Coeur Mining Inc (CDE) 2008 Q2 法說會逐字稿

Good afternoon. My name is Thea, and I will be the conference operator today. At this time, I'd like to welcome everyone to the second quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. (OPERATOR INSTRUCTIONS) Thank you. I'd now like to turn the conference over to Ms. Karli Anderson, Director of Investor Relations. Please go ahead, ma'am.

Thank you. Thank you today for joining us to discuss the Company's results for the second quarter 2008. This call is also being broadcast live on the internet through our website at www.coeur.com where we have also posted the slides that accompany our prepared remarks. Telephonic replay of the call will be available for one week afterward on our website. On the call today are Dennis Wheeler, Chairman, President, and Chief Executive Officer, Mitchell Krebs, Senior Vice President and Chief Financial Officer, Richard Weston, Senior Vice President of Operations and Don Birak, Senior Vice President of Exploration. Any forward-looking statements made today by management come under securities legislation of the United States, Canada and Australia and involve a number of risks that could cause actual results to differ from our projections. Please see our full cautionary statement on slide two. With that, I'd like to turn the call over to Dennis Wheeler.

Thank you, Karli, and welcome and thank you for joining us on today's call. In the second quarter we continued our growth strategy by making progress on our newest long life mines which are expected to maximize value for you, our shareholders. The three key legs of this strategy remain. Our San Bartolome mine in Bolivia, which began commercial production in the second quarter, Palmarejo in Mexico where we reported substantial reserve and resource increases, and Kensington, where we continue to move forward towards our goal of production late 2009. These are all large long life assets which over the next two years, we remain confident we'll continue to ramp up companywide production, cash flows and reserves. In 2008, with San Bartolome now contributing its initial production, Coeur expects to produce 13 million ounces of silver on a companywide basis. Next year, we are expecting to increase silver production to nearly 24 million ounces as we bring Palmarejo online. In other words, we plan to nearly double our production next year, and these new sustainable long lived silver Mines will have a major impact on Coeur into the future.

I'll begin by highlighting some important milestones we achieved during the quarter. San Bartolome, our newest silver mine in Bolivia, did reach commercial production. It is today planned to be the world's largest pure silver mine and we're very encouraged by the high quality of the production of the site. Our first shipment of dore reflected an impressive 99.9% purity. San Bartolome does continue to maintain an excellent safety record and continues to benefit from strong, local support and cooperation. We are now forecasting to produce 3.2 million ounces of silver in 2008 from San Barts. Our 2009 guidance, however for the mine has not changed and remains at nine million ounces for that year.

No doubt we did experience start up issues at San Bartolome in the first half of the year. We've made some changes to the infrastructure which included replacing some parts of the mill and bearings, which cost us several days of production. Admittedly, we're disappointed with the slow start up of San Bartolome; however, we've seen nothing, I emphasize we've seen nothing that tells us this mine will not operate at the full capacity for which it was designed. We're implementing a number of measures to get us to design capacity late in the third quarter. We're making personnel improvements. We're intensifying the training and development of the work force, and we expect to very soon complete the modifications to the Ball mill. Reaching our production targets at San Barts is paramount to Coeur's growth strategy. I can assure you that we as an executive team, along with our strengthening Bolivia leadership, San Bartolome staff and work force are committed to getting it to design capacity late in the quarter. On slide seven, we showed the location of our new Palmarejo silver and gold mine in the heart of the Sierra Madre mineral belt of northern Mexico. We're pleased to report Palmarejo is on schedule, on budget, and now is set for an earlier March 2009 start up. The feasibility study, you'll remember, for Palmarejo focused only on the Palmarejo deposit. We reported a total mineral inventory of nearly 100 million ounces of silver and 1.2 million ounces of gold, and the contribution of Palmarejo alone, without the additional ore bodies has already added significantly to Coeur's mineral inventory. Palmarejo boosted Coeur's total silver mineral reserves by 29%. Increased our companywide gold reserves by 51%, an we expect the mine, when in operation in 2009, to generate approximately $125 million in operating cash flow annually based on current metals prices.

At our other major development project, Kensington in Alaska , we continued to make measured progress towards a late 2009 start up. We told you on our last conference call that Coeur Alaska has submitted a modified plan of operations to the US Forest Service for an alternate tailings facility for Kensington. Separately, the United States Supreme Court has granted the State of Alaska and Coeur Alaska's petitions to review the Ninth Circuit Court of Appeals decision relating to the original Kensington tailings permit. Of course, we're not able to predict the potential outcome of the United States Supreme Court review, but the bottom line is this: we now have two parallel paths to get us into production at Kensington late next year. We're looking forward to getting the tailings issue resolved. Building on our strong local support in the Juneau area and realizing the long lived gold production and economic benefit that Kensington represents to your company and the southeast Alaska region. Once in operation, we expect the Kensington mine to produce 140,000 ounces of gold per year. In addition, we're conducting a new exploration program later this year as we pursue defined opportunities to find new resources at Kensington that could further expand its future production. Slide 11 demonstrates the combined contribution of these three new projects: San Bartolome, Palmarejo and Kensington and what they represent to Coeur's silver and gold production profile over the next three years. At 21% compound annual growth rate over 2007 levels for silver, a 32% compound annual growth rate for gold, with further exploration an reserve growth in the Palmarejo district, we expect these growth forecasts to further increase.

As we grow the Company, we continue to maintain an excellent record on worker safety. For example, over the las12 months, we've reported a companywide incident rate of just 0.64 incidents per 100 employees, far below the mining industry average of 3.1 incidents per 100 employees. We do make safety a top priority at Coeur and we go the extra mile by applying United States mine safety and health standards across all of our operations throughout the world. Our production growth is expected in turn to lead to significant cash flow growth. In 2009, we are projecting to generate $235 million in operating cash flow and nearly $300 million in 2010 based on current metals prices. Now I'm going to ask Mitch Krebs to join in to review the quarters financial performance with you in more detail.

Thanks, Dennis.

Over the next few minutes, I'll discuss some of Coeur's key financial metrics for the second quarter. For full financial details, please see our press release that was issued this morning, as well as our 10-Q that will be filed later this afternoon. In the second quarter, the Company reported a net loss of $5.4 million which includes $10.7 million of expensed pre-development costs relating to the Palmarejo project. These costs will now begin to be capitalized going forward due to the completion of the Palmarejo feasibility study during the second quarter. Excluding these costs, second quarter net income was $5.3 million or $0.01 per share. We have a fully funded capital plan at Coeur and $187 million in cash equivalents and short-term investments as of June 30 and I will go into further detail on our capital plan shortly. The next few slides give you a comparison of a few key financial metrics. On slide 15, you'll see that our cash costs per ounce of silver have remained more or less consistent over the last six quarters as metals prices have increased substantially. We continue to aggressively manage our costs at the site level by carefully analyzing our materials, personnel and expenses. On slide 16, you'll see that sales of metal in the second quarter were $50 million.

We were affected by a brief shut down at Cerro Bayo relating to an electrical upgrade as well as mill start up issues, commissioning issues at Martha which affected our quarter-over-quarter performance. With both of those items resolved and San Bartolome now in production, we are are optimistic about our sales prospects for the third quarter and the fourth quarter of 2008. On slide 17, you'll see the last four quarters' gross margin which is essentially metal sales less production costs. In the second quarter, we maintained a solid gross margin of right at 50% despite being impacted by the Cerro Bayo temporary shut down and Martha commissioning its new standalone milling facility. We consider gross margin a key benchmark and a key area of emphasis and focus as we transition our asset base to large longer life mines that Dennis was talking about earlier, and we're maintaining this margin in an environment of cost pressure. Just for some examples, at Cerro Bayo and at Martha , if you look at the first six months of this year versus the first six months of last year, labor costs on a per ton basis are up 37% and 47% respectively. Diesel costs are up at Cerro Bayo 39% and Martha at 60%, first six months of this year versus last year. Power at Cerro Bayo is up 36%. So in order to maintain -- I think we've done a good job of maintaining our margin and our cost profile in an environment of pretty intense cost pressure. Turning to slide 18, EBITDA for the second quarter was $11.7 million after adding back those pre-development costs from Palmarejo that we have had to run through our income statement. On slide 19, you'll see our last four quarters of net income. Our second quarter was a loss of 5.4, but adding back the Palmarejo pre-development costs, we would have reported net income of $5.3 million.

The next set of slides take you through each of our current operations and just show the quarter-over-quarter and six months over six months comparison of operating cash flow by mine, and you'll see that with the exception of Martha, which was impacted by the transition to becoming a standalone operation in the first half of the year, each of our existing sites has improved its operating cash flow contribution on both a quarterly and first six-month basis. For example, on slide 20, you'll see Rochester's operating cash flow is currently up 25% year-to-date over last year, contributed about $14.2 million to operating cash flow in the second quarter alone. Flipping to slide 21, you'll see that Cerro Bayo, second quarter cash flow of $9.5 million, and cash flow at that site is up about 112% year-to-date over 2007. And as I just mentioned at Martha, Martha is Coeur's only existing site to show negative operating cash flow year-to-date; however, it's important to point out that operating cash flow at Martha through the first six months includes nearly $12 million of increase in working capital, which reflects the primarily the lag in timing between when we produce silver an when we receive payment from our refineries. Without these timing adjustments, Martha would have contributed about $4.5 million in positive operating cash flow year-to-date. Slides 23 & 24 summarize our two Australian interests, in Broken Hill and Endeavor, both of which continue to be strong performers with Broken Hill contributing $5.6 million and Endeavor contributing $3.2 million to operating cash flow in the second quarter. Since 2005, Broken Hill has contributed over $40 million of cash flow to Coeur and Endeavor has contributed over $16.5 million of cash flow to the Company. Turning to CapEx on slide 25, this pie chart breaks down our spending year-to-date of just under $169 million. You'll see it's fairly evenly distributed among our existing sites and then San Bartolome. We expect the bulk of our remaining CapEx in 2008 to be spent on completion at San Bartolome as well as continued CapEx at Palmarejo. Slide 26, then I'll wrap up by discussing our liquidity and capital plan.

As of June 30, as I mentioned, we have cash equivalents and short-term investments of right at $187 million, and a program to grow our cash flows at both our new mines an our existing mines. We are aggressively managing our spending on both the operating and capital costs as well as aggressive working capital management. Even in light of an escalating commodity cost environment, our CapEx budget has not changed. For the remainder of this year, the last six months of 2008, we expect to spend between $185 million and $215 million in capital spending. This, of course, includes the single largest component of our CapEx profile, the Palmarejo project, and those capital costs as part of the feasibility study just went through a very thorough third party evaluation and updating. At the current time, the Company is comfortable that its existing cash plus cash flow from operations during the second half of the year will cover our second half capital expenditures. We are continually reviewing the Company's cash and spending forecasts, and we will continue to manage the Company spending including even a slowdown of spending in our projects if necessary. We expect to grow our cash flow in the second half which will lead to a further bolstering of our cash position. With that, I'd like to turn the call over to Richard Weston and Don Birak who will provide an update on our operations and exploration

Thank you, Mitch.

Silver production (inaudible) for the second quarter as detailed on slide 28, an this was up 5% over the last quarter. You'll see that our 2.5 million ounces of silver production is well balanced and diverse across our six operating mines. While San Bartolome was a small contributor to our second quarter results, we had our first silver core there in June and we are very pleased to have completed the first shipment dore in July and we expect San Bartolome to be a solid contributor to our second half results. Looking at slide 29, in the second quarter, Coeur reported gold production of 13,470 ounces which was generated by three mines, Cerro Bay in Chile, Rochester and Martha. We look forward to the start up of Palmarejo this year, which we expect will contribute significantly to Coeur's gold and silver production in 2009. At San Bartolome, we continue to work through start up issues as Dennis discussed. We are currently repairing our Ball mill bearings and in the interim, using our SAG mill and reduced throughput. We expect to have this issue resolved this month. We currently are using an interim disposal area within the (inaudible) facility and expect this facility to be completed during the fourth quarter of 2008. In this initial year of production, we expect to produce 3.2 million ounces of silver and remain on target for the projected nine million ounces of production next year.

Turning to Palmarejo, we also made considerable construction progress at Palmarejo during the second quarter and we remain on schedule for out March 2009 start up. On slides 31 through 34, we've provided the start up activities. The tailings dam and environmental control dam pre-construction work is well advanced. We have approximately 600 contract employees on site for construction activities. Excavation for the processing facilities that the plants have been completed and contracts for mechanical piping and electrical work are in place. On a community relations front, contractors have been sourced to maintain a number of local community roads. I'm also pleased to report that some of our critical past items are actually ahead of schedule at this point. In particular, the underground development from our two portals and we remain very confident in our March 2009 start update. On slide 35, we're provided a 3D image of Palmarejo. Over 1,200 measures of underground development and open pit free stripping activities are advancing as planned. Both mining struggles currently pre-stripping with a daily production rates of up to 50,000 metric tons being achieved. Work on the plant site, roads and the main camp are well advanced and an schedule for the March 2009 start up. Now, Don Birak will discuss the exploration progress at Palmarejo.

Thanks, Richard. An important milestone in second quarter involved the completion of Palmarejo feasibility study. The study focused only on the Palmarejo deposit. We reported a total mineral inventory of nearly 100 million ounces of silver and 1.2 million ounces of gold in the proven, probable, measured and indicated categories. Contribution of Palmarejo loan is already significantly added to Coeur's mineral inventory. I'll point out again that this reserve growth outlined in the feasibility study covered just one of the three current silver and gold deposits defined thus far, but the majority of the districts main targets having relatively little prior exploration, we have just scratched the surface on the reserve potential at Palmarejo with much more exploration to follow this year and in the future. In particular, we are engaged in intensive drilling program at the Guadalupe deposit.

From the chart on slide 38, you'll see we've already recorded substantial gains from our early drilling. Further increases are expected throughout the remainder of the year and we anticipate these will result in new reserves. At Palmarejo, we budgeted $8 million US to expand and define the resources and reserves. This important program represents nearly 30% of Coeur's total 2008 exploration investment and we're pleased with the results so far. In first half of the year, we're focused, as you might expect, on the project's first feasibility study and definition of the first proven and probable mineral reserves for this important property. Second half of 2008 will focus on reserve definition, geo technical drilling at Palmarejo and drilling to further expand and define Guadalupe, the second of three major mineralized structures in the district. We completed the new mineral resource estimate for Guadalupe and we continue to drill there with three Coeur drills currently. We achieved a greater than 80% conversion rate of Palmarejo's resources to reserves in the feasibility study and we're excited about the potential for Guadalupe to contribute in a similar fashion to future reserves.

Now let's take a closer look at Guadalupe on slide 40. This deposit, located about five kilometers to the southeast of Palmarejo. Since we've first visited Palmarejo, we've been impressed with the exploration potential of the full district, in particular, the setting and potential of Guadalupe for the main controlling structure that's parallel to Palmarejo, dipping steeply to the northeast. The images on slide 50 compare the outlines of the mineralized zones sometimes referred to clavos In Palmarejo and Guadalupe at the same vertical and horizontal scales. The 1250 and 750 meter elevations are shown for your comparison. While Palmarejo has been well defined by exploration and definition drilling from the 1250 meter elevation to below 750 meters, it remains open at depth and on strike. As well, Guadalupe tops out at about the 1250 meter elevation, but so far, has only been tested to about 950 meters down. From these images, you can see that Guadalupe II remains open at depth and on strike. As a result of new drilling, geologic modeling, we recently completed the estimate of the mineral resources for Guadalupe. This major deposit now contains over 28 million silver and 383,000 ounces of gold and indicated resources in over 16 million silver and 271,000 gold ounces of mineral resources. Slide 41 shows two three dimensional views, the new model of Guadalupe on the bottom and the prior model in the upper left corner. You can see where the outline of the mineralization has been expanded on strike and at depth, particularly the central and northern parts of the deposit and where our internal gaps have been filled. I'll put this back over to Richard to give you an update on operations at Cerro Bayo.

Okay, thank you, Don. At Cerro Bayo, we were infected by lower than expected terms and grades contained in the current mine areas. We have worked aggressively to cut costs at that site and we have reduced labor costs by 37% since October 2007. We now expect Cerro Bayo to produce 1.2 million ounces of silver and 22,000 ounces of gold during the balance of 2008 -- during 2008. The Fabiola and Dagny veins discovered in June of last year are currently under development and are expected to contribute to production later this year and throughout 2009, and I'll let Don fill you in on that.

Okay, thanks. Drilling to expand and define the current resources and reserves in the Cerro Bayo continued again at a high pace this quarter. As Richard mentioned, you'll recall it's just a year ago that we discovered mineralization in Coigues Este and the Dagny and Fabiola veins. Since then we've drilled over 41,700 meters of core and colored two portals to access the deposits. On the map view, you can see all of the new veins in the main Coigues Este area , about one kilometer east of the Cerro Bayo mill. Dagny and Fabiola are just two of many veins we've discovered in this area. In the past quarter, our exploration efforts were directed to expansion and delineation of the resources on all the veins an tightly spaced drilling on Dagny to define new reserves. We're going to continue to drill throughout the remainder of the year on these new important discoveries.

Let's shift to next slide, 44, in this longitudinal section, you can see the location of the 2007 discovery drill hole which intersected ore grade silver and gold about 75 meters below surface and you could see the outline of the deposit defined through the end of June. The deposit is now over 700 meters long and approximately 150 meters in vertical extent and still open. Now I'll turn this back again to Richard to discussion operational progress at our Rochester

Thanks, Don. We're currently engaged in a technical study to determine the potential for the conversion of 27.9 million contained ounces of silver and 183,000 contained ounces of gold resources in various areas of the mine to provide for additional production at Rochester. Rochester is currently in residual leach mode and has been performing ahead of budget throughout the year. We expect our optimization review to be complete during fourth quarter 2008 and we now expect Rochester produce 3.1 million ounces of silver in 2008 a substantial increase over our earlier guidance which was just 1.8 million ounces for the year.

Okay, well this is Don again. We continue to explore at Rochester to test new structures that we think have potential to host high grade mineralization, perhaps feeder structures for the large bulk tonnage Rochester deposit and to facilitate conversions of the mines large additional measured indicated resources to prove an improbable status. On slide 46 you can see a three dimensional image of the current Rochester mine topo in gray and some of the remaining measure and indicated mineral resource blocks beneath and peripheral to the mine limits. As Richard mentioned, the current mineral resources total over 183,000gold ounces and over 27 million ounces of silver, modeled with metal prices of $600 gold and $11 silver. This year, we will conduct a program to confirm our model with the remaining resources, especially higher grade sections and prepare new model with metal prices to be used by our engineers an their technical and economic evaluation. In addition, we'll continue to test structures in a district that have potential to host high grade silver and gold. Last year, our program targeted two such structures exposed in the bottom of the Rochester pit. The pump and the corner fault, you might remember those, and that program of seven core holes validated this exploration concept and I'll turn this back over to Richard to discuss our other operating mines.

Thanks, Don. At Martha, we experienced substantial improvement in throughput during the last quarter. We completed commissioning at the mill and we expect grades to meet or exceed expectations in the second half of the year. Guidance for Martha stands at 3.2 million ounces of silver for 2008. On slide 48, we're looking at production at Coeur's two operating interests in Australia, Broken Hill and Endeavor at Cobar. Both were impacted by the unfavorable pricing situation for lead and zinc during the quarter. Coeur has now recouped 110% of its initial investment at the Broken Hill mine and 37% of its total investment in Endeavor. We now expect 2008 silver production from Broken Hill of approximately 1.4 million ounces and 2008 production from Endeavor of approximately 900,000 ounces of silver. Now I'll turn this back to Dennis.

Thanks, Richard. We believe Coeur continues to benefit from a nervous, but we believe long term and robust precious metals environment, which by most measures, we expect to continue. We believe that investors will continue to seek out metals as a safe haven in this current global convergence of financial instability, heightened economic concerns an political tensions. Most precious metal analysts have forecast continued strength of our metals going forward. I'm sure many of you have seen the recent Reuters poll of 36 analysts and traders that show consensus 2008 price estimates of $17.50 per ounce of silver and $930 per ounce of gold. We do remain bullish on both of our metals, and we're thoroughly convinced that the execution properly of our strategy of bringing new long lived sustainable mines into production is the best path to maximize our shareholder returns. We are excited as we look forward to the remainder of this year and into 2009, with our goals and our resolved stiffened and consistent. This includes reaching design capacity at San Bartolome, advancing Palmarejo construction and production to a March 2009 start up on schedule and on budget. We expect Martha to deliver increased silver production at lower cost, and we believe that Rochester will continue to outperform. We're also looking forward to a resolution related to the Kensington tailings facility and we planned through our robust exploration program to continue to expand our reserve and resource base. We will continue to further strengthen the Coeur team by adding top notch management and technical personnel throughout the year. And lastly, we'll continue to manage costs effectively as an industry leader and efficient cost of production. I can assure you, we have a dedication and fervor today to do whatever needs to be done to get all of these projects done right. Indeed, we expect these to continue to be exciting times in precious metals market an we're looking forward to keeping you posted and well informed on our progress as we go throughout the balance of the year. Thank you very much for joining us today, and we're ready to take your questions.

(OPERATOR INSTRUCTIONS) The first question is from Jorge Beristain with Deutsche Bank.

Hi, good morning gentlemen. Just picking up on the theme of keeping the market well informed, did I miss a press release about the potential miss on Cerro Bayo of 2 million ounces?

Jorge, hi, this is Mitch. No, the updated Cerro Bayo guidance is new as of this mornings release.

Okay, I just wanted to make sure I didn't miss something there. If you could just -- I just want to kind of come through on a mine by mine basis what the updated latest guidance is. You are mentioning now Rochester could produce 3 million ounces for the full year, but is this change in guidance at Rochester related simply to the fact that you ended up not selling it? In other words, the run rate that Rochester is throwing off, I think you had kind of intoned on previous guidance about a 1.5 million ounces, assuming it was sold mid year. So is the change that you're actually increasing the guidance at Rochester, or just simply that reflects the full year impact of keeping Rochester on balance sheet? That's a good question.

That's a good question, it's Mitch again. No, the original budget for the year included Rochester for the full year. This is strictly related to the fact that silver is being recovered from the heaps at a faster rate than anticipated earlier in the year, so this is truly just an increase in production for the year from Rochester from, I think, 1.8 up to the 3.1.

Okay, so that's a net 1.3 increase, and then at Cerro Bayo, what is your updated '08 and '09 forecasts?

'08 is now 1.2 and we have not put out any '09 guidance mine by mine.

And the prior guidance for Cerro Bayo was 2?

Yes, I think 2.1.

That's a change of 0.8, okay. Martha?

3.2. An increase of 0.4. Broken Hill? 1.4.

And Endeavor?

0.9.

Okay. So then, that's a change of guidance of about a negative million tons, sorry, a million ounces?

Yes, those five operations, the numbers I just ran through gets you right to about 10 million ounces.

Okay. And then on San Barts, if we could just understand a little bit more clearly the operational push back there and how confident you are now that you will hit the 2 million ounce run rate in the third and fourth quarter.

Yes, I'll let Richard handle that one, Jorge.

Thanks.

Yes, hello, Jorge.

Hello.

The forecast for the balance of 2008 at San Bart is 3.2 million ounces for the year.

Okay, so then you are implicitly sort of reducing your prior 2 million ounce run rate to about 1.6 per quarter?

Not -- it's Mitch again. The 3.2 would not be split up equally between the third and fourth quarters. We'll plan to see a continued ramp up between now and the end of the year, month by month, so that that 3.2 would be more weighted towards the fourth quarter versus the third.

Okay, and then are you still standing by the '09 guidance on San Bart?

Yes, we are.

And just also on the acceleration of the Palmarejo project, I also wanted to understand, sorry, I thought I heard Dennis mention that you were moving that project forward to March of '09 start up.

That's correct.

And are you sticking by the full year prior guidance there, or will this lead to an increase in the full year '09 guidance now, because of the extra quarter pick up of production?

No. We're sticking with the guidance that we put out there for Palmarejo for 2009 of 5.1 million ounces of silver.

Okay, so despite the now three quarters of operation, you're maintaining the full year guidance, okay. Thank you.

Ladies and Gentlemen, (OPERATOR INSTRUCTIONS) The next question is from John Bridges with JP Morgan.

Hi, Dennis, everybody. Sorry to be repetitious, but on San Bart, what were the tons and grades and recoveries you got during the quarter, we're trying to put them into our model.

Hey John, we'll follow-up with you on that one. This is Karli.

Hi, Karli, okay. Quarter two CapEx?

Quarter two, just the second quarter?

Yes.

Yes, for six months, it was 168 which included the $25 million payment to Endeavor in the first quarter, so the second quarter CapEx number was companywide, was about $105 million.

Okay. You made reference of the potential to slowdown spending on some of these things to manage your cash flows. What are your cash flows looking like now for the second half?

We are looking at operating cash flow in the range of $60 million to $75 million.

Okay, and capital spending?

We are looking at somewhere between 185 and 215.

John, I'd like to add further that we don't have any present intention at Coeur to slowdown the CapEx spending, places like Palmarejo. What we're signaling to you and the other people on the call today is that we'll be very disciplined in the way we manage our cash in this environment, and we'll do what we need to do to insure the financial integrity of the Company.

Yes, well you've been through some tough times before the 1990s, I seem to remember. When the silver price was just $5.

Yes.

Do you have a Q2 CapEx number for San Bart?

Yes, it was right around $30 million, John.

Okay, guys, good luck.

Thank you, John.

Thanks.

There are no further questions at this time. I would like to turn the conference back over to Dennis for any closing remarks.

We would like to thank all of you for joining us here today, and we can assure you we'll keep you closely informed on developments within the Company as we go through the balance of this year. Thanks again.

Ladies and gentlemen, thank you for participating in today's conference call. You may now disconnect.