Kinross Gold Corp (KGC) 2009 Q1 法說會逐字稿

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Red Back Mining first quarter 2009 results 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 provide the at that time to queue up for questions. (Operator Instructions). I would like to remind everyone that this conference call is being recorded on Tuesday, May 12th, 2009 at 11 a.m. eastern time.

I'll now turn the conference over to Richard Clark, President and CEO. Please go ahead, sir.

Thank you, operator. Good morning, everyone and welcome to the first quarter conference call of Red Back for 2009. On the call from Red Back and available to discuss sort of any aspect of the quarter are myself, Simon Jackson, VP Corporate Development, Alessandro Bitelli, Chief Financial Officer and Kevin Ross, Chief Operating Officer. So when we get to the question-and-answer session feel free to direct your questions to any of us.

I would like to conduct the call as we have in the past and that is basically just my opening remarks and then I'll pass off the call to Alessandro who will go through the quarterly numbers. And then after Alessandro has done that, I'll then take us through where we are in this quarter in terms of Red Back events, particularly in regard to our expansions, our resource, and reserve definitions and other exploration issues.

So at this point, I think I would like to preface Alessandro comments by saying we're very proud of this quarter, it's been our most successful quarter from profit perspective. We are on target in terms of our forecast for the year both in terms of our costs and our production. And so it's been a really good start to the year for the Company.

So at this stage I'll pass off the call to Alessandro who will go through the quarterly numbers.

Thank you, Rick, and good morning to everyone. We are very please to report the record quarterly results for the three months ended March 31st. Indeed, an [addicum] of $25 million, $22 million before the gain on sale of marketable securities. The ounces produced and sold were more or less plus or minus 3% of the record level achieved in the fourth quarter of last year. And production levels for 2009 are expected to increase and reach 400,000 for the year. Mainly with an emphasis in the second half of the year when our plant expansions in [Autumn] will be complete and the underground operations will start.

Realized gold price was strong at $917 per ounce. As you probably know, Red Back sells it's gold at spot into the market, upon receipt of delivery from the refiners. From an operating cost perspective, we are in line with expectations for the year on a corporate level. At Chirano, specifically, we expect to see a decrease in cash cost to approximately $484 per ounce for the year. As the year progresses we have underground ore, higher grade ore from India and Akwaaba that comes into stream and the expansion is completed, again in the second half of the year. At Tasiast cash cost at the first quarter was less than expected due to lower processing and mining cost. And over all for the year, as I said we expect the cash cost to average $320 per ounce.

With respect to other elements of our results, depreciation and amortization are likely to increase in the second half of the year as the capital expansions and the underground developments move into commercial production. And we realize the additional ounces to the revenue line, but the related capital cost will be amortized or commencement of amortization of those capital costs will commence against the related reserves.

On the corporate side of things, G&A costs are in line with expectations as we target an average of approximately $1.5 million per quarter. With some variations due to different costs incurred at different times of the year from quarter to quarter. Specific to the first quarter of the year, Red Back sold the shares in Mineral Deposit Limited. It has acquired these shares in September of 2008 and we realized the profit of $3 million. The funds from the sale of the shares of MDL as well as the funds from our shore from prospectus financing completed in February of this year increased the Company's cash balance to over $135 million. And that will provide us flexibility in responding to corporate opportunities as the year progresses.

To date Red Back Mining has not recorded income taxes in it's accounts because it's taxes operation are under tax exoneration treaty until the end of 2010. At Chirano, profit have been generated now in 2008 and to date in 2009 but any potential income taxes at Chirano are offset by previously unrecognized tax benefits relating to accumulated tax pools. Ultimately taxes will apply at 25% in both Ghana and Mauritania, however we do not anticipate being in a taxable position before 2012. With a deferred tax expense to start being recognized in 2010 and partly only with respect to the Chirano operations.

In the first quarter quarter of 2009, capital costs reflect current plans. Expenses are on schedule and on budget with respect to the capital expansion. And a majority of the costs are expected to be incurred in the first half of the year with the completion of the capital expansion. Other costs like cut backs are also going to be incurred predominantly in the first half of the year compared to the rest half of the year. Exploration costs are in line with the budget, with approved budgets for the first half of the year. The programs for the second half of the year have yet to be finalized. But in light of recent successes at Tasiast and Chirano it's reasonable to expect a ramp up in the second half of the year particularly at Tasiast.

In summary a record quarter with very strong profits and progress as planned our on capital expansion and underground capital programs. We maintain our target production levels of 400,000 ounces for 2009 at an average cost of 308 -- $385 an ounce. Based on the current gold price of approximately $900 an ounce, this will generate cash flow from operations in excess of $200 million.

Thank you very much, and back to you Rick.

Thanks very much, Alessandro. Okay, I think everybody would agree that that's a very, very strong quarter financially. We've also had considerable success in a number of other fronts. Not the least being a continued increase in our resources and reserves. The latest being at Tasiast and we reported in the quarter a 39% increase in reserves to almost 2.3 million ounces over and above the last time we reported.

In the last 16 months, since we acquired the project, we have increased reserves at Tasiast by almost 120%. That process we expect to continue. Our next update is currently scheduled for June. And that will be a conversion of additional inferred resources into measured to indicate and subsequently reserve.

The exploration success at Tasiast continues to impress us dramatically. We made a new discovery that we recently announced in what what previously though to be a barren unit. We are getting a much better geological understanding of what is going on at Tasiast and that is leading us to new discoveries. The latest discovery we call the [fell site] zone is immediately adjacent to our west branch deposit and is going to change the optimization of that pit and the pit design. The pit is likely going to expand significantly to the east and to depth. And we're currently working on that in conjunction with in fill drilling of the fell site zone.

As Alessandro mentioned, and I'll stay on Tasiast for a minute, we expect to increase exploration at Tasiast dramatically. We have been restrained on exploration at Tasiast and the project in general due to logistics. We just have not had the accommodation capacity at site, due to the fact of the number of contractors we have had at Tasiast for the last year in respect of the expansion. That situation is changing in June. And will continue to get better through July and August and accordingly we'll be ramping up exploration significantly in two prongs.

One is to continue reserve definition and conversion in and around the existing deposits. And the second exploration program will be regional. And it will include affectively targeting within or in excess of 20-kilometers from the plant site at targets we've identified over the last year and a half. With the objective of identifying a new deposit and potentially a new mine. So you can expect to see us announce sometime in the next couple of months a much more expanded exploration budget at Tasiast.

Going on to Chirano. Again I'll stick with exploration for the moment. We recently had an analyst tour down to both projects. We took approximately 40 people down and over the course of three days visited both Tasiast and Chirano. When we were at Chirano, we advised the tour that we had intercepted a significant drill intercept below the Paboase South deposit which is immediately adjacent to the West of the plant at Chirano.

We have subsequently received results from a second hole which confirm our first hit. And we're in the process of drilling a series of six holes on that discovery and we very much hope it develops into something along the lines of Akwaaba Deeps. It's early days, I'll preface and emphasize that, it's very early days. However these drill intercepts are the most significant drill intercepts we've had at Chirano since the discovery of Akwaaba Deeps. So we're very excited about that and we hope to be reporting on a regular basis our progress at that discovery.

In terms of the expansions and again staying with Chirano, as Alessandro indicated, we are on schedule, we are on budget, the majority of the capital has been spent. Chirano is the first phase of the expansion, the crushing circuit has been commissioned and is in operation. And the second phase, which is the milling phase, is scheduled to be commissioned in September. And we're looking to have the full capacity under the expansion for the final quarter of 2009.

At Akwaaba Deeps, again is on schedule. It's on budget. I think as we've reported we're already putting ore through the plant. And again we're looking for material -- an increase of material tonnage in the third quarter of this year, ramping up to 100,000 tons a month going into 2010. Again, very pleased with the progress of Akwaaba Deeps.

Jumping to Mauritania on the expansions. Again on schedule, on budget with commissioning of the new mill scheduled for sometime in June, with completion of the expansion by the end of August. And again, looking for at least a full quarter plus of expanded production from Tasiast for 2009. Which will very much keep us in line on our forecasts of production and costs. So again, it's been a spectacular quarter for us on the exploration front and on the expansion front.

And the last major accomplishment in the quarter for us was the closing of our $165 million facility, financing. We raised that money to put us on the same level as our peers in giving us the capability to act very rapidly on potential corporate acquisitions going forward. I think it's important to remember that Red Back is a Company that's been built on transactions.

We've capitalized on the assets themselves in terms of exploration and we've had huge success there. And obviously we'd very much like to acquire another project along the same lines as a Chirano or Tasiast. And we continue to work hard at identifying those and we're now capable certainly in terms of manpower, in terms of development skill, and in terms of financial capacity to do another deal when it comes our way. So I think that we expect to continue along these lines.

As I said, in summary, increasing resources and reserves on a regular basis, continuing to put out exploration, success, results on a regular basis. And we very much look forward to reporting to you on our second quarter, which will give us a much better picture of where we sit at the half a year mark on the expansions and the underground development.

So on that note, I would like to pass it off to question and answers. And as I indicated at the outset of the call, there are four of us available, the majority of the senior management of Red Back on the line, both in terms of financial issues, exploration issues, corporate issues, and operating issues. Thank you very much.

Thank you. Ladies and gentlemen we'll now conduct the question-and-answer session. (Operator Instructions). Our first question comes from David Stein of Cormark Securities. Please go ahead.

Thank you. Good morning, guys. My first question, I guess a couple of quick financial questions. The $28 million that you borrowed before to buy the MDL shares, was that a line of credit, and if so is that still available to you, or is that closed now that you've paid it off?

That was a specific-purpose loan and that was repaid at the end of February. We have been negotiating for some time with the same bank a line of credit and that line of credit should become available to us this week should we need to use it.

Okay. And then secondly, you talked a bit about the lower depreciation and that it's going to go up in the second half. Can you say what the magnitude in terms of dollars per ounce?

No. That's a good question, David. It is really a function of production because the majority of our depreciation and amortization is based on production and reserves. But as the underground and the plant expansion come on stream, we could see an increase in amortization of approximately $20 per ounce at each of the two sites with respect to the capital expansion at each of the two sites. And on our life of mine underground operation with respect to the amortizational development costs, total development costs for the projects or not just the ones incurred to date, we're probably looking at $50 to $60 per ounce of amortization.

That's just a trano, the 50-60?

That's the underground. It will be less this year, because not full development costs have incurred but will have been incurred by the end of 2009.

Okay.

And again it depends on the number of ounces produced.

Okay. Great. And then last question. Can you tell us what the second hole hit on the Paboase?

Let's put it this way, David. It was a better hole than the first one.

Okay. Fine. I'll take that. That's all my questions for now. Thanks.

And our next question comes from Kerry Smith of Haywood Securities. Please go ahead.

Thanks operator. Hello, everybody. I had just a couple of questions. Alessandro, your comment on being taxable by 2012, what sort of gold price are you going to use with that calculation?

That's really based on gold price staying between $700 to $900.

Okay. And when you said taxable --

Meaning payment of tax. Actually paying taxes as opposed to recording taxes.

Right. To be cash taxable.

Cash taxable. That's right.

Okay. No, I understood that. And then just on a general question on the costs. For Q1, the costs at Tasiast were quite a bit lower than your guidance of 320 and then Chirano was the opposite of that where the costs were I think 509 or something and you're budgeting for 80. So as we move forward in this year, your costs would need to come up significantly at Tasiast to average out at 320 for the year and I guess for Chirano they would have to come down to sort of 460 or 470. And I'm just wondering, on the one it seems a bit more out of whack at Tasiast that would like the 320 is maybe a little bit conservative but I just wondering if you could give me some guidance there?

We like being conservative, Kerry.

I think Kevin wants to take this one.

Okay. Hi, Kevin.

I've just been handed the hospital pass. Kerry, there is definitely a curve on Chirano's costs as we go through the year. Obviously as we get higher grades coming through from the underground which is going to be in the second half of the year and as we're able to increase the throughput, that is obviously going to skew the costs in the second half of the year. So in fact costs are in line with our budgets as cash costs at Chirano and we're still forecasting a fall off through to average 480, therefore obviously by the end of the year we'll be lower than that.

I think one of the other benefits that both sites are actually gaining from right now is obviously fuel. We actually budgeted use for our base budget costs, fuel costs, local costs of $0.90 a liter. In Ghana we're actually paying over $0.70 a liter. And in Tasiast we're paying on the [average fuel] it's in the mid-50s and for diesel it's in the mid-60s again compared to -- so that's about $0.20 a liter below what we actually budgeted.

So that's a large element of our under or our positive variance in Tasiast. And again, as we come through with Tasiast and we see further production coming from the expansion, and also from the Dump Leach those ounces start coming through, then that's also going to help us. So at the moment we have some positive cost sides coming through primarily due to the low oil cost, low oil price rather, and therefore the subsequent fuel costs that we've been charged.

Okay. And so just at Tasiast then, Kevin was the cost in Q1 essentially on budget or I would presume they maybe were below budget and that was all made up with the lower --

It was below budget.

Okay. And was that entirely based on fuel costs?

Predominantly fuel costs, yes.

Okay. And you can just remind me again, maybe Simon or Rick, just on the election in Ghana, just remind me what it is and how the expected outcome is and how that may or may not affect you guys over there?

Yes, the elections are on June the 6th.

That's Mauritania.

Pardon me, Mauritania. I'm sorry.

Yes. Mauritania. And on June the 6th it's only an election for the government. But keep in mind that when the President was removed by the military, they did not touch any of the other elected officials in either of the lower houses, Congress or the Senate, the only issue was the President and so that's the only election taking place on June 6th. General [Aziz] who was the head of the military council, has resigned from the council, he has resigned his military commission. And he's thrown his hat in the ring and will be running in the election and is strongly expected to win. And after that, I think we'll see a much -- we're going to see a stabilization of international relations.

I think, as you were there, and as we've been telling people, we've seen no material affect at all to our operations as a result of the coup, quote unquote. And I think the biggest impact on Mauritania has been responses to the international community on a political level and some economic sanctions. With the election of General Aziz, which is not the preferred outcome by the African Union and the European Union, however I think it is inevitable. With that happening, we expect it will take a couple of months for everybody to accept that in the international community and then we'll see normalization of relations. But again all through that process, it has not affected our operations.

Okay. That's great. Thanks a lot guys.

Our next question comes from Anita Soni of Credit Suisse. Please go ahead.

Hi. Just a couple of questions on Tasiast. The recovery rate of 94%, I believe the guidance that was provided during the mine tour was 91%. Was there some kind of positive variance there?

Kevin?

Yes, there was a small positive variance. But still, Anita we actually have a blend -- we get slightly different recoveries from the fresh and the oxide. The oxide in the quarter was still predominantly higher and a little bit higher than we anticipated going through. So that's the main reason for that recovery issue.

Okay. And then in terms of what your total tons that are going to be mined during this year, you have about 5.2 million and then Dump Leach ore is what 2.3 million and CIL is 2.8, I believe -- or 2.6? So I'm just curious, the open pit basically gets split through the CI and the Dump Leach Ore, right? And then I'm just wondering -- what are the costs associated with mining the Dump Leach.

The way we're handing the Dump Leach at moment is that our designs are purely based on the CIL. So the actual pit shell and the design there from is purely based on CIL. So the way we're handling that at the moment is that any material that comes up to the top of the pit, it's first sort of choice is does this go to CIL or not. So material will go into the wrong pad and if it's fresh it may go into the intermediate stockpile.

For other material we then have a look at it at and say can this go to Dump Leach if it's oxide. And if it does, then we do not assign any mining cost to that because we treat this as a marginal cost. And if it's below nominal 0.15 grams per ton, that goes to waste and anything else above 1.5 grams to whatever the cutoff on the CIL plant is at that stage and it will vary through the life of the mine, it will go, if it's oxide, to the dumpage.

I'll probably need to call on that.

I'll give you a call after.

And just with respect to the Dump Leach this quarter, what was the recovery rate or is it too early to tell what the recoveries are at the Dump Leach this quarter?

The recovery -- obviously, you can only tell what the final recovery is at the end of the Dump. But the recovered ounces in Q1 and through mid Q2 are in line with the buildup of the recovery curve that we developed from our previous test work; namely, the Dump Leach test pads that we put in. We had two test pads and then we also did a lot of column test work as well. And our response curve -- and it all has to do with the volume of water that you actually put onto the Dump Leach, were in line with projected recoveries from the test work.

Okay. And so how much -- you're expecting about 30,000 ounces for this year at a full run rate? What would be the amount of ounces that you would be getting?

We still have the ramp up, so we've probably had about 5% recovery of that 30,000 ounces in Q1. We're looking at probably 15 in Q2 and then it will build up in -- in the second half of the year to pick up the balance.

Okay. So but for 2010, about how many ounces would you expect?

Well it very much depends on the grade at the time, Anita, and we're probably looking at around the 30,000 to 40,000 ounces. At that stage it will then be a pretty even quarterly buyout.

Okay. And then just remind me -- about how much material of this Dump Leach do you estimate you have?

At the moment we have 16 million ton in reserve and that's only from the Piment zone. One of the things that Rick mentioned earlier is that we're be updating the reserves shortly. And that will include the West branch Dump Leach material and there is a significant volume of material in West branch, probably at least the same at Piment, that will be converted to reverse. So we'll have substantial Dump Leach reserves available to us over the next five years.

Okay. Thank you. That's it for my questions.

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

Good morning, all and thank you for fielding the questions. Rick I hear you're stepping up the explorations. Can you give us a sense of how much you're going to spend this year on exploration?

David, if you ask me that question next we'll I'll be able to tell you that. I'm meeting with [Hugh Stuart] on Friday and he's going to give me some preliminary numbers. But basically we're going to ramp it up as much as we can in terms of capacity at Tasiast and we're going to put into the budget some element to increase a separate stand alone exploration office, et cetera. And so I'll be able to give you much more information on that starting next week.

And given your comments I presume you're in a generous mood?

I am.

You also mentioned that the drilling below Paboase South was analogous to what you've seen at Akwaaba. What makes you you think that, what have you seen in the geology to make you prompt that?

Well first of all, it's basically it's Winston grade, number one. Number two, at this stage, and looking at the first pull, David, as we were down there, it's pretty clear that we've been trying to target these dip [jars]. And so these holes were targeted to take basically -- to look and see whether or not we were on something that was resulting -- was a structural change in the prevalent mineralize zone. And that's what we seem to have intersected and it's a similar type of Genesis as we have at Akwaaba Deeps.

Okay. Now presumably the drilling you've done is only within a few hundred meters of the base of the pits?

Correct.

Have you done any deeper drilling or is that on budget ahead?

It's on going right now.

All right. And I guess from what you are saying also, that it looked like some of your earlier hits at Akwaaba then?

Correct.

Just on the topic of budget, what would you expect to be spending in Capex this year to complete your various projects?

If you give me a second, I can provide you with that information, David. We are looking at -- to complete the capital expansion at Chirano, approximately $20 million. And at Tasiast approximately $18 million. In addition to that, our underground development at Chirano is expected to be around $28 million. We'll have open pit cutbacks capitalize of around $14 million at Chirano. Mining fleet expansion of $9 million at Tasiast. Dump Leach pad capitalize cost of $4 million and then sustaining capital at each of the location of $67 million. Which is higher than what we expect later on in 2010 and following years.

Now just to get the context of that right, is that the spend for the year or is that the spend for the balance of the year.

No, that is the spend for the year.

Okay. Great. Thank you. All right. That does it for me for now. Thank you very much.

Thanks, David.

(Operator Instructions). Our next question comes from Nana Sangmuah from Clarus Securities. Please go ahead.

Congratulations gentleman for a good quarter. My question is on acquisition strategy going forward. Will the focus still be in the West African sub region or are there are some countries that your are exploring and consider no go's?

I think our definite preference is to try to did something in West Africa. In terms of strategy, I guess the easiest way to say it is we are looking for a project to continue our growth profile. We have really strong growth with Tasiast and Chirano into 2012, as we've forecasted now . And so we would like to be looking at a project now that we can bring in or have in production by 2012. And so at the lower level you're looking at prefeasibility at a minimum. And then basically we'd be looking at any type of project over and above that level.

In terms of geography, again West Africa and then Africa in general. There are countries we're not looking at, at this time. South Africa is one. We're not interesting in looking in Nigeria, Sudan. We're not going to do something in CAR. At the moment we're taking very much a wait and see posture for places like Guinea, et cetera. In terms of the African continent, I mean we're looking for projects that are going to give us a production profile of plus 150,000 ounces per year around 10-year mine life, a resource in excess of two million ounces and relatively simple metallurgy. So it sounds like the wish list of everybody, but that's really the parameters that we're focused on.

And so we recognize that we will exhaust those abilities in Africa in pretty short order because we've been doing a lot of work on that front over that the past year. So we're going to be moving our gaze a little farther upfield. We have a lot of expertise in Latin America, so we're certainly looking and will be looking more seriously in that area and potentially even for the right project of branching out to Pacific Asia. But again, we need size to lead the region and set up a new infrastructure and a new operational base. So that's essentially the recipe.

Thank you.

Our next question comes from [Mark Turner of Jennings Capital]. Please go ahead.

Hi, gentlemen. Just a quick question here on I guess last quarter's production records at Chirano. Obviously the sales number of 35,000, just over 500 ounces does not include the preproduction from the Akwaaba Deeps. I was just wondering the 34,260 ounces does that include a proportion of the development ore from there?

Yes. The production answers on the ND&A of 34,000 and change it includes any ounces from the development ore. On the other hand from the gold sold ounces do not.

Right. Do you have an idea of just what the development ounces were there?

It's 1467.

Okay. Perfect. Thank you very much. That's it.

Sure.

Next question comes from Kerry Smith of Haywood Securities.

Thanks. I just had a quick follow-up, Alessandro. When you start reporting cash cost for Tasiast including the Dump Leach, are you going to give us one cash costs for the combined operation or how do you plan to do that?

I'm just going to give you one cash cost, the Dump Leach operations is really going to be considered an unincremental cost which is part of the overall cost as well as the ounces produced is going to be an incremental number of ounces as opposed to a separate operation.

Right. Okay. And secondly on the Paboase South drilling, the second hole that you've go, how far away is it from the first hole?

Do not hold me to this, but it's within 75 meters.

Okay. And then you have, I think you said, another six holes planned around those two holes. How big of a area is Hugh kind of targeting to drill with those holes, do you know?

We're looking at basically to predominantly down plunge.

And how far down plunge, Rick?

I think the next -- he's trying to go is 70 or 100 meters below the last hole. And the purpose of this, Kerry, is to just give us the orientation, give us more information on what this things looks to be developing. And then he'll have to come for us for effectively an infill budget and a resource definition budget.

Right. Okay. And then just one last thing for Kevin. On the Dump Leach when we were there, you sort of had a temporary system to get solution onto the Dumps and you were going to put in a permanent system. Is that in place now so you're able to put a little bit better quality solution on there? Or what have you done?

We're in the final stages, Kerry. We have one more pond to complete and get that signed off by the government and then we can go full tilt with the [sign]. At the present we're still adding mortar from the staining temp so we're still ramping up.

Yes, okay. So once you get that done then you should see a bit more gold coming out. Okay. Great. Thanks a lot.

Our next question comes from [Isudu Sanive of Equinox Partners]. Please go ahead.

Good morning guys, thanks for the update.

Hi Isudu.

I want to ask about the recovery rate at Chirano. Is 91% a good rate going forward or will that come up with the -- the more crushing capacity coming online or is there any changes that we expect?

No, not -- we should be in the range of 91 to 92. It will be somewhere in that sort of range.

I see.

And it's not impacted by the Akwaaba ore that comes through, that has the same metallurgical properties as the open pit material that we're treating at the moment.

I see.

The only crushing -- the crushing actually assists us in through put, not recovery. We're aiming for exactly the same grind and therefore the same performance recovery downstream.

I see. In terms of journal, it seems like a fraction of the trip is capitalized. How would I think about what portion of the strip rate is capitalized versus expensed?

In physical numbers --.

If I can perhaps. Right now the cutbacks is affectively mining waste, it's tried to access additional ore that is currently sitting in the reserves. There is a fairly definitive cutoff point as far as when the cutbacks will the ore is going to be reached. So that transition will be fairly quick.

So when do you hope to get there and when would you -- what -- to complete that

The cutbacks largely by the end of this year and the majority of the cutback project is -- should be completed by the end of the second or third quarter. Some cutbacks operation will straddle into next year, but minor.

So going forward, what kind of strip ratio should we expect and what kind of cutbacks should we expect or what kind of cutback expense should we expect on an annual basis?

On an operating basis, our strip ration should be about three to one.

Yes. And is there any cutbacks on top of that that you should have year-over-year?

As I said, not too much will be done in terms of cutback. Operations following this year. There will be some, but not much.

Unless gold goes to 1500 bucks, Isudu.

That sounds good. And maybe one more question on Tasiast site. The grade on the first quarter was exceptionally good. What is the grade expected for the rest of the year and how would that affect cash costs?

I mean we're forecasting our grade for the whole of the year to be around 2.5. And that's cash costs will arise. Our forecast is for it to be 320 for the year.

2.5 starting right now.

No 2.5 for the year.

Average.

Average.

Right. Great. Thank you very much, guys.

Thanks a lot.

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

Thank you, operator. Well thank you everybody for attending the call. As I said, we have a lot on the goal. However in terms of execution risk which is something that I think has been of a potential concern to people, I think we've pretty much eliminated that with having completed most of the capital spends. And we're very, very close to completion of the expansions themselves. We're well down into Akwaaba Deeps. We're mining ore. So I think that any execution risk cap that we had on our share price, I'm very much looking forward to being removed. And we're certainly seeing some positive signs of that in the last week or so. So, I look forward to sharing with you an update for our second quarter and in particular by giving you a more detailed explanation on our exploration programs. Thank you very much.

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