Question-and-Answer Session
Question
(Operator Instructions) So our first question comes from the line of John Bridges with JP Morgan.
John Bridges - JP Morgan
Good afternoon, Dennis. I suppose it’s still morning for you, sorry about that.
Dennis Wheeler
Yes. Thanks, John.
John Bridges - JP Morgan
Just wondered, you seem to be liquid enough based on CapEx. How much money do you think is going to get consumed in the pipeline work-in-progress as you ramp up production at Palmarejo?
Mitchell Krebs
Yes, John. Hi it’s Mitch here. How are you?
John Bridges - JP Morgan
Hi fine and yourself?
Mitchell Krebs
Good thanks. As we’ve said, we have a full year CapEx budget at Palmarejo of approximately $100 million with about $60 million of that having spent in the first two months from here, then that will decline gradually as the mine begins to ramp up in March, April, May and June.
John Bridges - JP Morgan
Right and so the CapEx numbers that you speak of, do they include the money that will be going into the pipeline or is that a separate number?
Mitchell Krebs
Say that again, John. I couldn't quite catch the word you used there.
John Bridges - JP Morgan
The pipeline that concentrates that you're going to be producing or the pipeline material, how much money is going to get taken up in that?
Mitchell Krebs
Oh, I see. The working capital leg, as we build up.
John Bridges - JP Morgan
Right.
Mitchell Krebs
Yes, that's in the $100 million John and it's reflected in the $100 million as it's broken out month-by-month. Clearly that will be the bulk of the CapEx in April and May as we see that working capital swing as we go from startup to full scale production.
Mitchell Krebs
Okay, fine and then perhaps a follow-up for Don maybe. I see there's been a pickup in the resources at Endeavor. How do you see that being translated into reserves?
Don Birak
Hi John. Well, I think we feel pretty good about the invested, both at Endeavor and Broken Hill. They have a strong resource and reserve base and we work pretty closely with the operators on their program going forward. Endeavor people spend a good amount of mine exploration and we're comfortable with their program.
John Bridges - JP Morgan
Any thoughts on how and what's needed to take it into reserves?
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