Kinross Gold Corp (KGC) 2007 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Red Back Mining year end report conference call. At this time, all participants are in a 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. (OPERATOR INSTRUCTIONS). I would like to remind everyone that this conference call is being recorded on Monday, March 31st, 2008 at 12:00 p.m. Eastern time. I will now turn the conference over to Mr. Richard Clark, President and Chief Executive Officer. Please go ahead.

Good morning and good afternoon to everybody as the case may be. Thank you for attending our conference call in respect to our financials for 2007. On the call from Red Back is myself, President and CEO, and also Alessandro Bitelli, Chief Financial Officer of the company and Simon Jackson, Vice President, Corporate Development. What I propose to do is to start off with the review of the financial highlights of the year. And I'll ask Alessandro to go through the key points of the financial statements and the MD&A. Following Alessandro's presentation, I will take over again and give everybody a brief summary of where we sit at this point in time, being the end of March, 2008 and where we're going for the rest of the year. And then after that explanation, then we will turn it over for Q&A, if that works for everybody. So at this point in time, I'd like to pass the meeting over to Alessandro and he can go through Red Back's financial results for 2007.

Thank you very much, Rick and again, good afternoon to everyone. I would like to start my commentary highlighting the fact that 2007 was a very pivotal year for Red Back, some significant transactions took place that are putting Red Back in a very good position to move forward this year and in the next few years with a balance sheet that is debt-free. We have unwound our hedged position at the Chirano gold mine and we will now be generating revenues from two operating mines, the one in Chirano in Ghana and the one in Tasiast in Mauritania, with a production profile of approximately 245,000-ounces in 2008 going to over 400,000-ounces by 2010.

All of this was possible thanks to the acquisition of Tasiast of August 2007 as was financed equity issue for $336 million. The repayment of Chirano's debt and the unwinding of the related [forward-goes] contract was completed in October and November of 2007 as well, and financed by an equity issue. We had total gold production of over 148,000-ounces, of which 20,000-ounces, approximately, came from Tasiast during the commissioning phase. Tasiast's commissioning phase was completed at the end of 2007 and so we began 2008 in commercial production. And as a result of moving forward with Tasiast and Chirano and on the basis of the strong gold price and our belief of the strong potential for growth, has issued capital expansions at both Chirano and Tasiast and is now undergoing underground development of the property body at Chirano. With respect to the specific results, I think that the -- what can be easily seen is the effect of the unwinding of the hedge during the fourth quarter.

For the full year, the revenues per ounce were $578, which is good improvement over the first six months of 2000 -- the last six months of 2006 and the previous year as well. The fourth quarter clearly benefited from the unwinding of the hedge and being able to sell significant portion of the gold at market and the bottom line, excluding the cost, one-time cost of the unwinding of the hedge also reflects the additional cash flows and revenues generated from the higher gold price. With respect to other specific items during the year, we reported gain on sale of securities of approximately $5 million on a strategic investment of marketable securities, and we also reported the reflection of minority interest with respect to the 10% ownership of the Chirano gold mine by the Government of Ghana. That was in relation to their share of the results from the Chirano operations, which include the one-time costs of the hedge, the unwinding of the hedge.

With respect to the balance sheet, the balance sheet reflects a 400% increase in assets, as a result of the purchase of Tasiast. Again, our liabilities reflect the fact that we do not have any debt. The future tax liabilities that is sitting on the balance sheet is really a function of the differences between the future deductions available for accounting purposes versus the future deductions available for tax purposes resulting from the purchase of Tasiast. It is very much an accounting requirement to book that, the tax effect of that difference and going forward, that tax liability will be drawn down as cash flow and income is reported at Tasiast. We have a very strong balance sheet, as i said. We have $76 million in working capital, over $60 million of which is cash. With that cash position and the cash flow from operations, we are well-positioned to support our capital expansion in the underground development at the Akwaaba deeps in Chirano and we certainly expect to have a very strong year with cash costs under $400.

I don't have any other particular comments but certainly I'd be very happy to answer any specific questions that you might have.

Thanks very much, Alessandro. What we'll do -- what I'll do here is basically go back and comment on some of the key points corporately that Alessandro highlighted in respect to 2007 and then as I said, we'll give -- I'll give a state of the nation as we sit right now.

Obviously, 2007 was a watershed year for Red Back. Lots of things happened. We confirmed -- at Chirano, we confirmed the economic viability of going underground at Akwaaba. We acquired the Tasiast project in Mauritania from Lundin Mining after they made a successful bid on Rio Narcea. We then went on and took on in August possession of Tasiast and proceeded to put the mine into production by the end of 2007, and achieved commercial production at Tasiast in January of 2008. In terms of -- we've also -- in terms of reserves, and resources at Chirano, we were able to replace the ounces, the surface ounces that we had been mining for the past year, and in Tasiast, obviously we put out relatively recently a new resource, measured and indicated resource for Tasiast, which showed a significant 63% increase over that resource when we acquired it and took possession in August of 2007,

And based on the resource reserve increases at both Chirano and Tasiast, as Alessandro indicated, the Board of Directors of Red Back met in the fall of 2007, and approved the expansions of both projects, effective immediately. At Chirano, we are going from a through-put of 2.1 million tons per annum, up to 3.6 million tons per annum. That's a slight increase that we forecast to the market, and we'll be saying more about that over the next couple of months. At the same time, we -- the Board of Directors approved an expansion program for Tasiast and Tasiast will be increased from a through-put of 1 million tons per annum to 2.6 million tons per annum. At Tasiast, we're on schedule to achieve that expansion completion by the end of 2008.

Also at Chirano, we're on target and schedule to be commissioning the expanded plant in the first quarter of 2009. Obviously, that is going to have a significant impact in terms of our annual production. As we've indicated, we're looking at 245,000-ounces for this year, going upwards to 350,000 in '09 and in excess of 400,000 approaching 2010. And we're very optimistic for achieving numbers in excess of 500,000-ounces into 2010, but again, obviously that -- more information will come out of that as we progress through this year and into the expansion. On the corporate front, as I said, we were successful closing the Tasiast acquisition. We did two equity raises, one for the Tasiast acquisition and the other to retire our debt and hedge position. Both those went extremely well.

We did the Tasiast equity financing at $5.50 and with -- and that was in the spring or the late spring of 2007 and by the fall we did the approximately $110 million equity financing for the hedge and that was done at $6.60. Since that time, we've had an increased stock performance. We've hit a high of $9.16, obviously settled back in recent weeks as a result of the market and gold price. However, even sitting at I think $7.25 this morning, I can tell you that management is extremely pleased with the performance of the company's stock price over 2007 and into at least the early part of 2008. And we -- as, again, Alessandro has indicated, we're predicting sub$400 cash costs at both Chirano and Tasiast in 2007. Sorry, 2008, and looking to see a decrease certainly in the Tasiast cash costs going into 2009 and also the Chirano cash costs as we get into the fully expanded plant mode. So given the two projects we have and the resource success that we've had in 2007, we are expecting a very strong growth period for Red Back in 2008, 2009. Our drills are turning, I would say very aggressively at both projects.

We are looking to duplicate the success of Akwaaba deeps at other parts of Chirano and news will be forth coming on a regular basis in that regard. At the same time, we're having significant exploration success at Tasiast and we are looking to do at least one more resource reserve upgrade, if not two this year, at Tasiast, and I think we'll be seeing that this -- what started off as a million ounce mine is turning into something much, much larger than that by the end of this year. That's the summary, unless Simon, you have any comments?

No, that's fine, Rick. I think you hit all the important parts.

Okay. That highlights pretty much our year, both financially and what we've done corporately and project-wise. What I suggest now is we turn it over for Q&A.

Thank you. Ladies and gentlemen, we'll now conduct a question-and-answer session. (OPERATOR INSTRUCTIONS). One moment, please, for your first question. First question comes from [David Austin from Core Mark Securities]. Please go ahead.

Thanks. And all right. So first question is on Q4. Do you guys have split-outs of your operational results on Q4 that I could check with you quickly, or no?

We can certainly provide you with some indications. Q4 was a much better quarter for Red Back. Our average revenue per ounce was over $800. Our cash cost was in the neighborhood of $385. And the profit on the mining operations was approximately $9 million effectively over 70%, 75% of total profit from mining operations for the year. Clearly an indication of the benefits of unwinding the hedge.

What were your gold sales in the quarter?

We -- total gold sold, the revenues were 26, 220.

How many ounces.

Ounces, 32.5

And that's opposed to how many that you produced in the quarter? You produced more than that; right?

Production and sales were very similar. I think 125 to 127, the difference, very small. 127 produced, 125 sold.

Do you know what the gold production in Q4 was versus sales?

David, we don't have that number right in front of us but we can get that to you.

Okay. All right. So that's that on the Q4. On maybe some of the more kind of future looking stuff, on Tasiast, can you maybe elaborate on some of the things that you're seeing on the geology that's getting you excited about the upside there? It sounded like there's more to the story than meets the eye.

Yeah, David, what's going on obviously is we've -- you know, we've been drilling consistently since we took possession in August. Most of that has been an infill program in the existing pit designs and that's where we've got our bump in terms of the resources, and we'll soon be putting out the number on the reserves. We have had success on strike to the south of the pit complex, going towards what we call the West Branch. We are now drilling in the West Branch and we fully expect a significant type of conversion profile on resources in the West Branch, as well as an expansion of those resources themselves. And again, we're looking likely to be able to put out those numbers in the first part, first month of the third quarter.

We have discovered a new zone in the main ore body itself which we call the football zone and we're currently drilling that now to get an idea of exactly what the resource potential of that is and what it means geologically. But a lot of this stuff has been hit peripherally as part of the infill program. There's been no concentrated effort to go out and look at new targets to this point in time and there's certainly a lot of them in and around the mine itself, and we'll be getting into that over the next couple of months as we're bringing in a couple more drills.

Okay. Great. Finally, the 500,000-ounces production that you referenced earlier, do you see a way to get there organically, or are you thinking acquisitions when you put out a number like that?

Yeah, well, that's my optimistic forward-looking statement, David. But that is an organic number.

Okay. And I mean, in terms of the difference between the 400 and the 500, I mean, is it going to be Tasiast, Chirano, a combination of the two?

I think it's going to be a combination of the two. I think we expect that Tasiast is going to outperform our forecasts. As I think a lot of people know that we've been over the last month and carrying into this month, we've been conducting heat leach tests at Tasiast. We're very optimistic of those results and if that proves to be the case, then there will be a very near term bump in reserves and also a near term bump in production profile. We're basically looking to leach the low grade fraction and if that works, we'd probably be moving our cutoff down to about 0.3.

What are you doing with the low grade right now? Are you stock piling it?

It's waste. It's waste. It either goes to a low grade stockpile or just pure waste.

That's all the questions I have for right now. Thanks a lot.

Okay. Thanks, David.

Your next question comes from Kerry Smith, from Haywood Securities. Please go ahead.

Thanks, operator. Rick, have you let the contract for the underground development at Akwaaba deeps yet, has the contract actually started?

Yes.

And so did he start on schedule or what's the schedule now in terms of when he might actually be into ore then?

We're actually just commissioning the portal now, Kerry.

Okay.

And the contractor is an underground mining contractor, company name is Barminco out of Australia. And they are on-site and as I said, we have started. I haven't put an announcement out yet because I want them to confirm to me that the portal has actually been framed.

Right. Okay.

And done and then we'll put out an announcement.

And in the budget to get that operation up and running, commissioning in Q1, is that essentially on schedule with that timetable, then?

It is. It's probably a week to two weeks maximum [fletched] a bit but they feel they can pick that up. So in the grand scheme of things, it's virtually on time.

Right. Was the underground development the critical path or was it the mill? I guess it would probably be the mill construction anyhow, right?

It's both. What was key to making this work from a scheduling perspective is our acquisition of the mill.

Right.

And I can tell you that the mill came on the same ship as the underground equipment.

Right.

So our brand-new ball mill is at Chirano as we speak.

Okay. Okay. Great. And just on --

Kerry, it's Simon. Just to interject, just to make sure we're on the same page here, the Q1 '09 commissioning time frame is for the mill expansion.

Right.

The underground development, we should be in the ore body by roughly the end of the third quarter.

Yeah, sorry.

And actually fading from Akwaaba deeps sometime in the fourth quarter of '08.

Okay. Into the existing mill, obviously.

Yeah.

Okay. On your -- you're still planning I presume to put out your new reserve number -- there's new reserves and resources to come out in the next month or two. Can you give us a better handle as to when those numbers might come out?

I'm actually working on the news release on Tasiast now and I expect that we will have a release out certainly by the latest, next week.

Okay.

On Tasiast.

Yep.

On Chirano, it could be a similar time frame. We're going to have two -- there's still -- there's two ways of -- two mining methods that are still calculating. One is the same, the reserves that we put out before on Akwaaba deeps was based on a long hole open scoping mine design.

Yep.

And we will be in a position within the next week or two to do an upgraded reserve on that design.

Okay.

Okay. So that will come out. But the 90 plus percent, the mine, actual mine operation will be some form of modified sublevel caving.

Right.

And that reserve apparently will be ready in about two months. Okay? And that -- so the reserve that's coming out, the long hole open scoping reserve will be higher grade, lower tons.

Right.

And then when we finally put out the sublevel cave reserve it will be lower grade, more tons, more ounces.

And that will be in two months.

Yeah, about two months.

May or June let's say.

Yeah, this is just the engineers going back and forth on the two different methods that we can still go with and we're still doing some test work on the sublevel cave model and they're telling me it's all going to be done in two months.

What about a mine plan to encapsulate the reserves? Because presumably the actual mine plan will incorporate some mostly sublevel caving but some long hole as well in probably areas where it's appropriate and will you have some sort of a mine plan that will be available this year, which would sort of encapsulate all that.

The mine plan, once we get the final reserve numbers out, the mine plan shouldn't be that much longer.

So maybe August or something, mid-year.

Yeah, because -- well, as Simon said, we'll be into the ore body in the fourth quarter and putting ore through the plant and what's happening is there's two EPCN contracts at Chirano. One is for the crushing circuit and the other's for the plant. The crushing circuit is scheduled to be completed in the fourth quarter and then obviously the plant, commissioning the plant in the first quarter of '09. So as I said, as we mine the underground ore in the first phase, it will be going through the expanded crushing system and into the plant and we will just displace low grade surface ounces with the high grade until such time as the full plant is completed.

Okay. And you you talked about this new foot wall zone that was discovered in Piment Central in Tasiast. Would that actually be encompassed in the existing pit design or is will be in the new pit, the new reserve that you put out in a week or two here.

No.

It won't be.

Potentially it's in the resource, but it's not within the reserve.

So it wouldn't be in the reserve, but it would fall into the existing pit, ultimately it might be ore.

Some of it might and some of it won't and we'll have a much better idea on that in the next month or two.

Okay. And the exploration drilling or the other drilling you're doing at Tasiast, because you had talked about having another resource update at Tasiast sometime later this year.

Yeah.

Is that likely to be, what, Q3 or Q4 then?

No, it's going to be Q3. Probably for the next one. And it will be incorporating results from the West Branch.

Right.

Deposit and it's also going to be, again, updating the central Piment zone with the various Piment zones and it will take into account some of the material or the material we're discovering in terms of the foot wall zone, but also there's a whole bunch more of inferred. The bottom line is when we ram the shells on these things, Kerry, the shells kept going. We have to keep drilling. We got very positive results.

Okay. Okay. Okay. That's great. And I guess just one last question, if I could quickly. In the underground targets around Chirano that you plan to drill below the existing open pits, how many of those targets will actually get drilled this year with, say, half a dozen holes.

Let's say there's 15 targets, I suspect all 15 will be drilled.

There's going to be a lot of exploration news at depth as it were, then.

Yes.

Thanks very much.

Okay, Kerry.

Your next question comes from David Haughton from BMO Capital Markets. Please go ahead.

Hi, Rick and Simon.

Hey, David.

My ears picked up at the increased through-put at both Chirano and Tasiast, 3.6 compared to 3.5, just a slight increase, clearly, and 2.6 compared to 2.5 at Tasiast. Can you give any indication as to whether that's within the same sort of CapEx limit that we're looking at previous.

The 3.6 at Chirano, the CapEx is probably going to go up a little bit but David, that's a bit of smoke and mirrors. Because we had also been looking at sort of a small side budget for a flash flotation circuit and that budget was about $10 million. And what's happened is rather than do the flash flotation circuit, the engineers have gone back and done some more tweaking on the processes design at Chirano and feel that by increasing the capacity and by doing some more things with the design, they can achieve the same result as the flash flotation circuit with better economies.

Had a note in here, it was $35 million for the expansion to 3.5 million tons plus 10 for the float. Is that all up 45.

You're still in the same ballpark, yep.

Okay. Very good. Now, on the topic of CapEx, can you give us an idea as to how much you'll be spending at Chirano during 2008 and the same question would apply for Tasiast.

I'll pass that over to Simon and Alessandro.

Thank you.

David, in that Chirano this year, the CapEx forms into three different areas. There's the plant expansion area and we estimate roughly about $30 million for this year. Secondly, there's the development costs for Akwaaba deeps and we estimate for this year that will be roughly 25 and then exploration-wise, there will be about $12 million this year and the regular sustaining capital we estimate will be around 3.5 for '08. So that's Chirano. At Tasiast, the mill expansion in round numbers is about $40 million, which we expect to be complete in the fourth quarter, so that will all be spent this year. And exploration-wise at Tasiast, about $6 million at this stage, but I anticipate that's probably going to rise. And at Tasiast, sustaining is probably giving it's the first year of the operation and we're still going through some of the bugs, probably around the $5 million mark.

But longer term you would expect lower?

Yes.

Probably half that longer term.

Okay. As far as the contributions from the underground at Chirano this year, can we expect to see any commercial ounces coming through for 2008?

You can on that. I think in the 100 -- in the 100 -- the forecast that we put forth, David, I think there's about under 10,000-ounces I think. Okay. Am I right in that, Alessandro?

That's right, Rick. 135 135,000-ounces is our estimate for Chirano this year and off the top of my head I think the underground portion of that is around 6.5.

I think that's right.

But it's certainly less than 10. David, just to kind of put some color around that, we're obviously trying to be relatively conservative, because there's obviously -- there's a long way to go before we're down to the ore body and so on but that's our estimate for this year.

Okay. Now, just flipping over to Tasiast, you're saying that the expansion would be right by the end of 2008. What sort of through-put should we be looking at for 2009. Would we be up at the 2.6 or hitting in that direction?

Yes. Yep.

Okay. So the 2009 forecast of 300,000-ounces seems relatively conservative. Is that an interpretation?

I like conservatism.

Right.

And that also does not include any success we might have from our heat leaching work at Tasiast as well. Those are -- we haven't put out in any of our forecasts any potential from heat leaching.

Now an accounting question. With the hedging, I had anticipated a hit to the hedge over the life of the contract, so more than just one year. Is there a rationale as to why you took it all in one year instead of out over duration of contracts?

It's from an accounting principles perspective, the unwinding of the hedge was treated as a period cost, consistent with the way in which we were treating the forward sales contracts at the beginning of the year, we made an election on the financial instruments standard that came into force and allowed us not to at the same time recognize changes in the values of those forward set contracts from period to period, as well as when we made the decision to unwind the hedge, not having to carry that cost for the remainder of the life of those contracts. So it was consistent with the treatment and the financial instruments as was decided at the beginning of the year.

Thank you. Just a point of clarification, Rick, when you're talking the ounces, are you talking about a 100 base is for operations or are you netting out any minorities?

100%.

100%.

And the only minority we have is in Ghana.

Yes.

We own Tasiast 100%. And in Ghana, 90.

But the government would be participating once you've had pullback of some costs, et cetera?

No, it's a carried interest. I see what you mean, David. Sorry. No, once we have recovered costs, then it would effectively be an equity and a dividend interest.

That's right. Okay. All right. Good. Thank you very much for that.

Your next question comes from David Austin from Core Mark Securities. Please go ahead.

Just one follow-up question. You guys don't report any tax at this point. Any sort of vision into the future, when you think you'll be paying -- reporting tax?

Well, certainly the -- if I can answer that question, David, the results for this year in Chirano, with the unwinding of the hedge, clearly indicated at that level we incurred a significant loss. As we go forward, we do expect to show significant cash flows and profits. We do have large tax pools accumulated, both at Chirano and at Tasiast, and the expectation is that taxes will not -- will not need to be paid for at least five or six years.

That long.

Tax holidays and their mining convention and in Chirano, we are probably looking at, as I said, five to six years, somewhat depending on the treatment of the hedge for tax purposes which it's a rather unique situation and interpretation of the tax laws in that country will need to be carefully reviewed and assessed prior to making a final determination as to the exact tax deductibility of that item. Conservatively, we're not reporting at this point in time a tax asset with respect to these deductions.

Okay. Thank you.

Your next question comes from [Enruth Smithy] from Equinox Partners. Please go ahead.

Hello, gentlemen.

Hello, how are you?

How are you?

Good, good. Question on the situation in Ghana. Do you know, has the aluminum smelter restarted?

I don't know the answer to that.

I see.

I can tell you that certainly we have not experienced the power problems in the first quarter of this year that were the case last year. We did have some power issues, but they were local issues, for example, trees falling on lines and a bird hitting a transformer and things like that. But there was no power cutbacks from the VRA.

And you were planning to put any HFO backup?

We're kicking around some ideas about backup power. And most of -- in regard to a couple of aspects, one is just always having reliable and consistent power. Not in the sense of VRA cuts or rationing of power, but sometimes you get fluctuations in what they call dirty power. We are talking about some sort of supplement in that regard and those studies are ongoing. Obviously you continue to monitor the situation with fuel prices as to whether or not the cost of hydro is against the cost of fuel prices but at this stage of the game, I don't see ourselves certainly not in 2007 going and buying a power plant that would serve all of Chirano's needs. We continue to rely on the government grid.

I see. And just a rough translation that I have here, looks like the through-put was a bit slower in Chirano in the fourth quarter. Was there any specific reason for that or what do you expect this going forward with the underground?

The through-put issues, the main reason for through-put issues were variations in the fourth quarter and going forward this year, until the expansion is completed, is crushing. As I think everybody knows, when we got the mine into production originally and got down into the hard rock, we discovered that the rock was much harder than was forecast in the original studies. It offset that in 2007. We put in a portable crusher and we had -- that has certainly confirmed to us that that is the issue. We added a second portable crusher in the third/fourth quarter of last year and so any deviation from through-put means that there's probably maintenance issues on one of the crushers or one of the crushers is down for some period of time. But that is the main reason for the through-put fluctuations. That is all going to be solved when the new crushing system is installed. The upgraded crushing system, and that is scheduled to be completed by the end of the third quarter, beginning of the fourth quarter.

Great. Well, thank you very much, guys.

Your next question comes from Nicholas Campbell from Canaccord Adams. Please go ahead.

Good afternoon, gentlemen. Just had a couple of questions. I was wondering if you could give us a little bit of color on what type of through-put you would be looking at or you'd be considering for a through-put for heat leach at Tasiast and how much low grade ore are you looking at right now?

I don't have those numbers right on the top of my head, Nick. We can get them to you. And in terms of through-put, you know, we're still doing the studies. What I can tell you, we've now built two pilot heaps and we're looking at basically run a mine heat leaching and also crushing agglomeration. We expect those studies will be completed certainly by the middle of May, in terms of the irrigation side of it and then we should be in a position in June to advise the market exactly what we're looking at in terms of production numbers and resources that will be going into those piles.

Okay.

Right now, I would just be giving you sort of guesswork.

That's fine. That's fair enough. Second question, with regards to Cody Extended, I think you guys are pretty close to being done, if not done doing your open put mining there. There were some discussions, you were looking at potentially expanding the pit or potentially starting an underground operation there. I'm just wondering if you have any idea on what sort of numbers or how much additional ore is sitting at. Cody Extended.

We're still drilling that. We had the drill us off that to complete Geotech work at Akwaaba for the last couple months. The drills have gone back into that area at the ore bod now, the exploration guys are drilling it off. We hope within the next couple months to be able to give you some firmer numbers on that. They've done back of the envelope stuff and we've done some internal stuff but it's not something I want to put out in the public just yet.

All right. Fair enough. Thanks a lot.

Okay.

(OPERATOR INSTRUCTIONS). Next question comes from Enruth Smithy from Equinox Partners. Please go ahead.

Following up on that thought, guys, to get to 130,000-ounces or 135,000-ounces of gold at Chirano, if the through-put is maybe two to 2.2 million tons, grade's going to be something two plus grams an ounce?

Yeah. I think the grade that -- I don't have the mine plan in front of me right now. I don't know if Simon, you guys do.

I don't. The thing you've got to remember here is the effect that towards the end of the year when the crushing system, the kind of upgraded crushing system at Chirano is finished and we start putting through the underground material will skew that kind of back of the envelope calculation you're doing.

I see.

I don't have the numbers in front of me of the grade profile over the months.

Okay. Okay. I'll catch up with you guys later. Thanks.

I can tell you, I think that for the -- this quarter, first quarter of 2008, the grade's been around two.

That's helpful.

Pardon me?

That's helpful.

Good.

Yep.

Thanks, guys.

Okay.

There are no further questions at this time. Please continue.

Okay. Well, if there's no other questions, thank you very much for attending. As we said, we've got a lot of things on the go. We're going to be extremely active in '08 with the underground development at Akwaaba, the expansion of both plants and very aggressive exploration programs at both Chirano and Tasiast. And you'll see I think from the financials and the MD&A, we also have what we think are very, very prospective -- two very prospective projects in Cote d'Ivoire and we are waiting for our final permitting on those to start drill programs. We've done, to this stage we have done trenching and geochemistry and come up with what we think are significant anomalies and we hope to be going in with drill programs within the next 60 days and looking forward to putting out some results on those programs this year as well. So it's going to be a big news year for Red Back once again and I thank everybody for their support and look forward for another strong year.

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