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Executives

Rod Antal - Chief Executive Officer

Mark Murchison - Chief Financial Officer

Analysts

Michael Slifirski - Credit Suisse

Stephen Gorenstein – Bank of America Merrill Lynch

David Haughton - BMO Capital Markets

Stuart Dodd - Renaissance Asset Management

William Morgan - Intrinsic Investment Management

Raj Ray - National Bank Financial

Alacer Gold Corp (OTCPK:ALIAF) Q4 2013 Earnings Conference Call March 12, 2014 5:30 PM ET

Operator

Thank you for standing by. This is the Chorus Call conference operator. Welcome to the Alacer Gold 2013 Year End Financial Results Conference Call and Webcast. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. (Operator Instructions)

At this time, I would like to turn the conference over to Rod Antal, Chief Executive Officer. Please go ahead.

Rod Antal - Chief Executive Officer

Thank you, Saatchi and thank you all for joining us today. This call is to discuss the 2013 year end financial results and also provide an update on the sulfides definitive feasibility study. Joining me on the call is Mark Murchison, our Chief Financial Officer.

I would like to point out that we issued two press releases this morning, one, with our full year 2013 earnings results and the second important release with the sulfide definitive feasibility study update and resource reconciliation project. Mark and I will be speaking to a slide deck summarizing our financial results and definitive feasibility update, which along with other documents released today is available on our website. Following the presentation, we will open up the call to a Q&A session.

If I could direct you to Slide 2 of the presentation. During today’s call, certain forward-looking statements will be made relating to the future business plans and other matters of a forward-looking nature. These forward-looking statements are subject to many risks and uncertainties, many of which are detailed in our public filings and can be found on www.cedar.com. There could be no assurance that such forward-looking statements will prove to be accurate as actual results and future events can differ materially from what they were forecasted or projected to be. Please take time to read the cautionary statement and understand that all forward-looking statements made today are subject to the disclaimer set out on Slide 2 of the presentation. Additionally, all dollar amounts in this presentation are expressed in U.S. dollars unless otherwise noted.

Our MD&A and earnings release which are both posted on our website at www.alacergold.com include a reconciliation of certain non-IFRS financial measures to the most directly comparable IFRS measures, including cash operating cost per ounce, total cash cost per ounce, all-in sustaining cost per ounce, all-in cost per ounce, and adjusted net profit, which may be used on this call.

Now, turning to Slide 3 which summarizes the strong performance from Çöpler. Before we dive into the details of the operating and financial results, I wanted to take this opportunity to make a few comments. It is well documented that we made a strategic decision early last year to divest the Australian assets and focus solely on Turkey. As you will know, the divestment process was completed towards the end of 2013. We then set out to reset the business with four key objectives which were to continue and optimize and imbed the improved operating performance at Çöpler with a focus on high margin returning ounces.

To provide clarity on the Çöpler oxide profile for the next four years, we determined the best processing method for the Çöpler sulfides and move forward on that basis and finally to refocus the expiration efforts in 2014. I am pleased to report that we are able to deliver on all these objectives. Most pleasing for me though is that 2013 safety, operating and financial performance at Çöpler which support our strategic decision to focus on Turkey only. So let’s take a look at few of the highlights.

Çöpler set a new annual production record of about 217,000 attributable ounces. This is a substantial 44% increase over the previous record set in 2012. Çöpler total cash costs were a low $429 an ounce and all-in costs were only $864 per ounce. Operating cash flow from Çöpler totaled $194 and this was prior to the one-time capital expansions of approximately $45 million for the SART plant, clay handling circuit and new agglomerator.

Looking forward to this year we expect to be one of the lowest cost producers in the gold sector. We will continue to generate free cash flow that will further strengthen our balance sheet. Alacer’s production and cost guidance for 2014 is 160,000 to 180,000 attributable ounces and all in costs of $730 to $790 per ounce.

Now please turn to Slide 4 for a discussion on Çöpler operations in 2013. Firstly, I am proud of the significant safety milestone we achieved in February of this year. We have worked 365 days lost-time injury free for about 2.8 million man hours. This is a major milestone that few mines ever achieve. Safety is the core value of our business and this achievement to me represents a leading indicator of an engaged and motivated work force. Our operating results indicate we have both.

At Çöpler a total of 6.7 million tons of oxide ore was stacked on the heap leach pads during 2013 at an average mine grade of 1.9 grams per ton. As expected the first half of the year gold grade was 2.14 grams per ton, which was higher than the second half of the year 1.63 grams per ton. I have mentioned that we undertook a number of operational improvements during 2013 which we have seen and we will continue to see the benefits from. These include better conveying and stacking practices and since September we are replacing agglomerator on the heap leach and following a metallurgic review of the heap leach performance increasing the cyanide dosage rates and improving the acid reticulation practices to obtain better gold recoveries.

Now recovery ratio in the second half of the year increased to about 90%. This was driven by the high gold production due to the run off from the high grade ore stacked in the first half of the year and the improved operating performance from the heap leach. We should start to see this recovery ratio return back to the long-term ultimate heap leach recoveries in 2014. We also renegotiated the mining contracts for the next four years that should see us maintain a mining cost of around $1.80 to $2 per ton.

The clay handling circuit in SART plant, capital investments were completed in 2013. This prepares us for the increase in clay rich fee and the higher copper grade as mining transitions from the Manganese Pit to the main pit during the year. The clay handling circuit became operational in late 2013 and the SART plant is ready to be wet commissioned when copper grades hit the threshold limit later this year.

Now please turn to Slide 5 and I will hand over to Mark for an overview of our financial results.

Mark Murchison - Chief Financial Officer

Thanks Rod. The corporation continues to have a very strong balance sheet. At year end we had cash of $290 million, no external debt and $315 million of working capital. In regard to cash now with approximately $25 million is expected to be paid to really a mining in the first half of this year as a distribution of this 20% share of the Çöpler operations from 2013.

As shown in the table there has been a decrease in total assets, total liabilities and total equity. This decrease was been driven by the sale of the Australian assets during the year and the $70 million special dividend paid in April. In accordance with the corporation’s dividend policy which is to pay an annual dividend of at least 20% of free cash flow of a dividend of $0.02 per share has been declared and will be paid on the 15 April, this year. This maiden dividend has been determined having regards of the financial position of the corporation. It also shows our commitment to deliver on our policies and our promises.

Now turning to Slide 6, we have an overview of the corporation’s profit and loss for 2013. Please note the summary title is for our continuing operations only and therefore excludes any Australian numbers. Touching on a few of the key items attributable ounces sold for the year were 218,692 ounces at an average price of $1,379, the gross sales of $377 million, which is a 12% increase on 2012. Çöpler’s production costs increased in 2013 by $41 million to $117 million. The increase was driven primarily by less waste being capitalized in 2013, a high volume of ore – a higher volume of ore being treated, higher processing costs including reagent usage and new items of (plant) and a one-off non-cash inventory adjustment of about $5 million resulting from a detailed review of the inventory accounting model in the fourth quarter. These increases were partially offset by the savings derived from the renegotiated mining contract Rod mentioned earlier and a one-off royalty credit of about $5.5 million arising from confirmation that a concession on part of the royalty charge was available to us.

Depreciation and amortization increased to $37 million for the year. The increase being driven by additional capital items commencing depreciation and high depreciation rates driven by the increased tons mine. Overall this resulted in a mining gross profit of $222 million for the year from continuing operations. We then further deduct exploration, G&A and other costs. The corporation reported a profit before tax of $173 million on our continuing operations. And finally taking into account the tax expense of $75 million resulted in the corporation reporting a profit after-tax of $98 million.

Now moving on to Slide 7 we have noted a few key points on the tax expense incurred during 2013. As noted the tax expense for the year was $75 million. This high charge was primarily due to an increase in the underlying effective tax rate and two additional items. As expected the underlying effective tax rate has risen to approximately 20% for two key reasons. Firstly we’re now operating under our second incentive tax credit certificate in Turkey which has a lower incentive tax rate.

And secondly the capital spend for 2013 was significantly less than prior years and resulted in less capital expenditure qualifying for the incentive tax credit. The two additional expenses recognized during 2013. Firstly there was an additional one-off tax expense of $13 million incurred due to the disallowance of some of the investment tax credits previously claimed in Turkey that were being carried forward for future use.

And the second item was an additional non-cash tax expense of $23 million which was incurred in Q4 to reflect the impact of the devalued Turkish Lira on our tax asset base. The tax asset base being equal to approximately $600 million and the devaluation of lira for the year of approximately 20%. With the closing year-end rate being US$1 to 2.15 lira.

Now please turn to Slide 8 and I’ll hand back to Rod.

Rod Antal - Chief Executive Officer

Thanks, Mark. We’ve demonstrated the key strength of this company is the delivery of greenfields exploration into production in Turkey. We recently released the results of our exploration program for 2013 together with our plans going forward. We have a great deal of organic growth potential building to our portfolio which is recently being prioritized based on geological information obtained over the past few years.

Therefore we’ve refocused our exploration efforts into three categories. First two priorities are in the Çöpler District and the third is in the regional exploration. In the Çöpler District our first priority is a discovery of additional (indiscernible) hole that can benefit from the existing Çöpler infrastructure. A number of targets have been identified through the early stage exploration work and initially we will drill on nine prospects including Bahçe and Demirmağara.

The second priority for us is in the Çöpler District is target along the 13 kilometer North, South trending mineralized built on the Eastern side of the district. There is a potential for a standalone cost of deposits along the various sales and mineralization mainly epithermal skarn and porphyry style gold and gold copper. In 2014 we’ve committed $11 million to the full district exploration program. The third part of our efforts what we focus on the Turkish regional exploration but we have seven active projects outside of the Çöpler district. In 2013, a great deal of the exploration budget was targeted at Dursunbey in the Central West of Turkey.

We recently released the drill results of the 2013 drilling program and while they are encouraging, I would caution that this is still at a very early stage. Initial drilling at Dursunbey returned a number of excellent near surface intercepts including a 26.5 meters of 7.9 grams of gold and 20.6 meters at 10.8 grams of gold per ton. The 2014 exploration program includes infill and extensional drilling with the aim of determining the continuity and extent of the mineralization at Dursunbey. The 2014 exploration budget for the regional program is $9.6 million.

And please turn to Slide 9 for an update on Çöpler sulfide projects. As I have said from the start of this call, we would normally have tried to separate the DFS update from the financial release. But given the importance of the DFS work to Alacer in the next few months and just as importantly the recent structured and systematic project to understand why a positive gold reconciliation exists from the sulfide ore mine today, the timing coincides with this financial release. I want to say from the start that the outcomes of the 5,000 ton per today whole ore pressure oxidation DFS are on track to be released in Q2 2014. A number of work streams are completed or nearing completion and will soon – and we will soon begin our internal review process. Importantly, (tasks) such as supplemental environmental impact assessment will be ready for submission to the regulators this month.

Now, moving to the positive sulfide gold reconciliation, in 2013, we started to mine material quantities of sulfide ore. Initially mining was in the Manganese Pit and while of the positive gold reconciliation results were encouraging, we began a review to determine why this bias existed in the Manganese Pit only. Later in 2013, we started to mine in both Main and Marble Pits where we saw the significant positive gold reconciliation continue and this continues today. On a contained ounce basis, this had led to an almost 40% positive reconciliation across all three pits.

We recently began an extensive work program to understand the factors contributing to these positive gold reconciliations. This work includes review on the drilling database, how the sulfide resource has been estimated, the characteristics of the sulfide ore mine today and completing a discrete validation drilling program. It is still too early to say conclusively what are the exact factors linked to this positive bias. Obviously, we would like to include the outcomes of this resource reconciliation project into our DFS. But it is dependent on the timely completion of the work in the validation drilling program. I would also like to take this opportunity to add that until such work is complete, the impact of such reconciliation and its impact on the definitive feasibility study is unknown and therefore subject to uncertainty. Finally, I reiterate the resource reconciliation work will not delay the release of the definitive feasibility study in quarter two this year.

Now please turn to Slide 10 and we will wrap up before turning over to questions. In closing, I would like to summarize the strength of Alacer. In 2013, we delivered a very strong safety, operating and financial results from Çöpler. Our experienced team in Çöpler has demonstrated very capable exploration, development and operating skills and our skills are complimented by a joint venture partner Lidya Mining. Çöpler’s low cost heap leach production continues to support the strong positive cash flows. And we look forward to releasing the DFS outcomes in the coming quarter. And finally, while I appreciate the market isn’t ascribing value to exploration results at this time, I believe that are recent exploration update provided some insight into Alacer’s organic growth opportunities from our existing Turkish portfolio.

This now concludes our prepared remarks and I will open up the conference call to questions.

Question-and-Answer Session

Operator

Thank you. We will now begin the questions-and-answer session. (Operator Instructions) The first question is from Michael Slifirski of Credit Suisse. Please go ahead.

Michael Slifirski - Credit Suisse

Thanks. You have lot of those effusive of the questions. First of all with respect to sulfide study and the ongoing grade outperformance, what’s the risk that the initial study doesn’t have enough capacity for that additional gold, is there any risk that the feasibility comes out with a design that doesn’t have the capacity to get lower recovery or some issue that needs to be addressed?

Rod Antal

Not in some that’s the good question Mike. Good morning. The capacity we have looked at different scenarios here. I think the bottleneck that we would have would be at the end of the circuit and the gold recovery circuit, but right now we don’t think that will be an issue for us. In terms of the chemistry and the actual workings of the sulfide plant and the pressure oxidation circuit we don’t believe it have any impact moving forward.

Michael Slifirski - Credit Suisse

Terrific. Thank you. Secondly with respect to the sulfide ore on the stock pile, just looking at the increase in book value that versus increasing tons, what are you capitalizing there, are you capitalizing the mining cost plus an attributed strip ratio because it looks like you are capitalizing about some – it was about $9 a ton for that 1.3 million tons?

Rod Antal

Look Mike I will let Mark answer.

Mark Murchison

Michael, yes, that’s right. So we are capitalizing so that the cost of moving sulfide plus the ways to get to it. So managing the sites about $9 a ton that we are capitalizing and that’s sitting as a non-current asset on the balance sheet.

Michael Slifirski - Credit Suisse

Alright, thank you. Thirdly, depreciation given that you spend a fair bit of capital and a lot of those projects somehow are later in the year or commissioned during this year, as we think about somewhat the depreciation might be for calendar year ’14 I am not quite sure how to add that extra $40 odd million of CapEx we just divide that by the remaining reserve ounces or can you give us some guidance as to how we should allocate that depreciation to (indiscernible)?

Rod Antal

Yes, look Mike I think you have already problems moving that is the wrong way to approach it. But everything is pretty much split on those projects it’s little bit remaining on the commissioning for the SART plant in 2014, but its not really material. But the remaining depreciation values will be amortized over years on production basis.

Michael Slifirski - Credit Suisse

Okay, thank you. Just couple of more very small ones if I may, the tech staff (indiscernible) so can you simplify calendar year ‘14 what sort of P&L tax rate we should issue?

Rod Antal

And again I will hand over to – I will let Mark take that.

Mark Murchison

But Michael going forward our expectation is that it will come back to a normalized effective tax rate getting closer to the corporate tax rates in Turkey of 20%.

Michael Slifirski - Credit Suisse

Okay, thank you. And the expiration results on the oxide ore those two properties you have referred to, how should we think of them with respect to oxide mine life, they looked pretty interesting I assume they were in trackable distance, so what do you sort of strategically think about them with respect to continuity of oxide production?

Rod Antal

Look I think the key in this Mike as we look forward on the drillings programs that we have constructed for this year and beyond is there is a number of targets around, if you look at the map on the slide the blue color is the area that we have the highest priority for another satellite oxide into using the several infrastructures so that’s really the area where we are putting the highest priority for that top of discovery. It doesn’t necessarily have to be significant because of the tracking distance that we have in order to be grade dependent. But you can imagine if we are successful in this program we had a number of satellite ore deposits that could quickly add up to be quite valuable just by the fact that we can use the infrastructure in Çöpler. So it’s – we haven’t – we will find an expiration program around the discovery of a certain amount of ounces to meet our hurdle rates. But it might come from another deposits, it might not just be one discovery, could be a number of discoveries. So that’s what the program is designed to cover this year. We will through the drilling program and seeing what we actually uncover.

I think the issue for us as we look forward is going to be at this time when we exhaust the current heap leach capacity, its going to that they have to support potentially another heap leach build somewhere in the (indiscernible) as well, so that’s going to be….

Michael Slifirski - Credit Suisse

Thank you. Just trying to understand and I am sorry to drag it on, but if there is no exploration success and that looks highly unlikely, is it the fact that there is no significant capital remaining in additional heap leaches and if there is success what’s the step change in CapEx required to build another lift or a new pad?

Rod Antal

There is a couple of new pad areas that we have identified and the rule of thumb that we are using for a 30 million ton heap leach is about $30 million.

Michael Slifirski - Credit Suisse

Alright, thank you.

Operator

The next question is from Anthony Kuo of Bank of America Merrill Lynch. Please go ahead.

Stephen Gorenstein – Bank of America Merrill Lynch

Hi guys, it’s actually Stephen Gorenstein here. Just a couple of questions, basically on the dividend, obviously based on 20% free cash flow, can you just outline what sort of – what elements you are including in the free cash flow each year you got – previously dividends is that coming into it?

Rod Antal

Look I want to excuse Mike and elaborate a little bit on the actual calculations of the actual dividend. But I think just as a remark the dividend policy we set in 2013, so that was a new policy for Alacer. I think what you are seeing here is a result of the good operating performance that we have. The $0.02 that we declared is we have considered our future capital requirements and obviously the operating results that we just had from Çöpler over 2012 led to the $0.02 distribution back to our shareholders through an ordinary dividend. I think it’s a jump for us, it’s obviously a positive step to delivering on our commitments and I think that’s important to sort of take on board as we move forward. But Mark you want to just articulate how the free cash flow...

Mark Murchison

Just to add to that. I think the free cash flow calculation is literally the opening effectively what’s in our bank at the start of the year compared to what’s in the bank at the end of the year. And that was the move and that took into accounts the entire corporation so everything that happened within the Australian business unit as well.

Stephen Gorenstein – Bank of America Merrill Lynch

Excellent and a couple of other questions just on the sulfide and the reconciliation, obviously very positive as you have outlined strongly (indiscernible) can you give us an idea of how much more glide and how much less tons that encapsulates?

Rod Antal

It’s more a complex question just asking it a sort of global level monthly because it does differentiate by pits and by mine so it does vary. I think the biggest thing here is just really to take away as we clearly mentioned it obviously last year as we are mining in the Manganese Pit layer on the year we are saying that the positive box coming up. That was obviously very interesting for us. But given the fact that materially the larger quantities of sulfide that was going to come from the mine at Marble Pit, it was interesting, but it wasn’t sort of I guess, a lot of changing. As we moved into the Main and Marble Pits what we have actually seen is a higher contained gold positive reconciliation from those two pits and that continues. But importantly the other two pits are really going to provide the larger amount of sulfide ore for the pressure optimization study that we are completing here in the next couple of months. So what need to be, an opportunity has obviously it’s going to be our attention and we have taken a lot more structured approach to problem solving and understanding why these positive bias exist. And at this stage is still too early tell for sure exactly what it is, but it’s a high class problem for us to have right now. And we will just continue that work and we will publish it. But these that you are asking for, I think we will start to give more detail as we start to uncover and start to understand what exactly is driving that positive bias.

Stephen Gorenstein – Bank of America Merrill Lynch

Excellent and just one question on that, do you expect the study on the reconciliation to be done (confident) DFS or not?

Rod Antal

We are doing everything in our power to progress that study as quickly as we can. It’s obviously very complex and there are a number of checks and balances along the way that we have to go through to conclude that study. So we do everything we can to get to a point where we would like to have some inclusion of whatever the outcomes are in the new – particularly in the new 43-101 statements that we published for the definitive feasibility. But if we can’t we’ll progress it as far as we can and understand what’s left when we end up publishing the DFS. So one hold is up from a DFS perspective but we will have to wait and see just how fast we can get the work done.

Stephen Gorenstein – Bank of America Merrill Lynch

Thanks Rod. I appreciate that.

Operator

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

David Haughton - BMO Capital Markets

Hi Mark and Rod. I got a couple of questions for you. Firstly you mentioned the supplementary EIA. What sort of timeline do you have for approval on that?

Rod Antal

Thanks, David. Look it is supplementary and I think it’s important to understand what. When we originally got permitted Çöpler we actually permitted for sale and I also look at – as well as in that tailing stand. So that has been permitted already for that type of infrastructure. So the supplementary part is really – it’s a refresh to go back over the original permitting and to refresh it for the new requirements for the pressure oxidation. So that’s why it’s supplemental so it’s not starting from scratch and I think that’s a very important thing to understand. That the process itself look if you take anywhere between six to nine months it’s (Technical Difficulty) there is a consultation process that we have to go through etcetera. So it’s well set out, it’s well understood from our basis, but it will still take it, the best part at least nine months to complete that.

David Haughton - BMO Capital Markets

Okay. So worse case might be by year-end then?

Rod Antal

Look I think that’s what we’re planning for yes from that then obviously the late permit work can start once the EIA is secure.

David Haughton - BMO Capital Markets

And what permits would be required beyond the EIA approval to move forward on your sulfide plants?

Rod Antal

So it’s really two permits, the treasury and forestry permits and that would be – that is basically just transitioning it from treasury and forestry related commercial use. So it’s similar to what we’ve done again before. Again it’s not – we’ve got the majority of the line used but there will be extra requirements to reach the tailing stand where it’s larger than what we had originally anticipated from the CIO circuit.

David Haughton - BMO Capital Markets

Okay. And just leaving on to the DFS coming up. What can we expect for it to contain, what level of detail would you be disclosing in it?

Rod Antal

Look it will be a pool of DFS study David. So we’ll have all the normal components that will have for the full engineering, the metallurgy and all the other components that you’d expect to see in a definitive feasibility. The financial result in it from that obviously we’ll then progress in our 43-101 statement. So that will happen in 45 days from the date we release the results of the DFS.

David Haughton - BMO Capital Markets

So it would also include expectations of CapEx, OpEx timelines, production profiles all that kind of stuff?

Rod Antal

All the important things that obviously everyone needs to be hit the project, yes.

David Haughton - BMO Capital Markets

And can you give any more refinement on Q2 release? Are we looking at the end of the quarter of somewhere in between?

Rod Antal

Look it’s still got ways to go in terms of our internal work. That is really going through all of the separate works that are coming together here now to create good review. And then obviously they’re putting it all back together and packaging it out. So it’s still months away from completion.

David Haughton - BMO Capital Markets

Okay. And as part of the consideration cash flow and your capacity to fund that would be in there as well. Would you also be exploring avenues for debt facilities if need be?

Rod Antal

David look I think we thought that the actual engineering and technical work that’s going on the phase, we have a number of parallel streams and obviously for us this is important the technical study and one of them we just talked about was the – completing the environmental impact study that will be the – that social license work that we’ll do to understand the community relations framework that will operate in, in the future. And then another stream is the financing stream.

So as I said before really the key to this is going to be to understand the capital commitment schedule which will come out of here in the next little while which will tell us whether we have any funding requirements if we had a negative cash balance for a period while we had a significant capital commitment. So we are looking at alternatives to whether we might need some sort of credit facility, it might just be a revolver type facility to help this through and make sure we’ve got enough working capital while the construction program goes on but again they are jus the options that we’re looking at.

David Haughton - BMO Capital Markets

Alright. Thank you, Rod. Look forward to that important update.

Rod Antal

Thank you.

Operator

The next question is from Stuart Dodd of Renaissance Asset Management. Please go ahead.

Stuart Dodd - Renaissance Asset Management

Hi guys. I was just curious has the sulfur reconciling in the sulfide ore?

Rod Antal

Hi Stuart, look it’s I think the good news from this is that as we’ve been bringing this sulfide ore to the stockpile the sulfide within our range of expectation. So we haven’t seen any grade variations to the sulfur something which obviously is very important as we move forward.

Stuart Dodd - Renaissance Asset Management

Okay, great. Thanks.

Operator

Next question is from William Morgan of Intrinsic Investment Management. Please go ahead.

William Morgan - Intrinsic Investment Management

Hi gents, two questions, one a bigger picture, the other on (indiscernible). Just on the (indiscernible) how does they – tax liability increase on a depreciation?

Rod Antal

Well I hand it over to Mark.

Mark Murchison

William the chart explains is simple. It’s totally complex and very technical accounting I guess. That we report all of our numbers in U.S. dollars so our book value of our assets in U.S. dollars, but our tax basis actually in Lira. So when you compare the two then if you had $100 or so of book value in U.S. dollars and Lira is depreciating in a modest out of the year say $80 with the depreciation it goes down to only $60 so you then from a deferred tax liability perspective you end up with a bigger deferred tax liability that you need to recognize and the offsetting to that is to tax expense. So slightly completed but I hope that explains it.

William Morgan - Intrinsic Investment Management

Thank you. Just given the political elections, can you just – I appreciate it’s isolated and not much but just is there any risk in the manifestation of changes in bureaucracy or their attitude towards the company in terms of approval. So risks on tax base and range, just – should embrace on any potential risks?

Rod Antal

Sure, look obviously I mean there’s quite a lot of news like coming out of Turkey right now and for us obviously we watch that very closely. I think look the real indicator here for us is in maybe what’s going to happen here in the overall elections is the elections will take place at the end of this month. I think that will be – which is the end of the March that will be certainly an indicator of potentially what might happen in the future. But and still that stays I think it never just be pure speculation on my part. I think from our perspective though and operating in Turkey and having very strong relationships with the regulators and the people, the people that mattered for us to be successful I mean that continues underground.

And I think what’s important is been happening in Turkey just over the last particularly over the last period there’s been a certainly a permitting blockage if you like in the system in Turkey where a lot of the permits were referred to the Prime Minister’s department for approval. Just recently we’ve actually seen that being freed up and those permits being referred back to the appropriate government deposit to go through the process. So that’s been a very positive outcome over the last period even in times where there is elections going on. The other thing that we saw more recently as well which I think is also another positive is the auction process whereby you can obtain exploration licenses and landholding around Turkey has also started to begin as well. So that’s another positive indication that while there is a democratic process going on in the elections in Turkey there at the bureaucrat level or in the government department level they are still working, so very positive outcomes.

William Morgan - Intrinsic Investment Management

Monitoring trying to in which respect?

Rod Antal

Okay. We are going to say we mostly will be able watch it and we will take on board really what happens.

William Morgan - Intrinsic Investment Management

That’s been on any business sentiment expressed or they are neither is much revenue as I can get so no commentary that increased taxation we are making on taxation agreements?

Rod Antal

Now, look I am not at all nothing that – we have very strong relationships particularly with our local district in Turkey and obviously local regulators (indiscernible) I mean around goes on that share from itself. I haven’t heard of any talk about changes to the legislative regimes that would impact us financially from taxation considerations or whatever. We have actually just gone through a significant tax review which is just normal process maybe again committed that with a pretty positive results, so I think it is - I haven’t heard of anything already speculation of.

William Morgan - Intrinsic Investment Management

Thank you.

Operator

Next question is from Raj Ray of National Bank Financial. Please go ahead.

Raj Ray - National Bank Financial

It seems I have a quick question on the cash taxes paid during Q4?

Rod Antal

Could you tell again Raj so it wasn’t particularly clear.

Raj Ray - National Bank Financial

The cash taxes paid during Q4.

Rod Antal

With the question was specifically on why were they – what they were or.

Raj Ray - National Bank Financial

Yes, what they are?

Rod Antal

The tax expense or the taxes paid?

Raj Ray - National Bank Financial

Yes, the taxes paid?

Rod Antal

I will hand that one over to Mark.

Mark Murchison

Raj, we did – we certainly had some taxes paid in Q4, so we had some corporate tax payments to make because we – as I said our tax rate is actually – effective tax rates increased in Turkey as we have less incentive tax credits than we had previously. So that’s probably the mind driver and there are just really normal corporate tax payments. So in Turkey the way it works you pay your quarterly tax installments or corporate tax on a quarterly basis and then you do effective true up in April following on that.

Raj Ray - National Bank Financial

And what was the amount that you paid in Q4?

Rod Antal

Yes, Raj I don’t have that data with me. We can get back to you with that.

Raj Ray - National Bank Financial

Okay, thank you. That’s it from me.

Rod Antal - Chief Executive Officer

Thank you, Raj.

Operator

This concludes the Q&A session. Ladies and gentlemen, this concludes today’s conference call. You may now disconnect your lines. Thank you for participating. Have a pleasant day.

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