Centerra Gold Inc (CGAU) 2007 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Centerra Gold Fourth Quarter Year-End Results Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded Wednesday, February 6, 2008. I would now like to turn the conference over to Mr. John Pearson, Director, Investor Relations with Centerra Gold. Please go ahead, sir.

Thanks, Vick. Good morning, everyone and welcome to Centerra Gold's 2007 Fourth Quarter and Year-End Conference Call. With me are Len Homeniuk, President and Chief Executive Officer; David Petroff, Executive Vice President and Chief Financial Officer; and this morning we welcome the new addition to our team, Steven Lang, Vice President and Chief Operating Officer; Ian Atkinson, our Vice President, Exploration; and Ron Colquhoun, Vice President, Project Development and Engineering.

Today's conference call is open to all members of the investment community and media in listen-only mode. After the formal remarks, we will then open the phone to questions. Please note that all of the figures today being discussed will be in U.S. dollars, unless otherwise noted.

On our call today, Len will start with a review and an update on political events, Ian will address the reserves, Steve will comment on the operations, followed by David with a review of the financial results.

Before we begin, I would like to caution you and everyone on the phone that certain statements made on this call may be forward-looking statements and as such are subject to known and unknown risks and uncertainties which may cause actual results to differ materially from those expressed or implied. For a more detailed discussion of the key assumptions, risk factors and uncertainties associated with Centerra's business and our industry; please refer to our news release issued yesterday, Tuesday, February 5th, and our securities filings on the SEDAR website.

And now, I will turn the call over to Len.

Thanks, John and good morning, everyone. Despite the numerous challenges we faced in 2007, the Company has successfully met our revised gold production and cost forecast, producing 550,000 ounces of gold and a total cash cost of $442 per ounce. We made significant advancements in our host countries where we negotiated preliminary Kumtor agreements and an amended Boroo stability agreement.

Looking at our reserves, using $550 per ounce gold; we replaced our proven and probable reserves which continue to total 7 million ounces of gold at year end. Additionally, our measured and indicated resources on a 100% basis increased 200,000 ounces to a total of 5.8 million ounces of contained gold.

On the financial front, the fourth quarter was better than a year earlier, with net earnings before unusual items of $0.05 per share or $9.7 million. We had unusual items in the quarter totaling $36.5 million, which is the non-cash expense related to the additional cost based on the closing price of the Company's shares on December 31, 2007 associated with the expected issuance of 10 million treasury shares regarding the Kumtor agreement that we had previously announced on August 30, 2007.

For the year, we generated net earnings before unusual items of just over $39 million or $0.18 per share, which reflects lower ounces sold, increased costs, and Boroo's taxable status in 2007; partially offset by higher gold prices. We recorded unusual items totaling $131.6 million for the year related to the Kumtor preliminary agreements.

Cash generated by the operations amounted to $41 million per year and we ended the year with $106 million of cash after capital expenditures of $121 million, which included $25 million of sustaining capital.

For the year, revenues increased to $374 million, largely due to the positive movement in the gold price as our average realized price was $691 per ounce in 2007, up from $597 per ounce in 2006.

Just a brief commentary on the evolving political situation in the Kyrgyz Republic; on December 16, 2007, parliamentary elections were held in the Kyrgyz Republic. The political party, Ak Zhol, received the majority of the 71 seats-- 71 out of 90. And under the terms of the new constitution, they formed a new government. The new Parliament began its regular business after the New Year. Ratification and approval of the agreements entered into by the government of the Kyrgyz Republic with Cameco Corporation and Centerra is on the Parliament's agenda. As previously reported, we expect the Kyrgyz Parliament's approval by February 15th.

Yesterday, we also responded to media reports of a criminal tax evasion investigation by the Kyrgyz authorities against Centerra and its subsidiary Kumtor Gold Company, and that we believe there is no basis for the reported investigation. Indeed, we note today that there are reports that the Kyrgyz authorities have stated that this is a routine procedure.

And now a few words about Mongolia; as was previously announced on December 27, 2007, we received approvals for the Gatsuurt in-situ reserve and resources from the government of Mongolia. This paves the way for the commencement of negotiations of a definitive investment agreement with the government. However, as the country is preparing for parliamentary elections in June of 2008, negotiations may be affected.

Ian Atkinson will give you a review of the reserve update. Ian?

Thank you, Len. As Len mentioned, at the end of 2007 approved and probable reserves on a 100% project basis, totaled 7 million ounces of contained gold. Measured and indicated resources totaled 5.8 million ounces of contained gold of which Centerra's share is 5.3 million ounces.

Our reserve and resources were calculated at December 31, 2007 using the gold price of $550 per ounce, up from $475 per ounce which was used for the 2006 reserve estimate.

At Kumtor, we added 578,000 contained ounces of reserves before accounting for mining 421,000 contained ounces in 2007. Reserves at Kumtor now total 4.9 million ounces of-- contained ounces of gold. The increase in reserves is a result of the lowering of the cut-off grade and changes in the pit design.

The reserve rate at Kumtor decreased from 4.7 grams per ton gold, to 4 grams per ton gold, due to the lowering of the cut-off grade from 1 gram per ton gold; reflecting the higher gold price used in estimating reserves.

Measured and indicated resources at Kumtor increased by approximately 170,000 ounces and inferred resources decreased slightly.

Currently, our pit design at Kumtor assumes that the glacial tilt and bedrock will be hydrologically depressurized to achieve the pit wall slope angles in the south end of the Central Pit. Geotechnical work to date has indicated that the till is amenable to depressurization and a program to hydrologically depressurize the till and bedrock has been designed and will be implemented in 2008.

To reflect the geotechnical risks and the technical risks associated with implementing the depressurization program, 18 million tons of proven reserves containing 2.5 million ounces of gold have been reclassified to probable reserves at Kumtor.

At Boroo, 111,000 contained ounces have been added to reserves before accounting for 297,000 contained ounces of reserves mined in 2007. Boroo's reserves are just over 1 million ounces of contained gold. The change in reserves at Boroo is the result of a slight increase of the size of the pit design.

Reserves and resources at Gatsuurt were unchanged at 1 million contained ounces of gold as the benefit of the increased gold price was offset by increases in the estimated operating costs and royalties.

Our priorities for 2008 will be to continue to add to our reserve and resource base through exploration. We've budgeted $25 million for these programs in 2008.

I'll now turn it over to Steve Lang to discuss the operations.

Thanks, Ian and good morning, everyone. I will now briefly review the operations. Kumtor produced almost 74,000 ounces of gold this quarter as expected, which was higher than the fourth quarter of 2006 due to the higher grade and recovery since in 2006 production was impacted following the pit wall movement in July of 2006.

As a result of our geotechnical studies to stabilize the waste dump above the Central Pit in the SB Zone, it appears that the till layers are roughly 40% thinner than originally thought and that the till appears amenable to dewatering.

A series of geotechnical drill holes converted to pumping wells, allowed for two pumping tests to be performed that provided the necessary hydrological information within the warmer and unfrozen tills, to conclude that a depressurizing and dewatering program may be beneficial to the till consolidation and the slope's stability. A till depressurizing and till dewatering program has been initiated for 2008 which should allow us to steepen the pit wall angles to near its original design and allow the removal of much less waste than originally expected in July.

We are still on track to get to the higher grade ore in the SB Zone in the second half of 2008. Work is continuing on the SB underground decline and we continue to advance this work as quickly as possible, with underground production targeted to commence in 2010. Our current expectation is that underground production may be about 300,000 ounces. I emphasize this is very preliminary. The current underground resource of 1.8 million contained ounces is in the inferred resource category; is not a reserve and will not be included in the updated Kumtor's life-of-mine plan.

The updated life-of-mine plan will be included in the technical report being prepared by Strathcona Mineral Services, expected to be filed in March.

Boroo production was as expected, but lower than the fourth quarter of 2006 as a result of lower grades. The recovery has been affected by the changing metallurgical nature of the ores in Pit 3 as they are more refractory at depth. Total cash cost increased to $353 per ounce as a result of the lower production and the increased costs of maintenance in major mine and mill reagents and consumables.

Looking forward to 2008, we anticipate Kumtor gold production to increase to between 580,000 and 620,000 ounces and expected total cash cost of $350 to $390 per ounce. This excludes the new proposed revenue-based tax which would make it $430 to $470 per ounce, if the new revenue-based tax is reflected as a royalty and included in total cash cost.

More than 70% of the ounce production is planned for the second half of 2008, once the high-grade SB Zone is exposed and being mined. Mining operations at Kumtor in 2008 will be primarily in the Central Pit, where mining will be focused in the south section, targeting the high grade mineralization of the SB Zone. No work is planned to be carried out in the north section of the Central Pit.

The mill head grade at Kumtor is expected to increase to 4.11 grams per ton in 2008, compared to 2.36 grams per ton in 2007 and mill recoveries are expected to average 82.6% compared to 72.7% in 2007.

Our 2008 production guidance is not impacted by the establishment of the depressurization and dewatering programs. As the warmer unfrozen tills are being exposed by mining activities into 2009, the depressurizing and dewatering programs will need to be fully functional to allow the geotechnical consolidation of the tills and to mine at the plant pit wall angles in 2009 and thereafter.

At Boroo, 2008 mine production will be sourced both from Pit 3 and Pit 6. Total gold production, including heap leach production for the year, is expected to be 190,000 to 210,000 ounces. The mill grade is estimated at 2.78 grams per ton, with an estimated recovery of 78.8%. A total of 3 million tons of lower grade material at .69 grams per ton will be stacked for leaching on the newly-constructed heap leach pad. The stacking of the leach pad began in the last quarter of 2007 and the first cell will be ready for solution application in the first quarter of 2008. Total cash cost for the Boroo site in 2008 is expected to be between $380 and $420 per ounce.

At this point, I would like to turn the call over to David to provide a review of our financial performance.

Thanks, Steve. And I'm going to start with our Mongolian segment and the financial results at Boroo. The quarterly comparison, and that's fourth quarter '07 to fourth quarter '06, shows revenue lower at $33 million, and this reflects the dramatically lower sales volume. It was down by 47%. And that's partly due to the ounces which were produced but not recognized as revenue.

The cash cost of the 59,000 ounces of gold which we poured, were adversely affected by the reasons that Steve mentioned, which were the higher mine fleet maintenance costs and the major mine and mill reagents and consumables.

Additionally, with the increased royalty rate as well as the increase in the average realized sales price, royalty costs were more in the fourth quarter of this year than last year, almost a two-fold increase. Reflecting the fully taxable status of Boroo in Mongolia, earnings for the quarter were down from last year.

For our Kyrgyz Republic segment, in the fourth quarter of 2007 revenue was significantly better from the higher gold prices and more ounces sold. Gold production of the 74,000 ounces in comparison to Q4 2006 reflected the better mill head grade and better recovery. And of course the lower cash costs reflect the higher production.

In the Kyrgyz Republic there were earnings before unusual items and taxes for the quarter of $3.1 million. Now looking at the income statement on a consolidated basis, 2007 fourth quarter revenue at $89 million was reflecting 23% lower sales volume and 31% higher realized gold prices.

Now due to the preliminary agreement the Kyrgyz government announced in August, we expensed $37 million of unusual items. Therefore, for the fourth quarter of 2007, we reported a net loss of $26.7 million or $0.12 per share; and that was down from net earnings last year of $1.9 million or $0.01 per share.

And full-year 2007 results included $131.6 million of unusual items and that resulted in a net loss of $92.5 million or $0.43 per share. This compares to last year or 2006, where we had $60 million or $0.28 per share of net earnings. And the significant difference between the two years obviously reflects the unusual items, Boroo's tax status in 2007, lower ounces sold and increased costs. It was offset of course by higher gold prices.

Now with respect to flow of funds; $3.2 million of cash was used by operations in the fourth quarter of '07 and this is down quarter over quarter, mainly because of increased working capital levels.

Cash used in investing activities for the current quarter is lower than the comparative quarter, mainly due to decreased growth capital spending. But if you look at cash used in investing for the full year of 2007, it's higher; mainly due to the mine expansion at Kumtor which included the purchase of the new mobile equipment earlier in the year. And growth spending for 2007 was $96 million; sustaining capital was approximately $25 million.

When we look forward for 2008, capital expenditures are anticipated to be $68 million, which includes $36 million of maintenance capital. The growth capital is expected to be $31 million, $21 million at Kumtor and $10 million at Boroo.

We finished the year with a cash balance of $105 million. Holding some of this during the year in Canadian dollars was an effective natural hedge against the depreciation in the U.S. dollar. Currently our Canadian dollar and cash balances are minimal.

For administration costs, including the ongoing costs of maintaining the corporate office in Toronto; we had an expense of $25 million in 2007. Looking forward to 2008, we're expecting a total administrative cost at around $36 million.

And looking forward at production, our 2008 forecast of consolidated gold production is 770,000 to 830,000 ounces. That's more than 40% higher than 2007. And overall, as you've heard, total cash costs are forecast to be $420 to $460 per ounce and that assumes completion of the definitive agreements with the Kyrgyz Republic concerning Kumtor.

Now the forecast treats the proposed new Kumtor revenue-based tax as a royalty, and therefore it includes it in the total cash costs starting January 1. If the new Kumtor revenue-based tax is treated as a tax on income, it would be excluded from total cash cost per ounce and our unit cash would be forecast to be $360 to $400 per ounce. And that assumes gold at $800 per ounce.

And finally, based on our 2008 outlook, for every $25 change in the spot price of gold, there would be an approximate change of $17 million in earnings and cash flow. That's about $0.08 per share.

So with that review, let me turn the call back to Len.

Thanks, David. I would like to highlight that at Kumtor we are on track to access the higher grade SB Zone in mid year and at Boroo the first cell of the heap leach pad will be ready for solution application this quarter.

With that, let's open up the call for questions. Operator, would you please lay out the procedure for our question-and-answer session?

Thank you. (Operator Instructions) Our first question comes from the line of Haytham Hodaly from Salman Partners. Please proceed with your question.

Good morning, gentlemen. Just a few questions, actually; the first one maybe for David-- David, why would you consider treating the new tax as a royalty including the total cash cost? Is there an accounting advantage to doing so?

Haytham, thanks for that question. It's really that currently we have both the royalties and income taxes applicable. And the new tax is to replace both. And the question is whether you include it in the cash cost as if it were a royalty or if you exclude it as if it were income tax; so we're kind of showing it both ways, because it replaces both items.

Yes, okay. Is there anyone else that's gone through this that you know of that it treated it one way or the other?

We're not aware of any other precedent like this.

Okay. Another question just to David as well, with regard to the exploration of $25 million in 2008; will all that be expensed or is there some capitalized?

We expect to expense all of it.

Okay. Maybe just another question while I've got you on; DD&A at Kumtor seems to have spiked up on a per ounce basis this last quarter; is this new DD&A per ounce reasonable to use or do you expect it to come back down?

Well, I think that it spiked up in the quarter because we've got all our equipment now in place. It averaged for the year about $100 per ounce and I think that's reasonable going forward to use.

Okay. Thank you. I will leave some questions for others.

Our next question comes from the line of Victor Flores of HSBC. Please proceed with your question.

Yes, thank you and good morning. I guess my first few set of questions I'm going to throw at Steve and see if he's gotten up to speed in the past few months. Hi, Steve.

Good morning, Victor.

First question goes to this till layer that's been a bit of an annoyance, and if you could just clarify that hydrologic depressurization means you're just going to pump the water out of it.

Right. I guess I would differentiate a depressurizing program from a dewatering program in that we would not completely dewater the till. It's just a matter of bringing down the level of water pressure within the till.

Okay. And does that have any impact on the material that's still frozen or do you think that'll stay frozen even after you release some of the pressure?

I may turn that question over to Ron Colquhoun, who is a bit more familiar with the program.

Victor, the frozen till will be primarily mined out in 2008 and our next cutback will start exposing more of our till and this is the area that we're trying to depressurize and consolidate the till under that activity.

Okay, great; thanks. And could you tell us what that ends up doing to your strip ratio this year; what you've learned about the till?

The impact in 2008 is negligible because we had really committed to pit slopes for this year much earlier so that it won't impact this year's strip ratio; it's really a go forward in 2009 and thereafter.

Okay. And the impact going forward we think is for it to be lower?

Right. Well, we don't quite get back to the original well designs but it is steeper than we've been currently digging.

Okay, great; thanks. And then just turning to the underground; you mentioned I guess some tantalizing hints about what production might be. What are you finding with respect to ground conditions in the underground?

Well, first off let me clarify; we're looking for about 300,000 ounces on an annual basis once we're up and fully running. But again, this is on resources, not on reserves. So it's very preliminary. As far as ground conditions, we'll be pulling the first round probably before the end of this month in the underground. We go about 15 meters and then we have about 180 meters through the fault area, and that's probably the most difficult ground we'll see and we'll know a lot more after that's done.

Okay, great. And then just could I ask you what you think you'll get out of the heap bleach at Boroo this year?

It's roughly 40,000 ounces.

Great, thanks. And then just if I may indulge in one final question; it's a bit of a philosophical one. Centerra has learned certainly over the past couple of years what low grades do to cash costs and profitability. And I'm just wondering whether the decision to lower the cutoff grade due to the higher gold price is just somewhat of a mechanical thing because that's what people do when they recalculate reserves or whether some careful thought has been given to what that does to production costs and NPV over the long term?

Okay. It's more of a thoughtful review and it is an economic-based one. Really, as we look at the material in that area as we dropped the cutoff grade from about a 1.3 to 1.0 gram per ton; that material is largely stockpiled in the near term. So it really isn't part of the mill feed and doesn't affect the head grade to the mill in the short term.

But certainly that material on an incremental basis is profitable for us.

Okay, perfect; great. Thank you so much.

Our next question comes from the line of Cosmos Chiu of CIBC World Markets. Please proceed with your question.

Good morning, gentlemen. I guess my first question is on [grades]. By our calculations, because you're expecting about over 5 grams per ton head grade in the second half of 2008; is that reflective of what we should be expecting in 2009?

2009? We really haven't completely finalized 2009 mine plans, so I think it might be a little early to look at that. It will come out in the March technical report.

Okay. My second question is- when would we be expecting real results from the underground portion of the SB Zone?

It's Ian, Cosmos; Ian Atkinson. We should be able to start some of the exploration drilling from the underground decline hopefully by the late third quarter this year, but we won't get into drilling the SB resource and doing the definition drilling there until probably the end of the first quarter of 2009.

That's all I have. Thank you.

Our next question comes from the line of Steven Butler of Canaccord Adams. Please proceed with your question.

Oh, yes; good morning, guys. A couple questions; Ian, just to elaborate there- so are we to imply therefore that a booking of reserves if it were to be booked ultimately as a reserve at the SB underground; would be a 2009 phenomenon at the earliest?

Yes, that's correct.

Okay. And just a question for you with respect to lowering the cutoff at Kumtor; yes, grade goes down. I would have maybe expected a few more ounces to have been added, recognizing that you did partially replace or almost fully replace production at least. But, were there any constraints there, maybe strip ratio-related or pushback-related that maybe kept some ounces out of making it into this revised pit and revised reserve at a higher gold price?

Yes, actually Steve there are some limitations; particularly on the south end of the Kumtor pit when you come up against the glacier, so that we do have a physically defined pit limit that we cannot expand on at this point in time. So we can only collect the material between the old cutoff of 1.3 and 1 that's within the current pit shelf.

I mean, hypothetically speaking Ian, if you were to lower the cutoff again to say from 1 to .8; would there still be a resistance to add more ounces? Is that because of this constraint at the southern end of the pit?

On the southern end, yes; on the northern end is where the opportunity is. We have resources under the north high wall and that's the -- there isn't a restriction there. It's strictly an economic decision as to whether we can support the strip ratio, as you're trying to take out the top of the hill.

So there's an opportunity to add or convert resources on the north end to reserves, although at the southern end right now we're restricted because of the glacier.

Okay. Thank you. And last question; David, as we looked at their total cash cost reconciliation of course which shows as costs appreciate, the disclosure per ounce of gold poured at both Kumtor and Boroo; there's some big inventory movements; particularly at Kumtor, despite actually sales of gold being not far off production of gold at Kumtor. Maybe you could elaborate there. Is there any catch up on prior quarters for that inventory movement because I don't quite get the math there because I do imply that if you were to have reported a sales-based cost per ounce, the number would have been probably closer to $510 to $525 an ounce, per ounce of gold sold. Do you have any comments there, thanks?

Well, Steve; thanks for that challenging question. I think that obviously we do it on ounces poured to be consistent. There is some movement in circuit inventory but not a considerable amount. I think if you want, we can take this off line and we can talk about this in detail later.

This is influenced though obviously by a little bit of the gold price as well; these same ounces in circuit.

Okay. We'll talk a little bit later. Thank you very much.

We have a follow-up question coming from the line of Haytham Hodaly of Salman Partners. Please proceed with your question.

Thank you, Operator. Kumtor; can you give us an idea of what you're seeing so far in terms of grade in the first quarter and I guess just based on that what you would expect maybe for the second quarter as well?

I'd say the first quarter so far has been roughly in line with the fourth quarter. We would expect a slight improvement in the second quarter as well, compared to the first.

Okay. And tonnage-- mill tonnage is still going to be somewhere around 1.4 million a quarter sort of thing?

Yes.

Okay. And then I guess just a follow-up question on Boroo. At Boroo, how do you expect the grade of the material placed on the heat bleach pads to change after this year?

I don't have an answer right off so I may defer to Ron Colquhoun on that.

The grade will gradually go down as we get into a lower grade that we're stockpiling. It will average out approximately .8 grams, .85 grams per ton.

Sorry, that's up slightly isn't it? I think the number you put for the quarter is .69 for this year.

There is a-- that's an overall history.

Okay, so over the life of the heat bleach, you expect to get somewhere around .8?

That's correct.

Okay, so expect it to generally go up from this year's levels of .69?

Generally, yes.

Okay. I guess just one further question on Boroo. What do you see happening to the mill grades after 2008?

Mill grades will be generally on track with what we've done to date. We'll see lower recoveries as we go through transitional material and move lower in the pit. So we will see lower recoveries.

Okay, perfect; thank you.

Our next question comes from the line of Ryan MacArthur of UBS Securities. Please proceed with your question.

Good morning. I wanted to go back to another question. And I know you don't want to give your 2009 plan yet. But originally in the last one you sort of laid out I guess it was 18 months go; had Kumtor sort of ramping up higher this year and get into high grade and then even higher next year. With all the changes in cutoff, changing the shape of the pit walls; do you still expect production at Kumtor to be higher next year than this year? Can you even give us that right now?

Ryan, Len Homeniuk here. Ryan, what we expect to see is still being worked on by Strathcona and at this stage, we'd rather not speculate on it. So what we'll do is wait until that's available. It will be at the end of March.

Okay, fair enough. Maybe another question just on a totally different topic; can you just elaborate a little bit about why admin is up to $36 million next year?

Sure, Ryan. We have a bunch of things in there that are different than 2007. You may have heard me mention we don't have Canadian dollars in our cash balances anymore. So we're projecting a $2 million increase from foreign exchange. We are about to-- we're in the process of putting in place a revolver, providing for fees and expenses and like that's under $2 million but it's going to be expensive in today's environment. We have a $4 million increase in stock-based compensation that's in there and also we had some turnover in our senior ranks and we didn't have a full year of everybody on board with full salaries and that's going to add a little bit to 2008.

So would that be on an ongoing basis going forward, maybe it's not all the way to 35, but it sounds like I should be using $30 million as opposed to $25 million in the future?

I think that; I would say $30 million perhaps going forward, plus whatever we can do with the stock price in there as far as stock-based compensation, yes.

Well that's good stuff, that's okay. Okay, that's great; thanks very much.

(Operator Instructions)

Our next question comes from the line of Greg Newcrest of TD Newcrest. Pardon me, that's Mr. Greg Barnes of TD Newcrest; please proceed with your question.

Yes, thank you. Len, on the situation in Kyrgyzstan with respect to ratifying the new agreement at Kumtor; you're bumping up to the deadline date of February 15th. You seem to be making moves to imply that you expect that deal to get done or to get ratified. Can you give us any sense on whether you might have to extend the deadline or not?

Greg, good morning. Well, first of all the agreement needs to go through the committee process in the Kyrgyz Republic and it's gone through and been endorsed by two out of the three committees. And the final committee, we expect to meet some time this week. And then it will go to Parliament. So we're still being told by the speaker of the Parliament that it will be done by then.

If it's not, I think we'll look at the options at that time. But as of today, we expect it to be completed by the 15th.

Okay, good. Thank you.

Our next question comes from the line of Tim McCutcheon of [DBM] Capital. Please proceed with your question.

Hi guys. Actually the question right before is the one I wanted to ask, so thank you very much.

Mr. Pearson, there are no further questions at this time. I will now turn the call back to you.

Thank you, Operator. Thank you everyone for your interest in Centerra and we look forward to seeing you again at the first quarter of 2008 conference call. Thank you.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.