Update on our Hermosa project in Arizona. Following our announcement this morning, which included a summary of key findings from our pre-feasibility study for the Taylor deposit, we have Pat Risner, our President of the Hermosa Project, joining us on the line today from Tucson, Arizona. Pat has a wealth of experience operating and permitting in North America, and is here to answer any questions on the pre-feasibility study, as well as a work plan for both Taylor and the broader Hermosa project. If we think back to 2018, the acquisition of Arizona Mining was an important milestone for South32. It was the first step in our journey to reshape our portfolio for a low-carbon future, as we work to identify and direct capital towards projects with a bias to base metals. Since then, while progressing Taylor's pre-feasibility study, we have made several other decisions that have accelerated this journey. In the past year, we have completed the divestment of South Africa Energy Coal, concluded our exit from Manganese Alloys, announcement of divestment of Metalloys, having previously divested Temco, agreed to the acquisition of a 45% stake in the Sierra Gorda copper mine in Chile, and exercised our preemptive rights to increase our ownership in the green-powered Mozal aluminium smelter. In addition to this, earlier in the month, we announced our intention to partner with Alcoa in restarting the Alumar aluminium smelter in Brazil using 100% renewable power. Coming back to Hermosa, Taylor is the first development option of what we anticipate will be many opportunities here. The project has the potential to sustainably produce the metals critical for a low-carbon future across multiple decades from different deposits. Completing the pre-feasibility study for the Taylor deposit is an important milestone in that it demonstrates its potential to be a globally significant and sustainable producer of metals critical to the green energy transition in the industry's first quartile. Beyond Taylor, the Clark deposit offers the potential to unlock further value from our investment in Hermosa through the production of battery-grade manganese. A scoping study has confirmed that Clark has the potential to underpin a second development stage at Hermosa, with future studies to consider the opportunity to integrate its development with Taylor, potentially unlocking further operating and capital efficiencies. We continue to progress work on Clark and increase our exploration activity across a broader land package. The combination of Taylor, Clark, and the broader land package gives us a platform from which to realize Hermosa's full potential. We are designing Taylor using automation technology to minimize our impact on the environment and to develop a carbon-neutral operation in line with our goal of achieving net zero operational carbon emissions by 2050. Taylor will be a low-impact, low-carbon, zinc-lead-silver underground mine using conventional mining and processing techniques. The dual shaft mine design prioritizes high-grade ore in the early years, while the ore body's geometry enables multiple concurrent areas of mining over the mine life of more than 20 years. This design supports high productivity with nameplate capacity of up to 4.3 million tons per annum, leading to operating costs in the industry's first quartile. Hermosa is close to existing infrastructure, skilled service providers, and crucial supply chains in North America, making it an ideal location to develop a mine that will produce metals to support the world's transition to a low-carbon future. Zinc is used in renewable energy infrastructure such as solar and wind for energy conversion and to protect against corrosion, and silver is a key element in solar panels. Both zinc and silver will benefit from the uptake of renewable energy in our base case, with the benefit to increase further in a 1.5-degree climate change scenario. Taylor will now progress to a feasibility study where we look to unlock further value from the deposit. Taking time now to reflect on the acquisition, it's important for us to acknowledge that some of the reasons that first attracted us to Hermosa, including the Taylor ore body and the prospectivity of the broader land package, have turned out to be better than we expected at the time. We have increased our confidence in the 138 million ton Taylor deposit, which remains open at depth and laterally. The significant exploration upside is highlighted in the exploration target we announced today between 10 million -95 million tons. Very nearby targets like Peak have confirmed our belief of copper on the property, while we are excited to drill the Flux prospect once we get approvals. In terms of the broader land package at Hermosa, we believe we are yet to truly scratch the surface. Outside of the prospect of finding further base metal deposits at Hermosa, the Clark deposit is also better than we first expected, and we look forward to completing a PFS focused on the battery-grade manganese market, a market with significant potential. Notwithstanding this, it's important to acknowledge other areas that have not been as positive, including the disruption of COVID and the additional time it took to have actually completed the PFS. While the requirement for dewatering beyond our initial expectation has resulted in the need for some $200 million of additional upfront direct capital. Through feasibility, we'll focus on opportunities to further enhance returns, establishing the project as a carbon-neutral development, identifying opportunities to optimize operating and capital costs, and completing further drilling to extend the already substantial resource life. As I've already said, the future development of Taylor provides a platform from which to realize Hermosa's full potential. It will further strengthen our portfolio and align with the already substantial growth in production of metals critical to a low carbon future that we have embedded in our portfolio over the past six months. Thank you. We will now open the line for questions. I'll hand back to the operator who will direct the call. Thank you. Your first question comes from Paul Young from Goldman Sachs. Please go ahead. Thanks. Happy New Year, Graham, and nice to meet you, Pat, over the phone. Graham, first question is on the capital estimate. It's come in, I think, a fair bit higher than what the market was expecting. Now, I think part of that, I think you just alluded to, is the $300 million odd of water CapEx. Obviously steel prices and inputs are pretty high at the moment. You know, Graham, Arizona is a pretty cheap place to operate when it comes to mining, certainly relative to Australia. I guess the question I have is that, and I should add, sorry, that, you know, feasibility study estimates typically only go one way versus PFS estimates. The question I have, Graham, is that, is this a BHP style bells and whistles estimate or is this a, you know, First Quantum oily rag, you know, South32, what it should be, you know, optimized and really thought through capital efficiencies up front? And also what escalation and sort of contingency actually have you built in to that $470 million number? Yeah, thanks, Paul. Maybe, first of all, happy new year to you. I mean, Pat can sort of talk a little bit more specifically about the project itself, but I guess a couple of things that you do call out is, one, that, you know, as we alluded to actually in the release, this is really reflecting the latest market prices that you're actually seeing in the U.S. And obviously over the last couple of years, we've seen, particularly in the last six or 12 months, an increase in what, you know, some of those inflationary factors actually look like. Now we can go into that in some detail. I think you sort of hit the nail on the head on the other piece, and I did that in the introductory comments. You know, the dewatering, there are lots of things that I can talk about, geology, prospectivity of the land that are better than we expected. You know, the dewatering is certainly, while it's not relatively unknown in that area, and Pat can go into some benchmarking data, the dewatering is certainly higher than we expected. You know, you're looking at a direct cost of roughly $225 million and indirect cost of $140 million. But it's also probably the item that's now on the actual critical path. It's certainly not a BHP style mine in terms of size, quantum, what we're looking for, it's probably not. You know, First Quantum obviously has the reputation of building some things really quick and good and a strong track record of that. You know, I'd like to think we've got a balance, if you like, of what that looks like, but we've also been considerate of how we've developed it. The classic example there, Paul, is when we first picked up the project from Arizona Mining. You know, Arizona Mining had already started two declines. Very quickly worked out that we stopped those declines within a month of basically acquiring this because they had not done any work, if you like, around hydrology or geotech. If we continued to actually go through with those declines, we would have probably flooded the mine. I think that's an important consideration. It's certainly not a gold standard mine. We have certainly been thoughtful about, well, what are the critical risks? What do we need to understand around the geology and particularly around the water? Maybe, Pat, you can talk a little bit about how we develop the capital estimate. To your point, Paul, just before I hand over to Pat, a couple of comments I would make is obviously there is contingency in there. There is considerations of what an EPCM could look like. I think they've actually both got opportunities to improve. A lot of the work on this is actually not the PFS study and Pat can sort of take you through that. The other piece is we see a lot of opportunities in the feasibility study, potentially with integration with Clark and other work that will allow us to get some more synergies out of this project. You know, the one thing I've said from day one and probably sound like a broken record, you know, obviously people put a lot of value on Hermosa around Taylor. We've always talked about the three components of value. You know, the Taylor, the Clark, the broader land package. And probably where we are now, we're in a position to start talking about some of those opportunities outside of Clark. For example, we talked about Peak. You know, we're gonna get the actual approval to get into Flux, and I think you'll see a lot more information flow around that. Maybe, Pat, worth you talking about the capital estimates and your sense of comfort around that. Sure. Thanks, Graham. Nice to meet you, Paul, over the phone. Yeah, I think maybe a couple of things. Graham's talked about the dewatering element. I won't go over that again. That's obviously one factor. I think one other thing I would note is you've probably noted we are capitalizing for a, you know, higher production rate than what we've originally flagged. I think, you know, with regards to open stope mines, one of the higher productivity open stope mines that will be out there in the market. There is an element of that. The capital cost escalation certainly in this market is real. In the 18 months up to sort of the middle of this past year, you know, we'd seen particularly lumber and steel with some extremely high escalation rates. One thing we have seen since the middle of the year is for that to soften. We've been able to contain costs over the last six or eight months pretty well in our estimates. In regards to the confidence in the estimate and your question around contingency and class, what you would see in terms of contingency would be pretty typical for a PFS level estimate. We aim for what we call a Class 4 estimate at this phase. You know, the entire estimate is built up to that level. What I would comment, though, is we have gone a bit beyond that in the mining area, and particularly, with the production rate we are planning, and the development around that. The mining portion of the capital estimate, which is about 40% of the planned project expenditures, with respect to the growth capital, goes beyond a Class 4 estimate, and through an external review has been deemed closer to a Class 3, which is pushing more towards a feasibility level estimate. However, our contingencies and allowances would very much be what you would expect for a pre-feasibility phase, with some allowance for what we have seen in terms of cost escalation in the market more recently. Maybe just a last comment on that, Paul, would be, look, the surface facilities we're looking at around processing, there's nothing fancy in that. There's nothing we're doing new. It's a pretty standard process with, you know, standard materials. So we're not sort of looking to try something amazingly different in that space. Maybe worth just touching on some of the benchmarking work. Pat, you've done an operating cost because Paul sort of made the comment about operating in Arizona. You know, how does this stack up, I guess, around other similar kind of operations? Sure. So around benchmarking, we've conducted some external benchmarking with external partners. You know, our mining operating cost, which is just under $35 a ton, at least with respect to analog operations, that would be similar mining method, similar conditions, would rank nearly the lowest in the sector for similar like type mines. Similarly with processing around $13 a ton would be one of the two or three lowest cost processing, operating cost processing operations for similar type facilities and analogs. With respect to the question around the BHP versus sort of a lower scale or a lower end of the scale, in terms of. It's certainly not an operation that's gold-plated. We do have a small footprint on which we need to build this project with the land base that we have. So I would say, if anything, we've had to be extremely efficient, and thoughtful about how we place and build infrastructure to make sure we contain ourselves to that small footprint. We've looked at a lot of modularization in the capital estimate so that we can access lower cost labor, which has been necessitated by the smaller footprint, but generates capital efficiencies as well, 'cause you can access lower cost labor off-site and bring it in in modules. We'll do that at significant scale given the setting where we are. Last thing I'd just add, we're going through a value engineering phase at the moment before we prepare to start the feasibility study, where we are looking at some additional opportunities around capital, particularly with the shafts. Well, thanks. Thanks, Pat Risner and Graham Kerr. Excellent detail so far. Graham Kerr, can I ask you a second one, please? That's around, I know you haven't given economics on the project. You haven't given, you know, what metal prices you've seen. But is it fair to say that, you know, probably some 15% IRR is the outcome if we did use consensus numbers. It's a line in the sand. It's a starting point. Clearly, you think that, you know, exploration upside or higher prices will improve economics. Just on that, as far as upside is concerned, with Clark, are you assuming in a higher mining rate, a second plant? With the Peak prospect, very early days, I know you've got a lot of drilling to do, but potentially here we could be looking at a copper float circuit added into the plant, into the design, correct? Correct. Pat can sort of talk a little bit more both of those, Paul. I mean, I would come back to the position we've always said that, you know, Taylor's the first, it was the most advanced piece of work, but it's always been the first part of the development. You know, people sometimes confuse Taylor with Hermosa. We've always been clear that we've seen three pockets of value. Even in Taylor itself, before we answer the other two questions, it's important to understand, to Pat's point, there's a whole lot of opportunities around, you know, the value engineering work we do, but also on the operating costs. We've been pretty conservative at the moment, assuming that all that material will actually be sent overseas to China, to Europe. As we all know, obviously, in the U.S., there's a push by, including Biden and the prior administration, to get access to critical minerals. There's a huge opportunity in that for us actually to continue to lower our operating costs by actually sending the concentrate to ports in the Americas. That's the other piece that we'll have a look at in the next part of the study. So look, I think what we do give you is we give you recoveries, we give you CapEx, we give you know, production profile, et cetera, which allows people to work out the returns. I mean, I would have the view that, look, we've probably always been slightly more bullish on zinc because of the way we see the market. We do see the world's gonna be in a position as time goes by. You see grade degradation. New projects in places like Peru, South America, and the U.S. are gonna be more and more challenging. You can see that with all the projects that are going on today. In some ways, that's actually, you know, you're gonna need the introduction of new projects to actually support, if you like, what's gonna be the demand to actually green the world. We had a good slide in the pack and the supplementary information on zinc, and you can just sort of see what we're talking about in terms of demand. In a 1.5-degree world, climate change, which is what most people are sort of modeling now, you're gonna see a huge increase in what people need for zinc. As we know, supply side is becoming more and more challenging across the world. So I think that does actually provide it. PFS studies are always interesting. Feasibility studies are always interesting. I mean, you made the comment about cost escalation or CapEx escalation between those phases. I think you're right, but if I go back to when I was at Cannington, when we actually completed the feasibility and went into execution, I think we had a silver price of $4.50. We had a mine life of 14 years. We had a throughput rate of 2.2 million tons. You know, if I think back to probably almost 30 years in the industry now, if you think about a return on invested capital, I would say that Cannington has probably been the best asset I've seen in terms of one of them. I think, you know, there's all those unknowns that are still sort of play out in this space. You know, what it's gonna be at a particular point in time, the project, you know, has got a lot of things to be done in front of it. I think what Hermosa has for it is optionality. Optionality potentially around copper, around manganese, further exploration. Maybe, Pat, worth talking about those circuit changes because you've certainly thought about that a little bit more than the team has. Do you wanna comment on both the manganese and the copper? Sure. Thanks, Graham. On Clark, Paul, it would need to be a separate processing facility. Obviously, we'd have a hydrometallurgical circuit to process the oxide ore and produce the battery-grade manganese products. That's probably the biggest takeaway from the scoping study we've just completed is really validating the technical feasibility to produce battery-grade manganese materials from Clark. It was a very significant milestone for us. It would have to be a separate facility. We do. That being said, you've noted in the release, we do see significant opportunities to look at an integrated underground development, shared underground infrastructure and development, you know, potentially utilizing multiple access points for both ore bodies. We will look to leverage some of those synergies going forward with Clark. With respect to Peak, yes, certainly, we could see an additional copper circuit in due course if that were to continue to evolve into an opportunity. You know, we do see some connection with the Taylor Deeps now with this Peak prospect. That's an exciting opportunity for us. Maybe last thing I would add, the real opportunity on the value side for Taylor too are extensional options to convert some of that exploration target into resource and ultimately reserve. Those opportunities in this latest mineral resource estimate and model have been much more clear to us, and we are working quickly to try to bring those to fruition in the next mineral resource estimate. I think. Thanks, Graham. Thanks, Pat. Yeah. Peak's an interesting one, Paul, 'cause it's 13 holes, so we've got to sort of balance where we're up to. Even though it had some good results. If that is actually connected obviously to Taylor Deeps, that gives opportunities about how you'd mine it and sequence it. I think more importantly, chasing the source of where it's coming from, you know, there's still a lot of work to be done on that as well. Right. Okay. Thanks, Graham. Conscious of time, so I'll pass the call on. Thank you. Your next question comes from James Redfern from Bank of America. Please go ahead. Oh, hi, Graham. Good morning. I just wanna maybe if you could please discuss or go into a bit more detail around the permits and approvals required for Taylor. Just in terms of, I guess, I think in the past, you've mentioned that you've got approvals for the first seven years of mining, but just maybe if you can elaborate on that. Just wondering if you would FID this project in mid-calendar 2023, if that was the case, if you still only had mining approvals in place for the first seven years of mining, given a 22-year mine life and the CapEx that's required to be spent. Thank you. Maybe, James, just handling that, and I'll get Pat to go into the detail of the permitting. Maybe a couple of points to be made up front. The original assumption that Arizona Mining had is that they would do, if you like, roughly seven and a half years of mining before they went onto federal land. That's when they'd need the federal approval process. For us, it's important to understand the distinction, and Pat can do this in far more detail. I'll give him the opportunity in a second. The distinction between Rosemont and Resolution is very important in this space. When we talk about federal land, what we're talking about is disturbing federal land to simply put the second tailings facilities on there, which is a dry stack. It's not more infrastructure, it's not a large open pit mine. It's a second tailings, if you like, facility, a dry stack tailings facility, which Pat can talk to about the size and what does that look like. I'd also wind back the clock and say that, look, it's not actually the approvals that's on our critical path. It's actually the dewatering. Maybe, Pat, you can talk about the permitting process and maybe some of the analogs that are worth talking about. Sure. I think the key is with all of our facilities, initial tailings storage, ore body access located on the private lands, it's initially a state permitting regime. We already hold the state permits that are required for the dewatering program. Those were granted in July and August. We would require a couple of other state approvals to move forward into the production phase. Those are approvals we typically plan on 13-15 months. They have statutory timelines. The first two that we just received, we got within 12 months. That's essentially the permitting regime to get started on the private lands for that initial period that Graham spoke about. On the federal permitting, definitely a very different situation, as Graham alluded to, with some of the peer projects in the region. I guess the real key is if you look at projects like Rosemont, Resolution and any of the others, if you go through the files and the database of federal mine permitting, they're typically disturbing, or, you know, around thousands of acres of federal land. NEPA, the federal permitting process being very much a statutory or a procedural statute, it really has to take a hard look at impact on federal resources. For us, because we're able to contain most of the development to the private lands, almost all of it, other than some incremental tailings storage, our disturbance on federal lands is gonna be orders of magnitude lower than almost all of the peer projects. That is key. We've designed the project to have a small footprint to meet our sustainability objectives and goals, but it actually should be a significant advantage for us when the time comes for us to conduct those permitting processes because the impacts being analyzed are very different. You know, Resolution would be on the order of 6,000-7,000 acres, Rosemont nearly 4,000 acres. We'd be talking about a few hundred acres in our case because of the design of the project and the small footprint. That's, you know, that's very advantageous for us in that sense. We're doing a lot of front-end loading to look at how we prepare for that process, and we believe that gives us the best opportunity to get through it in a reasonable timeframe. Is that helpful, James? Maybe one other thing I might add in, just in terms of an analogous project. There was another project that got a Record of Decision on its federal permitting in the region in the last six months or so. Probably one of the few that is similar to us in that it's a tailings facility, only a few hundred acres. They got through the process in about four years. Okay. Thank you. Thank you. Your next question comes from Lyndon Fagan from JP Morgan. Please go ahead. Thanks very much, and Happy New Year as well, Graham. Look, the first question I've got is just to flesh out the grade profile a little bit more. Previously, there'd been some information released about higher grades up front. I'm wondering how high they get, and I guess whether you can help us try and model that and how quickly it fades. The next question is just to try and understand the CapEx a bit more. I'm just wondering if you can help us bridge the gap. Arizona Mining put out a budget of $519 million, dated January 2018. Obviously, there's been significant changes to the scope and its figure. What are the main buckets, if you like, to add $1.2 billion just to get it into production? I'd like to just try and understand that a bit more, if it's possible. A third question, if I can sneak it, just to talk about traditional owner consent and where that's at. We've seen other projects in the U.S. basically stall because of not just traditional owner consent, but locals not wanting it, legal challenges. Obviously, Sandfire's Black Butte project is an example. Just wondering what the feedback is on all of that. Thanks. Yeah, absolutely. Look, I'll give the bulk of that to Pat, 'cause he can talk about traditional owners, the CapEx build-up and the profile. I can come back and talk a little bit about the PEA CapEx. Well, actually I'll talk a little bit about the PEA CapEx. I mean, keep in mind the PEA by Arizona Mining, as you'd always expect, was a promotional PEA. We talked not about numbers at the time, but where we saw there were weaknesses. I think the other thing that we were very clear about that when we made the acquisition, it wasn't based on the PEA numbers. We had our own view of numbers, and we can come back to that. The grade profile, you know, you'll see a comment on Slide 16 that we talk about in the first five years. We actually target higher grade material, roughly about 12% zinc equivalent. What we are doing obviously is lots of work to continue to add to the resource and focus on what looks beyond that. Maybe, Pat, I'll get you to talk about the grade profile and the mining profile, the traditional owners, and then I'll come back to the CapEx PEA. Okay. Thanks, Graham. In terms of grade profile, this was a big focus in the move to the dual shaft ore body access. It puts us in the sweet spot or the heart of the ore body immediately, which is on patented lands. And so that does give us, as Graham alluded to, the first five years, we average right at 12% zinc equivalent grade. And then for years six through the end of the mine life, it hovers between about 9.5% and 10%. Fairly, you know, fairly flat and level from year six to the end of the mine life. The work we're doing on that exploration target, some of that extensional opportunities are looking to bring in potential higher grade areas around the shaft to try to extend obviously that period of initial high grade for as long as we can. That's some of the work we've been doing around infill and extensional opportunities for Taylor. On traditional owners, the project is not located on what we call tribal trust lands in the United States, so not on reservation lands. There are tribes that have historic affiliation and habitation. At some point when we go through federal approvals, there will be a consultation process with Native American tribes who have had some historic affiliation. We have really front-end loaded our work around that. We are still quite a ways away from that consultation, but we've done a significant amount of engagement with all of the tribes who we believe or have come to learn to have historic affiliation in the area. Even though we're well, well ahead of that permitting process, we've already conducted all of the Class 3 cultural surveys that are required on all of our lands. It's not required by law on private lands, but we've done it anyway. We've collaborated with the local traditional owners from the Tohono O'odham tribe, who are the closest neighbors we have, for them to provide tribal monitors for those surveys, and we've proactively engaged the leadership of the tribes on the results of those surveys. All of those voluntary measures to really get out in front of this issue, share, be proactive, engage and learn and understand, to set ourselves up for, you know, for the best outcome in that space. I would say that's, you know, that's going well so far. There will be a formal process run by the federal authorities at some point in consultation as part of the NEPA or federal permitting process. Thanks, Graham. Graham, did you wanna talk about the CapEx first? Yeah. Yeah, back to the PEA. If you go back to the PEA, again, we didn't base the acquisition on the PEA. We did our own estimate. The obvious ones, when you look back in hindsight now, was they had virtually, well, let's call it almost zero when it comes to indirects in their estimate, when you go back and look at their PEA. So it was really the direct capital costs. Probably the other easy ones that fall out that you talk about would be where the move from the declines to two shafts. That allows you to get to the high-grade material that allows you to get the throughput, so it's considerably higher throughput. So they probably had an allowance from memory when you had a think about their, you know, they talked about the declines. They had probably a couple less, sort of about $176 million, whereas roughly, you know, dual shafts are about $300 million. They talked about a throughput for the first five years of 3.3%, and then ultimately getting to 3.9%. We're pretty much doing a single stage jump to 4.3%. The dewatering is probably worth a difference of about $360 million, you know, over the life of the CapEx. Lyndon, they'd probably be the big buckets. But you know, again, I'd be clear, they were not the acquisition costs that we used to evaluate it. I'll also be very clear, the one that we did not expect to be as large as what it actually is the dewatering costs. Obviously you have the knock-on impact of time, owners costs and the indirects that are associated with that. Does that help, Lyndon? Okay, you wanna move on. Okay. Thank you. Your next question comes from Brenton Saunders from Pendal Group. Please go ahead. Afternoon, all. Thanks for the update. I just wanted, for clarity in terms of permitting, to understand the distinction between the state and the federal processing and the federal permitting process, which is only required for additional dry stack tailings. Can I take that as read that there's nothing unquantifiable or in the way of, from permitting perspective, to FID and commence construction on this project? Thank you. Brenton, I'll just give that straight to Pat. He can talk about it. Thanks, Brenton. No, nothing to get to FID. We would require two state permits or actually modifications to two permits we hold. I'll correct myself there. Modifications to two permits that we already hold for the TSF on private lands, as well as a discharge permit and then an air permit for the emissions from on private lands infrastructure. That's all that would be required to move into full production. You know, we would plan to commence those processes towards the end of this calendar year, early next calendar year with, as I said before, a sort of 13-15 months duration. That's all that would be required to commence to full production on private lands. Maybe the distinction of the litigation risk between the federal and the state process, Pat. We assume that most, if not all of the permits could be appealed and potentially litigated in court. Obviously, the state permits, if they are appealed, and the two we've received recently, one was not appealed, which was a really good outcome. We are going through the appeals process on the second one, but it is a state agency appeals board that is a pretty sort of process that's well understood. If it's litigated, it's litigated in state court, whereas in a federal permitting process, you end up in federal district court and eventually the circuit court of appeals. You know, we do think that it is, I guess, a more clear path to achieve the approvals that we need and get through the appeals and litigation on the state jurisdiction. Certainly, as I said before, we have some real advantages as we get to the federal permitting compared to some of the other projects. We do see the state permitting regime in Arizona is very efficient. Thank you. Thank you. Your next question comes from Rahul Anand from Morgan Stanley. Please go ahead. Oh, hi, Graham and team. Thanks for the opportunity. One quick clarification before my two questions, if that's okay. The access to federal lands, is that fair to say till year six that you require that, or has that changed in this, in the new plan? That'll bounce around depending on the throughput and the ramp up. Probably the other opportunity we'll have a look at the PFS is, you know, do you actually look potentially at raising potentially the tailings wall or the percentage of paste you have. At the moment, it's driven much by the throughput. I think the current estimate is probably what, Pat, it's probably around five-ish years at the current throughput rate. Again, that's got some upsides as we go through that next piece of work. Okay. Perfect. That's helpful. Okay. First question was around operating costs then. We've talked a fair bit about CapEx today. I wanted to touch a bit about on those. Obviously, PEA around that $50 a ton mark, milled, and then today we're at $81. I guess two of the key drivers there are firstly the other cost line, which sits at $23 a ton. And then the G&A, which is $10 a ton and used to be $2 in the PEA. Perhaps if you can provide a bit more clarity around what makes up some of that extra $30 in costs, please, that'd be beneficial. Why don't I come back for the second? Yeah. The, a gain, I would be, you know, PEA is quite a promotional document from Arizona and not what we would have used to base the acquisition on. If you go to the $23 and strip it down, the single biggest component is $16 a ton for transportation. Again, as I mentioned earlier, we assume that every, all the concentrate at the moment goes to Asia or goes into Europe. That's actually quite a high transportation cost. I think the opportunity we've got, particularly if you think about what the government's trying to do around critical minerals, they've already added manganese, and zinc is actually on the list now, and putting aside any potential permitting opportunities. It's more for us around what does that mean for the market in the Americas. That's the next part of the marketing team's study about how do we either, you know, look at the smelting opportunities that exist in terms of customers in the Americas, or how do we actually include that as that continues to actually change. Okay, perfect. Look, two other small ones, I guess. One, on Clark and Peak. Now Clark, if you can help me understand by when do you need to have a decision on that for it to neatly fit in the production or rather the construction timeline once you've reached FID stage. Secondly, with relation to Peak, is that something that you can accommodate within the current shaft design, or do you need a potential expansion beyond this for it to run concurrently? I mean, Peak, I would say 13 holes. We think, you know- Mm. We're pretty comfortable it's probably gonna be an extension of Taylor Deep. What we don't know is how big, how fast does it go back to the heat source that's actually driving the copper. That's probably gonna be a couple of years, I'm guessing. Pat, you can correct me, I've got it wrong, but more drilling to understand that because, you know, it could potentially be very large in terms of the growth of that. Then you reevaluate what you do with it. Maybe Clark, you can answer that one pretty easily, Pat, 'cause I know you've been doing the work on that. I think the key on Clark, you know, we're accelerating through some of the key selection study work at the front end of the pre-feasibility study phase now. The real critical path for the study work on Clark is to get to a point where we understand what's the optimal production rate based on market primarily, and the engineering around the facilities, so we can make some key decisions to understand what the permitting path for Clark looks like, and therefore, what an integrated development might look like from a permitting standpoint. We've got probably about a little less than 12 months work to do on that. We'll be in a position to be able to make some of those key strategic decisions around what an integrated development looks like from a permitting standpoint. That's what really unlocks and enables our ability to potentially bring Clark to fruition in the near term, is being able to make those decisions so that we know when we could have approvals in hand to consider an integrated development. Obviously, mate, you know, Clark is quite close to the surface, so one of the options to think about is a relatively easy decline into it. But then does that open up opportunities like Padaleu to around shared development, potentially trucking some of the higher level Taylor material? They're all the things that I'll go through to sort of work out what fits together. Mm-hmm. Okay. Very interesting. Thank you very much. I'll pass it on. Thank you. Your next question comes from Glyn Lawcock from Barrenjoey. Please go ahead. Oh, Happy New Year, Graham. Look, I wanna go back to the capital question a little bit. I'm just trying to square the circle. You know, you gave us $400 million of additional capital for dewatering, direct and indirect. I mean, we've increased by $1.2 billion, so you've given me a third. You've mentioned inflation. Just feels like there's a lot of gap to bridge. I guess when I look at the PEA, I mean, obviously it's a long time ago, and as you say, promotional. They used $1 a pound zinc and got $2 billion of NPV. You know, if you think about what you're just gonna have to spend additional, it does sound like you're a lot more positive than $1 a pound zinc. I'm just, i f you could make some comments around, you know, on face value, it's not economic anymore to do this project unless you are well north of the long-term cost or long-term prices that they were talking about back then. I've got one other quick question after that. Yep. Look, the CapEx, you know, you think about the CapEx, we talked about direct costs, about $1.2 billion, and we talk about, if you like, indirects of just under $500 million, so $472 million. I would start by saying that they essentially had virtually zero in terms of indirect, Glyn. I think that's a big difference to start with. If you sort of focus on the direct dewatering costs, they're about $225 million, including the indirects. Obviously the shafts are probably about double of what the declines would be, but allows you to get to that 3 metric ton production rate. I think it's an element of inflation across the line that sort of drives that. We can certainly circle back up a little bit more than that. To be honest, as you know, from day one, we've always distanced ourselves. Yeah. Away from the PEA, for part of those reasons, but also careful not to shoot them down. Does that sort of help with the capital split? I get that. Okay, that's fine. You've got an OpEx that's 60% greater. If I take the higher CapEx, the higher OpEx, you know, if you still use what the market thinks is $1 a pound zinc, this project doesn't work. I heard what you said earlier about, you know, you've got a very different view of the zinc market. Is it fair to say, you know, that's, you know, for us to get comfortable like you're getting comfortable with this project, given the new dynamics, we've got to move our thinking materially like you seem to have done? Yeah. Maybe a couple of comments I'd sort of make is, one, when it comes to those operating costs, like we mentioned earlier, roughly $16 a ton out of the $23 is related to the transportation costs to get this material somewhere else. I think that's a big opportunity for us to actually improve in that space. You know, they didn't really have any material numbers associated with that. I think, look, there is no doubt that if you think about lead, you know, we're certainly not above consensus on lead. Silver is always an interesting one to try and pick a silver price. Like I said, it was $4.50 when we did Cannington. Certainly from our perspective, you know, we have been for a period of time, you know, more, if you like, a believer in the fundamentals of zinc. We think it is something the market doesn't understand. We do think it's a place where there's an opportunity, if you like, where there is gonna be a strong demand for new material. The reality is for that to occur, you're gonna have to induce new projects. Those projects are gonna be more and more challenging. Okay. Fair enough. Just a quick point of clarification. Everyone's talked about the surface and federal approval. Is there any? Do you go under federal land? Does that trigger any requirements as well? Yeah. Pat's the expert on permitting. Pat, I'll get you to cover that one. What triggers the federal permitting is if you create what's called a significant surface resource disturbance on federal land. If you were conducting activities subsurface, and you were not creating any impacts on the surface or risking any of those impacts, you know, then technically it wouldn't trigger it. But for the most part, any activity on or under federal lands, you know, we consider would trigger that. That's the criteria, though. You don't expect, Pat, sorry, that any of your underground activity will trigger a federal permit requirement then, just when you do the tailings dam on top? We will confine our underground activities to the private lands until we get to the point where we are creating surface disturbance on federal lands. There is sufficient high-grade resource to do that actually. As I said before, the best part of the ore body from a grade standpoint is where the shaft is on the private land. We would not step out of those boundaries until we have the federal approvals in hand. But- Is that timing the same as the above ground disturbance, or is the underground when you step out different timeframe? Same timing. Okay. Thank you. The one thing, sorry, Glyn, just to close. We did talk about operating costs, but I did fail to sort of say, look, when you do the benchmarking, and, yeah, the cost has moved different from Arizona for different reasons, and there's still opportunity around transport and a few other items, but you're in the first quarter. Yep. Okay. Thanks, Graham. Thanks, Pat. Thank you. The next question comes from Peter O'Connor from Shaw and Partners. Please go ahead. Hey, Graham. I don't think you've had a very good new year, Graham. You've been very busy, but happy new year anyway. I had a couple of questions. Is there an element of sharing of CapEx for Clark, and should we think about some cross-subsidization for that? Does that $1.7 billion actually include a component underground on surface facilities that may be included? On Slide 16, you've already answered that question about the production profile, but can you just square up that slide with those comments? Because the way I read that slide, I don't read it the way you answered that last question, and I've got a follow-up after that. Pat, you've got both those? I'm not sure which slide. On Slide 16 is the production profile. Which part do you have a question about that I... The two bars. The left-hand bar is the life of mine, 27-49, and it's at an equivalent grade of 9.9 and output of sub 300, which would include the high grade first 5 years. The second part, which I think this is the first couple of years of high grade, but it's a higher annual production and it's a higher equivalent grade. Or sorry, slightly lower equivalent grade. I'm just wondering if you can square those up. If you were grade rich, as you said, 12% in the first couple of years, I thought the left-hand bar would be lower, the right-hand bar would be higher. But look, it's a minutiae. I'm happy to take it offline, but, Well, we can. We'll come back to you because it's actually the breakdown of the components because the little box talks about the first five years, whereas the steady state year talks about 30-44, so it's beyond the high ramp up or it includes a bit of it, and the other piece is the life of the resource. I think there's probably a little bit of work just to sort of match up the periods. It actually handles that one, Peter. Okay, that's fine. On the CapEx, just thoughts on what does Clark use a Taylor build and how significant is that number? Is that a part of that overall escalation? Yeah, I would say in the first instance, the capital estimate you see now is for the Taylor development. What we would see are some synergies potentially created to bring Clark on in an integrated way as opposed to look at Clark in an independent way. Potentially down the track, that presents opportunities for sustaining capital savings for Taylor and growth upfront capital savings for Clark should an integrated option, you know, prove to be viable, and able to be permitted in the right timeframe. I would see opportunities for upside on success, sustaining capital for Taylor, and potentially for initial capital for Clark should there be those opportunities. Okay. Royalties. Sorry, Graham. I was gonna say, Peter, the way I think about this is, this is what it takes to build Taylor. If you actually do Clark, you get some benefits from the upfront capital if you're just doing Clark by itself, but you also get some synergistic benefits for both after that. Got it. You've noted the tax rate. Is there any royalty component we should be aware of, private or government, federal or state? You'll see it actually on page, I think it is 12 of the release from memory, where we actually talk about, you know, there's some private net smelter royalties that average about 2.5% or 2.4% on roughly $4 a ton of ore processed. You know, that comes in on page 12. You'll see all the detail there, Peter. Okay. It's not on page twelve, but I'll find it. That's good. I just couldn't find where the It should be on page 12, operating cost. Oh, the release. Sorry. I wasn't Yeah, yeah. Second to last paragraph. We break that down in detail of what they are on the percentages. Perfect. Last one, Graham. Thinking over the next one to three years, what are the major milestones? I know you noted some of these in the presentation release. What milestones would we be expecting re, the feasibility study date, Clark PFS date, approval dates, if there are any that are obvious over the next little while, just to give us some milestones. Well, Pat, I'll hand that one to you from the project perspective, and then I'll talk about it from the group perspective. Yeah. Middle of next year for commencement of dewatering as well as final investment decision. Early calendar 2024 for start of shaft excavation. Underground exploration and lateral development coming off the ventilation shaft later in calendar year 2024, and then obviously first stoping ore in FY 2027. Great. Clark, or PFS? We're aiming to get through the selection portion of the PFS late this calendar year. That's probably the next big milestone for Clark 'cause that'll give us the direction of where we're going. Got it. Thank you. Your next question comes from Robert Stein from CLSA. Please go ahead. Hi. Thanks for the update. Just two questions re, market. One, I noticed that the by-product prices in your presentation are at FY 2021 rates, which for silver is, you know, as we discussed, you know, higher than the long-term average and lead seems to be sort of in the midpoint of the last 10 years. Just wondering, the mine production profile seems to be a bit more of a co-product relationship than a by-product relationship just on the relative zinc equivalent metals. Just wondering how sensitive are the project returns to those by-product prices, and should we think about this purely as a zinc mine or do we think about this as a co-product mine in times when the zinc price drops but silver's strong? You know, production focus may shift, and that may change how you plan your mine. That's question one. I've got a shorter one to follow up. Yeah. Well, it would certainly see it as a co-product mine. I mean, you get the two concentrates. Obviously, when you mine in a particular area, you don't separate them. It's part of the processing that you pull them out. You know, obviously, zinc and silver are far more attractive in a world that needs green metals, particularly if you believe in the 1.5-degree scenario where you see the demand for both significantly increase. I think the reality is people are just getting their minds around that. In the base case, funny enough, lead still continues to actually be attractive. If you go to 1.5-degree world, obviously, lead isn't as attractive in that world as the world pushes hard with the decarbonization agenda. I guess the flip side is the majority of zinc mines are byproduct, you know, they're co-product mines. So the lead isn't as valuable, you probably need a higher inducement price to induce zinc. I think that's the way we think about it. You know, we see the value in the zinc and the silver, but the reality is you get the zinc and you get the lead concentrate, and the silver more naturally migrates towards the actual lead concentrate. Then you said you had a second question, sorry? Yeah. The second question was, just in terms of, looking at the zinc market going forward and seeing over the last sort of 12-18 months, TCs have been quite low. A lot of the rent is, I guess, handed off to the refiner in times when that reverts back to, you know, a arrangement where TCs are around the $250-$300 a ton mark. Is there any plan when you sort of look at those North American customers that you go downstream at all? Or is it pretty much, you'll just take whatever the market price you can get is? Yeah, look, I mean, that's a constantly evolving situation. The one thing that's not evolving is we're not interested in going downstream and building a smelter. When I say it's, you know, evolving quickly, you're seeing a fair bit of political push and demand just actually occurring in the Americas for that to actually happen. You know, I think the AFR article said it well today. The last thing Biden wants to do is actually go to China and ask them to actually produce more critical minerals that they need for their own energy security. I think, you know, that's the unknown piece in the background. I come back to one of our earlier comments. You know, if you think about a 1.5-degree climate change scenario world of zinc, that means you need roughly a six times increase in renewable energy capacity. You know, wind increasing by 10x, solar by 14. It actually means that primary zinc demand will effectively almost, well, it will be 2x. It’ll go to 24 million tons. Conversely, you know, we expect to see supply, you know, expected to fall by about 3.5% to 2030. That really is driven by, you know, mine depletions that we’re seeing, lower average grade, longer approval pathways and constraints to supply. We think the zinc is a very attractive market. You know, everyone, including ourselves, likes to look at copper and what that looks like. I think there’s equally a strong story in zinc, but in fact, the market’s probably much more fragmented. When you think about where a lot of the zinc supply comes from, I think there are areas of higher risk as well. We certainly have a belief in where zinc is going. Thank you. Thank you. That is all the time we have for questions today. I'll now hand back to Mr. Kerr for closing remarks. Thank you. I wanna thank everyone for the opportunity today to actually provide the update. As we've mentioned from day one, you know, when we did this acquisition of Hermosa from Arizona Mining, it's always been about three pieces of value: Taylor, Clark, the broader land package. You know, Taylor provides the foundation 'cause it was the piece of work that was most advanced. You know, Taylor itself, while dewatering has been disappointing, it is very clear to us that the resource still has considerable upside. There's opportunity still to look at how we bring Clark into this and how we get some of the synergies. Clark in itself is far more positive than what probably Arizona recognized at the time. You know, today, you've seen some glimpses of the resource potential when we talk about Peak. We've got flux, we've got a number of other opportunities on the property to actually explore. I think more importantly for South32, this has been a part of reshaping the journey or reshaping the portfolio journey that we've been on for a period of time. As I mentioned at the start, the divestment of South Africa Energy Coal, the exiting the manganese alloys business, the acquisition of the 45% stake in Sierra Gorda in Chile. You know, what we've done on the aluminum side by getting more exposure into the green side, both to Mozal and also to Alumar in Brazil, really sort of changes the portfolio from the day of the demerger, where we had a strong exposure to bulks, you know, to an organization now that has a strong exposure to the base metals, which are the, you know, the edge, if you like, which are the metals of the future. Now, the base business continues to run well despite the challenges we're seeing around COVID globally. But I think the portfolio is in a good position. I think these are the right steps as we think about the future. Wanted to thank everyone for their questions and support today. Thanks, Pat. Thank you. Thank you. That does conclude our conference for today.