Uranium One's CEO Discusses Q3 2012 Results - Earnings Call Transcript

Nov. 6.12 | About: Uranium One (SXRZF)

Uranium One Inc. (OTC:SXRZF) Q3 2012 Earnings Call November 6, 2012 10:00 AM ET

Executives

Chris Sattler – CEO

Scott Melbye – EVP, Marketing

Steve Magnuson – EVP and COO

Graham du Preez – EVP and CFO

Analysts

Adam Schatzker – RBC Capital Markets

Edward Sterck – BMO

Brian McArthur – UBS

Oscar Cabrera – Bank of America

Ralph Profiti – Credit Suisse

Tyler Langton – JPMorgan

Operator

Good morning. My name is Melissa [ph], and I will be your conference operator today. At this time, I would like to welcome everyone to the Uranium One third quarter results conference call.

All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question and answer session. If you would like to ask a question at this time, simply press star and then the number one your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you.

Mr. Chris Sattler, Chief Executive Officer, you may begin your conference.

Chris Sattler

Thank you, Melissa. Welcome everyone to Uranium One’s third quarter 2012 results conference call. With me today are Steve Magnuson, our chief operating officer, who will update you on our operational results for the quarter. Our chief financial officer, Graham du Preez, who will review our financial results; and Scott Melbye, our executive vice president of marketing to provide you with some commentary on the market.

Before we begin, let me draw your attention to our cautionary statement. This upcoming discussion does contain certain forward-looking information with respect to Uranium One’s operations and financial results. Actual future results may differ from expected results for a variety of reasons which are described in the cautionary statements regarding forward-looking information in our press release.

Turning to our third quarter 2012 highlights, third quarter is proven to be another strong quarter operationally for the company. Uranium One had total attributable production of GBP3.1 million for the quarter, an increase of 23% over the prior year period. Our average total cash cost per pound sold remains the lowest in the industry and was $16 per pound during the quarter.

Our average realized sales price was $49 per pound in line with the average spot price of $49 per pound for the quarter. Revenue was $143 million on GBP2.9 million sold. And during the quarter, we did determine that it would not be economical to mine, the South Zarechnoye satellite deposit due to lower uranium prices following the Fukushima incident together with a decrease in the resource base resulting from recent exploration work.

As a result, we incurred non-cash expenses $79 million by writing down the carrying value of South Zarechnoye. This resulted in a net loss for the quarter of $61.6 million or $0.06 per share.

It is important to clarify that our production plans from the existing Zarechnoye mind remain unaffected. Our adjusted net earnings for the quarter were $7.6 million or $0.01 per share compared to adjusted net earnings of $46.4 million or $0.05 per share during Q3 of 2011.

Cash flow from operations before changes in working capital was $73.3 million for the quarter or $0.08 per share. Our cash position remains strong with $442 million in cash and cash equivalent as of September 30th, 2012.

Turning to the corporate update, slide 5, Uranium One now owns 100% of the Honeymoon mine after receiving all regulatory approvals for the withdrawal of Mitzui from the joint venture. The corporation recognized the gain of $17.2 million as a result of this transaction.

During the third quarter, Uranium One made strong strides with its sales and marketing efforts by concluding two contracts with new customers. Of note, the United Arab Emirates announced the award of $3 billion worth of fuel supply contracts to six global suppliers including Uranium One for the supply of U308. This long term contract will meet a portion of the uranium requirements of Barakah Nuclear Power Station scheduled to start up by 2017.

Furthermore, Uranium One concluded its first contract with the Chinese utility which calls for the supply of Uranium to China Guangdong Nuclear Power Corp in 2012 and 2013. As well, on October 15th, the minister responsible for the environment in the vice president’s office issued an environmental impact to such certificate to Mantra Tanzania in respect to the Mkuju River Project. The issuance of this certificate completes Mantra’s application for a special license for the project and represents a significant permitting milestone.

Turning to slide 6, Uranium One continues to ramp up its production and we continue to have a steady state goal of producing at a rate of 22 million to 26 million pounds per year by the end of this decade. We expect that growth will be driven by our assets in Kazakhstan, the United States and Australia in the near term. And that production from Mkuju River could drive our growth in the second half of this decade.

Throughout this ramp up, our strategy is to remain the lowest cost producer in the industry. Our production guidance for 2012 remains unchanged with 11.6 million pounds for our production and we expect our average total cash cost per pound sold to be $19 per pound. We continue to expect attributable sales for the year will be 11 million pounds for 2012. With last night’s press release, we have provided detailed guidance for 2013 and consolidated production guidance for 2014.

Total attributable production for 2013 and ‘14 is estimated to be 12.5 million and 13 million pounds respectively. The breakdown of the production cash cost and capital expenditure guidance can be seen over the next two slides in our webcast and is also included in our MDNA.

During 2013, our average cash cost per pound sold is expected to be approximately $19 per pound, in line with our guidance of $19 per pound for 2012. We expect attributable sales to be approximately 12.5 million and 13 million pounds in 2013 and ‘14 respectively. We expect attributable capital expenditures in 2013 to be $107 million for oil field developments and $66 million for plant and equipment, totalling $173 million for our assets in Kazakhstan, the United and Australia.

In 2013, general administrative expenses excluding any non-cash items are expected to be approximately $40 million and exploration expenditures are expected to be $8 million.

At this point, I’d like now to turn the call over to Scott Melbye for an overview of the uranium market.

Scott Melbye

Thank you, Chris. Market prices for Q3 2012 ranged between $46.50 and $49.50 per pound U308. After trading at or above $50 per pound for close to one year, the uranium market broke through that support level as a result of ample spot supplies, meeting demand of a more discretionary nature. This became even more pronounced in October and into November with the price currently residing at around $41 per pound.

Selling activity has been dominated by producers closing sales for year-end cash flow and by traders unwinding long positions and engaged in short selling. The volumes of transactions have been significant and lower prices continue to draw discretionary demand. So this material is clearing the market. While these influences may continue to persist, they tend to be of a short term nature and not indicative of a shift in the underlying fundamentals.

If anything, the medium to long term fundamentals have improved with the announcement of mine expansions being deferred indefinitely and some companies declaring that they will not go forward with significant mining projects due to market conditions.

On the demand side, China have announced that they are resuming approvals of new reactors on identified coastal sites, following a hiatus to review post-Fukushima safety issues. These developments will add to the 15 units already in operation and the 26 currently under construction. As such, we believe that the installed capacity of between 60 and 70 gigawatts is achievable by 2020.

In Japan, we’re seeing mixed signals where the government announced the gradual phase-out of nuclear energy by 2040 only to backtrack on those plans due to their limited energy options and pressure from business interests. We believe that the Japanese nuclear industry is probably is on more of a long term recovery plan than that of a phase-out and will continue to rely on nuclear for a reduced yet meaningful 15% to 20% of their energy needs.

Restarts of idle Japanese reactors will now not occur until the second half of 2013 due to new safety guidelines issued by the independent Japanese regulator in Q2 2013. This and billions of dollars of capital upgrades being undertaken at Japanese reactors should go a long way towards regaining public confidence in that country.

Turning to Uranium One, we realized the 2.9 million pounds of sales in the third quarter at an average price of $49 per pound, which is in line with the average spot price for the third quarter. Approximately 40% of our 2012 sales guidance of 11 million pounds remains in the fourth quarter and is already under contract. The adage that sales volumes are not uniform across calendar quarters, certainly holds true for 2012, and as a usual, is a result of customer delivery scheduling and logistical considerations.

The contracting highlights. Chris mentioned regarding China and the United Arab Emirates demonstrate the importance of the emerging markets to Uranium One success going forward. Our contract portfolio has a solid grounding in the established markets, particularly the United States. However, our ability to grow will be supported by a strong presence in this rapidly expanding nuclear markets.

At this time, I’d like to turn the call over to Steve Magnuson for an operational overview.

Steve Magnuson

Thank you, Scott. The third quarter of 2012 was once again a strong quarter for Uranium One operationally. Total attributable production was 3.1 million pounds for the quarter in cash cost average $16 per pound sold. Uranium production at our Kazakhstan operations was above our estimates for Q3 as uranium concentrations from new well fields at all of our mines are meeting or exceeding targets. The supply of asset has been steady and we are receiving our full allocation.

At Willow Creek, production continues to ramp up and flow rates and uranium concentrations are increasing what well field solution concentration is now averaging more than 40 milligrams per liter. Well field construction and development also continues as planned for future mining areas of the Willow Creek deposit.

The Honeymoon Project became a wholly owned subsidiary of Uranium One on September 28th and Uranium One continues to be the operator. Production operations were shut down for a portion of the third quarter to just drying procedures, but the plant has since resumed operations.

I will now turn the call over to Chief Financial Officer Graham du Preez.

Graham du Preez

Thank you, Steve. Revenue was $142.6 million in the quarter, lower than revenue of $157.7 million in Q3 2011 due to a lot of average realized [inaudible] price and lower sales volume. Operating expenses was $44.6 million or $16 per pound sold in Q3 2012. The appreciation for the quarter was $38.2 million or approximately $13 per pound sold compared to $41.8 million or $14 per pound sold in Q3 2011.

Earnings from mine operations were $38.8 million in Q3 2012 compared to $73.7 million for the same period in 2011. General [inaudible] expense including stock option expenses of $1.7 million was $11.8 million for Q3 2012, compared to $14.3 million including stock option restricted share expenses of $2.3 million in Q3 2011.

The net loss for Q3 2012 was $61.6 million or $0.06 per share compared to net earnings of 45.8 or $0.05 per share for Q3 2011.

The net earnings for Q3 2012 was $7.6 million or $0.01 per share compared to adjusted net earnings of $46.4 million or $0.05 per share for Q3 2011. One of the items added back when calculating net earnings is the unrealized foreign exchange effect of our ruble bonds on net earnings.

All the ruble cash flow is on the bonds that are converted into U.S. dollars through cross-currency interest rates swap. The swap effectively converts the ruble bonds in terms of [inaudible] fixing our principal and interest requirements in U.S. dollar terms.

While the swap is in place, we are not exposed to any ruble currency risk. For accounting purposes, however, the [inaudible] certain foreign exchange gains or losses in the income statement during the term of the ruble bonds at each reporting period.

Accumulative effect of ruble U.S. dollar currency movement on the income statement is expected to be zero over the full term of the ruble bonds and swap. Make foreign exchange losses of $5.3 million were recognized in the income statement for the third quarter.

Consisting of foreign exchange losses of $26.5 million on revaluation of the ruble bond, the closing dollar rate on the reporting day offset by the fee value changes in the swap of $21.2 million. In terms of fee value loss of $13.3 million was recorded against the fee value and each reserved in equity bringing a total equity movement to $7.9 million.

During the third quarter, Uranium One determined that it would not be economical to mine the South Zarechnoye deposit due to a decrease in Uranium processes to Tokushima incident together with a decrease in the South Zarechnoye resource resulting from recent exploration result and the completion of an economic assessment.

The South Zarechnoye deposit is adjacent to Zarechnoye deposit where the corporation is currently mining. The carrying value of the Zarechnoye monetization been written down by $90.2 million offset with deferred taxes of 11.1 million resulting in a net impact of $79.1 million.

The two years withdrawal from the joint venture was finalized in September upon receipt of the last regulatory approvals. The corporation recognized the gain of $17.2 million on the two years withdrawal. The corporation now owns 100% of the project.

On September 30, 2012, the corporation net cash and cash equivalent of $442 million compared to $619 million at December 31, 2011. Working capital was $628.7 million at September 30, 2012.

I will now turn the call back to Chris.

Chris Sattler

Thank you, Graham.

Operator, that completes the formal part of the conference call. at this point, We’d be happy to take some questions.

Question-and-Answer Session

Operator

(Operator instructions) Your first question comes from the line Adam Schatzker from RBC Capital Markets. Your line is now open.

Adam Schatzker – RBC Capital Markets

Good morning. Chris, I’m wondering if perhaps you could give us a little bit more detail into specifically what affected the economics at South Zarechnoye. You mentioned there was a decrease in the size of the resource. I’m assuming that there was a historical national resource there.

If you could give us a little bit of an idea what happened there. And if perhaps, there’s any read through to the other projects.

Chris Sattler

Yes, Adam. The time that we acquired that asset, there was a rushing resource classification system of P1 resource. And over the last two years, we’ve done drilling and exploration where to prove up, attempt to prove up those P1 resources to a higher category to allow us to do oil field design and mine planning.

Unfortunately, those P1 resources did not convert in the same ratio that we’ve seen at our other operations. I think if you look at the location of the Zarechnoye mine and the South Zarechnoye deposit in relation to the other mines in Kazakhstan, it’s in a completely different area. I think it is specific to South Zarechnoye.

I should say that we do see exploration potential at Zarechnoye itself. And now that we’ve made a decision on the satellite deposit, we’ll turn our attention back to exploring at the Zarechnoye mine proper. So, unfortunately, I think it’s a one-off event that’s related to South Zarechnoye specifically.

Adam Schatzker – RBC Capital Markets

Oh, okay. Thank you. And just very quickly as well, asset consumption, of course, being one of your major expenses in running these mines. I just wonder if you could give some ideas how that’s trending in each of the deposits if it’s stabilizing going up, going down.

Steve Magnuson

Consumptions?

Chris Sattler

Asset consumption, yes.

Steve Magnuson

Yes. Adam, this is Steve Magnuson. The asset consumption has been consistent. We track it on the unit basis per ton of uranium or extracted and we’re seeing similar usages overtime. So, nothing alarming there. And we are getting our budget at asset, so we feel pretty good about the asset situation right now.

Adam Schatzker – RBC Capital Markets It’s safe to assume the higher cost mines consume more assets?

Steve Magnuson

Yes, absolutely.

Adam Schatzker – RBC Capital Markets

Okay.

Steve Magnuson

On the west or western side of the basins there you will see higher asset consumption.

Adam Schatzker – RBC Capital Markets

Great. Thanks very much. I appreciate everybody’s assistance, as always.

Steve Magnuson

Thanks, Adam.

Operator

Your next question comes from the line of Edward Sterck from BMO. Your line is now open.

Edward Sterck – BMO

Good morning gentlemen. I’ve got two questions for today. The first is on the 2014 guidance. It’s just the phase of ramp up is slowing slightly versus if you would extrapolate from the phase of growth so far. And which project potentially lacking behind a little bit over that 2014 time period?

Chris Sattler

Yes, Ed. This is the first time that we’ve introduced formal 2014 production guidance. If you look at the mines we have in Kazakhstan, really, four out of six are at or very close to full production levels.

The growth for us in Kazakhstan going forward is coming from Akbastau, and very gradually over the long-term Kharasan. So near term growth, we expect will come from Akbastau. It’s not a linear interpolation of 2012’s production to full capacity. It’s more a U shape or more of an exponential curve weighted towards 2016. So, that’s the situation in Kazakhstan.

In the United States, we are continuing to ramp up production levels from Willow Creek. We expect to achieve about a million pounds a year production. And to get to full production levels of GBP2 million a year, we’d like to see higher uranium prices.

Edward Sterck – BMO

Fair enough. Thank you. And then my follow-up question is, just on South Zarechnoye, if you look at the technical report, it suggest that the regulator was very keen for product launch to be put in place there by now.

Is there any possibility of losing the minimal license there having put that in place and now obviously taken the right off against the some of the carrying value.

Chris Sattler

Yes, I think, Ed, we’ve made our decision together with Adam on that project. We’ll let the license lapse.

Edward Sterck – BMO

Okay. Thank you.

Operator

Your next question comes from the line of Brian McArthur from UBS. Your line is now open.

Brian McArthur – UBS

Good morning. I just want to go back to Mkuju River for a bit. You talked about the definitive feasibility study and Q1. But your option sort of comes up June 7th. Is that going to be early in Q1? I mean, if it starts to get late in Q1 by the time you get all the data in in a couple of months to decide on the options funding. How do you work through that process if the timeline gets compressed?

Would you pre-fund? Would you potentially even look at re-extend the option or just some general thoughts, and all of that?

Chris Sattler

Brian, what I would say right now is the company is focused on completing our permitting negotiations that depends of the government. That’s task number one. Task number two is to complete that feasibility study work. And we are now at the point with our major shareholder of going through that review process of the work done so far.

I would say that ERM, they do have quite a lot of historical and current operating expertise and they’re bringing some new ideas to the table. So we will evaluate those.

But in my mind, I see this dual tracking the permitting and the feasibility study process. Once those two tasks are complete, we’ll be able to make a decision as a management team. But until that work is done, there’s been no decisions made.

Brian McArthur – UBS

Okay. Fair enough. Thanks

Chris Sattler

Thanks, Brian.

Operator

Again, if you would like to ask a question, press star and then the number one on your telephone keypad. Your next question comes from the line of Oscar Cabrera Bank of America. Your line is now open.

Oscar Cabrera – Bank of America

Excuse me. Good morning everyone. Chris, just wondering if you can provide context around your decision on an economical or an economic project. What sort of long-term uranium price were you using for your decision to show the project in Zarechnoye? And is there minimum rate of return overall weight that you guys are using?

Chris Sattler

Yes, Oscar, I can’t disclose our internal economic parameters. But to suffice to say, we would need to see significantly higher uranium prices in order to make South Zarechnoye economic.

And the decision was based on two factors; one, the uranium price, but also the resource and the complexity of the ore body. So, that’s the comment on the uranium price.

In terms of how we evaluate projects and what internal rate of returns and things like that that we’re looking for, each are evaluated on a case by case basis. But I would hesitate to give you exact hurdle rates for the company?

Oscar Cabrera – Bank of America

Okay. Let me try it like this, based on what you’re seeing with uranium price and uranium demand over the next few years, the profile that you have at the beginning of this year over the next five years, is that significantly different to what you’re working towards right now?

Chris Sattler

Yes, Oscar, when we analyse the market, we take the base data that’s provided by analyst and industry trade publications and we make our own judgments about which mines are going to be going into production and meeting their targets and timelines. And so, on that adjusted basis, and even if you didn’t adjust those assumptions, there is a need for new mines to be built to be meet growing demand. And demand, I think, it’s important to notice it’s still growing.

So, then you look at that section of new supply that’s needed to come online. Some of that new supply will need a higher uranium price in order to go ahead. In my mind, I think our projects are at the lower end of the cost curve. And that’s a benefit of our strategy, which is to focus on the lowest cost operations.

So, I think our mines are going to be the first to fill that requirement going forward. So I think in the medium to longer term, absolutely not our strategies, not changed.

Oscar Cabrera – Bank of America

Strategies not changed. And then if I can just ask one more please. One of the previous questions, I think it was southwest though that’s growth near term and then Kazakhstan. And then you talk about a U-shaped production profile.

Can you give us at least a sense of what sort of levels are we looking at in the medium term, like 15 or 16?

Chris Sattler

Yes, if you look at one of the earlier slides in the webcast, we showed you our steady state production levels from each particular mine, Akbastau and Karatau together we see producing at about 5,000 tons. Zarechnoye itself, I think we can assume, 970,000 going forward, and those figures are on 100% basis.

The remaining mines, Akdala, South Inkai, those are at full production that are very close. Kharasan is only going to ramp up as quickly as it can repay debt. So, I see that mine being the last in Kazakhstan to achieve full production. and that’s towards the end of the decade.

Oscar Cabrera – Bank of America

Okay. Great. Thank you. That’s helpful.

Chris Sattler

Thanks, Oscar.

Operator

Your next question comes from the line of Ralph Profiti from Credit Suisse. Your line is now open.

Ralph Profiti – Credit Suisse

Good morning. Thanks for taking my question. It’s more for clarification. I’m just wondering, does the 2013 guidance at Akbastau assume that section four comes in or are you able to get that up step of, say, GBP1 million of production only from sections one and three?

Chris Sattler

Yes. No, Ralph, we do have some production coming in from section four, and that can be treated through the Karatau plant, which is what we’re currently doing with any solutions from the other blocks.

Ralph Profiti – Credit Suisse

I see. Okay. Thanks very much.

Chris Sattler

Thanks.

Operator

Your next question comes from the line of Tyler Langton from JPMorgan, your line is now open.

Tyler Langton – JPMorgan

Without the Southern deposit, I mean, could you just comment a little bit on how that case impact cost going forward in this other 2013 level? Is that kind of something that you think you could stay at those levels?

Chris Sattler

Tyler, yes, we went through a rigorous process here over the last couple of months looking very hard at the cost and capital expenditure proposals of all of our Kazak mines. I’m pleased with the outcome of where we’ve gotten to, which is maintaining our cash cost guidance of $19 per pound.

Now, of course, individual mines will vary. But I think the figures that you have for Akdala, South Inkai, Karatau, Akbastau, $15, $18, $13 for Akbastau and Karatau. Those are good numbers to use going forward. Zarechnoye, I believe our guidance is 24, $6, $26 per pound. For 2013, which is also a good number going forward.

Now, we’re seeing –

Tyler Langton – JPMorgan

Good price. Good run rate within the –

Chris Sattler

I think, that’s a good run rate. That’s a good run rate. Inflation in Kazakhstan is I’ve been saying that a safe assumption is to use what Kazak CPI is, which is running at about 7% per year. That’s going to impact wages. So, that’s a reasonable assumption going forward.

Tyler Langton – JPMorgan

All right. Great. Thanks so much.

Chris Sattler

Thank you.

Operator

Your next question comes from the line of [inaudible] from Canaccord Genuity. Your line is now open.

Unidentified Analyst

Hi, good morning guys. Just in regards to CapEx, I appreciate the guidance for next year $173 attributable. Is that a good run rate for sustaining capital post 2013? Because there’s really not a lot of projects going on next year.

Chris Sattler

Hi, Harris [ph]. In terms of sustaining capital, the way we broken out our capital expenditure guidance. You can look at well field development. So, for example, Akdala, $11 million next year. That works out to be roughly $4 per pound sustaining capital.

And depending on the depth of the deposit and how closely we have to space our drilling, the numbers you see for well field development for the mines that are full production are good assumptions going forward. Mines that are in ramp up, such as Akbastau, we’re going to be developing more well fields ahead of us. So, that capital expenditure would be a little bit higher than a sustaining level.

But Akbastau, I think the best proxy for sustaining capital at that mine is what’s happening at Karatau because that’s at full production and it’s neighbouring ore body.

The second column in our guidance is plant and equipment. There are some special projects that are underway, such as building out the satellite plant at Akdala. That should be completed next year. So, I think we’ve got some dryers that are being installed, that should be completed next year and done.

Akbastau, there is some construction activity as well. So there are some one-off expansion capital projects I’d call them.

Unidentified Analyst

Oh, okay. So then in 2014 and beyond, we should start to see that plant equipment number come down for these mines.

Chris Sattler

Correct.

Unidentified Analyst

Okay. Thanks, Chris.

Chris Sattler

Thanks.

Operator

Your final question comes from the line of John Hughes [ph] from [inaudible]. Your line is now open.

Unidentified Analyst

Operator, just two quick ones, your fourth quarter sales number. I worked around 4.4 million and you’d noted a million pounds and you’d noted that it was the – that that sales number was under contract. Is the full 4.4 million contracted? And is that a fixed price?

And I’m just sort of trying to get a feel for exposure to the spot price over the course of the quarter?

Scott Melbye

John, this is Scott Melbye. As you know, our portfolio is tied largely to spot prices at time of delivery. So, you can assume that those are under contract and that’ll be delivered under the prevailing spot prices.

Unidentified Analyst

Okay. Great. And I’m just wondering as well, the HEU contract at the end of next year expiring, could you provide sort of a perspective on where you think that downgraded material? Is it going to stay in Russia? Will it continue to be produced? I’m just wondering if you have a perspective on that supply – change in the supply side at the end of next year?

Scott Melbye

Right. As you know, the HEU deal is coming to end at the end of next year. I will say that the conditions that created that deal back in the ‘90s after the break of the Soviet Union, it was a much different time than it is today. And I think it’s safe to say that the deal served a very important, non-proliferation and disarmament role. And it provided uranium side about 24 million pounds a year to the market.

But the conditions going forward are such that Russia has no desire going forward to continue with that. It doesn’t mean that Russia won’t be supplying EUP to the western market. But more so going forward, the source of uranium in that EUP is from mine production, much of it from mines in Kazakhstan like ours.

So, I think it will have a big impact. We’ll help right now. Obviously, the spot market today is oversupplied and the demand is a bit discretionary. So, I think the end of the HEU supply at the end of 2013 will be a welcome development.

Unidentified Analyst

Great. Thank you very much, Scott.

Operator

There are no further questions. I’ll turn the call back over to the presenters.

Chris Sattler

All right. Well, thank you, Melissa and thanks everyone for dialing in to our conference call. As always, if any of you have follow-up questions, please feel free to give Anton or myself a phone call. Thank you.

Operator

Ladies and gentlemen, this concludes today’s conference call. You may now disconnect.

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