Eldorado Gold Corporation Q4 2009 Earnings Call Transcript

Mar.19.10 | About: Eldorado Gold (EGO)

Eldorado Gold Corporation (NYSEARCA:ELD)

Q4 2009 Earnings Call Transcript

March 19, 2010 11:30 am ET

Executives

Nancy Woo – VP, IR

Paul Wright – President and CEO

Norm Pitcher – COO

Ed Miu – CFO

Earl Price – Former CFO

Analysts

Haytham Hodaly – Salman Partners

David Haughton – BMO Capital Markets

Kerry Smith – Haywood Securities

Anita Soni – Credit Suisse

Barry Cooper – CIBC

Bob McLarey [ph]

Operator

Good morning, ladies and gentlemen. Welcome to the Eldorado Gold Corporation year-end 2009 financial results conference call. Please note this call is also being broadcast on our website at www.eldoradogold.com. Please be advised that this call is being recorded on Friday, March 19, 2010, at 11:30 AM Eastern Standard Time. I would now like to turn the meeting over to Ms. Nancy Woo. Please go ahead, Ms. Woo.

Nancy Woo

Thank you, operator. This presentation includes statements that may constitute forward-looking statements or information. Any forward-looking statements made and information provided reflect our current plans, estimates and views. Forward-looking statements are information, which include all statements that are not historical facts are based on certain material factors and assumptions and are subjected to certain risks and uncertainties that could cause action results to differ materially from those anticipated in or suggested by the forward-looking statements or information.

Consequently, undue reliance should not be placed on these forward-looking statements and information. The information contained in our annual information forum and in our annual quarterly management discussions and analysis available on our website and on CEDAR identifies factors and assumptions upon which the forward-looking statements or information are based on, and the risks, uncertainties and other factors that could cause actual results to differ. All forward-looking statements and information made or provided during this presentation are expressed qualified in the entirety by this cautionary statement and cautionary statement contained in our press releases.

I will now turn the call over to Paul Wright, President and CEO of Eldorado Gold.

Paul Wright

Thank you, Nancy. And good morning, ladies and gentlemen. As previously mentioned, this is the Eldorado Gold 2009 year-end financial results conference call. Joining me today in Vancouver are Norm Pitcher, our Chief Operating Officer; Ed Miu, our Chief Financial Officer; and Nancy Woo, we’ve just heard from, our Vice President of Investor Relations. And making a cameo performance, we have Earl Price, who was the company’s CFO until his retirement at the end of 2009.

We will follow the usual format, with Norm and Ed providing some commentary on the 2009 results and some color to our expectations, plans and outlook for 2010, and then we will open up for questions. We are frankly very pleased with the year-end results and the performance of our mines in the fourth quarter. Our mines through the year achieved a target set for them in terms of both costs and performance, affirming our position amongst the very few producers who delivered into or exceeded their guidance as of the beginning of the year.

Total cash costs of $337 an ounce also allowed us to remain one of the lowest cost pure gold producers. At year-end, we completed our Sino Gold transaction, and I must say the integration has gone very well. We are looking forward to another busy year with mine construction at our Eastern Dragon project in China and our Efemcukuru project in Turkey. Although it is early days in the year, we are satisfied that the production guidance that we provided to you previously of 550,000 to 600,000 ounces at cash cost less than $300 an ounce or $400 an ounce is indeed solid.

On the exploration front, last year was again a very successful year, and exploration made a significant contribution along with the Sino Gold transaction to increasing our proven and probable reserves to an excess of 15 million ounces.

In summary, the company is in excellent shape. We have a strong balance sheet. We remain unhedged. We have mines that are performing to plan. We have construction projects that are on schedule. And we are looking forward to adding through the completion of these two new construction projects in excess of 200,000 ounces at cash costs around $200 an ounce. We have an exciting year of exploration ahead of us with a budget of $35 million and a total of in excess of 20 drilling projects that we will be reporting in through the year.

With that, I’ll hand over to Norm for further comments.

Norm Pitcher

Thanks, Paul. Good morning, everyone. Let’s start off in the operations, and we are off to a very strong start this year in February, which is a short month. We produced over 55,000 ounces of gold. So we feel quite comfortable with our 2010 guidance of 550,000 to 600,000 ounces.

Going to Kisladag, in Q4, we produced 70,131 ounces at $296 per ounce. For 2009, that gave us 237,210 ounces at $280 per ounce. We are forecasting for 2010 between 230,000 and 240,000 ounces at $310 to $330, increasing in 2011 to 270,000 to 280,000 ounces at $300 to $320. For 2010, we will be mining a strip ratio at about 1.2 to 1, and the average grade of 1.03. We are going to spend $65 million in CapEx at Kisladag this year, which is mostly crusher upgrades to the 12.5 million tons per annum and leach pad expansions.

At Tanjianshan in Q4, we produced 37,773 ounces at $329, which gave us for 2009 a total of 105,610 at $349. In 2010, we expect between 95,000 and 105,000 ounces at $420 to $435, at the same number in 2011, at cash cost of $400 to $420. In 2010 we will be mining a strip ratio of 2.5 to 1 in the main JLG pet and grade through the metal will be approximately 3.85 grams per ton.

At Jinfeng I’ll just – for the Sino assets, the ex-Sino assets will just start in 2010. We are looking at this year for 170,000 to 190,000 ounces at $450 to $480 per ounce. 2011 is 200,000 to 220,000 ounces at $370 to $390. At Jinfeng for 2010 we are going to mine about 400,000 ounces from underground, and the remainder 1.1 million tons will come – I'm sorry, 400,000 tons from underground and the remainder of 1.1 million tons from the open pet.

We are currently in the process of rebuilding the block models at Jinfeng, designing the 2010 infill drilling programs, and the start of the study, which will determine the optimum pit size and underground production rates. We are fairly confident that there is a larger pit there, and we will know that by probably mid-year to Q3.

At White Mountain in 2010, we are going to do 55,000 to 65,000 ounces at $430 to $460; in 2011, 65,000 to 75,000 at $410 to $440. White Mountain does have excess mill capacity, and we are currently reviewing alternatives to increase underground production to take – to allow us to access that excess capacity.

On the development side of Efemcukuru, we have completed the updated mine plan, which incorporated the North Ore Shoot into the development layout and life of mine schedule. Construction activities continue in full swing and are on schedule and budget. The SAG and ball mills are onsite and sitting on their foundations. We expect to begin underground development in early Q2, which would allow us to meet our predicted 2011 production guidance of 90,000 to 100,000 ounces at approximately $200 per ounce.

At Eastern Dragon, we recently released and updated mineral resource, mineral reserve statement, which showed an increase of 47% in measured and indicated, 42% in proven and probable reserves. Physical construction activities are getting ready to resume on site as the weather improves. We are currently at 85% of the engineering design completed, and procurement is also at 85%. Approximately 20% of actual construction on site, which is right where we should be on schedule. We expect production to commence in early 2011, and we will produce 70,000 to 80,000 ounces at cash cost of approximately $150 per ounce.

At Perama, the PEIA has been submitted. We expect approval of that by the third quarter, and we will submit the full EIA by the end of the year. At Vila Nova Iron Ore in Brazil, due to strengthening of the iron ore prices, we have decided to start production there. We are not going to give any guidance for 2010. It’s still quite early there. We’ve got a fair bit to do till we can start shipping iron ore out.

Turning to exploration, 2009, as Paul mentioned, was a very good year for us for exploration. It saw us increasing resources and reserves at Kisladag, Efemcukuru, and Eastern Dragon as a result of brownfields drilling programs. We also discovered the 323 zone at Tanjianshan and acquired a host of new exploration targets in China as a result of the Sino transaction.

In 2010, we have approximately $35 million budgeted for exploration, which includes 125,000 meters of drilling. In China, that’s going to be split between Tanjianshan. We have $3.8 million budgeted there, which would be mostly 323 zone drilling and additional reconnaissance. 323 was a covered target that we discovered, and we will be looking to the South for more targets like that.

At Jinfeng, we’ve got $2.5 million budgeted, which is for mine site drilling, plus four additional exploration licenses in the vicinity. At Eastern Dragon, we have $2.4 million budgeted there. That is for mostly drilling outside of the main lode 5 zone. This is an epithermal, high grade, shallow ore body. It appears that we have – that we may have multiple veins in the area based on trenching and rock chip sampling. So we will be drilling those quite aggressively this year. And at White Mountain, we have another $2.5 million budgeted, which is for step-out drilling of the main zone and two other regional targets.

I would like to direct you to the website, and if you look at the recent presentation of – that we gave at the PDAC, there is quite a bit of detail on the Chinese exploration effort. In Turkey, we have almost $7 million budgeted. We’ve got a 20,000-meter program at Kisladag, which is actually twice what we drilled in 2009, with an additional 5,000 meters at Efemcukuru to explore the parallel Kokarpinar vein where we encountered economic Whitson [ph] grade in 2009 drilling. This would appear to be a parallel structure to the main (inaudible) vein. We will also be continuing our regional recon program, plus more advanced exploration on three properties that we identified in Turkey in 2009.

With that, I would like to, for the first time ever, turn it over to Ed Miu.

Ed Miu

Thank you, Norm. Good morning, ladies and gentlemen. During the fourth quarter 2009, the company completed the acquisition of Sino Gold. The transaction was completed on December 4th, to be exact, as control was effectively transferred on that day. The acquisition impacted 2009 income statement insignificantly, because only one month worth of Sino Gold’s P&L data was consolidated into Eldorado’s. On the other hand, the impact on the company’s year-end balance sheet and the year’s cash flow statement from the acquisition was quite substantial.

Regarding the balance sheet, 2009 year-end asset balance increased significantly from the previous year-end by about $2.5 billion. The bulk of the increase resulted from the Sino Gold acquisition. More specifically, cash and cash equivalents, including restricted cash, went up by more than $200 million. Of that, $104 million came from Sino Gold, with the remainder contributed for increased cash generation from operations as a result of higher gold price and also increased sales volumes.

Inventories were up year-on-year due to higher ore stockpile, in-process inventory, and material and supplies. The increases in mining interest and goodwill, which constituted the lion’s share of the year-on-year increase in assets, were also attributable primarily to the Sino Gold acquisition. On the liability side, the majority of the increases in various accounts will also attribute by the Sino Gold acquisition, including bank debt totaling $191 million, asset retirement obligation liabilities, and future income taxes.

Moving on to the statement of operations and deficits, let me point out first, the fact that in 2008, there was a $71 million non-recurring gain from the sale of the Sao Bento Mine. Excluding that one-time profit, which amounted to $0.20 a share, 2008 diluted income per share was $0.26. 2009 diluted income per share was also $0.26, of which $0.08 was earned in the fourth quarter. General and administrative expense of $32.5 million decreased by $5.8 million compared to 2008, primarily due to lower stock-based compensation cost resulted mainly from the timing of the issuance of options.

Incidentally, there have been questions raised as to whether there is a difference between our China mine sales price versus the spot price on the Shanghai Gold Exchange. The answer is no. As the case in point, other than a contractual refining fee charge of 1.41 renminbi per gram, Jinfeng’s settlement prices on eight recent gold sales transactions during the period January 5 through March 11 of this year were sold at the spot rates of the Shanghai Gold Exchange, as of the transaction date for number two gold in 99.95% purity.

Likewise, for White Mountain, the sale prices for the sale on January 22nd and February 23rd this year, we are at the spot rates of the Shanghai Gold Exchange for those states, minus a refining fee of 1.15 renminbi per gram. On the cash flow statement, net cash increased in 2009, exceeded that of 2008 by close to $188 million. The year-on-year change was essentially accounted for by the net increase resulted from the Sino Gold acquisition, coupled with lower capital expenditures in 2009 and relative changes in non-cash working capital.

I’m open to questions.

Paul Wright

All right. Thank you, Ed. Thank you, Norm. And operator, we will open up for questions, please.

Question-and-Answer Session

Operator

Thank you. (Operator instructions) The first question will be from Haytham Hodaly from Salman Partners. Please go ahead.

Haytham Hodaly – Salman Partners

Thanks, operator. Good morning, everybody.

Paul Wright

Good morning, Haytham.

Haytham Hodaly – Salman Partners

Just a few questions. First of all, with regards to the debt that was taken on, is there any plans to accelerate the repayment on that debt?

Paul Wright

Look, we are taking a hard look at the debt, Haytham, to see frankly what’s the best way of managing it on a go-forward basis. I mean, historically you know the corporation hasn’t been enamored with having debt on the balance sheet. I mean, certainly we don’t consider ourselves to be overleveraged, but we will be – given the strong production coming from the mines and the gold prices remaining strong, we will be looking at what our options are here. We have a busy year for construction in terms of CapEx at Efemcukuru and White Mountain, sort of Eastern Dragon and Kisladag. But it wouldn’t be – they will be surprised if we don’t look to sort of reduce that debt a little faster.

Haytham Hodaly – Salman Partners

Okay, that makes sense. Just with regards to your G&A levels, I know you guys got it to 45 (inaudible), does that include any unusual items this year for the transaction? Is that a reasonable number to use going forward at this point?

Ed Miu

Yes. About $5 million of that $45 million is a result of the transition resulted from the acquisition. So I expect that much to drop off on a go-forward basis.

Haytham Hodaly – Salman Partners

Okay, great. And I guess with regards to the exploration budget of $35 million, is that $35 million all going to be expensed or is there some of those going to be capitalized?

Ed Miu

$5 million of the $35 million is going to be capitalized.

Haytham Hodaly – Salman Partners

Okay. Then with regards to the tax rate of 42%, what’s driving that number up specifically?

Paul Wright

Where did you come by 42%, Haytham?

Haytham Hodaly – Salman Partners

That was the effective tax rate guidance in the quarterly. Did I misread that?

Earl Price

Are you looking at the – this is Earl. Are you looking at the quarter or are you looking at the year-end?

Haytham Hodaly – Salman Partners

You know what, I think I’m looking at the year-end.

Earl Price

Okay. Well, if you are looking at the year-end, there is a number of issues, particularly to compare effective to the previous year. One, the $70 million of sales was basically tax sheltered. So if you look at the previous years, therefore you have a very low tax rate for – current tax rate for Eldorado. Now, you roll forward to this year, you know longer have the shelter, but what we do have in Eldorado is the fact that we have Vancouver expenses, G&A expenses, another G&A expenses in Brazil, whatever that are not sheltered at all with any income. So you basically have a lower income, which effectively raises the tax rate then based upon the two producing assets.

Haytham Hodaly – Salman Partners

Okay. And I was looking at the – for the year-end, which says you (inaudible) 2%. Can I understand what’s happening there?

Earl Price

Yes. So you see what’s happening. What we need is we need a Canadian profit producing mine so we could use up our tax losses here.

Haytham Hodaly – Salman Partners

Great. That makes sense. Okay. Maybe just looking at the same page that has outlook there, the $280 million provided for CapEx, you give a great breakdown for $195 million of that, which goes to Phase 1 of Kisladag, Efemcukuru and Eastern Dragon. So there is about $95 million left. How much of that is sustaining? What’s – is it all sustaining, and what’s the – is there any other big components?

Norm Pitcher

Most of it is sustaining.

Haytham Hodaly – Salman Partners

Okay, perfect. That’s perfect. Thanks, Norm.

Norm Pitcher

You’re welcome.

Operator

Thank you. The next question will be from David Haughton from BMO Capital Markets. Please go ahead.

David Haughton – BMO Capital Markets

Yes, good morning and thank you. Just following up on Haytham’s question, I had also noted 42% as the overall effective rate. It’s on page 12 of your MD&A. So what should we be using then for 2010 if it’s not 42%?

Paul Wright

The blended average rate for the countries in which we operate, we will be above 25%.

David Haughton – BMO Capital Markets

Okay. It’s written in the text of the MD&A at 42%.

Paul Wright

Well, yes, but – yes. For the country, that’s correct. But again, what I’m saying is you’ve got to add the G&A costs, which are not sheltered with income. So that effectively raises the tax rate. So for going forward basis, I would say you want to use at least 30% to 33%. Do you understand the calculation? What I’m saying is basically we’ve got additional cost, which reduces the profit. So the effective tax rate tax rate goes up against those countries that are producing. Let’s just go through country-by-country at the tax rates. The tax rates in China are 25%. Tax rates in – corporate tax in Turkey is 20%. That’s the (inaudible) tax applicable to those operating entities. The step-up, as Earl describes, relates to the expenses that are not –

Earl Price

Well, basically there are going to be expenses incurred in Brazil because there is not income generated in Brazil. Their expenses incurred here in Vancouver because there is no income in Canada or Vancouver. There is – throughout the legal chain, we have legal structures requirements in Bermuda, Barbados, all of that that are small, but there is no income generated. So you understand what happens?

David Haughton – BMO Capital Markets

Sure. Continue.

Earl Price

So that’s what the issue is. So I would say you would be better off to use a tax rate going forward now, not the average of the 20% and the 25%. It would be somewhere between 30% and 33%.

David Haughton – BMO Capital Markets

Okay. Now, Haytham had also identified the guidance for the depreciation. Would you be able to step three for us where you see each of those levels of depreciation?

Ed Miu

Yes.

David Haughton – BMO Capital Markets

Thank you.

Ed Miu

For this year, total depreciation and amortization is $106 million, of which $56 million goes to Jinfeng, $19 million White Mountain, $15 million Tanjianshan, and the remainder of $15 million, $16 million Kisladag in Turkey.

David Haughton – BMO Capital Markets

Okay. And that level that we are seeing at Jinfeng, is that going to be a sustainable regular level of that $56 million?

Ed Miu

Yes.

David Haughton – BMO Capital Markets

Okay. That’s quite an uplift back in the Sino Gold base of Eldorado at – Eldorado. It was even some 20. So, a very substantial proportion. I’ll take it then of the acquisition cost would be tagged to Jinfeng that you’re depreciating.

Ed Miu

That’s correct.

David Haughton – BMO Capital Markets

All right. Thank you very much, gentlemen.

Operator

Thank you. The next question will be from Kerry Smith from Haywood Securities. Please go ahead.

Kerry Smith – Haywood Securities

Thanks, operator. Paul and Norm, can you just give me a little bit more of an update on what the statuses of Perama? You did give a bit of it in your commentary, but just a bit more of an update.

Norm Pitcher

Well, yes. I mean, we’ve gotten – the Pre-EIA has been submitted. We are sort of looking at approval of that by June, somewhere in around there. At the same time, we are putting together the full EIA. The Pre-EIA really just sort of sets the basic ground conditions for the project. But you are pretty much locked into those. We’ve changed a few things that we put in (inaudible). We’ve also put everything into one (inaudible) or it’s like a county to make the permitting a little bit easier. And then once the Pre-EIA has been approved, we will submit the full EIA.

Kerry Smith – Haywood Securities

And then the full EIA you are saying should be submitted by year-end, what is your expectation in terms of how long do you think it might take to have –?

Norm Pitcher

Probably about six months or so for approval on that.

Paul Wright

Yes. And hopefully we’ll get it – I mean, when we say, by year-end, hopefully it will be within about three or four months after we get the Pre-EIA approved. So call it late – early fourth quarter.

Kerry Smith – Haywood Securities

Okay. So late Q3, Q4 of this year, and then six months from there for the approval. And then can you just remind me what has to happen after that in terms of getting to the point where you could make a development decision?

Norm Pitcher

Nothing really –

Kerry Smith – Haywood Securities

Are there any other – like, you need a construction permit, is there anything else that –?

Norm Pitcher

Yes. I mean, there is various local – yes, there is various local construction permits that we will have to get, but no, nothing major. I mean, once the EIA has approved, that’s by far the biggest milestone.

Kerry Smith – Haywood Securities

Okay. So –

Norm Pitcher

And in terms of a production decision, as you’re probably aware of – you know, the project is kind of a no-brainer.

Kerry Smith – Haywood Securities

Yes, of course. Of course, yes.

Paul Wright

Yes. I mean, that’s why, Kerry, if you look at our – the disclosure that we made on our website in our corporate presentations, we point people towards the sort of the back end of what 2011 being in a position to start construction or start those effectiveness [ph].

Kerry Smith – Haywood Securities

Right, okay. And in the Pre-EIA, are you required to give some sort of general parameters on the operations?

Paul Wright

That’s correct.

Kerry Smith – Haywood Securities

Are those parameters public or can you share with some just – what sort of parameters you are conceptually thinking over that you put in the document?

Paul Wright

We’ve actually made, Kerry, a disclosure on the results of the – either filing today or in the next couple of days a full 43-101 report.

Norm Pitcher

Yes. If you look on CEDAR – yes, I think actually today we are probably going to be filing the technical report. If not, it will be up – is it today? If not, it will be up next week.

Kerry Smith – Haywood Securities

Okay, fine. So I can look at that. Okay, that’s great, because I had some assumptions that I’d like to just take a look at what you’ve done there. That’s perfect.

Norm Pitcher

Yes, look at the technical report, Kerry.

Kerry Smith – Haywood Securities

Okay. Great. Thanks a lot.

Paul Wright

Yes.

Operator

Thank you. The next question will be from Anita Soni from Credit Suisse. Please go ahead.

Anita Soni – Credit Suisse

Thanks. Thanks for – sorry. Okay. Just got a little bit of a –

Paul Wright

We are having trouble hearing you, Anita.

Anita Soni – Credit Suisse

That’s good. Okay. Actually, can I – I just have a question with respect to the cost you’ve given out right now. You produced, I guess, 364 in Q4 and the guidance is about I guess $60 or $80 per ounce higher for 2010. I’m just wondering if there are any kind of expectation for higher costs or what that’s a function of and why there is a little bit of higher expectation of cost going forward there?

Norm Pitcher

Yes. I mean, the cost probably is – it's probably grade related, the cost going up. I’m not sure how the – I don’t know about that calculation for the past production. What we are saying is that 55 to 65 this year at around $430 to $460. And we’re pretty close to that.

Anita Soni – Credit Suisse

Right. In what sense are you pretty close? Just Q4, I think that you actually produce at 364 for the quarter – $364 per ounce?

Paul Wright

There was production in Q4. Well, I mean, we would have about two weeks attributable production, Anita, to be frank. We are not trying to be evasive, but we are not really in a position to make too much commentary of where it’s on [ph] in terms of the two weeks of production in Q4. I mean, the cost that we’ve projected for 2010 reflect obviously the budgeted planning process that we’ve gone through.

Anita Soni – Credit Suisse

Okay. Thank you very much.

Paul Wright

Yes.

Operator

Thank you. The next question will be from Barry Cooper at CIBC. Please go ahead.

Barry Cooper – CIBC

Yes. Just wondering if you can walk us through what kind of things need to be done to basically start up drilling over in terms of jobs required and what kind of cost do you think you will be incurring to get that started and when will it start do you think?

Paul Wright

Well, I think a couple of things, Barry. I mean – in terms of getting people onboard and ramping up, it’s probably six weeks to eight-week type of exercise in terms of cost to get things up and running. It’s probably $1.5 million to do so. Working capital to sort of get us to the point that we can probably be in a position to have our first shipment. It’s probably maybe another $3.5 million to $4.0 million that’s the order of magnitude. I don’t have the shipping schedule in front. But again, this is why – one of the reasons why we are at this point not giving some firm guidance. We will do that later.

Barry Cooper – CIBC

Right. But basically then if you are in my shoes, if I assume sort of (inaudible) kind of what you told us before is realistic?

Paul Wright

Sure. Look, you’re not going to – you are not going to see any big shift until the third quarter.

Barry Cooper – CIBC

Right, right, yes.

Paul Wright

I mean, Barry, just on this project – I mean, as we’ve said over and over again, it’s – we are probably the most reluctant iron ore miners in the face of the planet. I mean – but with the present iron ore prices and the outlook and there is clearly margin here, so we’re going to get this mine up and running and start getting some cash back for. But I think it’s a more likelihood and be a precursor to have actually – sooner rather than later probably bending the asset.

Barry Cooper – CIBC

Right, right. Okay. Good enough. That’s all my questions.

Paul Wright

Yes.

Operator

Thank you. (Operator instructions) The next question will be from Bob McLarey [ph], a private investor. Please go ahead.

Bob McLarey

Good morning. Previously, a comment was made concerning taxation-wise that it might make sense to acquire a producing Canadian miner. Has there in fact been any exercise in this direction?

Paul Wright

No, no, there hasn’t. That was a comment made by our recently retired CFO who is engaging in the luxury of being able to make those comments as a retired CFO. Now (inaudible) – pointing out how we could conceptually obviously utilize the tax credits that we built up, it’s – frankly it’s not really on our priority list.

Bob McLarey

Okay. Thank you.

Paul Wright

You’re welcome.

Operator

Thank you. We have a follow-up question at this time from Haytham Hodaly from Salman Partners. Please go ahead.

Haytham Hodaly – Salman Partners

Thanks, operator. Just wanted to confirm the $385 to $400 cash cost, that is cash operating cost that excludes royalties, is that correct?

Paul Wright

That’s correct.

Haytham Hodaly – Salman Partners

Okay, perfect. That’s it. Thank you.

Operator

Thank you. And we have a follow-up question at this time from Anita Soni of Credit Suisse. Please go ahead.

Anita Soni – Credit Suisse

That’s okay. My question has been answered.

Operator

Thank you. There are no further questions at this time then. So I will turn the meeting back to you, Mr. Wright.

Paul Wright

All right. Well, thank you, operator, and thanks everybody for being on the call. Look forward to talking to you again.

Operator

Thank you. The conference call has concluded. You may disconnect your telephone lines at this time, and we thank you for your participation.

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