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Legato Merger (ASTL)

Participants
Michael Moraca Treasurer and IRO
Michael McQuade CEO
Rajat Marwah CFO
David Gagliano BMO Capital Markets
David Ocampo Cormark Securities
Anoop Prihar VIII Capital
Kirk Ludtke Imperial Capital
Call transcript
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Operator

Greetings. Welcome to the Algoma Steel Third Quarter 2022 Earnings Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. the Investor to Relations turn Moraca, host, now and Treasurer Officer. will conference your over Michael I

You may begin.

Michael Moraca

call. are Good morning Officer; quarter conference third Steel and Group today's everyone and Chief welcome fiscal to Rajat Marwah, XXXX Financial Chief McQuade, our Michael Algoma our Inc.'s Leading Executive call Officer. earnings

made I replay remind Steel's involve comments this the Investor may in uncertainties. forward-looking call reminder, and inherent the corporate a materially today at being recorded to will of today's on later contain Algoma applicable and differ statements call of meaning from would be securities within today. As statements is Actual risks assumptions the made you results may website www.algoma.com. available laws, like made for section which and

analysis. U.S. earnings accordance using we as financial disclaimer note refer which our prepared accompany outlined earnings prepared and the today ask everyone to call our read the the Please dollar found of includes today's that in Steel's corporate third to are to our statements Algoma in Canadian our as our statements IFRS, presentation call can the section U.S. would management's and financial in and website. slide on and two XXXX functional mind, in of non-IFRS posted legal slides remarks. evening, accompanying discussion the currency. risks today's certain be assumptions the financial presentation, also on The dollar prepared and currency fiscal quarter are measures. our investor with GAAP that addition, Last With an I references discussion for from today's differs to In presentation to

XXst, and statements otherwise in from today's Please dollars for to XXXX. call on noted. March been our December are note nine and Our fiscal prepared April months amounts all to Xst ended year referred financial runs the three Canadian have XXst unless

the turn a our Executive question-and-answer call will Officer, Chief now session. Mike? Following Mike I will remarks, conduct we McQuade. over our prepared to

Michael McQuade

joining priority start continued Mike. quarter XXst, was Algoma's year proud Good improvement call markets. has matters you, I'm calendar over for fiscal and comments, our in top their Steel, safety and zero last entire as for lost-time of that collective to Algoma's thank XXXX, call and you substantial resulted safety since commend quarterly returning December in by the one decade injuries. earnings employees. achieving pursue we our Thank our XXXX second without for earnings our the our our Algoma morning. to our frequency third of we is truly at addressing Welcome most our public to and Algoma us, injury I what At say goal believe ever. years will of performance I always, workplace team my focus success in Safety as continued ended diligence safest rate. relentlessly compromise

it will Before Algoma strong for getting path transformation industry, North and into it shape in remarkable I'd few to our discussing today's American quarter, how how underway, the the a specifics spend our like results positions minutes steel the forward. of

what shareholders of operations value pricing and safe are be cyclical our are facilities. cash enviable by on at investment, sheet markets in capital focusing much realize through have for and long-term volatile, into work the expect means on management that have, we to some in creating transformative seen of that and future. financial us Prudent quarters. several not our has highly putting point balance We Too in management, financial the we we cash are today. position gone efficient evidenced combination as laser-focused Steel prudent we a last the can over

our obtained from transformative we end EAF the financing construction of and quarter cash CADXXX underway. commitments Canadian the million at of is have had the project we With government, on hand the

to Our time expand on facility ability and is is on long-term budget, stakeholder value. our designed lowering our the primary a steel-making production which to bring into facility and carbon and enhancing modernize focus EAF our while intensity preserving capacity,

XXXX fully reminder project Let are by why approximately annual the about you raw so quick industrial our as furnaces finishing forth me we Accord. X.X throughput represent emitters combined federal our XXX% lowering of EAF while the are the dual of targets XX% project. entails of COX capacity, level This carbon steel the reduction set of under operational. tonnes, for emissions production excited XX% million a Paris would downstream when give provincial designed and of for that matching The

be furnace over before XX-month expect steel into two we of the time. the in The pass away becomes But online will company bring capital supply and be This fundamentally blast the be power production Later the successful the focused see the current our dive framework quarter's grid increased transition phases facilities with will the Rajat in steel and without all will is operate, positioning in next-generation next as go our we from from how We by steel achieved transform to allocation available I benefit as construction we it record EAFs from today's facility that, maker, favorable production, the who it pricing the operate environment. months support it how over to government. a online and we evolving are to come results. disrupting the financial over XXXX to presentation, of in followed continue to market over and XX provincial on Construction expected as sustainability phase. safely to a project of will across we and steel cycle. poised a following deeper

Rajat Marwah

you and joining the call. Thanks thank Mike. for Good morning

once again the I'll unless that displayed otherwise in Algoma. noted. expressed Our Canadian generating cash you quarter are third results of numbers all fiscal potential impressive again remind dollars

of and cash we highlighted sheet seasonal balance the finished traditional $XXX CADXXX was CADXXX inventories with senior We generated during XX% despite of under of credit million, million, from of CADXXX by cash of income that the of Our long-term achieved which quarter quarter EBITDA and all our CADXXX operating availability EBITDA million full transformed results million were raw adjusted activities facility. fully quarterly outstanding an building secured repaying by margin our adjusted reflected revolving net materials. million of debt. Furthermore,

a prior quarter. tons capital X% the performance, down drivers only XXX,XXX on our As the sheet government X% is key in result, remaining Diving long-term linked sequentially, the of debt our but form into shipped year quarter, to the as of our we net in compared the to up balance loans projects.

the shipments prices. sequentially of Net year. the outside sales their in revenue steel averaged and of holiday same through versus quarter, our to issues XX% impact our prices customers, contract an and ton, year order book than to previously sequentially we and the calendar of agreed our versus lower announced, in of including logistical are increased were previously that last quarter in at operations, lag due billion realization The higher XXX% up upon up increase as As CADXX,XXX This is and X% our reflects had This quarter chain XXXX up CADX.XX we prior positive XXX% challenges. up in ship altered steel shutdown per period. the revenue. flow constraints, the levels the of expected we in supply in first inventory increase resulted expected various half COVID-related

year's material per in XX% price increased side, the quarter, cost year of employee increase SG&A prices, to cost averaged levels adjusted the sequentially cost a All-in-all, Algoma's entire second milestone the This accomplish of raw the to goods team of dedication and higher sold and time. related ton the in fiscal prior quarter historical an for Algoma. It increase for we CADXXX public listing. marked selected and our quarter. of hard testimony as the to driver able of a what increases Algoma commodity of XX% third profit performance, historical were On sharing the approximately over consecutive our result our base was record main work EBITDA, includes a

billion breakeven over XX calendar EBITDA just XXXX. from to months levels adjusted generating ago Moving near CADX.XX in

the surpassed to of a earnout announce of shares adjusted million earnout to of calendar ended the required common eligible holders Directors the result, have XXXX, million our approved event, the the we As to trigger issuance for right are year a full XXst, XX.X December earnout in pleased and resulting which Board $XXX determination that EBITDA management.

We days. capital into allocation. market current now issued business expect it five to back and I'll approach within on deeper Mike to shares disciplined approximately be the to Mike? non-management to turn to our balanced dive further color conditions provide and

Michael McQuade

Rajat. Thanks

ago. pricing state of the the clearly are few steel Looking highs a just seeing levels off at North we market today, of the from months American

mid-cycle double However, remain XXXX historically than to approximately still prior any prices point pricing. higher and

that where a We equilibrium in the expect we to the market out. by level shake is in find remain about supported This near-term fundamentals order our we should and book. see optimistic and pricing

steel and premium mill should shift coil. our us book customer of These volume our We've of contract investments selling products. helped year. of service strategically include prices stability that or producer which of sell given move on provides Canada's we price always $XXX as plate base of currently We the opportunities play a We the Canada XXX volatility down order ton only per approximately have target and that hot-rolled offerings range calendar well, provide a a of across contract. many sell traditionally products, to wide XX% that operations heat higher to our as price maintained in and in a some when compared a U.S. servicing We customers up sales experienced commitments the discrete quickly. plate currently treater as percentage are and diverse and lagging mechanics enjoy over

hot Our project unit, leveler we to of calendar completing the on We completed of enhance is surface inspection modernization XXXX. designed which look the to assembly and our forward recently this commissioned remains further our track project and our automated XD balance capabilities. during new

to pricing to the demand intensive number imports. sector near a steel These that the potential reasons We strong term will underlying include factors be intermediate factors and optimistic at have settle supply levels. and positive other from automotive attractive industries and of relating

even benefit the to favorable construction value to project, of market conditions EAF real operationally, well-positioned punch one-two long-term development shareholders. we creation as execute our are providing of and from We the these a

little me Now, our more policy. capital a bit about allocation talk let

excellence position operational ensure financial steps to and value share from the a to execute in strong history. Our primary to benefit initiate sheet also the have regular we long-term our $X.XX per project, to utilizing on focus prudent the In in ability operations to balance quarterly is pricing EAF us our taken strengthen afforded our dividend. opportunity the meantime, phase and have our market the to next shareholder delivering company's discipline ushering by

shares purchase the of issuer our have flexibility shares initiated It's results transformative open were the normal we develop Finally, build assets, time-to-time. can short bid to a considering have just existing time-to-time, where in quite us point our attractive produce ago. a and we the be our dividends, from change we gives few from to for quarters initiated exciting that reached repurchasing and opportunistic market history, a course from from in a where operations, program and allow new

reevaluate free not as of generator our We spend it the is not will we policy we That means, expect significant have. term. continuously Board yet to within our do focus the said, live reiterate with that longer allocation cash I will our over capital being money be to a

well-capitalized our public our markets, included proceed EAF strong development to achievement our milestones major our of to development dual now steel the of in project in secured Sault achieving construction manufactured transformative a the XXX-year financial We and continued execute. history, including conclusion, employees. generational and legacy decision a new of our in to our third EAF with enter fiscal positioned Ste. and Algoma a investment quarter change results, debt, that project, as how centered the historically designed for Marie, retirement phase of to facilities, with safety return forever number a senior is So, on and

focused this greener, and investment more resilient. make our Our critical team business to competitive, both more operationally on financially and is

happy stakeholders. Q&A our We We very expect a forward proposition give your for Algoma for future of Steel. questions. At to create value Operator, take much please we point, compelling much this instructions be you this holds. in for your very session. Thank look continued what interest the would transformation the the to will all

Operator

is conducting time, with with question first this be At Markets. question. a session. question-and-answer BMO Please Gagliano Our Capital Instructions] [Operator proceed from David your we'll

David Gagliano

questions. your commentary and my taking in the obvious what quarter. noticed for this Thanks morning. -- probably good the and Hi, no start We've there's remarks prepared the in earnings with question. MD&A, release near-term I'll this presentation is in outlook

some distributors, lags a challenges give provide that kind regarding us pricing, and lagged just of given to we're volumes, could about available? you the buyer on given that around if as a can thoughts the in hearing wondering the and from was is I So, the sense there, quarter we're halfway current your volumes if the Thanks. strike thinking what you pricing given

Michael McQuade

Good morning, David.

are come minimize will to of to reverting industry to guidance the practices that are to we quarter. in the What later guidance So, the I start volatility uncertainty we the estimates. strive to want that is sector with do brings trying

As in instill are out, that be supply being was our issues pricing in variable. It's we manner volume guidance say. it modeled. contracts than chain quarter lagging confidence half well a can and and you we imperative near-term that provided the point the And it experienced, go that more what felt our reasonably that with is left with a the that to really remains understood

David Gagliano

so volume it on there perspective. from these in is meaningful in is seasonally reasonable that recovery a Okay, this basis? headwinds a a be typically, versus quarter-over-quarter near-term, to volumes, will rebound assume still fairly typical a recovery albeit Considering muted the a

Michael McQuade

around year there think didn't new that available and had the our in into fiscal provided quarters. make is the marketplace QX fair. that way production its it subsequent I in that's We guidance was

quarter, typically major don't outages. we is fourth in a when Our winter time take period, fiscal the

So, production again, is high. our reasonably

connecting the factors. things got and evolving So, the of we've really positive couple side It's a the Detroit. with supply that's blockades very at side bridges really like day-to-day demand Windsor

David Gagliano

a of, us into this but volume this other quick, and one priced? then issue of I'll amount give sense -- the this, perspective, that volume kind get not real And -- of current Okay, amount piece kind you to versus from off quarter of was when just was was a understood. that the just can last deferred -- well timeline quarter

Rajat Marwah

this is Rajat. David, Yes,

was around So, previous XX,XXX the the was and the December in six which quarter, roughly which quarter, tons priced will first volume months we through it the built flow of last in quarter. in

will So, move that -- into that's how be pricing the shipped. XX,XXX will those for

David Gagliano

think X%. okay, Okay, the by buybacks the the different and route, being the just you amount there to perfect, routes? NCIB potential went repurchases additional on move thought I -- it which of as total switching that’s given Obviously, And year does helpful. of then Is gears caps we buyback. through kind

Michael McQuade

own in investing What number result the after years, legislation. is cash we've in is you you long-term while like of eight the right, normal team And use three bid, of if value put to the and that the for place, So, year buying value decision of Investing stock. threats proud identified our issuer more weighed investment investing of along flexibility accretive the any the further our earned do strengths, our us shareholders. building last to shore proposition, would presentation. opportunities the to after what that you're increase completion others absolutely protected our accomplished in our or shareholder and to there's the sizes opportunities I'm next any I'd investing other more to opportunities over ultimately to available to to for up be business. That in will that still sustainable by the with course provide value. blocks, prescribed we've mitigate advantage has it will take does direct that's weaknesses and it against be electric arc will slide

to value of of the the things with additional lens for greatest So, decisions, be what creates the our including all will evaluated shares investment long-term those opportunities shareholders. do through

David Gagliano

kind of over for would free cash some go range with be companies problem distribution that Algoma? ranges of If be be expectation we've for have" process, to sort time. from information, as this have shareholders has -- other range flow Algoma a targeted approach to that kind requirements, that of were to distributed public some provide a of provided what there our to reasonable "good after Okay. of through of sort companies this And capital been seen

Michael McQuade

through of whichever are great cash in shareholders, guidance might create on I any spend really, for long-term it's cash any be as we that the to that buckets provides what be that principle say, we look this our for just in until given will to a split some building it's value that to time. and you're looking to evaluate opportunities might have. greatest premature terms previous of the principles those our with it's that opportunities, of guiding point premature return. the answer the strengths -- question Again, respect question, And David cash. as and dancing some think for I future of And distribution so I provide premature path at Appreciate our them. But said. see allocation kind to we'll

David Gagliano

understand at shoot Part helpful. clearly of stage and the in constraints me Okay, messenger the asking don't this I questions. of terms the job. the

can give also CapEx for the been the of terms year to project In for XX sense for spending overall plate there project? CapEx, us next and/or XXXX EAF needs then calendar for has or the and the months the capital any changes a modernization you

Rajat Marwah

million Yes, the a plate than in pretty other saying be have let's much roadshow modernization been say the presentations. line EAF, we with so, million, will And in CapEx what in -- range. that's our CADXXX CADXXX including

be to spending in are Our maintenance we year. comes range the plate odd CapEx that CapEx the then then will and CADXX million next continue modernization and

we the no CapEx plate substantial perspective is and So, from that mill, change even will what in have EAF past. be overall. there From declared

David Gagliano

for me. last Okay, piece

that is? CADXXX the Is clarify -- is to XXXX fiscal a -- that million, what million that is to that was CADXXX that Just CapEx? year

Rajat Marwah

the modernization. will it which be No, year, for mill concludes plate next

year. plate are So, next taking for mill the we modernization

next will say. So, for let's be fiscal it

David Gagliano

Thank fiscal, All Got you. Next right. understood. sorry. it,

Operator

Securities. with is with your proceed David from Cormark Please Ocampo next question question. Our

David Ocampo

Good morning, everyone.

Michael McQuade

Good morning.

David Ocampo

to way. could question on out would figure to wanted what and the look just returns, shareholder about like keep returns different maybe I then do balance cash you that the it Is a and balance like? there but follow-up potential modeling guys potential David's sheet your minimum a we approach can on

Michael McQuade

looked we So, factoring at really XXst, that we associated David, government the December -- cash address on cushion that also requirement two financing as we to to electric in way our I evaluated seasonal at the balance and the or at arc, the our would then occurs And the volatility we that hand, looked the looked see in us. it, complete from approached available additional is looking or that took the Also then volatility there. market. steel factors, in capital, the the working with a volatility worked at

through to on go and that ourselves protect month electric we position are of there the facilitate in where to implementation, spend every working what's make is each the that arc we each and hand really sure that seasonal left as to through sector. as So, and cash see to we'll continue every quarter, evaluate steel and allows us the volatility capital well

David Ocampo

following a talked, with sheet, you here? being about sense. products plate around of And higher the think business about makes touched overall prices participate in than appreciation your for your that XX% little XX% CADXXX like, contracted, lot you we see that then you is as a of should plate bit guys -- prices similar pattern plate should a No, mind, we is in

Rajat Marwah

for XX-XX It contract roughly order will bit perspective. is different. a contract book spot be little from Yes, our so plate versus

monthly should and can accordingly. flowing to quarterly, through you books it that split from take and into we same the level should the flow high So, see

David Ocampo

of similar and follow monthly portion fixed a it of lag, rate? a Raj, the quarterly doesn't lag, contracted then breakdown, that kind that, annual

Rajat Marwah

plates are those normally, not price. And fixed Yes.

So, monthly be it will quarterly. and

pricing. fixed no So,

David Ocampo

million XX-month availability are you can in I with parts, mills? about and then cost timeline of us there's I there EAF guess hearing guys your for we're everything how And for comfortable number? you shortages labor with on construction overruns Perfect. if And still the remind any CADXXX leeway terms guess

David Ocampo

and the with front that path a So, into on is does to buffer phase critical that end. it question answer built two XX-month parts some have construction the

buffer XXXX. that the cost put as that that still contracted, remain buffer second than And in project this well. confident overall yet delivering about The really represents significant there calendar XX% we be a cost. quarter more of the by was pieces to now it into remaining of So, have

and sufficient buffer is that this So, well we think in at to buffer budget there on point. as as financial lead-time project on-time bring

David Ocampo

me. it perfect. for Okay, That's

Michael McQuade

you, Thank David.

Operator

is Our with Anoop proceed VIII with next Prihar from Please your question Capital. question.

Anoop Prihar

morning. Good

Just a couple of questions me. for

wonder of that given might couple First interpretation out on we've could seen how give over the volatility of your a as us playing next I all, volatility you if to and the the driving you what's side, of see bit quarters? HRC

Michael McQuade

was highs and steel and the of Morning the Certainly minus times significant were Anoop, highs question. cases. a kind mechanism actually sector, remain in the new three thanks the base is not inventory likely carry in for above even the hit mechanisms. or demand to pricing have customer pricing actually or in the that previous self-perpetuating index A had in of peak America and it's of midpoint many Certainly cycle. the volatility hot-rolled of, are that drives marketplace the the exists that XXXX, the those and Prices plus August that North unprecedented the or supply coil today amount timeframe. chain

are to on reduced orders prices and the demand. pullback anticipated So, where a fall, those inventory just periods during perpetuates that

call of there's is So, really supply/demand that anybody's struck. the until is an guess. equilibrium out Where that balance gets is, a

very still strong think very, -- fundamentals North I that what's demand/supply now. American that a fundamentals period steel there is for that of a support sector more the we will time market is within strong believe important

Anoop Prihar

in plate what between viable? extent CADXXX, And spread HRC customers even is substituting is it I being With guess that you plate and right what now, to HRC? are seeing approaching outer the

Michael McQuade

they're two markets and very very think applications. distinct -- very I No, different

and customers don't out. see So, in I substituting

Anoop Prihar

slipped pushing modernization, I right. Okay, you MD&A, when I mill back you slippage? about Can a talking to it I March were that And the bit think phase plate in sort looks on going terms has like first mean, us of, little of all about a talking noticed about the tell May, now we're, in initially, what's there the we're bit. little June. in

Michael McQuade

It to time. chain Sault also parts. here should make Marie, the Ste. say, issue was environment that It's was And conducive for back it market us wanted I on the last everything more a and sure sense make sure fall. six environmental climate given standpoint, of and here from some that pricing, -- in supply execute weeks. an move a could it the four made to by to we for I

Anoop Prihar

Okay. And just last question, given your unit higher comments on our be increasing basis? that input on a costs, is costs sequential it reasonable to assume will QX for

Rajat Marwah

not, So, start pricing down ore it to the that see do cost, normally lag will that well, last as and time, -- lag. should it the iron six flowing on a trending as I it's alluded months through we as

iron the first price and getting dropping fourth below in dropping back to to quarter -- flowing the next CADXXX calendar cost with CADXXX, our -- we the now is below through ore then fluctuation and of which fiscal into should to second coming see So, of index we quarter, that year.

So, stabilizing, perspective, seen, but Sault cost cost the flow cost supplies getting through April what last that of is make, will whether raw coal gas, when CADXXX whether on we year I'll is from see around higher from definitely time, this start plays that material that There pressure other I out, elements only to cost, The inflationary major power, into will new see. said trending Ste. it's in that right it's Marie. It's how should alloys, direction. be we year-over-year, be is other year-over-year, higher. we will which per our and coal, onwards point ton

Anoop Prihar

Okay.

just that a the coming takes should So, Is costs statement? on fair and so our and sequential for a moving direction. in down understand basis, I be some QX right puts

Rajat Marwah

Yes.

Anoop Prihar

Okay, great. Thank you.

Operator

Our Please next your Capital. question. with Ludtke Imperial Kirk is question from proceed with

Kirk Ludtke

everyone. me? Hello, Can hear you

Michael McQuade

Good can morning. We Kirk.

Kirk Ludtke

Great. for on quarter. the the call. congratulations Thanks Well,

follow-ups. couple a Just

I that confirm you you. I'm known. well the On costs should pricing you And will to the guidance, be helpful. that's already want that -- everything sequentially, be for down also sequentially, realized else mentioned up March quarter being coming Thank is correct? pricing mentioned just input equal, super

Rajat Marwah

look construct of should you perspective. think I the So, from at pricing

definitely do depend because last the monthly lagging contracts, when month's they we are quarterly look monthly from quarter-over-quarter have on up So, flowing you be the go at will settlement. the contracts, When last -- they quarter. into which you

spot as price front. into the February, XX% is as as weeks is concerned, have to the or down, will of on the be lower they in So, lead-times starts falling roughly contracts. impacting and mostly January our XX% monthly HRC pricing I are they which And far gone business, four the mean, on

So, Plate at on move will opposite contracts pricing. hand the it it's spot that's where will spot get it different, how be be will -- the the direction is constructed. and than other the up in will lower higher filling

how that's So, will it move.

it it, you with do end once So, will number. up the

such, are We not giving move. will any guidance as but that's how it

Kirk Ludtke

moving of lot A pieces Okay. there.

And remain -- thinking you've in got in that color. our about the back -- should on with have a helpful to should calendars try milestone to we at a into or we by certain to just something. track? point built in, order next we buffers is appreciate respect those that on I be that I EAF, the time Okay, the that's milestone should that I'll there happening

Michael McQuade

answer. to question Tough

mill at look there of out Gantt achieved. putting you If hundreds upon the the literally What is major doing like when and are chart, are are press we releases line milestones hundreds the we items. are

You've Danieli. contracts seen equipment for the letting of to the

with buildings, transformer we anticipate continue the site, our LSP. associated The contracts would I for [ph]. drive of to the thing seen to piles upgrade be contracting PTI, next would the You've the prepare GE let

So, there's no one major.

for of If the buildings. picking you're our looking for the the partner next would one, erection be around it

Kirk Ludtke

when that? expect do Okay, you to announce

Michael McQuade

be my week within two would or That a will be guess. best

are on that Our would But reasonable guys working contracts. be -- it procurement a guys expectation. and

Kirk Ludtke

like a risk pretty seems low That milestone.

Michael McQuade

cost. point would the with of being that much is parts like, the again make you if it's contingency And rather stronger, construction. available that the is for significant It the though the a remaining component of

Kirk Ludtke

Got it.

in I the you respect I the to that then lastly, XX.X shares earnout days. say think I next be great. shares, Okay, it. million issued And appreciate heard with will five

Rajat Marwah

shares, Yes, will that will Those portion the will be less XX.X days. of next be non-management be than shares the million issued roughly. in the it which five

Kirk Ludtke

-- be in Fantastic. the is by then Great. And then? placed buyback lastly, will program

Rajat Marwah

-- couple the it all for stuff, takes processes TSX TSX, to not it Yes, complicated, as of get but NASDAQ done takes with and weeks. is

have earnout So, shares once are done issued. we it the should

Kirk Ludtke

Okay, be -- place whatever so you that respond. you so happens, it'll can can in

Rajat Marwah

Correct.

Kirk Ludtke

Thank appreciate. I Great. you guys.

Michael McQuade

you. Thank

Rajat Marwah

you. Thank

Operator

Our next David with question. Please Markets. is BMO Gagliano question Capital with your from proceed

David Gagliano

Hi, sorry.

a follow-up. Just quick

year everything than us You XXXX. fiscal other EAF for the gave earlier the CapEx on

I expected think that's in EAF the you fiscal CapEx What's project said CADXXX million. believe was XXXX? CADXXX for million right. I the year to

Rajat Marwah

It's -- I bigger -- of are areas. can the on structural into a a we you other going getting contracts now range little as through right process range and give

on from a CADXXX let's outflow portion in million assuming cash the it to money some dollars. of on net that should get government will be Canadian in, let's CADXXX say, anywhere basis, -- we So, million say

So, a that are range on giving in it's but bigger a there lot that's go, will range. difficult you. of But pinpoint, I'm to that it so things the be

David Gagliano

to CADXXX the CADXXX for million portion? assume government that funding does What million

Rajat Marwah

it. Well, this is net of

assumes that the taken government I've funding this So, in.

of and we'll the the CADXXX CapEx be cash get So be -- company. will the balance the some CapEx million funding million the out in will spending CADXXX to -- be government going range. in And overall will the

David Gagliano

any Okay, kind that government capital when on to of returns so, they? are are what the regarding tap apologize to you shareholders? restrictions funding, Can and any you caps if there remind or and into I just been are addressed? this funding, me -- already there start And again, has restrictions the government if

Michael McQuade

during two the -- There portion are relates infrastructure phases. bank the are. It distinct from and there to and

the this that to the but allocations, one-third ultimately on looking claw-back to government We phase, secured the During it Capital becomes availability. point. would ability on and repayments our would project. there's draw, complete a completion and that ensure at construction the is are funds require

consider the phase effectively of So, of the financing. distributions government during availability to construction one-third reduce the

David Gagliano

one -- government or going mix we Thanks. that think, know. range know that's Is is -- helpful. obviously, range million what's rough don't CADXXX we something million, CADXXX to guess, been gave, I that's like tapped the But of breakdown? rough million, this I two and break buckets the or can that yet? is And -- or from within this come CADXXX million, down? know, Okay, based you on I you funding, buckets that both on CADXXX don't the into two implies the there's

Rajat Marwah

of combination It's both a buckets. the

And how there from in now. thing capital right based how the money spending the changes the go drawing are on along, that that's it there And will in goes. as will we changes be we is So, be on is the capital if government. the allocation, the allocation other

on the specifically million as So, the infrastructure mentioned the CIB, Mike bank. CADXXX

CADXXX to the restriction. are So, subject or claw-back million

capital So, that allocation -- that will years. as is are plans fluctuate the developed over

David Gagliano

that's helpful. Okay, Thank you.

Operator

the have over the I the turn Mike to of McQuade end question-and-answer will now We call session closing and reached for remarks.

Michael McQuade

year. this call you participation results quarter fiscal updating third continued forward listen, report and for we'll to your to our when later in quarter interest We XXXX you in Algoma our soon. again, and Well, results our earnings stay thanks talk fourth your Thank and on you. conference Please for safe we look Steel. progress

Rajat Marwah

Thank you, guys.

Operator

This concludes you time. disconnect participation. and lines conference for Thank at may you this your your today's