紐蒙特黃金公司 (NEM) 2014 Q1 法說會逐字稿

Good morning and welcome to the Newmont Mining first quarter earnings conference call.

(Operator Instructions)

Today's conference is being recorded.

If anyone has any objections, please disconnect at this time. I'd now like to turn the call over to Kirsten Benefiel, Director of Investor Relations. You may begin.

Thank you, operator. And good morning everyone. Welcome to Newmont's first quarter 2014 earnings conference call.

Joining us on the call today are Gary Goldberg, President and Chief Executive Officer; Laurie Brlas, Chief Financial Officer. They and other members of our executive team will with available to answer questions at the end of our call.

Turning to slide 2, I'd like to refer you to our cautionary statement. We will be discussing forward-looking information which is subject to a number of risks.

More information is included in our SEC filings which can be found on our website at Newmont.com. You can also find our latest financial information and additional data in the investor briefcase on the Financial Information page of our website, as well.

Now I will turn it over to Gary.

Thanks, Kirsten and thank you for joining us this morning.

Our trajectory of strong cost and production performance continued in the first quarter of this year, and that's what we will focus on during this call. I realize there may also be interest in recent media speculation, and therefore, I want to address that upfront. We're always open to opportunities that can make our Company stronger and benefit our shareholders and other stakeholders.

While I cannot comment on rumors or speculation, I can tell you that we continue to be focused on running our business. That means meeting our commitments, maintaining our standards and delivering shareholder value.

Now I'd like to turn to our first quarter results, which include reductions of $82 million in gold all-in sustaining costs and 4% improvement in gold production over the prior year quarter. Running our operations more efficiently is at the heart of these results and closely linked to our safety performance.

Turning to slide 4, I'm pleased to report that we've sustained six straight quarters of industry-leading injury rates thanks to widespread ownership for working safely and efficiently. However, this performance is overshadowed by the tragic loss of our colleague, Simon [Donkor], a crusher operator at Akyem operation who died on March 26.

We are taking steps to understand what went wrong and to prevent a similar accident, both at Akyem and at all of our operations. Fatalities are unacceptable, but we will honor Simon's passing by renewing our commitment to safety, and we will not let up. Continuous improvement is a way of life across all aspects of our business.

Turning to slide 5, Newmont is the premier US-based gold mining Company, and I will take a minute to cover what makes us a global leader. We have a strong asset portfolio with 70% of our production derived from the Australia, New Zealand and the United States. We will deliver production of about 5 million ounces of gold per year over the next three years, and 90% of our revenues come from gold.

We lead the gold sector in safety and sustainability and believe that these attributes are key to both attracting the best people and protecting our investments. As we've demonstrated, we are relentless in our work to improve costs and efficiency. Our team reduced gold all-in sustaining costs by $82 million in the first quarter of 2014, and we're on track to save at least $600 million to $700 million by 2016.

Turning to our balance sheet, we are maintaining financial flexibility in a challenging price environment. Most recently, we prepared to reschedule our debt payments and revised our dividend policy to adapt and thrive.

Finally, we've established a more disciplined approach to screening investments based on their value and risk profile and our ability to execute. Viewing ours assets and opportunities through this lens has helped us prioritize our best organic development options and move forward with divesting assets that are not a good fit.

Now I'd like to turn to the specifics of what we delivered in the first quarter of 2014. Moving to slide 6, our operations started the year on solid footing, lowering costs and increasing attributable gold production by 4% compared to the prior year quarter. We set ourselves a challenge to produce gold more efficiently, and we're meeting it through improved technical fundamentals, from ore body modeling and mine planning to mill throughput and recovery. We also improved attributable copper production by 20% over the prior year quarter, primarily through new production at our Phoenix Copper Leach operation.

I will take you through our regional performance starting on slide 7. In North America, strong production in Nevada partially offset a loss of gold production in Mexico due to an explosives permitting issue at La Herradura. This issue has been resolved, and the operation is expected to return to full production in the second quarter.

Our Australia New Zealand operations improved gold production in the first quarter, and production in South America was lower over the prior year quarter, due to planned stripping. We expect production to increase in the second half of 2014 as we reach higher grade ore at Yanacocha.

Africa was a star performer. Our Akyem operation produced 120,000 ounces of gold at the lowest cost in our portfolio. And in Indonesia, attributable gold and copper production was up 14% and 11% respectively due to higher grade ore and higher recoveries.

Summing it up, we controlled what we could control which is further reflected in our cost performance. Turning to slide 8, we reduced our gold all-in sustaining costs by 8% or $87 per ounce compared to the first quarter of 2013, and we are well below our 2014 guidance of between $1,075 and $1,175 per ounce. The total reduction adds up to $82 million and keeps us on path to reduce cost by $600 million to $700 million over the next three years. It is also worth noting that the reductions we achieved more than offset higher costs in South America related to the planned stripping in the first half of the year and in Indonesia related to export constraints.

Turning to copper costs on slide 9, copper all-in sustaining costs were 9% higher over the prior year quarter, due to export constraints at Batu Hijau and cost allocation variances at Boddington. These were partially offset by Phoenix Copper Leach performance.

Despite higher costs in the first quarter, we are still on track to meet our 2014 guidance of $2.75 to $2.95 per pound of copper. Lower capital spending played a key role in reducing all-in sustaining costs.

Turning to slide 10, our first quarter capital spending is down by $275 million or approximately 54% lower than the first quarter of 2013. About three-quarters of this amount reflects reduced development costs. Development capital is lower because we brought the Akyem and Phoenix Copper Leach projects into full commercial production on time and on budget in 2013.

Our current development expenditure is focused on completing the Turf vent shaft where we spent about $20 million in the first quarter of this year. Shaft sinking commenced in January and is on target for first commercial production by late 2015. We've had good success in improving project economics in our organic growth pipeline and will reconsider our development spend for the right opportunity.

First cab off the rank is the Merian project in Suriname. The team has done an excellent job optimizing project costs and mitigating risks, and we expect to reach a decision this quarter.

The remainder of our capital reductions are due to lowering our sustaining capital expenditure by $65 million. Although we continue to expect a slightly higher sustaining capital spend in 2014 over 2013, we are making good progress in improving our technical and cost performance at every operation.

Let me clarify that we're reducing sustaining capital by fundamentally improving the way we run our operations, not by pushing costs out. For example, we are improving equipment component life through our asset management program.

I'd like to give you a couple of examples of our most recent success stories now. Turning to slide 11, as I've mentioned before, Tanami was one of our weakest operations at the end of 2012. In 2013, we put in new leadership, modified our mine plans and ore body models and improved mill efficiency and throughput. The result was a step change in production and productivity, making Tanami our most improved player.

We are seeing the results of this turnaround in our first quarter results. Highlights include a 43% reduction in all-in sustaining costs, a 40% increase in gold production, a 20% increase in ore tons mined as a result of improved planning and performance, and a 32% improvement in grade achieved through optimized mine planning.

I also want to spotlight what our team in Africa has done to improve the business. Turning to slide 12, as we reached the end of 2013, we faced challenges at our Ahafo operations due to higher stripping and lower grades. The team met this challenge by reconfiguring its plans to better balance mining rates and milling capacity and ultimately achieve healthier returns. We are confident that these changes will improve costs and production and are backing that commitment by revising our 2014 outlook for the region.

All-in sustaining cost guidance has been reduced by 13%. Capital expenditure guidance has been reduced by 9%. And production guidance has been increased by 2%.

Before I pass over to Laurie to discuss our financial performance, I want to touch on Indonesia. Turning to slide 13, we continue to meet with government officials to seek clarity and a mutually acceptable resolution to new regulations governing copper concentrate exports. We also continue to believe that our contract of work protects our right to export copper concentrates and prohibits new taxes.

At the same time, we're taking a collaborative approach to resolving this issue, which is ultimately in everyone's best interest, and we're making some progress. We're about halfway through the process required to secure our export permit. We've completed the first two steps in a four-part process and have received registered exporter status.

We are now awaiting approval of our 2014 work plan, which is a prerequisite for receiving a recommendation for an export permit from the Ministry of Mines. With this recommendation in hand, we will be able to apply to the Ministry of Trade to receive the actual permit.

All of this said, our copper concentrate barn will reach capacity in the second half of May. If this happens, we will be forced to implement contingency plans to scale back production. While we cannot commit to building a smelter ourselves, we support the government's policy for in-country smelting and have committed to provide a $25 million bond towards the construction of a smelter.

Finally, we are cautiously optimistic that we will receive the necessary approval to export over the coming weeks and that proposed export duties will be clarified. Our ultimate goal is to restore stability so that we can continue to operate in the near term and protect asset value in the long term.

With that, I will hand over to Laurie to discuss our first quarter financial results.

Thanks, Gary. And thanks to everyone for joining us this morning.

As Gary mentioned, we are very pleased with our results that indicate a strong operating performance, as we have focused on lowering costs and raising gold and copper production. With this focus, we offset escalation and held total CAS flat over the prior year quarter, while noticeably reducing overhead costs and sustaining capital spend.

Turning to slide 15 and comparing Q1 2014 to the prior year quarter. As you can see, we experienced lower commodity prices, and as a result, revenue for the quarter was down approximately 19% over the prior-year quarter.

Our GAAP net income from continuing operations was $117 million. This quarter's net incomes was impacted by an unusually high tax rate of 55% versus 33% in the prior year quarter. The sale of Midas had a very significant impact on the tax rate for the quarter.

We recorded a pretax book gain of $47 million, but the book tax rate on the gain was 75%, due to the fact that related deferred tax assets transferred with the sale of the asset and our current capital loss carryover position. That's $35 million of tax expense on the P&L statement, which obviously resulted in lower earnings for the quarter.

I will talk about this in more detail shortly, but we reported adjusted net income of $108 million or $0.22 per share, compared to $353 million in the prior year quarter, or $0.70 per share. Cash provided from continuing operations was strong at $183 million.

We continue to be focused on generating positive free cash flow, and if we include the sale of the Midas assets, we achieved positive free cash flow for the quarter. Internally, we are very committed to delivering free cash flow consistently and cumulatively.

During the quarter, we paid a dividend of $0.15 per share. And as we announced earlier this week, our Board approved the dividend of $0.025 per share payable on June 26. This is based on our gold linked dividend policy and the average gold price during the first quarter of $1,293 per ounce.

Turning to slide 16, we compared adjusted net income for the quarter to the prior year quarter. As you can see, price decline was by far the primary difference, and without that impact of over $300 million, we would have reported higher adjusted net income this year due to the operational improvements we have implemented.

The average realized gold price was $1,293 per ounce this year versus $1,631 per ounce last year, roughly a 21% reduction. Our average realized copper price of $2.50 a pound this year versus $3.12 last year was approximately a 20% reduction.

Realized copper pricing was impacted by declining copper prices in Q1 of this year compared to the provisional pricing recorded at year-end, resulting in a mark-to-market adjustment of $0.37 per pound. The lower volumes in the current quarter exacerbated the impact of the mark-to-market adjustment on a per pound basis.

Our tax rate was higher than the prior year, primarily due to the impact of increased taxes in foreign jurisdictions. Year-over-year, we had a slight improvement in total overall cost applicable to sales on the higher volume. The stronger volume contributed nearly $30 million to our adjusted income.

We saw significant reductions in overhead expenses such as exploration and advanced projects. G&A and other expense were also down 20% and 48% respectively over the prior year quarter. After considering all of that, we reported adjusted net income of $108 million or $0.22 per share for the quarter.

Turning to slide 17, we started the year very strong by reporting gold CAS for the quarter of $751, slightly down versus the prior year, and at the lower end of our guidance for the year of $740 to $790. This demonstrates cost control and our ability to combat inflation.

Looking at the numbers by region, we see reductions across the board in gold CAS with the exception of South America and Indonesia. In South America, we experienced significant planned stripping and leach pad adjustments in the first quarter and anticipate reaching higher grade in the second half of the year. So we still expect to achieve our full year expected result.

In Indonesia, we continue to experience higher costs until we get to the bottom of the pit where the high grade ore is located. These are both timing issues.

Looking at the other regions, we see CAS declines of 5% to 23%, very strong performance, which is why it is important to understand the detail behind the totals and look beyond the timing issues. For the quarter, we reported copper CAS of $2.71 per pound, up 19% over the prior year. This is primarily driven by Bata Hijau and where we are in the high strip portion of the ore body. Offsetting that, Phoenix delivered a strong quarter with copper CAS of $2.39 a pound, down 25% over the prior year. At this point, we anticipate meeting our copper CAS outlook expectations for the year.

Turning to slide 18, we continue to be guided by our capital allocation strategy: First, improving financial flexibility, second, enhancing our portfolio to focus on assets with the greatest risk/reward profile, and third, returning cash to shareholders. We ended the quarter in a strong financial position, with $1.5 billion in cash and no borrowings on our $3 billion revolver.

We generated cash from operations of $183 million. We generated $57 million in proceeds from the sale of Midas and $25 million from the divestment of the Paladin securities. We closed on a term loan to retire $575 million in converts coming due later this year, and we extended the maturity of our revolver by two years to 2019.

Turning to slide 19, one of the results of these actions this quarter is that we're now able to lower our interest expense guidance by $25 million. Essentially offsetting this, we are increasing our tax rate guidance to 37% to 40% for the full year.

Two primary factors led to this: first, the Midas sale and tax treatment that I mentioned earlier, secondly, we're seeing higher than expected taxes in Peru as our deferred tax liabilities are turning more quickly than we expected. The Peruvian tax authorities recently changed the basis for their tax filings to IFRS, which was a major contributor to the change.

We do generally expect more volatility in our tax rate quarter to quarter, due to the valuation allowances we have in place. Overall, this has been a very strong quarter, and we are confident in our plans going forward. As Gary mentioned, we are pleased to announce the changes in guidance for the Africa region and confirm our guidance overall across the rest of the organization.

Now I will turn the call back over to Gary.

Thanks, Laurie.

Summing it all up, we're continuing to build on the momentum we established last year with strong cost and production performance in the first quarter of 2014. This trajectory will continue as we deliver on our commitments for the balance of this year.

Before I open the floor to questions, I want to leave you with a view of where we're taking the business in the future. Our vision for Newmont is to lead the gold sector in creating value for shareholders. As we've demonstrated, we are on track to maximize value in the short term and to capture the benefits of economic recovery and demand growth in the longer term. We set a clear path to improve the business by building a portfolio of longer life, lower cost assets, by delivering steady production, by making costs and capital discipline part of our DNA, by maintaining an investment grade balance sheet and financial flexibility, and by replenishing our growth pipeline.

Thank you for your time. Once again, I'm happy to answer your questions about our first quarter performance and our business. Operator, we will take questions now.

Thank you. We will now begin the question-and-answer session.

(Operator Instructions)

David Haughton, BMO, your line is open.

Good morning and thank you. Hi, Gary and Laurie.

Quite impressed with the African operations; it's led to a revision of your guidance for the better. Can you just explain a little bit where the beat is coming from in those operations and how sustainable you view it to be?

Thanks, David, and thanks for joining this morning.

In Africa, first of all at Ahafo, part of the changes that you've seen made here in our guidance tie back to the changes we were making in the business last year when we looked at all of our project portfolio and decided to take a look back through all of our projects. We pulled out and are reassessing both the Ahafo mill expansion and the Subika underground projects.

Those had been built into the plans, and as people were looking at the plans for 2014 through 2016, they hadn't gone through the optimization that's really necessary in the base case, and they've now done that work. And the primary piece I'd say is they've taken the pit there and the pit plans and pulled them in, brought them in more in line with what you'd need with basically a smaller producing operation. So you've matched the stripping more to what we expect in terms of production over the next three years.

So I see that as sustainable. I also see the plan that's we're reviewing here this year and into next year on both the mill expansion and the Subika underground as still something that looks very attractive, but we've got to do the appropriate homework to make sure that the plans will deliver the value we should achieve from them.

So the first quarter result in both Akyem and Ahafo on a cash cost basis, well below even the bottom of your revised guidance range. Are you just providing yourself a little bit of leeway, just in case there's some change in the grade being presented to the mill, or how should we read that?

I think we're pretty comfortable in terms of the grade and what we expect through the year. We are in the process at Ahafo of going through a workforce reduction, so we do expect some costs to implement that. That will come through and will come through Ahafo's costs, but we want to make sure we are able to continue and sustain that performance before we make further adjustments to our guidance.

All right.

You made reference to Merian in your discussion with a decision by mid year. I presume that any commitment to that has not been included in your guidance through 2016 on the capital. Is that correct?

That's correct. In fact, our guidance from 2014 through 2016, we removed all of those development projects other than the Turf vent shaft, which is included and the cost for that's included.

We have included costs to continue to do the study work on Merian, which will come to a decision on here in the second quarter and on the Ahafo projects I just mentioned, as well as on Long Canyon.

Okay. So what are the key things that you're looking for in Merian before you give it the green light?

I think from my standpoint, obviously we've got to have Board approval is one. But the team's done a good job.

We've gotten regional -- we've gotten the national government's approval to be able to proceed, which we didn't have. We've got the mineral agreement. We are working up our plans to be able to develop the project.

We've been working with the same group that ultimately built the Rosebel operation to look at how we would construct it and construct it more efficiently with the different model and the normal EPCM model, which we believe is an effective way to build this project. And really to take this final package together and take it forward to the Board for approval.

Okay. Would you be able to give us a bit of a thumbnail sketch as to what that mine could look like as far as the throughput and volumes and the costs, et cetera, the whole package?

Ballpark with Merian, we're about 400,000 to 500,000 ounces a year of production for the first five years. That's up a bit from where we would have been even a year ago because we spent quite a bit of time drilling and better understanding the ore body, especially what we'd be encountering in the first 3 to 4 years of production, just to have a better understanding.

The first part of the ore body, in fact the first 5 to 6 years we're mining primarily in the saprolite, which is fairly soft material. So it allows higher throughput, and that's what we've built into the plans as we look going forward.

On an all-in sustaining cost basis, we'd be looking at numbers in the around $800 to $900 per ounce range. Of course, that doesn't include the development capital. In terms of development capital, the 100% number that's out there is in the $900 million to $1 billion range.

And the size of the plant, and once you move from the softer material into the harder material, what size do you have in mind there?

Then, and it goes back to the hardness and a bit to the grade, and I don't have that number at the top of my head, but I'm estimating it's in the 300,000 to 400,000 ounce a year range.

Sorry to put you on the spot there.

Just one other thing, and to be clear too, on power costs, because I know that's one that always comes up. We're not part of the national grid there. We're independent.

We have our own Gen sets, and right now our estimate based on current world oil costs, because we'd be using heavy oil diesel fuel, our estimate for electric power costs in the $0.15 to $0.17 per kilowatt range. I know that's been one question we get a lot of questions from folks on.

Sure. Given the challenges that your neighbor has encountered in that regard. Okay. Thank you very much, Gary.

Thanks, David.

John Bridges, JPMC, your line is open.

Good morning, Gary, everybody. Thanks for taking the questions.

Just wondered with Indonesia, with the presidential election only in July, do you think you can get a resolution before that? And if you can't, do you have flexibility in the pits to move -- continue towards the goal of getting into the core of the ore body by the end of this year, early next, or would that be deferred?

Thanks, John, and thanks for the question on Indonesia. We had -- or actually Indonesia held their parliamentary elections earlier this month. That part of the election process is complete.

I wouldn't say it gave any clear leader out there. It's going to require several groups to come together in the presidential election to see where the outcome is. And then the presidential election, as you mentioned, is in July.

From our standpoint, we continue to have good dialogue, despite the elections going on with the various ministries that I've mentioned, trade, finance, and mining. And I believe we will see a solution.

Now, if we don't see a solution, one of the options that we could pursue is to continue mining overburden, but we are right at that fringe where you start to get into ore. What you I would be less inclined to do is to start stockpiling ore if we got into that situation if we're not able to ship concentrate.

Quite frankly, from a cash cost perspective, we're very close to that boundary here, and within four or five months of getting into the higher grade ore. We'd probably be better served to reduce our stripping. And that's what our current plans are, would entail, if we're forced to go down that path.

Okay. So that would delay the good stuff into next year?

Correct.

Okay. Just following on as a second, from David's question, the Merian thing, I thought there might have been a decision on that by now. Has there been a delay?

No, there hasn't been a delay. We've always said it would be a decision here in the second quarter.

Oh, okay. Sorry, my mistake. Thank you very much. Good luck.

Thanks, John.

(Operator Instructions)

Our next question comes from Andrew Quail, Goldman Sachs. Your line is open.

Gary, Laurie, thank you very much for the update this morning. Solid results.

Just got a question on North America/Nevada. You just looking at your guidance for capital expenditure from sort of 2014 to 2016, obviously it's pretty much more than half. I obviously understand the vent shaft is part of that CapEx.

What else is driving that down? Do you see, that outlook of 2016, is that sort of a sustainable number going forward?

Okay. Thanks, Andrew. Just a couple of things.

On Nevada in particular, we've got some higher stripping at both Carlin and at Twin Creeks this year, and we see that coming down in 2015 and 2016. And that higher stripping is part of what you're seeing showing up in the capital costs as well, the way we handle -- in our case we count it as sustaining capital towards the development of those two pits. So we do see that come down, and we do see past 2016 that more sustainable rate.

Okay. So we can sort of look at something like around a [$280 million] turn for North America?

[$260 million] to [$280 million].

Just one on Indonesia. Do you guys -- have you guys got a number for the actual stockpiles of copper content you have there?

In terms of specifics on the quantity or the dollar value?

The quantity.

Okay. Why don't we -- we can come back to you.

We can get back to you. It's in the 10-Q, but we will get back to you on that one, Andrew.

One last one on Africa. Obviously it was an outstanding result.

I think Dave did ask this question. Obviously the grade's sort of coming down at both. It's obviously about cost cutting.

Is there anything specific you're seeing, whether it be power or labor that's actually driving down those costs to a lower level?

I think the key at Ahafo in particular is the resequencing and bringing in the pit sequences, and that cuts down the overall stripping. So that's the main one.

But then we're really going through everything. Our G&A costs, and our operating costs in terms of people and addressing all those of costs.

I'm going to ask Chris Robison to just chime in. Chris is our Chief Operating Officer.

To Gary's point, it's primarily driven in the mine by our stepping back from a five shovel operation to a three shovel operation. So you've got those operating costs coming out, as well as the capital associated with that reduced production scenario.

Okay. Thanks very much. That's all I had.

Great. Thanks, Andrew.

Thank you.

(Operator Instructions)

We do have a question from Brian Yu, Citi. Your line is now open.

Thanks and congrats on a good quarter, Gary and Laurie.

First off, I think Gary, you said on the Indonesia export license you were over two of the four hurdles. Can you clarify if that's exclusive of the proposed export tariff, would that be a separate negotiation from those two of four hurdles?

Thanks, Brian. In terms of hurdles or steps that we're going through, basically the final step is up with the Ministry of Mines.

One of the things we expect to get clarity on here in the next week or so is the Ministry of Finance view on what an export tariff might look like. And then how we might address that, we will have to take a look at once we get that clarity. So that's not necessarily a direct step, but that's -- they will be advising back into the Ministry of Mines.

Okay. And say you do go through a workforce reduction, what does timing look like if things get resolved and go through the steps of restarting the operations there or getting it back up to 100%?

Without going into all the details, we do have very detailed contingency plans. I think our first step would be to reduce contractors and take that out of the -- take that group out of the system in terms of costs and to reduce our overburdened stripping.

And we wouldn't immediately lay off employees. I think it's important to be in a position to come back if we're able to reach an agreement. So that's been our approach if we get to that stage.

Got it, and then last one here, switching topics a bit. You were able to reduce costs quite a bit at Ahafo.

I'm wondering if there are other operations that are on the top of the list for mine optimization work this year?

We've got the full potential project, which I've described in the past, which Boddingtons was the first last year and we're running it through all of our on of operations and, in fact, are going through really the rest of the operations in the organization this year.

We prioritized it where our highest cost operations were first, and are working that through, and I expect to see further improvements throughout the year as we build that in and define specifically what the savings are. I'm not keen to put forward estimates without having detailed plans to back that up.

Okay. Thank you.

Thanks, Brian.

Our last question comes from Paretosh Misra, Morgan Stanley. Your line is open.

Thank you. Couple of questions.

First, on Merian. Just wanted to confirm that you purchased Alcoa's share, right, in first quarter?

That's correct, we purchased Alcoa's share in the first quarter.

So you are the 100% owner of Merian right now?

We're 100% owner, and once we come -- assume we come to a decision to proceed, then there's a notice period, basically with the government of Suriname where they have the opportunity based on a factor of historical costs to acquire up to a 25% equity interest in the project. And they've got 105 day window to exercise that right.

Okay. Got it.

And on Indonesia, I'm sorry if I missed that part of the answer, but is Ministry of Finance not involved in the process?

The Ministry of Finance is involved, but they have an advisory capacity, I guess I'd say, in determining what if any sort of export tariff might be applied.

Got it.

And last one on Nevada. What's the percentage of refractory ore in your feed stock? Is that still close to 80%?

And how much spare capacity to process that do you currently have?

I know it's less than 80%, but I'd have to get back on the detail. I'm not across the specific details, and I think you're referring -- well, it's less of an issue for Phoenix. It's more with Carlin and Twin Creeks, but I'd have to come back on that.

Thank you.

Thanks.

Thank you. At this time there are no further questions. I would now like to turn the call back over to Gary Goldberg. Thank you.

Thank you very much, operator. And thank you all for joining. I appreciate the great interest we had and the number of callers that were listening in today, and you can look forward to continued good results here in the future. Thank you.

This concludes today's conference call. Thank you for participating. You may disconnect at this time.