gil mentioned earlier, production for 2022 was always expected to be weighted towards the second half. However, second quarter production was lower than we initially forecasted. This was due to milling lower grade ore from low grade stockpile, a lower grade area of phase number two and oxidized material from the early development phase of the North pit.
In addition to the law of feed grades, mill throughput did not increase as much as planned due to the lower crushing circuit performance. The crushing circuit was impacted with processing oxidized ore from the top two benches of the North pit and wet, higher clay ore from the bottom of phase number 2. The crushing circuit continues to perform well with processing clean ore consistent with historical performance since 2014. However, we have started implementing improvements to the crushing circuit to sustainably achieve 45,000 tons per day on all ore types. Implementation of these improvements began in June and are showing positive results.
The mill increased throughput by approximately 10% quarter-over-quarter and processed all available crushed ore. The milling circuit is ready to process the design throughput of 45,000 tons per day, as it is available from the crushing circuit. Cost improved compared to the first quarter as we previously guided, and with the easing of several temporary costs. Costs remained higher than last year because of lower production in the industry inflationary pressures, notably in the cost of fuel grinding media, and mobile equipment repairs.
With production levels expected to increase throughout the remainder of the year, along with the reduction of temporary operating costs, and the completion of several sustainable products and capital projects we see costs markedly improving for the rest of this year.
Turning to Slide six, I’ll review our mining activities during the quarter. The focus continues on advancing phase number 4 and completing the waste stripping to expose higher grade ore, which will be the main ore supply for the mill for the remainder of 2022 and 2023. Mill production increased in the latter part of Q2, achieving 185,000 tonnes per day by index pit in June. We continue to implement improvements to further increase the mining rate. This is resulting in exposing higher grade ore from Phase 4 starting in late July.
Mine production has been impacted with supply chain issues impacting available parts, including parts of some of the mine production drills, drill availability, limited loss and inventory levels, which contributed to the delay in Phase 4 waste removal. We completed Phase number 2 during the quarter and started pioneering the North pit. The first one to two benches in the North pit are oxidized and we have mines through the majority of that oxide material to expose non oxidized ore. We did mill some of the North pit oxidized ore along with over 400,000 tons of low grade stockpile ore to provide mill feed during the quarter. Mine production is moving in the right direction to deliver high grade ore from Phase 4 in July as previously noted.
Turning to slide number seven, we have had a busy year implementing site improvement projects. This slide highlights the new improvement projects completed and in progress. Starting on the left side of the slide, the new filter press has also been installed and is in the final stages of commissioning. This will allow us to maintain the 45,000 ton per day milling rate during sustained periods of high grade without reducing mill tonnage like we were forced to do in 2021.
Moving to the right on the slide of the new cleaner flotation column, this column has been completed fully commissioned and is working well. The objective of this project was to provide additional cleaner circuit capacity to support higher, high cleaner circuit recovery, especially during periods of high mill feed grades or maintaining design mill time iterates. Moving to the right top right of this slide we see the ball number three project which is fully commissioned and ready to process the design mill tonnage. We have changed the Ball Mill number 3 feed arrangement in late Q2 to resolve issues which create a mill downtime and circuit instability. We will continue to optimize this in Q3.
On the bottom right side of the slide, we have the rougher flotation cell expansion, which is presently being constructed. This project has been impacted by supply chain challenges and is now scheduled for completion in Q4. The project will provide significant additional floatation retention time to increase recovery, especially on slower kinetic ore types. These mill improvement projects all provide performance gains and will add significant value over the life of mine. Slide eight outlines some of the details I’ve just discussed.
So I’ll now turn the call over to Rod to review our financial results.
Rod Shier
Thank you, Don. Turning to slide nine, as noted by Gil, the mine had an operationally challenged second quarter. Nevertheless, the company shipped and sold £12.9 million of copper, 5000 ounces of gold and 57,600 ounces of silver during the quarter and recorded sales of 59.1 million based on an average realized copper price of US$4.18 per pound.
The decrease in revenue compared to Q2 2021, was a result of lower sales volume and lower metal prices realized in Q2 2022 as shown on this slide. Cost of sales for Q2 2022 was $68.3 million as compared to $56.3 million for the second quarter of 2021. It should be noted that Q2 2022 cost of sale was net of $21.7 billion of deferred stripping costs as compared to $7.1 million of deferred stripping costs in Q2 2021.
The increase in cost of sales can largely be attributed to the increase in higher fuel and steel costs and increase maintenance contractor support required to assist with managing COVID-19 absences and other related workforce absences. This all resulted in a gross loss of $9.2 million for Q2 2022 as compared to a gross profit of $85.8 million for the same period in 2021.
Turning to slide 10, the company reported a net loss of $5.3 million for Q2 2022 as compared to a net income of $38.7 million for Q2 2021. Q2 2022 net loss is a result of higher operating costs and fewer pounds of copper sold as noted earlier, and is also due to a $15.9 million negative mark-to-market adjustment from provisional pricing on concentrates sales, as compared to an $8.8 million positive mark-to-market adjustment from provisional pricing on concentrate sale for Q2 2021.
In addition, the company realized a non-cash unrealized foreign exchange loss of about $6.9 million as compared to a non-cash unrealized foreign exchange loss of about $0.4 million in Q2 2021. A differential of approximately $6.5 million, which was primarily related to the company’s debt, this is denominated in U.S. dollars.
In Q2 2022, the company’s EBITDA was about $7.2 million and adjusted EBITDA was $16.1 million. Cash flow from operations was $9 million in Q2 2022 as compared to $94.6 million for Q2 2021. We made investments of $53.7 million during the quarter into development projects, which included detailed engineering work on EVA and at the Copper Mountain Mine for our plant optimization and improvement projects.
During the quarter, the company repaid U.S. 5 million plus interest on the US$250 million bond issue as scheduled, and we continue to place monthly funds into restricted account for the next upcoming bond payment in October. We have a net-debt-to EBITDA of 1.4 based on our Q2 ending cash position of $92.2 million and are well positioned to benefit from increased production as we enter the second half of 2022 and into 2023. And this is because of the growth projects initiatives we have made over the last 18 months.
And now Letitia will provide some comments on our outlook and projects.
Letitia Wong
Thanks, Rod. Looking ahead now on slide 11 with our updated guidance. As a result of production in the first half of the year, we are revising our guidance for production and costs. Production for the year is now expected to be in a range of 65 million to 75 million pounds of copper. This compares to our original guidance of 80 million to 90 million pounds of copper.
As previously mentioned, we are forecasting production to be much stronger in the second half of the year, with the fourth quarter being the strongest quarter. This is largely driven by the higher grades from Phase 4, as well as improved recovery and throughput as you begin to mine clear ore and complete all of our plant improvement projects. Effectively, we have pushed some of the plan to 2022 ore combined from Phase 4 into 2023.
With the revised production guidance, cost guidance is also being updated to reflect inflationary impacts and first half results, which included a number of non-recurring costs that are now behind us.
AIC is now expected to be between USD 2.75 to USD 3.25 per pound of copper this year. With a higher grade Phase 4 ore expected to continue through 2023, we are reiterating our 2023 production guidance range of between 90 to 105 million pounds of copper. Our production expected to be strong for the next three years.
Moving on to updates on our growth projects, starting with a Copper Mountain Mine on slide 12. We are continuing to advance work on the updated reserve and resource estimate and life of mine plan. Based on the drilling we have completed in 2021, and 2022, we’re really excited about the potential magnitude of increase in reserves.
We are also working through finalizing the different options for the mill expansion based on an anticipated larger reserve. We studied status quo 65,000 tonnes per day, and 100,000 tonnes per day. We are now working our way through the cash flow comparisons and once you finalize that, we will work on completing the technical report. Everything’s progressing really well, and we expect to publish the full technical report in September. The report will include both the updated reserve in Life of Mine plan.
Turning to slide 13, we’re also continuing to move our Eva copper project forward. Detailed engineering is now nearly 50% complete, and project financing is also advancing. We are also evaluating strategic opportunities for EVA. This could include joint venture partnership or a sale; we have engaged Macquarie to assist us with this process. We expect to present all of these options to our board and make a decision on EVA in the fourth quarter of 2022.
Before we conclude, I would like to turn the call back over to Gil, who will review a few of the upcoming catalysts we expect to deliver this year.
Gil Clausen
Hey, thanks Letitia. Now turning to slide 14. We are expecting to deliver a number of catalysts during the second half of the year. Specifically in the near term, in the third quarter, we will announce as Letitia mentioned an updated mineral reserves and mineral resource estimate for the Copper Mountain Mine and that will incorporate all of the drilling from our successful programs that we have in 21 and into 22.
With this announcement, the new life of mine plan will be released. And it will include a completed analysis of optimal concentrator throughput. So I think, as things are playing out right now with respect to that study, all the cash flow modeling that we’re doing is allowing us to get to an optimal conclusion for sizing the productive output of the mine with respect to that new resource and reserve estimates.
In the fourth quarter, we expect to have a decision made on EVA and with respect to how we enhance and unlock the value that we’ve created through that project for our shareholders, we also expect to complete the rougher expansion at Copper Mountain. We did have some delays, as Don mentioned, trying to get some components that were the locations cells, the shells from Mexico where there are fabricated up through the U.S. border in Texas. And then into Canada we had, we encountered some border delays there that impacted our timeline a little bit. And as we complete those projects, and we have the all the plant improvement projects up and running smoothly, we look forward to ending the year very strongly with our highest production quarter and we’re, as mentioned going to carry that through 2023.
So with that operator, we can open the call for questions.
Question-and-Answer Session
Operator
Thank you, sir. [Operator Instructions] Your first question comes from Orest Wowkodaw of Scotia Capital. Please go ahead.
Orest Wowkodaw
Hi, good morning. Appreciate you updating us on the guidance for production and costs. Wondering though about CapEx? Is the U.S.101 million guidance for CapEx for this year, is that still a valid number? Or is there been some upside pressure to that just given inflation?
Gil Clausen
Hi, Orest. I don’t recall 101 in terms of the CapEx guidance. Rod, do you want to give us an update. I know we’re pretty close Orest or actually below on our development capital budget. And but, wrapping in either with Copper Mountain but Rod, perhaps you can you can follow up?
Rod Shier
Yes, Orest I think we were sitting in at about 60 million U.S. is what we had guided at the beginning of the year is my recollection. And a majority of those costs are behind us. As, as Don mentioned, the rougher cells [ph] delayed a little bit. And we’re anticipating probably another CAD 7 million on that. We’ve advanced the EVA project with detailed engineering, and, you’re in the neighborhood of probably another CAD 10 million on that. And then there’s this minor stuffs still on-going, like all mining companies in BC water management is controlling water on your site is extremely important. And we’ve incurred a bit of costs on that, and those projects are coming to an end, but not quite done yet. And there is a number, I would say it’s going to be, under seven and a half million somewhere around there, if that at all. So that water management’s been on-going since 2019. And that’s a tough one to budget with. But I think we’re getting to the end of the course.
Orest Wowkodaw
Okay, I think I think the US 60 million was just growth spending. But I’m referring to a number that would include deferred stripping, and sustaining as well.
Rod Shier
Yes, okay. So, from a from a sustaining capital point of view, we have incurred about $19.2 million as you know, right now we guided 15. We’re trying to and a bunch of that is from carryover projects that are coming to an end. And, and it certainly, things like the car road overpass is now done. We’re certainly seeing some other items, but I don’t expect a lot more of sustaining capital in the second half of the year.
Orest Wowkodaw
Okay, and then maybe just shifting to the bigger picture. So it sounds like you’re planning to make a — the board’s planning to make a decision or strategic decision on EVA in the Q4, with the Copper Mountain expansion plan coming out here, and I guess by end of Q3, how should we think about sort of how these projects sequence moving forward? And does Copper Mountain kind of sit on hold until you figure out what you’re doing with EVA? Or is it more you got to wait on Copper Mountain anyways, because of permitting requirements, just wondering how to think about secrets being on growth moving forward.
Gil Clausen
Yes, thanks, Orest. So the, the EVA project analysis, as Letitia mentioned, is including an analysis of potentially a joint venture partner, potentially, a minority interest, so potentially a sale of the entire asset, and also a go it alone, or a combination of partnering and, and developing that asset. So, so that that work, is fundamentally it’s, it’s predicated on, on that full analysis on the confidence that we have on the capital plan, as we go forward on that project. We’re still seeing some issues in the Australian market. We put out our analysis and in November we’re still seeing some elevated costs in that market. And so we’re, we’re still a little reticent to commit any capital at this point in time until we see the ledger and supply chain issues completely ease in that area. So the Q4 timing, in our view kind of reflects that. So all our information will be back and we’ll be able to put a value on EVA or a number of these off options that will assess against the development of copper mountains and the development timing of Copper Mountain.
One of the options that we’re reviewing on Copper Mountain is, is basically a significant expansion, as, as Letitia mentioned, to 100,000 tonnes a day now that that has its own permitting, impact and timeline with a change of scale of that enormity. So we, so these things will have a natural progress flow. And we’ll look at the timing of everything on a relative basis. The 65,000 tonnes per day can be a sort of a step change approach for Copper Mountain. And a lot of the construction that that Don was reporting on, a lot of that capital invested was for, in essence, 65,000, temporary case. So in order to do 65,000 tonnes per day, we needed that cleaner column, we needed that filtration in place, and they’re sized for 65,000 tonnes a day. And the work that we’re doing on the cleaner expansion, although you’d have to credit, some additional cells on top of that, for 65,000 is relatively minor. So those are all projects that were designed to get us to 65,000 tonnes a day.
So depending on which choice actually makes the most sense, from a net present value perspective and a timing perspective, will have an impact as to the board’s decision on priority spending for the company. I think that’s a long answer. But I hope I answered your question somewhere in there.
Orest Wowkodaw
Yes, no, you did Gil. And just final a question. So if, if you decide it sounds like then the permitting cycle for the 65,000 tonne a day is relatively short, is that fair to say?
Gil Clausen
I would say the 65,000 tonnes a day is — it’s much more straightforward. It’s a less than 50% expansion of, of our existing plants. So it has, it has a different criteria for study. But I could let Don maybe Don has a few extra words, though, that you’d like to add.
Don Strickland
I agree, Gil 65,000 tonne a day option is much more straightforward, a lot more confidence, and it is a shorter timeframe than the 100,000 tonne a day. And so we’ve looked at those scenarios, and that’s part of our analysis on what the optimum tonne rate is for the site and the timing of which we could achieve those tonnages.
Orest Wowkodaw
Okay, just for and final question, if you decide to go with the 65,000 tonne a day, what would be your expectation for how quickly you could start, call it development out that like, how long would that cycle be the permitting cycle?
Don Strickland
Yes, that’s a good question. I guess I’d be able to answer that in the in the PFS study. But, we’ve sort of laid that out before and the last PFS study where we looked at 65,000 tonnes a day. So I think that that timing is still aligned with where we think it will be today. It’s just a different start. Start timing. So I think you can refer to the last PFS study and in our thinking there.
Orest Wowkodaw
Okay, thank you.
Operator
Your next question comes from Shane Nagle of National Bank. Please go ahead.
Shane Nagle
Thanks operator. I think Orest got most of my questions on that CapEx. But it just when you look at the numbers, it looks like you’re obviously tracking pretty well ahead on the sustaining and you mentioned that you were behind on some of the stripping. So just curious if you if you could provide a rough run rate once you’re kind of at normal state here reflecting this kind of current inflationary environment what might we be looking at for kind of a good run rate with capital stripping and sustaining capital at the operation when you’re when you’re up at that full 45,000 tonne per day?
Gil Clausen
Yes. We had a high stripping ratio. We — when you look at the overall stripping tonnes, we weren’t that far behind. So it’s the ratio that governs the capitalization policy because we have — we generally capitalize everything over the average life of mine strip ratio. So that’s kind of a normal policy for a lot of open-pit mines. So because we had some lower ore production in the quarter, ex pit ore production in the quarter, it drove our stripping ratio a little high. But we’ve been catching up on stripping the Phase 4, which we got behind on, frankly. We ran into some supply chain issues, as Don mentioned, with the drill. So we weren’t getting enough broken inventory in Phase 4 with drilling blast inventory, and we were getting behind on waste treatment in that zone, which did impact us.
And as we moved in the second quarter to really start to accelerate again and get that stripping — start to get that stripe caught up and Phase 4 available for development, we ended up with a high stripping ratio. So I don’t anticipate on a go forward that we’re going to see anything abnormal in our stripping or stripping ratio and in stripping rates. In fact, I think you may find as we release the technical report results and you look at the life of mine plan that our overall average strip ratios will be declining as the ore reserve is going to expand and maybe…
Don Strickland
I don’t quite think we can hear you, Gil. You cut out. I maybe able to finish the question for Gil for the balance of this year. I’m assuming everybody else can still hear me? Great thank you. Okay, for the balance of this year, as Gil mentioned, we had to change the mine — not the mine plan, but just the sequencing. And so we’re going to probably be in that 3:1 strip ratio for the next 6 months. And you’re going to see a little bit more deferred stripping coming in, in the order of sort of CAD 15 million. Now as you know, that’s not additional cost. Those are investment dollars. So it just comes down like your operating cost. And the way this mine was developed, it’s a series of pushbacks. So you’re going to go through periods of higher stripping ratio where you will defer.
And then as you get closer to the bottler, there’s more ore, that’s going to flip over the other way. And as Joe was mentioning with this updated mine plan coming the goal is to try and normalize as open as much as we can, and that will be coming out in September that — an updated plan. So right now, the view I’ve got is 6 months. And for the balance of this year, it would probably be around 3:1 and about sort of CAD 15 million or so deferred stripping dollars coming out of your operating costs. So I hope that answers your question.
Shane Nagle
Yes. That’s good color. Thanks. And maybe — I’m not sure if Don’s still on the line or if we could help — if Gil dropped off. But just looking for some — maybe some more granularity in the back half of the year. Obviously, there’s a bit of a delay in the rougher flotation. Does that — you mentioned I think it’s 0.3% copper grade in the back half of the year. Can you start feeding out that right away when you get to that plan in July? Or do you have to wait for that rougher — Will we have to dial back throughput through our Q3 a bit until you get that completely tied on and then really hit the 45,000 tonnes per day and higher grade in Q4? Or how can we think about kind of the quarterly breakdown, the second half?
Don Strickland
Yes, good question. So we’re not going to need to hold back mill tonnage until the roughers are complete in Q4. So our plan is to run the roughers that we have and ramp up the mill to our design of 45,000 tonnes a day here fairly quickly once we’ve fine-tuned the crushing circuit, I would say, to get the tonnage through the crushing circuit. So the plan is to be able to run a 45,000 tonnes per day, here fairly quickly. And we’ll have a slightly lower rougher recovery than we will once we get the roughers up and running and fully commissioned.
Shane Nagle
That’s great. Thank you.
Gil Clausen
Can you guys hear me now? Okay. Good. I don’t know how I dropped off or why I dropped off, but my apologies.
Operator
Your next question comes from Stefan Ioannou of Cormark. Please go ahead.
Stefan Ioannou
Hey great. Thanks most of my questions have been answered already. And not to sort of beat the topic to death, maybe just on the stripping again. I know the North pit you mentioned you’re in sort of the top 2 benches, oxidized material. Looking forward like this quarter and forward, are you kind of down below the oxide material now? Or are you into the sort of more a sweet spot of the deposit prop or away from sort of maybe higher stripping requirements for that particular pit? Or where are you in the North pit sort of, schedule, I guess?
Gil Clausen
Well, listen, we’ve mined through the top 2 benches of about two thirds of the outline of the phase design for the North pit. And that’s designed so that we can get down into fresh rock. And there’s going to be some more or less phased development or stripping development that will come later in the year as we take off the top cuts of the balance of the North pit. But we’re getting down into the fresh rock material now. So you can actually visibly see it when you look at the blast hole patterns, you can see orange colored oxidized material on the cuttings piles and you can see gray, completely gray, fresh — so now as we’re getting out into the below the top couple of cuts in North that you’re starting to see all that nice gray rock, which is indicative of good sulfide material and no oxidation.
So it’s a pretty visible thing. When you look at the cuts and the headings, you see the same thing. You can see contact line with the oxidation and staining up above it and the clean rock below it. So it’s just a matter of us getting through some of that material, Stefan. And we’re now working our way down into the north pit.
But there will be other phases in the north pit that will require us to strip off oxide, but we’ll treat that we’ll treat that oxide as waste in future, and we won’t see as much of that maybe potentially getting into mill.
Stefan Ioannou
Got it. Got it. Okay, thanks very much guys.
Operator
Your next question comes from Pierre Vaillancourt of Haywood. Please go ahead.
Pierre Vaillancourt
Hey guys. Gil, I was wondering in the current market environment, is it reasonable to assume that with regard to the EVA project, you’ll need a partner to go forward on that one?
Gil Clausen
Well, listen, our perspective on this is to get the best risk-return ratio that we can on this project, right? And look, when we started off with Copper Mountain, we had the same sort of dynamic in front of us and we brought in a partner and that alleviated all the capital concerns to respect to being able to finance a project the size of Copper Mountain as a small junior mining company. And so it was very helpful, and we got a really good project partner. So I think we’re seriously looking at all the options for EVA. And we hope to be able to provide fulsome detailed evaluation for our Board of Directors to consider.
Until the results of our partnership efforts or minority interest sale, either way you want to look at that, or joint venture, they’re all kind of the same thing, but — or a sale of the asset or a development of the asset on — until we have all those aspects worked out, we won’t know 100% for sure which course management is going to recommend to the Board.
But I think we’ll be in that position by the — certainly by the end of this quarter, Pierre. And then we’ll be able to sit down and talk that strategy through with the Board and come up with a decision that we’ll be able to relay to the market.
Pierre Vaillancourt
Is just — putting it on the shelf for an indefinite period? Is that also possible?
Gil Clausen
That may be. I mean, look, if it’s a consideration of the Board that they just would like to retain the asset and defer expenditures and put on the board until the environment shifts a little bit with respect to risk or financing or copper pricing or whatever, that’s obviously, that’s an alternative that the Board could choose to do.
But as I said, we’ll be in a much stronger position in — at the end of the quarter and, let’s say, late September is, so to speak, where we have all that information together, and we can sit down with our Board of Directors with a recommendation for management on an approach.
Pierre Vaillancourt
For now, Gil, how are discussions with potential lenders? What’s that looking like right now? Or is that sort of on-hold, pending completion of studies or what?
Gil Clausen
Well, we just — we pretty much — Rod and his team have advanced a lot of that work with our consultant too, which we’ve been using Endeavor Financial is small to resist Rod’s financial team here. But a lot of that work has been I guess, completed pending the final detailed engineering work being done and an updated capital report.
And we should be able to have that somewhere in the late September time frame as well. And with that final construction budget, we’ll be able to put the project financing execution plan in place if we want to do that with the Board. But certainly, how that’s going to be financed and the indicative rates and everything that we may anticipate or expect. I think Rod feels fairly comfortable to be able to work through that with the Board of Directors and get them the information they need to be able to make a decision.
Pierre Vaillancourt
Is there a strong interest in the project right now from other producers? And are you having productive discussions that way? Or how is that looking?
Gil Clausen
Yes. We have a process that, as Letitia mentioned, is being executed by Macquarie, and we are seeing strong project interest.
Pierre Vaillancourt
Okay. Okay, thanks Gil.
Gil Clausen
Alright, thanks Pierre.
Operator
There are no further questions from the telephone lines. I will take this opportunity to turn the conference back to Mr. Clausen for closing remarks.
Gil Clausen
Well, thank you, everybody, for joining us this morning. We, obviously do not relish being able to — being on these calls when we don’t have the greatest production news out of the quarter, but there was a lot of quick and exciting things at Copper Mountain. And you’ll see a lot of great news flow over the next couple of quarters, and we’re anticipating some strong results over the next few years.
So thank you all very much for taking the time to join us, and have a great rest of the summer. And we’ll talk to you again soon. Thank you.
Operator
Ladies and gentlemen, this does conclude your conference call for this morning. We would like to thank you all for participating and ask that you please disconnect your lines.
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