NovaGold Resources Inc (NG) 2023 Q2 法說會逐字稿

Good afternoon, ladies and gentlemen. Welcome to the NovaGold Resources, Inc. second quarter financial and mid year exploration update conference call. I would now like to turn the meeting over to Mr. Rick Van Nieuwenhuyse, President and Chief Executive Officer of NovaGold. Please go ahead, Mr. Van Nieuwenhuyse.

Thank you, operator. Good afternoon, ladies and gentlemen, and thank you for joining us. It has been awhile since we have taken time and opportunity to update you. During the period since NovaGold last reported, the Company has been very, very busy and I made a number of new milestones or achieved a number of new milestones as part of the Company's continued growth policy. Specific note, we completed the acquisition of the remaining 45% interest in the SpectrumGold on -- in mid July with an over -- overwhelming 99% of the SpectrumGold shareholders approving the share exchange. Management believes this transaction will significantly benefit all shareholders by consolidating its 100% interest in the Galore Creek asset and thereby forming a very well organized exploration strategy on that project. We have now in our portfolio four separate million plus ounce development stage projects including three of the largest undeveloped resources in North America. NovaGold continues to rapidly progress these four advance stage projects towards production with the ambitious -- with an ambitious exploration and development program this year specifically. Currently we have about $25 million budgeted for investment this year including $10 million by one of our joint venture partners. The 2004 exploration and development program will include an estimated minimum of a 40 -- about 40,000 meters or 130,000 feet of drilling with the majority of the work being focused, of course, on Galore Creek, although a substantial amount of work being done at Rock Creek, Ambler and Donlin Creek as well. During this conference call we're provide a -- we are going to provide a brief update on the Company's advanced stage projects as well as an overview of the operating performance of our Nome operations and then Don MacDonald will give a review of our financial performance as well.

Let's start off by talking about Galore Creek. A lot of very exciting things happening out there this year. First, we updated the resource estimate earlier in May that showed that the deposit contains some 385 million tons of ore containing 5.2 million ounces of gold, 67 million ounces of silver and 5.8 billion pounds of copper using a half a percent copper equivalent cutoff grade. The new resource confirms the previous historic resource estimates and shows greater contained metal in the indicated resource category of about 15% for gold and about 14% for copper. The resource modeling also indicates that the central and southwest deposits remain open to further expansion both in depth and long strike and, of course, numerous additional targets have yet to be tested. NovaGold has now consolidated the entire district with agreements in place for Copper Canyon and the Grace properties located immediately east and north of the main Galore properties. In addition NovaGold has staked some 37,000 hectares of new claims in the district. So we feel we pretty much consolidated the whole district now. NovaGold's 2004 exploration program at Galore will infill previously identified inferred resources as well as test new zones with the objective of defining additional resources. Currently we have up to about 70 personnel on site working mostly in drilling, geophysics, mine planning and infrastructure as well as a lot of environmental baseline data which is also being collected in and around the Galore Greek project. All this is in preparation for pre-feasibility study which is targeted for completion in the first half of 2005. Probably sometime May/June of next year.

This year's program at Galore Creek will be one of largest exploration programs in British Columbia with a budget of over $8 million, 5 million of which will be directed directly at drilling. A total of four drill rigs are currently operating on site, they plan to drill at a minimum of 20,000 meters or 65,000 feet. Two rigs are testing the south east margin of the Galore main deposit. We are drilling from last year fall intersected at significant new zone of mineralization below and to the east of the main deposit. This new zone has been named The Bountiful by the team out in the field. 15 -- and you will be seeing some drill results on this hopefully in the next few days or within the next -- over the next few weeks here. 15 holes have been completed for a total of 5,000 meters and all of this encountered significant mineralization. A third drill is currently working on the adjacent Copper Canyon area. All of the holes have been logged or mostly up to speed. I think the report we had this week was -- this morning was about 75% of the core had been logged and sampled. So we expect that Phase very soon. These initial drill holes -- excuse me, the fifth drill rig will be -- or a fifth drill rig will added here in another two weeks. We have another -- another drill rig that is currently doing geotechnical drilling for pit design work. So it is a pretty active camp this year out there. An extensive ground geophysical program is nearly complete and has identified several sizeable induced polarization chargeability anomalies continuing from the main deposit to the -- to depth and to the north and east of the known mineralization. This preliminary data suggests a dramatic increase in the apparent size of the mineral system as identified larger as a prospective ground for additional exploration.

A detailed airborne geophysical survey is planned to begin in mid-August providing coverage of the Grace and Copper Canyon areas as well. Hatch engineering recently completed an independent preliminary economic assessment study, or more commonly known as a scoping study, for the project which evaluated in detail the access infrastructure needs for the project as well as outlined the best approaches to mining, processing and transportation of the concentrate product. This study also estimates the capital and operating costs as well as the man power needs for the project as envisioned by NovaGold. The scoping study demonstrates that the Galore Creek project has the potential to recover at least 2.4 million ounces of gold and 32 million ounces of silver, and 3.3 billion pounds of copper over a 23 year mine life. In the first five years the project will produce an average of 270,000 ounces of gold, 1.8 million ounces of silver and 200 million pounds of copper annually at an average total cash cost of about 15 cents per pound of copper using the precious metals as a credit. Or stated another way negative $180 cash cost per ounce of gold produced using copper and silver as a credit. These are in line with the gold institute guidelines. These costs are based on long-term transportation, refining cost projections and metal prices of 90 cents for copper, 375 for gold and 550 for silver. Said another way, the total cold product cash costs would be $125 per ounce of gold produced and 49 cents per pound of copper produced for the first five years. The study is the first in a series of development studies we plan for the project assessing it's -- the potential viability of a conventional open pit mining operation on the property using long-term average metal prices. The operating and capital cost estimates in the study were developed to be reasonable estimates within -- within industry benchmarks.

The study is intended to quantify the project's cost parameters which in turn will be used as guidelines for ongoing exploration and engineering work and to define optimal scale for the operation in the eventual -- in the final feasibility study planned for 2005. We are very pleased with the solid economics of this initial scoping study at Galore and based on just what , two years of -- not even two years of work, a year and a half's worth of work from us, so we think it is a great, great start for the project. There remains significant opportunities to optimize and enhance the economics of Galore Creek. Of particular note, our current exploration model indicates that there is excellent potential to add significantly to the overall resource and specifically to expand the higher grade zones of the deposit. We plan to fully do that this season. We expect our drill results to substantiate these assertations very soon. With additional high grade resources the project could maintain higher than average grade throughput levels for the -- for an additional few years. A few things that we are going for this year than are an overall increase in the total tons of the project and more specifically looking for higher grade throughput early in the mine life. Obviously both those can have a very beneficial effect on the current economic base case used in the scoping document. The financial analysis for the -- using the 20 year long average price for copper at 90 cents per pound for Galore Creek could generate a pretax rate of return of about 11.2 to 16.6% and have an undiscounted after-tax net present value between 329 and 500 million U.S. for the range of gold and silver prices considered in the study. At the present market prices for copper at about $1.25 the pretax rate of return would double to about 23 -- 23.3% or up to 27.1% today and depending on the gold and silver prices. The undiscounted after cash net present value would be, in that case, 980 million to $1.1 billion. It is the proverbial cash cow.

This project will generate a huge amount of cash flow. Using long-term metal prices Galore Creek would produce about $150 million per year in pretax or $125 million in after-tax cash flows allowing for project payback of the mine capital with just 2.4 years. To put this in perspective, this would be equivalent to a 700,000 ounce per year gold deposit with total cash costs of about $200 an ounce which is pretty close to the low end of the industry average these days. At current prices, that is say $1.25 copper and $400 gold, the after-tax cash flow would be $170 million per year. Truly it's a world class asset. The study only considers the resources defined in the southwest and main central deposits and does not include any upside from the definition of new resources on the extensions or extensions to the southwest and central deposits. We also -- we obviously have identified mineralization in a number of other area at Junction Zone, West Port, Saddle Zone and also at Copper Canyon which we plan to at least get several of those higher priority targets drilled this year. Clearly with the likelihood of exploration success future studies will look at substantially increasing the mine throughput base case. In anticipation of this we are currently looking at a 45,000 and 60,000 ton per day mine models. For this drill season one of our primary objectives is to define at least 30 million tons of new higher grade resources as extensions to the known resources already defined at southwest and central deposit and/or at new satellite deposits. The amount of additional resource would increase the high grade throughput for another three years. This amount of additional resource would increase the throughput for another three years and significantly enhance the project economics.

This initial independent scoping study shows a solid economics for the project and identified several areas of opportunity to better optimize and enhance the economics further. For example, scaling the project up and using a larger -- larger equipment. Using rope shovels instead of diesel hydraulic shovels. Using conveyors for moving -- for handling mine waste materials in place of long truck hauls. All these will enhance the economics. We will also look closely at the project construction schedule to see if there are ways to shorten the overall construction timeline. I would characterize the study as pretty beefy. It's a -- we went into a lot of detail for a scoping level document. In fact, I think we probably could have gone ahead and done a pre-feasibility in hindsight. We hired a number of specialist consulting firms in particular looking at the infrastructural support for the project so we have a high degree of confidence in these initial estimates. With five drill rigs turning at Galore and detailed engineering studies now underway, 2004 is lining up to be a very exciting year for the project. We believe this study -- we believe the just completed study is an excellent start but the project is going to rapidly move towards -- towards feasibility study -- towards feasibility. We have had a lot of activity out there this year, in addition to the drilling we had the Mines Minister up, the Honorable Pat Bell was up last week touring the project, we've had a dozen or more B.C. regulars up for an initial trip and are planning another one in September. We had several meetings with both British Columbia and Alaska regulators getting things lined up on both sides so that we can submit our formal application for the environmental certificate next year in 2005.

We continue to strengthen our relationship with the Tall Ten First Nations and are actively working on a participation agreement with them and in fact we have another meeting on Wednesday later this week after we bring a group analysts up to tour the property tomorrow. Obviously it has been a busy time for us. In fact, so busy we've decided to hire a project -- senior project engineer. Dean Lindsey, former Placer Dome, will be joining us here middle of August and will be heading up the engineering studies for the project and starting the long haul towards the feasibility study. In short, we're very excited about all the work we're doing at Galore Creek and expect a lot of news flow out of that project later, well, starting actually here in a few days with the release of the drill results. Our next project up in the queue Donlin Creek, of course, the flagship of the Company is being developed in joint venture with Placer Dome, the fifth largest gold producer in the world. Placer currently owns a 30% interest in the project and has a right to earn an additional 40% interest from NovaGold by making a positive construction decision before November 2007. Must also extend $32 million towards development of the project and complete it's final feasibility study. The project is currently at the pre-feasibility study stage. Placer is targeting to -- to finalize that study and start the final feasibility study by the fourth quarter of 2004 along with initiating the -- the permitting process which they expect to be able to complete within two years. So that would keep them on track to make a mine construction decision by 2007. Donlin Creek hosts a measured and indicated resource of 11 million ounces of gold with an additional inferred resource of 14 million ounces making it one of the largest undeveloped gold deposits in North America. As currently envisioned Donlin Creek would be developed as a large scale open pit mining operation producing in excess of 1 million ounces of gold per year.

Placer Dome plans to spend $8 million Canadian or $6 million U.S. in 2004 on engineering and environmental studies toward the development of the project. Ongoing studies have identified feasible alternatives for project access and power supply. The joint venture continues to work closely with local communities, native corporation land owners and state and federal governments to develop this world-class asset. Our Rock Creek and Nome Gold projects. These of course 100% owned by the Company located just outside of Nome. We are completing a feasibility study. It's being carried out by an independent engineering firm Norwest Corporation. In addition with one year's worth of environmental baseline data the permitting process is anticipated to begin in the fourth quarter of this year. The Company anticipates completing infill -- additional infill drilling and metallurgical test work as well this year, all to be incorporated in the final feasibility study. We have a budget of about $6.7 million Canadian, it's about $5 million U.S., planned for -- for this year. Previously, we had reported that we were going to be doing a bulk sample but we had changed course and decided to go with the recommendation of our two consultants, Zamec(ph) and StressKona(ph), rather than doing a bulk sample we decided to go with a 40 Fold Twin RC core program. We have currently completed all the core holes and we are about, I think, two-thirds done with the RC portion of that program so we are -- that -- the infill drilling and the infill test drilling comparisons of RC and core are well underway. In addition, extensive trenching program has also been undertaken and further infill drilling and expansion of the resources is planned for later in the fall here. The Rock Creek project is anticipated to produce an average of 100,000 ounces of gold per year at a total cash cost of $200 per ounce. A mine construction decision at Rick Creek is targeted for 2005 after completion of the final feasibility study and receipt of construction permits.

The State of Alaska has approved a $5 million budget for construction of what they call the Glacier Creek bypass road. This is a 3 mile access route that will make the commute between Nome and the project sight a lot shorter and a lot easier on the -- on the trucks. The construction is actually underway as we speak. At the nearby 100% owned Big Raw property which is located just outside of Nome we are planning a, almost a 3,000 meter drill program there, both core and RC and it will test the potential of a -- a near surface gold resource. Historic work done in this area has identified a number of mineralized zones grading up to 10 grams per ton. Very similar characteristics to Rock Creek with free gold associated with quartzite. After completion of the twin and infill program the -- completion of the drill program at Rock Creek we will move the drills over to Big Raw so we don't plan to get that drilling done until this fall. Last project I will review is the Ambler project. In March of this year NovaGold announced the signing of a strategic alliance with Rio Tinto to develop the Ambler property located in northwestern Alaska. The agreement allows NovaGold to earn a 51% interest in this precious metal ridge volcanogenic massive sulfide district covering some 35,000 hectares. Excuse me, 35,000 acres or 14,000 hectares. The most advanced target is called Arctic.

It is a -- that is a historic inferred resource of 36 million tons with precious metals grading about 0.7 grams gold and 55 grams silver and base metals grading 4% copper, 5.5% zinc and 0.8% lead. This estimate was based on 70 widely spaced drill holes and was reported by the Alaska Division of Geological and Geophysical Surveys. The ore deposit ranks as one of the largest and richest undeveloped VMS deposits in the world. With a total in situ metal value containing some 817,000 ounces of gold, 62 million ounces of silver and 3.2 billion pounds of copper as well as 4.2 billion pounds of zinc, 640 million pounds of lead. It's truly another world class deposit. Mobilization of the project's (inaudible) team has been completed and a 2500 meter drill program is currently underway with the first couple of holes already completed. Initial exploration this summer will focus on developing an updated 43101 compliant resource model and then outline -- in outlining the resource we'll obviously be in addition to drilling new holes we'll be reloging all the -- all the historic core there. Manage to believe that there is excellent potential to expand the existing resource on the project, in particular there is a lot of information to suggest the precious metal content -- the historic precious metal content of the deposit has been understated so we think there is significant upside there as well. Just briefly on our Nome operations the Company is expecting a very -- is anticipating a very good year in Nome with sand and gravel and real estate sales. This is through our subsidiary company Alaska gold. The State of Alaska continues to move forward with the purchase of up to 300 acres of land from the Company in the space one of the multiphase expansion of the Nome airport facility. The State of Alaska has approved funds for that purchase and engaged an appraiser to value the land.

We've also engaged an appraiser and we anticipate that we will get to a sort of final negotiating terms here later in 2004 and hopefully close this transaction that we have been working on for several years. The project, the Port of Nome, is also expanding under a grant, a $39 million grant. It's a matching funds grant from the federal government with participation from the city. That project is in the final stages of consideration and will be -- the primary contractor has been selected and initial construction is set for later this year. Both the airport and the Port expansion projects along with the Glacier Creek Road project are expected to have a favorable impact on the Company's sand and gravel revenues. The Company continues to look at other alternatives for expanding it's sand and gravel business and to develop the real estate business as well in the Nome area. Don, I'm spoken -- tired of talking so I'm going to turn it over to you for the (inaudible-audio interference).

Thanks very much, Rick. I'm just going to finish up on the financial area here so I'm going to cover the -- some financial highlights from the second quarter of 2004 ended May 2004, and discuss some of our recent financial transactions. Unlike the area that Rick was discussing all amounts in my section are going to be in Canadian dollars. Most of the numbers Rick was mentioning were in U.S. dollars. On the financial side we've had a number of questions since we released our results on -- for the second quarter on the new stop based compensation rules so I will spend just a bit of time on this. This year, 2004, NovaGold has proactively adopted the new Canadian rules for accounting the stop based compensation which are similar to the rules that are expected to be effected in the United States from 2005 onwards. These Canadian rules require the Company to charge to income the theoretical fair value of the options granted during the period. As a result of this new accounting, there was a charge for stop based compensation based on the Black-Scholes basis during the second quarter of 2004 of $5.5 million and that relates to options granted in that second quarter all at prices above the current stock price, I may add. The interesting thing about this accounting, if there is such a thing as interesting accounting, is that exactly the same amounts, $5.5 million, is added back as a line item to shareholders equity so in fact there is no net increase or decrease in shareholders equity as a result of the $5.5 million charge to the income statement. As a result of the $5.5 million charge the net loss was $6.5 million for the second quarter of 2004 compared with a net loss of $3.4 million for the same quarter in 2003. However, before stock based compensation the Company's net loss was $1 million in the quarter compared with $3.4 million in 2004.

The major factors that gave rise to this $2.4 million improvement were an increase in net revenue of $0.5 million, a decrease in the write-down of mineral properties of $1.5 million and the reduction of foreign exchange losses of $0.6 million. For the six months ended May 31, 2004, the Company had a net loss of $6.8 million compared with a net loss of $4.8 million for the same period in 2003. But again after deducting the same $5.5 million for stock based compensation the loss was in fact $1.3 million for the six months of 2004 compared with $4.8 million for the same period in 2003. The major factors that led to the $3.5 million improvement were an increase in net revenues of $1 million, a decrease in property write-downs of $1.5 million and a reduction of foreign exchange losses of just over $1 million. On the cash expenditures side of the $15 million net exploration and development budgets that Rick mentioned we have spent - we had spent $4 million by May 31, 2004, so obviously the bulk of our expenditures on exploration and development are post this period. At the end of the period, however, NovaGold had a cash -- a consolidated cash of $57.4 million compared with $12.9 million at end of the same period last year. Since the end of the period we have completed, as Rick mentioned, the acquisition of a 45% minority interest in SpectrumGold, Inc. This was completed by a positive shareholder vote on July the 8th and the final completion of the transaction and execution of all documents in closing on July 15, 2004. This resulted in the issuance of 8.6 million shares of NovaGold and the assumption of 1.9 million convertible securities, options, warrants, and property payments all SpectrumGold. By this transaction NovaGold now holds 100% of the Galore Creek project and as you gather from Rick's discussion it is an extremely exciting project and we are very glad that we've been able to increase our ownership from 55% to 100% during this process. I'd like -- now like to hand the microphone back to Mike -- to Rick for questions. Don's been on vacation for a couple of days. Operator we'd like to go ahead and turn it over to questions and answers. So we'll give you a few minutes to get setup for that.

Perfect, thank you very much. We will now take questions from the telephone lines. If you have a question please press star, one on your telephone keypad. If you are using a speaker phone, please lift the handset and then press star, one. Should you wish to cancel your question at any time, please press the pound sign. Please press star, one at this time if you have a question. There will be a brief pause while participants register for questions. We thank you for your patience. Once again, we thank you for your patience while participants register for their questions. Once again please press star, one on your telephone keypad at this time for questions or comments. The first question is from Charles Kanell(ph), a private investor. Please go ahead.

Hi, Rick. What do you think of the general price of gold in the industry as it stands right now? And how do you foresee it vis-a-vis let's say the price of oil? Thank you very much.

Well, we would all like to see a higher gold price. But we are very comfortable here at $400 gold. Actually think it is not a bad price for our project. It is an excellent price. Vis-a-vis oil we may actually be seeing a return back to the '70s where you saw the good relationship between oil and gold price. We would certainly like to see that.

Yeah.

That would certainly make our projects that much more robust. But, without speculating too much on -- related to the upside I think we are comfortable where the gold price is at. We do think it's going to go higher. We think there are lot of fundamentals in place. U.S. debt being one of the principal carriers. I think the dollar is going to continue -- the value of the dollar is going continue to erode. But certainly $45 barrel of oil is going have an effect not just on the U.S. economy but on a lot of economies. So it will -- we will just have to hold out and see where --see where this ends up but we are quite bullish on the gold price and on the other commodity prices as well.

Thank you.

Thank you. The following question is from Ed Irvin from Wachovia. Please go ahead.

Hey, Rick and Greg. Congratulations on a good quarter. I was wondering, I missed the first part of the call. I hate to ask the same question but could you run the if gold continues to stay around 400 and copper stays around this 90 to $1.10 level what kind of cash flows can we look for from Galore Creek and also from Rock Creek?

Hi, Ed, it's good to talk to you again. With $400 gold and say $1.25 copper Galore Creek cash flow would be about $170 million a year.

After tax.

That's an after tax number so it is our real cash cow generator. Doug, do you want to expound a bit on that.

I think, you know, as Rick said, for the first five years that the principal payback when we are in the higher grade areas at Galore Creek the -- at, like Rick said, $1.25 to 90 cent we're looking at $170 million U.S. a year after-tax or about 220 million U.S. per year pretax. Using our longer term metal price forecast that we have in conservative numbers that we have in the scoping study it generates 100 and -- about $150 million a year pretax and about $125 million a year after-tax for the first five years all in U.S. dollars.

That is the base case of the scoping study. We fully anticipate that we are going to expand the resource there and we also believe we're going to find more high grade -- more higher grade resource that we can schedule early in the mine life so that currently that five years of higher grade we think we can expand maybe to 7 or 8 years and that is our objective for this year would be to add about 30 -- 30-35 million tons of higher grade resource that can get scheduled early. Obviously if you incorporate that in the model it is going to enhance the economics specifically.

What do you you think the odds are of finding that extra 35 to 40 million tons?

I'm not a betting man but if I were to bet it would be pretty good. We've been pretty good at exploring, Ed. So we've consolidated the district now. The current resource only includes southwest and what is called the central zone. We have about 35 holes drilled on the junction area that we can incorporate into our resource. We've got about half a dozen holes now drill on -- drilled on Copper Canyon which in addition to the 20 some odd holes that were drilled previous we will be able to put together resource there and there is some excellent higher grade material there that we again believe will get scheduled. We've got another literally half -- literally a dozen other targets on the -- on the property that need just to get additional drilling. In addition to that, we have just completed a -- a district-wide or property-wide IP geophysical survey which is an electrical method in an induced -- electrical method that basically is measuring the amount of sulphites under the ground and we have a number of new targets identified there both to the north and east of the current resource areas. So we are -- we are pretty optimistic, Ed, just to put it in short, that we're going to find additional -- significant additional resources at Galore this year.

Right. Thanks a bunch.

Thank you. The next question is from Robert Poon from Golden City Financial. Please go ahead.

Yes. I didn't quite saw the number of gold. So for next year for sure prices you will be a positive cash flow of 2005 and then 2006 what will be the positive cash flow per share?

To just to clarify, the cash flows are once the mine is in production the first five years are the ones that we -- we talked about, we sort of emphasized. The mine -- the plan right now is to complete the pre-feasibility study next year in 2005, the complete the feasibility study in 2006 and begin a -- begin the construction shortly -- in 2007 so you would be in production in 2008. 2008-2009 would be your first full year of production. So it is a ways off. We don't want to give the wrong impression. We're not going to be in production next year?

Even though for the Rock Creek?

No. All the cash flow numbers we gave you were for Galore Creek. For Rock Creek we are looking at first production in 2006.

First production.

And that the -- I think, actually, Ed asked a question of what the numbers would be for cash flow there. There will be $16 million of free cash flow from Rock Creek in 2006 based on a 375 gold price.

When you say production, how about pre-production. You measure about 70 some copper, gravel and sand, those are in 2004-2005, 2006 or have to be when to -- at the same time as the production of gold?

We have been producing sand and gravel for about five years out of our Nome operations so that is ongoing. That is a bit of a sideshow to be honest with you, it is not really our main business but it has been a -- it's been a nice -- a nice modest cash flow generator for the Company that we then turn around and put back into exploration. So we -- I think historically we've made about between 2 and $3 million Canadian a year from our Nome operations, largely from sand and gravel and real estate business which, of course, is not a really a core business, it is just what we have done to feed our exploration habit.

So the copper, the price of selling copper you said in conjunction at the same time then the production on the gold is the same time frame, right?

For Galore Creek it is a co-production of copper, silver and gold. That's correct.

All at the same time. How about for Rock Creek?

Rock Creek is a gold only deposit. There is very, very low -- very, very low silver content of the gold there. It is essential a free gold deposit. It is a hard rock deposit so it will be mined and crushed and milled and mostly -- most of the gold will come out as a gravity concentrate with a minor amount coming out as a flotation concentrate.

Will Galore Creek come on line on 2006 or 2008 on production?

Production is anticipated -- first full year of production is anticipated to be 2009 but we think we will have it in operation by the end of 2008.

Okay. Thank you.

Thank you.

Thank you. There are no further questions registered at this time. I would now like to turn the meeting back over to Mr. Van Nieuwenhuyse.

Thank you, operator. Well, again, we appreciate the opportunity to update our shareholders and interested parties in our activities. We are very, very excited about Galore Creek. Obviously, Donlin Creek is moving ahead with Placer Dome at the helm and Rock Creek is also moving ahead on a very fast pace with the feasibility expected to be completed later this year or early next year. So we are all pretty jazzed about what we are doing and we will look forward to reporting again to you perhaps the next quarterly -- when the next quarterly comes out, probably later in September, October probably. So thank you very much for your participation and we look forward to our next talk. Thank you.