Kinross Gold Corp (KGC) 2002 Q2 法說會逐字稿

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Kinross Gold Corporation second quarter results conference call. At this time, all participants in are in listen-only mode. Following the presentation we will conduct a question-and-answer session.

Instructions will be provided at that time for you to queue up for questions. If you need assistance from an operator at any time during the conference, please press the star followed by zero. I would like to advise all participants that this conference call is being recorded today, Friday, August 2, 2002, at 11 a.m. Eastern time.

I would now like to turn the conference over to Mr. Robert Buchan, President and CEO of Kinross Gold Corporation. Please go ahead, sir.

Hello operator.

Please go ahead, sir.

You didn't put us into the call.

You are connected. Sir.

Okay. Thank you. Um, good morning, everybody. Sorry for that slight misunderstanding there at the beginning.

This, as you know is the second quarter results for Kinross and I should mention, first of all, who is the in the room. Brian Penny, CFO, Scott Caldwell COO, myself Bob Buchan and Gordon McCleary, investor relations. There are a few comments I would like to make first of all, and then I'm going to hand it over to Scott to discuss Fort Knox in more depth.

First of all, Kubaka clearly the operational results of Kubaka are excellent. The issues that we have had in Russia relating to those lawsuits, and the resolution of the issues relating to the gold loans have now moved to the level of the Federal government and the discussions are ongoing between the Federal government, the local government and ourselves. The process appears to be heading towards a resolution, one that we're comfortable with. This is -- the resolution of this issue, which we hope would be this quarter is a precursor to getting a mining license for Birkachan. Until we get that mining license, we're somewhat restrained in what more we can say about Birkachan, but we fully anticipate it will be in our budget for 2004.

On Hoyle Pond, good quarter, good first half. The team has done a great job. Obviously to the month of June a great deal of time and effort was spent on working through the amalgamation of the dome assets with Hoyle Pond that occurred on July 2, and we are going through the process of trying to define what the production profile operating cost is going to be for the balance of this year and for next year. We don't have those numbers yet but we hope to have them soon.

Fort Knox, clearly there are some issues at Fort Knox that Scott will address; however, one of the key points that I think is worth mention, first of all, is the appointment of Rick Dye, who is a very senior part of our team is analogous to the appointment in February of 2000 of Gary Halvorson. It was a change in approach to the operation, when Gary came in and over the subsequent months there was a graduate but continuing decline in operating costs as a discipline that was required was brought to bear on the operation. As you can see in the press release, Rick joined the operation in April and from April through August there's been a gradual consistent decline in the operating costs, and I fully anticipate you'll see more of that going forward. I also ask you to use the -- the -- in the press release, we asked to you connect back to our website to review drill results, which are quite extensive for the in-pit drilling at Fort Knox which we're very excited about. As you can see for those drill holes, we fully expect that we should be able to replace the ore that we have mined this year in the pit, and also the George and Goose Lake results which are also very supportive.

The reason that we're not moving forward in George and Goose Lake at this point, is with the merger ahead of us, there are a number of other options that, in the short term, have more immediate benefit to the new company in the Lupin being the logical place to spend money in the last part of the year. We think there is a good chance that we have got the production to benefit Lupin in a few years. It does not mean that we have not got a good feeling about the drill results at Goose Lake. It was hard not to have a good feeling about them. You can see them in the website. It's just from a priority perspective, [inaudible] has a much quicker return on capital. And therefore, we'll grant it more of our attention.

Anyway, I had mentioned that I'd ask Scott to talk in more depth about the Fort Knox issues so I'm going to hand over the call to him now.

Thanks, Bob. Bob mentioned and you can read in the press release that Fort Knox had a disappointing quarter and first half. Spending was slightly below plan for the quarter in the first half. Our issues were obviously in gold production. It was below expected levels due to grade and mill through-put to a lesser degree, mill through-put. Grade averaged about one grams per ton. We are forecasting 1.1. Mill through-put was 35.5 tons per day. We were forecasting 40,500 tons per day.

Going through some of the things that may have impacted this production shortfall, the first thing I'd like to talk about is ore reserves. I'd like to stress that we do not have a problem with either the Fort Knox or reserve or the True North ore reserve. If you look at the Fort Knox ore reserve model it's performed very well throughout the project life, this is through June 2002. The models compared to blast holes has over predicted tons by about 7 percent. It is underpredicted grade by about 8 percent, and the model is underpredicted ounces by 1 percent so on the ounce side of things it's been one percent of what we -- the blast hole say that's happening out in the pit.

The True North ore reserve model again, it's performed very well through the project life, obviously went shorter than Fort Knox but the model is overpredicted tons by 3 percent, underpredicted grade by 9 percent, and the result to this underpredicted ounces by about 7 percent. If you look at the combined grades between both Fort Knox and True North compared to mill head grade, it's basically spot on for the year, so there is not a problem with our grade prediction forecasting tools. Mill recovery, is very high. It's good. It's 85.3. Plan was 48.4. So we are a little bit better than plan. Head grade as I mentioned was low compared to plan. One gram versus 1.1 gram. It's really was due to the inability for the mine to deliver predicted or planned ore to the mill.

Now, the -- when I say ore, we blend for not only grade, obviously very important gold grade, but also ore hardness. So we weren't able to deliver either the right grade, high enough grade, or the right ore type hardness. The issue was in the mine and it was mobile equipment availability.

The press release talks a little bit about the ore transport trucks. Basically, an inappropriate truck was selected. We have had problems with the frames transmissions, differential, the list goes on and on and on. The manufacturer stood behind the product,, ie paid for the fixes on the warranty basis.

The real solution in the short term is we have added some contractor owned and operated trucks to supplement our fleet, and we have purchased appropriate tractors to replace the existing tractors. They're Kenworth, a more robust equipped with Allison transmissions, and we have planetary drives rather than differentials, heavier frame, etc. They are a much stouter truck. They are also capable of handling 85 tons of ore. Our current fleet 85 tons of ore. Our current fleet hold 75 tons per trip, I am talking the owner operated truck.

The other problem was in the mining fleet, the mobile equipment fleet. This would be the Fort Knox fleets, the primary issue. In other words, availability were lower than what we planned. What have we done there? Additional maintenance management personnel joined the team. Beginning late last year, early this year.

The team has implemented, in our opinion, some sustainable improvements to our equipment maintenance practices. One, we have required and we are now retaining qualified mechanics and technicians. We strengthened the plan of predictive maintenance program. We have installed and have implemented an assembly line p.m., which each unit is seeing every week. The backlog board is fully operational, ie work orders are in place and being used, and we've purchased additional major components for exchange in the fall truck fleet. I think the problem is behind us.

The equipment availability are acceptable levels now. and they continue to trend upward. Other key indicators such as outstanding work orders are declining, so we're seeing the overall performance of the group improve. -- improve. Low tonnage to the mill. I talked about ore hardness. Again, the inability to move True North ore across, it's soft ore than Fort Knox. We weren't able to get the optimum, so the through-put went down for the Fort Knox mill. In addition to that, we had some problems with the mill. We had 90 hours of unplanned availability during the quarter.

Problems with the primary crusher, and we had to accelerate a sag liner change from July and moved it into June. The availability problems in the mill are not a long-term problem. We have very good availability, world class availability there. For the year, it's still greater than 94 percent, and project to date it's greater than 93 percent. The mill maintenance team is a great group of people there. They'll continue to do a job with planned predictive maintenance.

In conclusion, I think the maintenance issues at Fort Knox resulting in low gold production have been solved. Maintenance continues to improve, and like I said other key indicators show that the trend is going in the right direction. You can see that the costs are trending down. It will continue for the remainders of the year -- remainder of the year. That's all I have, Bob.

Thanks, Scott. Lastly on the merger that's previously announced, one of the three companies Echo Bay is an SEC registrant, and has to file their information document with the SEC for approval prior to sending it to shareholders. That was done mid-july. We expect that mid-august, I believe the 16th of August, we will get our first comments back from the SEC. I mean we'll determine at that point what level of issues there are, and then we'll have a better idea of when we will be able to call the various meetings. With that introduction, I now open it up for questions.

Thank you. Ladies and gentlemen, we will now conduct the question-and-answer session. If you have a question, please press the star followed by 1 on your touch-tone phone. You will hear a 3 tone prompt acknowledging your request. Your questions will be polled in the order they are received. If you would like to decline from the polling process, please press the star followed by 2. Please ensure you lift the handset if you are using speaker phone equipment before pressing any keys. One moment, please, for the first question. Our first question comes from Victor Florez from HSBC securities. Please go ahead with your question.

Great. Thank you. Good morning. Scott, you gave us a really good explanation for what's happening in Fort Knox, and you touched upon something that prompted a question, and that is the question of the grade reconciliation versus the model. If you are going to be somewhat lower on ounces because the grade is somewhat lower, does this not mean that you really have to push this plant to its maximum to get the kind of ounces you expected and the costs you expected? What bottlenecks, if any, do you see in the plan in order to bring this [inaudible]

Well, we the -- tonnage that we achieve or that we're predicting for the second half of the year through the mill, we have achieved it before, and again as I mentioned, it's critical to the proper blend of True North and Fort Knox ore, ie ore hardness. The True North ore is softer than the Fort Knox ore so we get a higher through-put. The target is to have roughly 30 percent True North ore and 70 percent -- 70 percent Fort Knox ore, so that will enable to us achieve the through-put rates. We have achieved those through-put rates on a sustainable basis in the past, so it's not really pushing anything harder. It's just getting the ore across the road. In other words, we have the ore available. It's ready to mine. We need the equipment availability. Another thing that's in our plans, as you know, we're constructing a [inaudible] at Fort Knox that will be operational in the fourth quarter, and that will improve recovery and allow us to produce more gold, again not having to reduce our mill through-put rate or mill production rate.

Thank you. A follow-up question. I know it's a small asset, but can you just give us a sense of what's going on in Zimbabwe these days and how it's affecting your operations there?

Well, Zimbabwe, you know, we're all familiar with the political situation over there, but Zimbabwe continues to perform very well ie, on an operational basis. Tonnage is up. Ounce production is above plan, and we continue to do very, very well. Costs are high when you compare it to what we were hoping to do primarily because of the economic -- the macroecomonic conditions in the country. But there is a -- we receive a artificially high gold price. Bottom line is the thing is cash flow positive and it's actually shipped a few dollars out of country to service some intercompany debt.

Thank you very much.

We now have a question from kerry smith from haywood securities. Please go ahead with your question.

Thanks, operator. Scott, just another question on Fort Knox. Could you tell me what the mill through-put was in the month of July when you estimate you produced almost 36,000 ounces?

Yeah. The --

I guess my question, is it at the rate that you need to achieve on a sustainable basis through the last half of the year?

Yes, it is.

Okay. Because the 239,000 ounces is effectively, you know, 40,000 ounces a month.

Yes, and it's a combination of increased head grade. The head grade goes to approximately 1.1 grams per ton, and through-puts right around 40,000 tons per day. Metric.

And so --

Kerry, the same -- the solution to the delivery of the True North ore is the solution to the (indiscernible) and the grade and the throughput.

I understand. So in July, though, you delivered about 1.1 grams in the mill. You are saying. And you ran around 40,000 tons a day.

Yes.

I guess the grade was probably a bit lower than 1.1.

Yes.

Okay. And, uhm, just on Hoyle, the grade was quite a bit lower in the quarter obviously than the first quarter, but still above your budget. Is that just a see sequencing thing with the [inaudible] mining, and what would the grade be for the second half of the year?

The grade -- first off, to answer the sequencing issue, we've seen significant -- I'll just say grade improvement, better than grade expected in the areas we mined this year. So higher grade than what we thought we were going to receive. So we got a benefit there. And, yes, the grades for the sequencing, that [inaudible] came online and compared to what we thought we were going to mine will be slightly different. The grade will be similar to what you saw in this quarter for the rest of the year. It's basically flat.

Okay. I know in Q1 the grade was better than you budgeted in the model.. That was the case for Q2 as well then.

Q1, I was talking to the first half of the year. Q1 model was underpredicted what we actually saw in the mine.

Okay. Okay, thanks very much.

We now have a question from David from Scotia Capital. Please go ahead with your question.

Thank you very much. Just, I think, three questions. With regards to - just want some information on True North if you can with regards to how much material was mined there versus actually trucked, so just I guess quantifying to see availability of the trucks at that time.

Yeah. The, uhm, -- I don't have the number of tons -- ore tons mined at True North. I'll look it up right now. But 1 70,000 tons of ore was stockpiled at True North. We were unable to deliver 170,000 tons of ore at the end of the quarter. That contained roughly 5,000 ounces of material, so it was stockpiled and mined there. And if you give me a second, I can tell what you we mined from true north.

While you're on that does that -- that means that was capitalized, then?

No, no.

It would be set up as an inventory for accounting purposes. You defer the costs.

Okay.

Yeah, we don't capitalize stripping or, you know, everything is expensed.

Okay. While you're working on that I'll just mention the second question. With regards to any comments with regards to what's happening at Refugio plans, CAPEX for start up, whether there will be a start-up, etc.

Refugio, uhm, working with Bema, we have just completed the restart, I'll call it plan, an internal plan. The document was put together for management review. It was released late -- early this week. So it's undergoing review right now, nd, you know, depending what gold prices do, depending what management decides, yeah, there is a viable option to re-open Refugio if that's what management decides we want to do.

Okay.

Why don't you go on to number 3 while he keeps looking for your number. Oh, he has his numbers, hold on.

If you look -- okay, for the month of June, total mine production at True North was a million 50,000 metric tons.

That's ore and waste.

That's ore and waste. Ore tons was 363 and we only shipped -- and this is just for June, 219,000 tons to the mill. If you add those two together, you get roughly 170 -- well, there was a stockpile beginning in June. You can see we mined 100,000 more tons than we were able to ship to the mill. So the ore's available. It's being mined. The issue was the inability to get it across, and the grade is slightly better than planned. -- than plan. David, are you still there? [ pause ] hello? Hello? Operator, are you there?

I am here. We now have a question from Ed Irving from --

What happened to Mr. [inaudible] Who had a third question? Any idea what happened to him?

I would ask Mr. [inaudible] o press star one again.

Okay.

There there we go.

Am I back?

Yes, you are back.

Oh, thank you very much. I got all the tons -- I got all the information. Thank you very much. The last question was just with regards to Lupin, and this is obviously not your problem at this point, but is reclamation bond, which has to be posted there, and how much would that be and how does that fit into the strategy going forward.

I don't have that information. We'll have to get back to you on it. I don't have it with me.

No problem. Excellent. Thanks a lot, guys.

We have a question from Ed Irving from [inaudible] Securities. Please go ahead with your question.

Good morning. The question I have is, I'm trying to put all the figures together, but I was trying to figure out after the merger's completed, what kind of reserve position would you have and what kind of growth -- I'm trying to figure out where the growth is coming from in the future.

Ed, this is Gordon McCreary. The reserve number, as at the end of last year, pro forma for the three companies would have been 17.9 million ounces. That information is available in the presentation materials on our website at Kinross.com if you want to refer to some of the detail of that. The -- obviously, well that -- that was done at $300 an ounce with the exception of 2 of the operations, which was actually within the TVX assets. One was done at 275 and one at 265, I believe. Anyway, the -- obviously, to predict what we are going to see for reserves at the end of this year is rather premature at this stage, but that gives you a sense of what the reserve pro forma at the end of last year was. There is also the question of what gold price one would use tend of this year, to be determined obviously. We still have five months of exploratory work to be done on those assets, as well.

I guess my question, uhm, is, the old Kinross had sort of a limited reserves going into the future, and I guess my whole thing was, where do you see the growth coming from, from the new acquisition properties or....

Well, the, uhm, yeah, the, uhm, two million ounces a year is the target for production, and obviously, maintaining a call it a theoretical mine life of something of six or eight years ahead of that will be a target. So replacing reserves, you know, projects such as Birkachan in the russian far east, this restart potential for Refugio would be part of that, the potential of the Aquarius project in Timmons, which would be an asset coming in from Echo Bay, projects like [inaudible] and Northwest territories would have an impact on the production longevity of the Lupin asset. George and Goose Lake, does that have a longer term, Bob always refers to it as a acorn for the future. Brian, I didn't understand what you just wrote there. Okay. Anyway, is that enough for you, Ed?

Yeah. I was just trying to get -- I'm sort of trying to get a feel of what y'all think the acquisition will really bring of the three -- the companies being together.

I suggest you go to the website and check the presentation package that we made on the announcement of the transaction. That shows some future expected production rates and so on.

Okay. Thanks a lot.

You're welcome.

Mr. Buchan, there are no further questions at this time. Please continue.

We'll just wait for a moment to see if there is another question or two. [ pause ]

Ladies and gentlemen, if there are any additional questions, at this time please press star1. If you are using a speaker phone, please lift the handset before pressing any keys. [ pause ] operate we have a follow-up question from David from Scotia Capital. Please go ahead.

I thought I'd take the opportunity. It's pretty self-explanatory in your press release with regards to what the -- how you are going to deal with the merger in the Porcupine joint venture. I want to clarify it, though. Your book value will be added to what [inaudible] dome has, and that will be the under appreciated capital costs going forward?

No. Basically what will happen, david, is our book value will be the carrying value of our 49 percent interest in the joint venture starting going forward and everything is shared 49/51 after that.

Okay. So what would be the UCC going point time equals zero?

Just give me a second. I have to open the page.

David, I read your piece this morning on the brazilian real with interest.

There is quite a spread between your two companies! Which is an opportunity I think.

Okay. We have the answer for you.

Thank you very much.

Book value of the property plant and equipment is he end of June at Hoyle was 38. So that's your opening undepreciated cost and that's us dollars.

Right. Then we just add that to what we have for dome, for [inaudible] dome.

No, no. That is what our 49 percent interest will be carried at.

Ah, I see.

There is no gain/loss recognition.

Okay. Then we just use the combined new reserve base as the denominator for going forward?

49 percent of it, yes.

Excellent. Okay, thanks a lot.

Actually, maybe I'll make a comment when you mentioned reserve base as well that coming back to Ed Irving's question earlier. Certainly a comment should be made as to the impact of the [inaudible]situation with placer and the joint venture. We carry a portion of the 60-pit [inaudible] as reserved of serves year, but there is more to come from that we would expect year end evaluation this year.

We have another follow-up question from Mr. Ed Irving from Wachovia Securities. Please go ahead with your question.

My question, I guess, is where do you stand on the outlook for silver and gold prices, and what do you intend to do with your hedge position?

As we have stated already in a previous press release, we are delivering into our hedge book it will fall by the end of next year. It will be down to just a couple of hundred thousand ounces. As far as the gold price is concerned, we are very positive on the supplied side analysis. Mine production, central banks and hedging all appear to be very positive trends today. The volatility in the market is obviously difficult to understand, but the trend appears to be positive. And we are cautiously optimistic that the price will continue to rise.

Thank you.

Our next question comes from James Popland from Soldman Sachs. Please go ahead with your question.

Good morning, guys. I'm sorry, scott, could you please go through again the ore reserve? You just gave us a number reconciling blast holes expected grade, etc. I'm sorry, could you just repeat that just for the benefit of slow people like me?

Sure. I'll go through it again. Again, in general the models are performing very well. In general. Starting first with the Fort Knox ore reserve model and this is through project life, so several years of production, when compared to blast holes, the model has overpredicted tonnage by 7 percent. The Fort Knox model is underpredicted grade by 8 percent. The net result of the ins and outs of those two numbers is that it has underpredicted ounces by one percent. I said spot-on. Now, it's within one percent. It underpredicted -- we predicted that we would have one percent fewer ounces than we actually got when compared to blast holes. The True North ore reserve model again is -- has performed well throughout its project life, but shorter than -- much shorter than fort knox but when compared to blast holes, the model has overpredicted tonnage by 3 percent, so 3 percent more -- we thought we were going to see 3 percent more tons than we did. The model mass underpredicted grade by 9 percent. The net result of those two figures is, the model has underpredicted 7 percent on the ounce category. S, we saw 7 percent more ounces in the ground based on blast holes than what the model predicted we would see when we mined the area. If you look at mill -- mill, and this is just for the year, it's basically spot-on. The mill is -- we're seeing what we said we shipped from True North and Fort Knox.

Great. That's fantastic. Thank you very much for that.

We now have a question from [inaudible]from Salomon Partners. Please go ahead with your question.

Good morning, gentlemen. The first question I guess would be regarding Kubaka. You mentioned that you will be mining the North [inaudible] underground mining methods I guess beginning in the fourth quarter of 2002 continuing into the third quarter of 2003. What type of production levels are you looking at, at that point in time and what do you expect cash costs to be?

Well, the -- first off the underground Kubaka in the latter part of this year will basically be building the portholes, The equipment actually arrives late december, equipment as in a scoop and jacklegs and that sort of stuff. So really there won't be any underground ore coming out of there until early next year, ie first quarter of 2003. We're projecting only about 100 tons a day out of that, I think we can do better than that, I'm talking 100 tons a day of ore. Production levels for 2003 -- [ pause ] -- I'm looking that up right now but it was --

While he is looking that up, obviously, in 2003, we are going to be into some stockpiled material, supplementing the seed as well so then the sweetener would come from this underground material that Scott has the numbers for.

Exactly.

You shouldn't actually be going for any quarter with any significant decrease in production? For example, the fourth quarter of 2002?

No. No. And like Gordon said, it was a combination of stockpiles and the sweetners, this underground material. We are going to produce, and this is to our share, so, in other words, 54 percent. We are going to produce it looks like about 103,000 ounces next year.

What type CAPEX have you allocated for this [inaudible]?

That capital will be spent this year, but it was $2 million. The development -- 100 percent was 2 million. Our share would be a little over 1 million. That includes development. Development is on -- developments on ore.

In terms of just your carrying value of your Russian asset at this point in time, roughly?

Brian's going to look that number up for us.

While he is doing that another question, I guess. Just to get me back up to speed on Birkachan, what has -- I mean, what are the mining methods and strategy you are looking at again you? You may have mentioned this I did come on late in the call. I apologize if I'm asking the same question.

No, not at all. What we're planning to do is we have [inaudible]out open pit, what we call starter pit that would carry production in '04 and '05. Because of the issues that are going on in Russia, we really don't want to go much beyond that in terms of saying anything.

Sure. And in terms of what's actually been done so far, Bob, what have you actually done in terms of development there?

Nothing.

Nothing. Okay.

The scale of -- the time the -- lead time to production is a matter of a few months.

And in terms of -- is it an expansion license, or is it a separate license altogether you would be looking for?

Right now, we have an expiration license we would convert at Birkachan, we would convert that into a mining license. We are in the process of that right now.

We have the right to ll the usually royalties and taxes apply to this area and with no effective tax concessions?

Actually, the -- the -- there will be lower tax rates and it's in the mineral replenishment royalty, because the bulk of the dollars spent on Birkachan were company dollars, not governmental dollars. That tax rate will be lowered, and I can get you those numbers. Give me a call and I can tell you how much lower it is. But it will be a lower tax rate than we're paying right now.

Sure. Maybe when we start moving it along and figure out what's going on in terms of capital, et cetera, we'll talk more about that.

Perfect.

Next question, I guess, would be just a touch -- I now touched a little bit on Refugio. You said there is a study that's just been completed that you still have to look at and analyze, etc. but your gut instinct, at let's say $300 gold price, I know before we had said that the operation would not start before $325 gold price. Has there been any -- or what advancements have been made to make you actually consider doing it at the current price?

It's too early to tell right now. But, you know, obviously when we put these studies together, we're looking at various scenarios, sensitivity analysis, 300, 325, 275. All we've looked at today, is the existing ore reserve resource and the heap leach, and the hope is to explore and then take a look at how we are going to open this thing.

Thanks.

By the way, the net book value of Kubaka at the end of the quarter is $20 million.

20 million. Thank you very much.

We now have a question from Kerry Smith from Haywood Securities. Please go ahead with your question.

Thanks, operator. Just if I could follow up on the hedge. Could you tell me the 149,000 ounces hedge this year, Bob, is it pretty much spread evenly over the last six months? Then the second question I had was the 100,000 ounces of [inaudible] next year, whether they mature kind of evenly over the year or in the first half or just when this come?

First of all, the 149,000 ounces hedged, about 75,000 of that will be delivered into in the third quarter, the balance in the fourth quarter. As far as the calls are concerned, it's basically half midyear, half end of year.

Okay, great. Thanks, Brian.

You're welcome.

We now have a question from John Bridges from J.P. Morgan. Please go ahead with your question.

Hi, Bob. Hi, everybody. I just wondered on Kubaka, the underground operation, you're conservatively forecasting a year or two of small tonnage. To what extent was that actually drilled and closed out? Presumably if it was designed as a pit, then they wouldn't have looked to hard for the all the underground potential.

We've drilled quite a bit there. I'm not saying that it's been completely closed off. But it doesn't look like it's going to expand appreciably at depth once we get in there we will obviously do some more drilling from underground stations. But, you know, it's -- we did drill from the pit. You know, as we mined through the pit.

As much as this was an open pit mine or looked as at in that regard, in typical Russian methodology, they had been underground on this during the expiration fee.

Okay. Well, that was a nice thought anyway.

Yeah, we wish. [ laughter ]

Thanks a lot.

We have no further questions at this time. Please continue.

Well, I think that we have taken enough of your time today. It's Friday before a long weekend.

In Canada anyway.

I thank you all for your attention. And I hope this is the last conference call we have as kinross as you know it and that the next conference call will be as the new Kinross. Anyway, until that time, I thank you for your attention. And good-bye.

Ladies and gentlemen, this concludes the conference call for today. Thank you for participating. Please disconnect your lines.