Agnico-Eagle Mines Limited (USA) Q1 2006 Earnings Conference Call Transcript (AEM)

| About: Agnico Eagle (AEM)

Agnico-Eagle Mines Limited (NYSE:USA) (NYSE:AEM)

Q1 2006 Earnings Conference Call

May 12th 2006, 10:30 A.M.


Sean Boyd, Vice Chairman and Chief Executive Officer

James Nasso, Chairman

Eberhard Scherkus, President and Chief Operating Officer

James Nasso, Chairman

The Safe Harbor statement, we will now proceed with a presentation by management of the corporation. But before I turn the meeting over to Mr. Boyd, I would like to caution you that the management’s presentations may include certain forward-looking statements. These statements are based on management’s current expectations, but they are naturally subject to uncertainty and changes in circumstances. These factors may cause the corporation’s actual results to be materially different from the expectations expressed or implied by such forward-looking statements. The corporation is not under any obligation to update the forward-looking statements in today’s presentations. The detailed information about risks and uncertainties is set forth in our most recent securities filings with the Ontario Securities Commission. I thank you and I turn the meeting over to Mr. Boyd.

Sean Boyd, Vice Chairman and Chief Executive Officer

Thank you Jim, and good morning everyone. And this is always a highlight for us every year to see a lot of our older loyal shareholders; we have people here that have been shareholders for 30, 40 years. So, there is a tremendous sense of history with this company, as most of you know we got our start several decades ago in Cobalt, Ontario producing silver, and it’s nice to be here at the King Edward, it’s always been known as the mining hotel. There has been, I am sure many deals struck in this hotel, but just for those of you who don’t know, our founder Paul Penna used to live in this hotel when he was in his 20s doing his mining deals way back when. So, we are happy to be here for the first time, we are happy to be sharing our story with you and giving you a sense of how we are making history here today as we move the company forward with the announcement of going ahead with LaRonde II on the back of record earnings and cash flow, and Jim will get into some of the other milestones that we’ve achieved very recently. And that doesn’t happened by accident, we don’t set records, we don’t move the company forward by accident, it’s all done and driven by the commitment, dedication and experience of tremendous workforce and in our view they are second to none in the industry and that will put us in extremely good status as we move forward and build five new projects and essentially transform the company.

Well that transformation is underway and we’ll talk about the components of that transformation, and give you a sense of where we are right now, where we see the business and the industry, and where we will be in a period of 3-4 years. And at the end of it, we’ll be glad to take your questions and this presentation will be followed by lunch.

I would like to talk about the gold price, it’s on everybody’s mind, I think it’s been a bit surprising at how quickly it has moved to the $700 level, it’s passed a number of, sort of key numbers quite quickly. Again that is surprising in a way how quickly it’s done, but it’s not surprising that we are here. Given the massive amount of liquidity in the system, essentially chasing the same amount of gold that we’re chasing 25 years ago when it hit the all-time high. And that move up has been relentless, it’s been steady, it’s gathering momentum, and it’s on the back of a declining US dollar, and I don’t think we see the US dollar fundamentally being supported by the financial policies in the US. So, I think we are going to see continued strong gold prices.

As for the gold shares, we still believe the best way to play the gold prices through the gold shares, quality shares that have reserves, that have low cost, that have gross and we have that. As we go through the story, we’ll tell you why it makes sense to play gold through nickel. But also, the shares are not reflecting the current gold price, we’ve seen some recent research where people are calculating that the shares are reflecting a gold price with some $200 less than where we are now. But we believe there is still room for the shares to move higher.

Also recently one of our shareholders in London just pointed out that the Financial Times Gold Index in the last week surpassed the all-time high that was set in 1996 when gold reached a high of 415. So there is still lots of room here for gold shares, and the gold share is not really reflecting the earnings and cash flow generating ability of certain companies within the industry, and that’s one of the things that we have here. Our LaRonde mine is basically perfectly positioned to benefit by the current commodity price environment, and we have an extremely good first quarter. And that was based on realized metal prices that are a lot lower than what we are seeing today. So, we are looking forward going forward to increasing earnings and increasing cash flow and that will be part of the story as we move forward.

What I would like to do is go through the strategy, I don’t want to go through that again, that was a forward-looking statement, which Jim covered. But in terms of the strategy when we look at the business and the industry, and we said at many times, there are challenges. The challenge is to replace your reserves, the challenge is to contain your cost, the challenge is to find good people to execute on growth plans. And for us, there is an added challenge and that’s retaining our good people, because people certainly are aware of the accomplishments of our crew, and we are certainly working hard to create a home for them so that they can advance and grow with us. And by going and building four or five new projects, we are certainly challenging our employees and giving them opportunities to grow within the company. So, that’s an important part of our strategy moving forward. It’s a unique story in the industry, it’s got tremendous growth, not just in gold production which we expect to triple by 2009, but also in the reserve base. And that underlies the valuation, we’ll talk about how our reserves have grown, we’re at 10.4 million ounces, going to 14 million to 15 million ounces just by drilling out our 5 million ounce resource.

We’ve always maintained a conservative financial position, even though we haven’t sold gold forward. We’ve got a strong balance sheet, we’ve been adding to the cash position, that will allow us to build our projects and do it and minimize dilution to our shareholders. We’ve always said as we are going to build four or five new projects, we will likely raise some equity, but the amount of equity we need is a lot smaller than it was even six months ago, and you can see that from our balance sheet, and you can see that by the cash generating ability of the company. And one of the things that we’ve never done, and I think we are probably one of the only companies that can say it as we’ve never ever sold away the upside to the gold price. Even the guys who used to champion it with us, Homestake and Newmont eventually perpetuated to the bullion dealers in the 1990s, we’ve never done it. So we are sitting here perfectly positioned to take advantage of higher precious metal prices.

We talked about records, it’s been a record year and a record quarter in terms of the quarter, record revenue of over $90 million, I’ll show you later on how that can grow, record low cost are negative, which – it’s an important number, we will talk about a number that’s more important on the cost side, and that’s cost per ton, because that demonstrates the efficiency of our operators, and our processors at the mine. Our earnings record $37 million in the quarterly basis, there was some gains there, we’ll break that out for you. Our cash position as we said, the balance sheet continues to strengthen, we’ve got a $155 million in cash. And we are excited by being added to the S&P/TSX 60 recently which is a big achievement for us and I know if Paul was here he’d be celebrating along with us.

Reserves are important, perhaps will be critical to this business and I think what we’ve seen in the industry, we’ve seen some hostile activity, which we had never seen in the past in the last year and a lot of that is driven by the need to replace some gold reserves, in this market. We are in a good position; we’ve grown our reserves steadily over the last several years as we’ve gained new access at LaRonde and grown that base to over 5 million ounces.

The story of LaRonde is absolutely incredible, when you think that 20 years ago, that deposit had less than 800,000 ounces. Today it has over 5 million ounces of reserve, another 1.4 million ounces of resource, and we’ve mined about 3 million ounces. So, our team took a deposit that was 7 million ounces and turned into a 10 million ounce deposit. So, they have the experience and knowledge and dedication to hopefully do that at these other projects. We are not saying that we own another LaRonde here but we certainly feel we have the ability to continue to grow these projects and there will be a focus drilling program to move ourselves from an already strong base of 10 million ounces up to the 14, 15 million ounce range. And the average of the mid-tiers approving all the gold reserves is about 5 million ounces. So, we’re already double that and looking to go 40% to 50% higher.

Our operating results, we had higher than budgeted tonnage. We had higher than budgeted recoveries in the mill; those recoveries were at record level. We had higher gold rate, as a result our production of all metals was extremely strong, which drove the record earnings and the record low cash cost because of higher commodity prices.

One of the key numbers on that slide is the cost per tonne. It’s not impacted by base metal prices; it’s not impacted by foreign exchange. And in the first quarter of ’06 that number was $57 per tonne metric.

In the first quarter of 2004, so going back nine quarters, the cost per tonne at LaRonde was C$52. So, there are certainly rising cost pressures in this industry, and our team went from sort of mine building and construction in 2003 when we had cash cost of 269, and they went into an optimization and efficiency mode. And as a result, our cost per tonne only rose about 9% in the two-year period, which is probably one of the best records in the industry. So that’s the same team, that’s taken LaRonde from 7 million ounces to 10 million ounces, that has a good handle on our cash cost and our operating cost at LaRonde that will be building LaRonde II, but when we say we have the people to make things happen, we certainly do at LaRonde and that’s the nucleus to drive things forward.

On the earnings side, we saw almost a 50% increase in our revenue to a record 90 million. Our earnings were $37.2 million or $0.35 per share, there were a couple of special items of about $0.13 of share in net. So the operating earnings were $0.22 a share, which is quite good in an industry where some of our competitors are earning $0.02 to $0.03 of share when gold was about $600. So you have to drive earnings, you have to focus on the bottom line and we certainly been able to do that at LaRonde.

The realized metal prices for the first quarter, the gold price realized was about $100 less than the spot price today. The silver price was about $4 less than the spot price predicted today. The zinc price realized in the first quarter was about $0.50 per pound less than what it is today, and the copper price was about $1.30 less than what it is today. If we get current metal prices and we can see in the second quarter maybe a 25%, 30% increase in revenues with no additional cost associated with that net revenue. So that’s the impact that we can have on both earnings per share and cash flow.

The cash flow per share before working capital changes was 42 million in the first quarter. On a mine operating profit level, the mine operating profit at LaRonde in the first quarter was US$57 million. All of last year, it was $114 million, so in the first quarter the mine earned half of what have earned in all of last year at lower realized metal prices than we have today. That shows you how well positioned this mine is to take advantage of these commodity prices.

This is an example of the steady performance of the mine in the graph, it shows you the cost per tonne milled which we talked about how steady that’s been over the last 9 quarters and the tonnes per day. So, this mine has been a consistent producer of daily tonnage averaging about 7300 metric tonnes a day, and that’s what driving the earnings and cash flow.

This slide, if you do some math with this slide and put in certain commodity price. If you took the current zinc price, zinc revenue would cover all of the operating cost of LaRonde, it would cover all of the smelting and treatment charges for both the zinc and the copper concentrate and there likely be a few million dollars left over. When effect this mine gets all of its copper, 20 million pounds on an annual basis assuming current metal prices, zinc prices, all of its silver and all of its gold for free at no cost. So, again if you turn that around that’s how profitable this mine is.

The financial position we talked about earlier $155 million in cash, we no longer have long-term debt, we converted our convertible debt in February of this year. So we are debt free. We have common shares outstanding of 111 million, that’s about doubled in the last 8 or 9 years but our reserves have gone up ten fold in that period.

So, I think it’s important to focus on sort of reserves per share and we certainly been a company that’s done a good job minimizing the number of shares that we’ve issued over the past few years. A lot of our competitors in the industry have 200, 300, 400 million shares outstanding. We are in a good position to generate per share growth in value based on that low number of shares outstanding. And we have bank lines of a $150 million, so we got some good financial flexibility to move the company forward.

Now, I will talk about the projects, most of you know where we’re situated, there are certain things we look for, when we look at projects, we like to own them 100%, we own all of our project to 100%. The project have to have geological upside and camp potential, we’re certainly used to doing that in Quebec. It has to be well matched to our technical skill sets, which these are given the depth of our experience at LaRonde, they have to be near infrastructure to minimize capital. I think that’s important in this day and age as capital cost are rising extremely quickly and being near infrastructure certainly helps keep the handle in the capital cost.

One of the things you’ll know here is that there in pro-mining jurisdictions, very low political risk, which is something that we look for. We don’t have the resources of the senior companies to being all places in the world, and deal with a lot of issues that can distract you from the actual mine building and operating. So, we deliberately stayed in areas that are supportive. How supportive? Well, the Quebec government just put forward a loan for Goldex, that’s a small amount of $6 million relative to what we are spending, but it shows you that we’re in jurisdictions where the government is helping investments go forward by putting money on the table and the Premier Quebec showed up at the property at Goldex a couple of weeks ago and presented that chart. So, it shows you the type of involvement that the government has in Quebec and we get the same in Finland now.

The government of Finland is negotiating now with us on reducing the royalty on providing infrastructure grants and employee training grants, again another pro-mining region that’s encouraging investments. So, it eliminates a lot of the distractions, that some of our competitors may have in dealing with permitting issues and another political issues that we don’t have. In order to maximize those asset basis, we have the largest exploration budget in the history the company to take those reserves from 10 to the 14, 15 million ounce level, but also to see how big the ultimate reserve resource is on property such as Suurikuusikko and Pinos Altos.

We haven’t had a production growth chart up in a while; this is the Quebec gold production growth chart, obviously doesn’t include what will happen when we add Suurikuusikko and Pinos Altos. What we can see here is that for the years 2009 through 2012, our Quebec operations average about 0.5 million ounces of production. Then when LaRonde II comes in full stream in 2013 that production in Quebec goes to 700,000 ounces. So that is an extremely strong base. In Quebec, we have 8 million ounces of proven and probable gold reserves, not including the significant quantities of byproducts and we also have about 2 million ounces of resource. So, in Quebec we have a combined 10 million ounces of gold. So that’s our base, that’s our foundation, that’s where we’re going to have the initial growth. And this chart further shows you the strength of that operation in northwestern Quebec, we get flexibility and movement of people, infrastructure and equipment, which helps keep the overall cost to operate in that region down.

This is LaRonde II; this is a picture of what the development will look like at the lower level. LaRonde II as you know has 3.6 million ounces of gold. And it also contains significant quantities of byproducts. The operation we’re planning there is for 6000 tonne a day operation metric. As you know, we are currently running LaRonde at 7300 tonnes a day, so it will allow for depth, we’re reducing the mining rate at LaRonde on a daily basis. We can do that because the gold rates are 80% higher than what they are at LaRonde I. And that will still allow us to produce an average of about 320,000 ounces of gold over the life of the current reserve position at a cash cost of around 230,000 ounces. In the earlier years, it could approach the 400,000 ounce level because we are putting that the initial mining plan over the most profitable tonnes to improve the rate of return on the project.

The Base case IRR here is 13% using those commodity prices, which are we feel conservative. Obviously, highly levered to commodity prices, positive IRR even at 350 gold. The capital cost up through 2012 is US$210 million. There would be sustaining capital of US$10 million to US$12 million for the balance of the reserve life, which is essentially development and during development of the ore body. So we spread that capital out over 5 or 6 years, which helps to minimize the impact, if we were to go with a big shaft from surface, it would have piled all the capital upfront, would’ve been a longer lead time. And we studied dozen or so different ways of looking at this and attacking this, and this is the best way to go forward. And we can fund this type of development of $210 million over the next 5 years or so out of the existing cash and balance sheet going forward.

One of the interesting things about the plan that they -- that the board approved yesterday was that we are using as much of the existing infrastructure as we can. We’re even using the same mining equipment that we are using at LaRonde I. We are using the same mining method, so we are not changing the mining method, so not only are the engineers and planners knowledgeable about that mining method and have confidence in the fact that will work but the miners know that method.

So, it’s something that’s -- if there is any team in the world that can manage this type of development is our team given the experience that they’ve had at the LaRonde I. We’re mining now at 2240 meters below surface and we’re producing 7300 metric tonnes a day. I don’t think there is a mine that we know, there maybe some in South Africa that are doing that type of performance.

Goldex has been a tremendous amount of advance there. In the last sort of while, the concrete head frame is in place that went up over the last month. So, if you go to Val d'Or, you can’t help but notice this on the skyline. This is the biggest thing on that skyline now, and I was there couple of months ago. And the best part of going there was walking in the drift and going around the corners and seeing LaRonde guys there.
Being the ship captain not in the Salt Lake LaRonde so that’s part of the advantage of having our operations very close together up in northwestern Quebec. So it’s moving along quite well.

Lapa, we’re looking at potentially accelerating this project, we have now drifted across the horizon, we have confirmed the continuity, we have extracted a sample. We are doing sampling on that sample to get a better sense of whether the grade is closer to the cut grade of about 8.9 grams or closer to the uncut grade of 12 grams, and one of the reasons we’re looking at potentially accelerating this is to continue on with the shaft sinking. We’ve got an extremely good crew there, who has shaft advance of about 9 feet a day and the original plan was to have that crew lead for about seven months, while we did some lateral development work and assessment work, and there was no guarantee we get the same workers back from the contractor. In this case assuming we decide to accelerate it, we would get the same crew back and we would be able to continue at that rate of advance, assuming we’ll make a decision to go forward, we need about an additional $80 million to put it into production. Shipping material directly sell around, we don’t have to build the plant here. So, again using the synergies and the expertise available to us at LaRonde to make that project worked along with Goldex that gives you that Quebec production profile.

In Finland, northern Finland, those of you that are going to go on the mine trip with us in June will be able to see how well the development of Finland is in terms of infrastructure, roads, roads into the property, power line into the property, great place to build the mine as we said local support, government support even to the degree of putting money up. We’ve got our management team in Mohegan and his part of -- his team is here today, they’ve also hired a chief geologist that’s now working on the exploration program. And what we feel is now that we’ve got a dedicated team there, and their sole focus is moving this forward that will start to move it forward at an accelerated rate.

We’re looking at having the feasibility completed this quarter and we will be providing that details before the middle of the year. What is nice about this project is its potential to get bigger, we’ve only drilled about 1/3rd of the strike length here, about 5 kilometers of an overall 15 kilometer strike length, the horizons expressed a surface, couple of meters of overburden, so relatively easy to put in open-pit in here, we estimate that the first 4 to 5 years of production will be strictly from an open-pit or pits as we move forward, and we hope that as we continue to drill along strike, given the fact that these zones expressed a surface that we could potentially find additional pits and expand the overall reserve and resource envelope. This is a project that didn’t have enough, or sizeable enough budgets to move it forward at an accelerated rate. There are no issue with budgets here now, we’ve got $5 million exploration budget and a dedicated team here, and that team’s job is not just to drill this but also look at other opportunities that are available in northern Finland and in northern Europe that we can get involved in at an early stage at an exploration phase. So, we are excited about the potential about deposits of growth.

Pinos Altos has got a resource combined of a little over 2 million ounces of gold and 50 million ounces of silver. It’s right in the heart of the Sierra Madre where there is an awful lot of mine building activity under way currently, it’s relatively straight forward to get permits here, we have water, we have power, we have roads here, so the infrastructure is all in place. And again we’ve hired a proven mine builder and Tim Haldane who has recently built a large mine in Mexico in the Sierra Madre. So, he knows this way around there and he is anxious to get going and move Pinos Altos forward.

What we are doing there is, we’ve got a new chief geologist who had spent part of his career in the Abitibi at Lac Minerals and in Bousquet and was involved at Bousquet II. He knows how we operate, how we think, and he is onsite now putting his program together to drill this deposit. And what we’re seeing is, we‘re seeing the potential to see Santo Nino and Cerro Colorado joined together at depth, but part of the program of the new geologist will be to add more drills and get deeper access to the lower parts of this deposit. It certainly has the potential to get bigger, 11,000-hectare property; we’ve only been working on the small fraction of that. So, a lot of upside as we start to focus again on this project.

Our scoping study estimated a CapEx here of about $150 million. Feasibility we expect to be ready in about a year. It’s the timeline of some of the upcoming news looking for Lapa and Suurikuusikko feasibilities in June, we’ve got the site visit in June -- June 13th to 15th and second quarter will be July 26th after the market closes.

But just to summarize, it’s certainly a growth story but it’s more than that because of the ability to grow earnings and reserves in this type of commodity price environment, and I think that’s extremely important. In addition, it’s also an exploration story. Because these deposits have a lot of structure that’s been undrilled, and that will have direct focus because we have dedicated people, whose job will be to move those projects forward to build up the reserve, to convert the resource and also to build up the overall resource outlined to get us sort of 14 million, 15 million ounce, which would put us at the top of the mid-tier pack. So that’s the presentation Jim, and I’ll turn it back over to you.

Question-and-Answer Session

James Nasso, Chairman

Thanks very much Sean, that was an excellent presentation. Now, the floor is open to questions, and we have two people with microphones, just raise your hands, and they will attend the particular table and you can fire away. There we go, gentlemen at the back.


Good morning. I was curious, the mentor was vested with as we go and Sudbury Contact became the Contact, am I correct?

A - James Nasso

Go ahead, keep going.


The properties that were with Sudbury Contact, where did they go? Did they stay with the Contact, or did they go with the Dcom?


We have Matt, do you want to – or Sean address that. Go ahead.

A - Sean Boyd

We, couple of years back, the properties that Sudbury Contact had at the time, they had some gold properties, some in Nevada and some in Canada, and Agnico bought those properties off to Contact for about $3 million putting much needs of cash in the Contact. Contact became a focused diamond explorer, and with new management the annual meeting was this morning, prior to us we owned 32% of Contact, and it’s got good prospects, and that’s the company to watch with the new management group.

A - James Nasso

Any other questions? Gentleman there?


Just a small point, but I know that you did go on about the total cash cost being nothing for the gold because of the zinc. And I’m wondering if you stripped out the zinc and the copper, what would be real cash cost for the gold? That seems to me to be a bit of an artificial number, or you say that you got a negative number for us?

A – Ebe Scherkus

It’s difficult to do that, because the ore is homogeneous, and we have to mix the ore to put in the mill. There has been some questions on the accounting. We’ve accounted for that the same way for over 70 quarters consistently. For the first time it goes negative, we’re hearing people say, “Well, maybe it’s not a real number”. The reality is, is that our zinc revenue covers all of the cost now, and we get the other metals for free. The other reality is that we’re using all of that cash flow to essentially build 5 new gold projects. And it’s hard to break them out on a separate basis.


Thank you, Ebe. The other point about that, you touched on a bit in the -- was the fact that from accounting perspective -- that probably concerns us, I was wondering are there any differences in accounting reforms for gold as opposed to other metals. Okay.

A - James Nasso

Lady next – lady right next to you, yes, go ahead.


Thank you. Could you comment on your price earnings ratio? It seems very high in comparison to a lot of the other gold and metal companies?

A – Ebe Scherkus

I would not say it’s high relative to the gold companies, but I would say it’s actually quite good. We will -- at these current commodity prices, we will out earn per share and out cash flow per share our competitors in the intermediate goals right now. Some of those gold companies are trading at $2 billion to $3 billion mark and cap higher than we are trading. And I think you have to look at forward earnings, and I think we explained this morning that that current commodity prices, we can see significant growth in both our earnings and cash flow. So let’s look at it on an annualized basis, as we get through this year and that’s why we think there is more upside in our valuation.

A - James Nasso

There you go right here.


Let’s speak of the significant deals Agnico’s and its results being achieved, what -- as Sean mentioned regarding Agnico's mineral claims because of balance shaft back joining property of whether mining company make significant high grade cost property -- ?

A – Ebe Scherkus

Referring to Globex-Queenston -


Globex Joint venture?

A – Ebe Scherkus

Yeah, we had a letter agreement with Queenston and Globex, that was subject to board approval, and the board didn’t approve it, and the deal didn’t go through. But we are currently drilling on our site of the property, right now.

James Nasso, Chairman

Any other questions? Okay that’s it. I just have a great statement as -- I will be very brief. So, I just have a few things to say and really when -- we would never come to an annual meeting with greater expectations than we have today. The pipeline is full, we just approved LaRonde II yesterday, gold prices are excellent, silver prices, base metal prices were really on fire. Yes, this past several weeks ago in New York we set a record, our share price set a record, yesterday we also set a record in Toronto here. We crossed the $45 mark, albeit we settled back to about $43 and change but we still cross the $45, which was something we hadn’t done for many, many years.

I reflect on these – and these events caused you to reflect on the corporate growth and development of our company, and I make a brief review and some of these that have been touched on by Sean but I just like to remind you, a short 8 years ago when Sean was chosen CEO, we had 800,000 ounces of reserves. And today as you saw, we have reserves that’s 8 years later of 10 million 400,000 ounces and growing. Record cash cost, record cash flows but all of this was not done in isolation. Ebe Scherkus and his very confident team, which you have met this morning are highly responsible for these results. And it goes right across the company, and is difficult that a lot of you people know Ebe and Sean well. They are very modest and when you try to complement them, they remind me of Gary Cooper, its almost like it was -- it was nothing but that’s not the case, it’s been a great achievement and they deserve much credit for their efforts. They are an amazing team. I also reflected on the stability of our company. In the last 35 years we’ve had essentially two CEOs with Hub serving as an interim President and between Ebe and Sean, they’ve got service of 42 years in a 35-year-old company, respectively 21 years a piece, that speaks to the stability and the commitment to our corporate mission.

I also like to mention the board; we have a very strong board that was in evidence the other day. We have a board policy where we visit our assets on a regular basis, meet our employees, have a board meeting on site, we did that the other day, we went up to LaRonde, we went in underground at LaRonde I, we went to the 230 level at LaRonde which will be LaRonde II, we went to Goldex, Lapa, and very, very impressed. And that’s where the component, the mining component of our board really came forward. They asked some very pointing questions, they informed and helped inform the rest of the board, and following that -- the meeting yesterday made it a very easy decision that we are -- we are always supplied with factual information that enables the board to make very, very informed decisions and that was done yesterday.

I also would like to say that this policy will continue. We will be visiting Mexico, Finland whenever appropriate whenever required we will see the people and represent the shareholders in the best possible way we can. We will always be with our feet on the ground talking to the people that are doing all the hard work as well as the people and our management team works very hard as well. But the fact is that we are not making arms-length decisions, we are making decisions where we visit and deal with realities.

I might say too, in going up north and all through the company, there is much enthusiasm needless to say and much excitement. And I think one of our directors, Doug Beaumont, well known, well respected in the mining industry put it best, after meeting up north the other day in Wednesday, he said I have been in the mining business for 50 years and I’d never been with a more exciting company and we all concur. But all of these things -- good things don’t happen in absence or isolation. I would like to point out that we have a very and you’ve heard this more than once a very dedicated group of employees. I want to know that their efforts, their energy and their fingerprints are all over our success and we thank them for that. That’s in the bottom of the mind and the top of the pyramid. We’ve had quality assets, quality reserves, quality people. Foreign language

And I thank you very much and a great effort, it was such a pleasure and we thank you for your hospitality the other day. These fellows never stop trying to improve themselves and it speaks -- the evidence is in the results. They are forever making things better and doing things more efficiently. Honestly, we ran wave about these people, they are an excellent team and I often thank these our co-workers, I wish the rest of cadet that could see the way they operate, they are extremely skilled engineers, geologists very hardworking guys, and we thank you.

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