Barrick Gold Corporation
Q4 2006 Earnings Call Transcript

Published: 5 Feb 2007

[Philippe Lietard:]

Thank you for joining us for our quarterly review. It is particularly good to be able to meet many of you in person, rather than guessing who is talking on the telephone as we do the rest of the year. By now you would have seen the results of the last quarter and of the year 2006, and I’m sure you would have noted also that the board of directors decided last Friday to declare dividends. Having mentioned the board, I would like to add that two of our independent directors, Aubrey Paverd, and Karl Voltaire, have joined our meeting today in Cape Town and I hope that those of you who are in the room here today can find the time to meet them. Mark will take us through the details of our operational and financial performance, so we are going to do that now. Other than to congratulate him in and his team for what has obviously been another remarkable year for the company. What I would like to do is to highlight that the fact that Randgold’s records of growth is not so much the product of chance of favorable markets. It is the product of a carefully considered strategy systematically applied. In the hectic deal-making atmosphere of the current gold market, such consistency might seem exceptionally conservative to some. But our response to them is look at the results, not only of the past year but of the years before that. The company’s history of creating and delivering value has very few peers in this. Our strategy is valued on a principle that is simple and it is sound, we invest our financial and intellectual capital in exploration to find and develop successful operations. Successful operations generate profits, which allow us to re-invest in our future and create sustainability. Randgold has highly profitable and successful operations and is developing more. The company has been profitable for six consecutive years and is forecasting further profits for the years ahead. We will use those profits to invest in building a future, and it will continue to do so for the long-term benefit of all of its shareholders and stakeholders. To be ambitious and prudent at the same time continues to be the main challenges of the company. The record shows it has been up to this challenge and that it is well prepared for the next decade. Thank you very much again for your interest in the company, and now I’ll pass you on to Mark. Thank you.

[Mark Bristow:]

Thank you, Philippe, and good afternoon ladies and gentlemen, for us in Durban, Cape Town, and also a very good morning to Victor, whose hosting our video audience in London. I had, as you’re probably all aware, intended to make the presentation from London, but I’m afraid our plans were no match for British Airways, and we thought it was prudent to get here while we could get here. And, anyway, I’m sure you’ll all agree that being in Cape Town is a whole lot better than being in London this time of the year. Again, thank you for attending this presentation and our results for the fourth quarter of the 2006 year and the yearly annual results. As always, we appreciate your interest in Randgold Resources. As you’ll have gathered from your information pack, 2006 was another good year for us with profits before tax up 54% and net profits also increasing despite the hefty tax charge at Morila. Gold production also grew in line with our guidance we have given to the market rising by 30% at a cash operating cost of $258 an ounce, and a total cash operating cost of $296 and ounce. In the first full year of operation, Loulo delivered a very satisfactory set of results and having settled down the plant and the underground operations we’ve moved on to the next phase which is the development of the two underground mines there. Work on the first of these is already underway, and at the state of Gara we have more than doubled the reserve, as you all noticed in the announcement, which you have. I’ll tell you more about both these operations a little later. Morila, on the other hand, came in with a solid contribution and while production was down year-on-year, it was in line with our expectation. Preparatory work for the bankable feasibility study is in progress at our Tongon project and in the mean time our continuing exploration program have added answers to our resource base and target for our portfolio. And as Philippe pointed out, and I see that Marco Corson is in the audience today, there marks another major milestone in the history of Randgold Resources and that is the victory of the dividend. Let’s start with Luolo, where our capital team did a really great rescue operation on the completion of the hard rock crushing circuit, which as you’ll recall was derailed by a defaulting contractor at the beginning of last year. In spite of the problem they had, the delays that had to be dealt with, the plant achieved all its design parameters for the year and in fact beat its main place capacity by a significant margin. Based on the success of the catch up drive, production of 242 thousand ounces for the year came within a whisker of our original projection. The CIL extension project which will take us for high-grade oil from the underground operations is nearing completion and we both have decided to proceed with the cyanide destruction plant given Loulo’s extended life. That’s scheduled for installation in the first quarter of 2008, and we’re going to do it in two crunches, first in Burkina and then a destruction plant following that. It will also have impact on our water control going forward. Completion of the box cut at Yalea has opened way for the sinking of the plant, which started on the 22nd of December for the first lot into hard rock. Gara, which was previously known as Loulo Zero, has been redesigned as we said we would, which has resulted in increased reserves and higher projective production. Generally there’s still a lot of oxide at Loulo and thanks to continuing exploration, reserves and resources there have again been added to in 2006. I should however point out, we only make our official reserve resource declarations during this quarter, the second quarter, along with the publication of our annual report. So the numbers that you are going to see in this presentation are before prenatal productions for 2006. Those official statements will come up with the annual financial statement. These are the very robust results from Loulo which speak for themselves. The high average gold price of $601 an ounce, received for the year were partly offset by delivering 66,000 ounces into the hedge at $435 an ounce. So received gold plots averaged out to $556 an ounce. Cash operating costs were $294 per ounce. And total cash costs were $328 an ounce, almost the same for the year as for the last quarter. Profit-per-mining were up for both the quarter at $50.2 million and the year at $57 from the $5 million. It’s worth noting that Loulo has been profitable from day one and this shows cumulative gold production of 310,000 ounces and $77 million in profits-per-mining since commissioning the mine in late 2005. Loulo's clearly a world class operation in its own right. And we believe, and I hope to demonstrate some of this later on in the presentation, it has significant potential for further upstarts. I paid tribute earlier to the great work done at Loulo by our capital team. There are often the unsung heroes of the mining industry. This selection of before and after photographs gives you some indication of the scale of the challenge that has been overcome in successfully delivering our second mine. The three stack photographs on the left are before and the four on the right are after, and you'll see if you look at the top left photo that was when we asked in the end to leave and you can see the completed construction on the right hand side. There's a lot of concrete and a lot of field work went during 2006. And the operating team as well had to keep the mine operating under these conditions for an extra year. So I think all in all we have demonstrated as before that we have a real integrated operating team within Randgold Resources and every indication is that we've got a world class team that fits with a world class operation. Our prime focus at Loulo on the capital front has now shifted to Yalea underground project which is well on its way to becoming a mine. As I have noted earlier, the development of the decon started in December and we're on track to access the first ore by the end of this year. Ore production is scheduled at 80,000 tons per month and is due in 2009. Yalea adds significant life and enhances the grade at Loulo and will dominate this profit and productions profile from 2009 until 2014. It is not only our next major growth advance but in effect the key to Randgold Resources' immediate future. Yalea's sister underground mine, Gara, we used to call it Loulo Zero, was redesigned and scheduled during the past quarter on a reserve which more than doubled to 1.4 million ounces. On this basis we can comfortably increase the extraction rate from the previously envisaged level of 60,000 tons per month to 100,000 tons per month. Development is due to start at the beginning of 2009. A twin ramp system developed from the Gara, open instead of a box cap, we'll divide the underground operation into separate mining and ventilation districts and waste parcels will be developed from inside the pit to facilitate backfall. Also highlighted on this slide is the latest model of the Gara ore body. Last quarter I mentioned that we had reinterpreted the geology at Gara and developed a model with a high-grade gold mineralization which was controlled by an overturned, anti-formal bonding structure to the stop width. 218 recognizant diamond drill holes confirmed the continuation of mineralization done and up to 400 meters down of the current wide range. And additional drilling is now underway to further test this exciting project and I'm sure you can look forward to additional information from the program. In redesigning Gara we looked at various options and in the end we decided not to go the conventional truck transport route but to use a conveyor belt system similar to that which we have planned for Yalea, which we are confident will give support the higher production rate we have planned for. And this really highlights the impact of the redesign. Not only will we be able to redesign it because we have significantly more reserves but the approach we have taken is one that fits with the Randgold Resources philosophy and that's value. NPV is our measure of value and you see the red bars indicating the bringing forward of the gold production and that hits the bottom line. Yalea and Gara underground developments have transformed the Loulo project elevating it as I've said earlier into a truly world class niche as you can see from the latest production forecast. They've extended Loulo's reserve life to beyond 2020 with production building up from the current 250 thousand ounces per year to more than 350 thousand ounces per year for the seven year period from 2009 to 2015. Speaking about 400 thousand ounces in 2011 and 2012 thanks mainly to the impact of high-grade product at Yalea. The challenge now is to find additional grade or expand the flowing capacity in order to sustain production at above 350 thousand ounces after 2015. And I think for people who know the company and who know me, we've never been able to stand on a 10 year horizon in our history and this really underpins the significance of the Loulo operation in our portfolio. Where Morila was the real company maker, Loulo we see as that solid foundation and what we can build our future. If we leave Loulo for a while and we'll come back to the exploration there and look at Morila, unhedged and debt free, it continues to be an abundant cash generator paying off $77 million in dividends to its share holders in 2006. We produced just over 516 thousand ounces for the year, down on the previous years expected because of the move to the lower rate areas of the cliff. Cash operating cost of $215 per ounce, and total cash cost of $258.00 an ounce were well contained given rising input costs, and it goes without saying that cost control remains the key priority going forward. The drilling program in the lead area is nearing completion and while it has added to the resource base around the peripherals of the ore body, but next to Morila remain elusive at the moment. These are the operating results from Morila. Production as you'll see was affected in the second half of the year by peak limitations, but this problem is being addressed and after the planned clip below design capacity in the second and third quarters production levels were restored in the fourth quarter and the plant is now operating at its full expanded capacity. Morila will continue to deliver robust cash flows for at least another four years. The two critical issues for management are to sustain improvement and recovery in the face of a lower seed grade and to ensure that the seeds availability is in the line with production demands and Morila has done extremely well in proving this recovery even with a drop off in the seed trade. So we really have learned a lot from the Morila processing and we are really starting to transfer what we learned to our Loula operation. After that brief overview of our operations let's look at what could well become Randgold Resources third line. That’s the bankable feasibility studies page and this project is due to kick off with a 30,000 meters building program and we're also selling a further round of samplings, which will improve our understanding of the ore and enable us to finalize the engineering design and appropriate approach. The difficult situation in the Cote d’Ivoire continues to make progress, and we've maintained all the way through good relations with the government as well as the other players in the process. And we're encouraged by all concerned to progress our budgets, and in fact we had and endless trip through Tongon, last Friday, I see some of the analysts in the audience today, if you have want an independent opinion, you can pick them up after the meeting. I think at this point it's worthwhile reminding ourselves that Morila, Loulo and Tongon, were produce by our own exploration efforts, and exploration remains the engine that drives Randgold Resources in line with our belief, that true values is created trough discovery and development. As I speak, our teams are out there in the field hunting for the next multi-million ounce deposit. Our footprints already covers more then 20 000 square kilometers in West and East Africa's most perspective gold region. This ground holding houses 128 prospects currently being evaluated while the search for more continues. The search is focused on but not confined to a number of priority countries within selected perspective regions and the in order to cast our net wider, we've established a specialist generative team to inspect opportunity in countries were we do not already have a presence. I believe it’s quite important to explain a little and that is that we have six countries in which we operate, five in the western circle and one in the eastern circle, Tanzania. We connect those countries on political, social and economic risks and these certain countries are comfortable in spending high risk exploration dollars. That doesn't mean that there aren’t other countries around the countries we operate, who are equally or boast an equal level of geological prospectivity but of course because of their situation, their political situation they somewhat error. And we just felt that it's important to take some of our key people and let them have a look at those countries. We've always been in the first group into a region and we want to be there in those countries if or when they emerge. I think it's also a very sobering reminder that everyone always thinks Africa, especially in emerging markets federally, move quicker than reality. Everything in Africa happens slowly. For example, with the elections, people thought it would all just happen, well it didn’t, it’s going to take time, governments take time to settle down and to understand the lay and lye of the land and the history etc. We have that experience in Mali, we’ve operated in Gara early on when they received their new republic and so we understand Africa we believe a little better than most and we understand the timelines and we believe the timelines today calls for another look at some of these countries that are in painful political conditions. Going back to those six countries, the Loulo stall, our main private area as we believe it has the potential to build the yield an additional world class deposit. We shifted recently away from the known deposits; we believe we understand them now after our extension and evaluation toward searching for that new deposit. We've continued to build a resource base at Loulo south which now stands over 10 million ounces and we hold more then 50 kilometers of space along the main Senegal Mali zone which played the key role in hosting the known deposits of the region. In 2007, we shall be concentrating our exploration activities in five main areas

[Charles Cano:]

Just I missed exactly what you were saying as far as the exceptional costs were concerned at Morila on the provisions for tax. Could you sort-of run through that for me again, please? And also, perhaps, say whether or not there's any scope for those provisions to be reversed, or alternatively, whether or not they're likely to re-occur.

[Mark Bristow:]

Yeah, Charles, that's a good question. And there's every chance of their being reversed. In this new age of auditing and stocks, you have to make provisions for these type of things, and we have moneys owing to Morila on TVA back in the last year, and some duty. And I'll take you through. The total provision we've made is $1.3 million, collectively between the two operations. $300 thousand more or less is for Loulo; the rest is for Morila. And it's to do with two aspects. There's a duty that we pay because we are exempt from field duties, and we used to pay it and recover it. We've recently agreed with government, and it's now in force, that we don't actually have to pay the duties and try to recover it. So that's being sorted, but we're just working through getting the previous duties that we paid back. On the back it's the same, you pay and you recover. And the way you recover is that you offset it. So you've got to go through an audit, with a year in arrears, you've got to go through an audit, and then you can offset it against the taxes you pay. And Morila pays a lot of taxes. The account is panning over. We've reduced it year-on-year. We had the same issue in Kiarma, and we eventually got all of our money back. But our auditors, in their wisdom, believed that we should provide for it; we've provided for it on a cost-of-money basis, time-daily of money basis. The other provision is Indian. We've provided just over$250 million against the $12.1 million debt owed that we carry in the balance sheet against Indian. You'll see a very lengthy disclosure in the reports on the claims that we put against Indian. We believe that we have now identified very large amounts of money that we can go after, and are busy formulating the claims for the liquidation. And I can explain a little bit more, if you want to, on that. The other provision was, there is a legal cost of the Indian dispute. Now, that will come back. We know that there's already enough money to pay that. But again we went through the income statement it's in the GNA number in the account, in the income statement. And there's the extra cost of stocks, which is not a provision; it's a reality, a harsh reality. And really those are the key ... And there's also a charge relating to diesel adjustments on the stock in Loulo. And that really sums up to just under $3 million.

[Charles Cano:]

Okay, thanks very much. Very full answer.

[Mark Bristow:]

Any other questions from London?

[David Bucolm:]

This is David Bucolm, private investor. Mark, could you just confirm what your hedging policy is on the revenue side, and whether you intend to do anything about hedging the cost of diesel – which I think you said accounted for 25% of your cost.

[Mark Bristow:]

We've always hedged our capital risks. And that hedge that you see us working through is the hedge that guarantees the development of Loulo. And we started Loulo when we pushed the button, when gold went through $400 because that's where it met our 20% return, and we could hedge at $400 and guarantee that return. By the time we had worked through with our hedging, the price was up at over $430 on the flat forward, and we managed to lock in a slightly higher gold price, and we reduced the hedge accordingly. And that really locked in the capital program for the open set Loulo project. What we did when the gold price kept going up, is we went back to our shareholders, and we said, “We have always looked at profitability, and we have always been a profitable company,” and the point I made to every shareholder was, when we decided to build Morila, there was not one shareholder that was prepared to put equity into the company. When you tried to see gold fund managers, they refused to see. What we did was, we went to the banks and raised the debt. And we raised a 100% debt for Morila, and we took out a hedge to bank that. And it's been a fantastic investment. With the gold price going up and the decision to go with the underground development, we had to make another decision. And we went back to our shareholders, and we said, “If you would like to top off $100 million, we'll insure that we can meet our capital commitment. We won't hedge it, because you're taking the risk.” Like, a lot of shareholders will say to management, “Don't hedge. We want the risk and the upside.” I've been there. But in a bull run, it works. So we went back to our shareholders and said, “We're going to do this big development. Are you...Do you...First of all, I want your guidance.” And still then they said, “We'll be happy to take the risks.” We did a proper right around to our shareholders. We raised $100 million and we haven’t hid any more. We don’t have any intention of raising any more. The next decision will be when we get to the development decision on Tongon, we will again consult with our shareholders, so that’s the way we run it. We’re not big on buying back shares, if you look at the cost of buying back the Loulo hedge which is just under 300 thousand ounces, about $70 million. If you take $70 million from our expirations subsid, we find millions of ounces. So, it’s much better for us as management to spend that money on finding more ounces. And we eradicate that risk. And also, I have a personal problem, I motivate very hard for financing structures with my board and its nonsensical to go back and undo something you’ve done for a very sound reason. It begs the question why you put the hedge in, in the first place. So we’re managing that hedge, we’re currently working with our bank so we structure it so we deliver about 7000 ounces a month so that gives us about 85% exposure on the spot and we get a really good realized gold price as you can see. So we’re very happy with that especially making all the returns more than we expected because of the higher gold price and that’s the reason why we motivated for our board for our dividends. Because we are keeping our assumptions on gold prices. Looking forward, again at $400 gold we currently can spend five years ahead and we really go ex-debt by then and so we’ve got plenty of space on our balance sheet. So, depending on the gold price going forward will depend on how we handle the risk in Tongon. I hope that answers your question. Diesel hedging is another game. We’ve done quite a research, and while it goes a long way…you pay. There’s none of this rolling and structuring, you just reach into your pocket and pull out lots and lots of those beans. Again, we don’t hedge for the sake of trying to enhance our revenues, we only hedge capital and there are many examples in our industry when our revenues and other currencies were running high, everyone was running around saying we’ll un-hedge, and then they took massive amounts of debt on top of that and then things went backwards and suddenly you’ve got a major problem. When that debt happens, shareholders and fund-managers don’t come to you. I think we’re charged to run profitable companies and that’s what we do.

[David Bucolm:]

There are two mentions in the review of outsourcing increase of companies knowledge and understanding of particular deposits. One to Kingston University, London and another one from the Australian National University, can you comment on that policy?

[Mark Bristow:]

Yeah, this is something we’ve been doing since we very first started, we’ve already had some relationship with very creative geological departments at various universities. We sponsor Ph.D.’s, many geologists work on Ph.D’s on our projects. Efforts in hunting teams with emphasis on Morila, and if you think you know it all you’re going to get really messed up. We believe and personally I believe, to stay ahead you’ve got to invest in research. The problem that we have in our industry today is that the mining industry hasn’t invested in people and it hasn’t invested in retail. For many years it didn’t believe in exploration, which I see signs of people changing their tune now. So, we’re not outsourcing any proprietary information. What we’re doing is accessing very smart people with good ideas and young undergraduate geologists who are aspiring to be a top scientist and we would like to first of all put our hands on them, and secondly to impose them to work 24/7, because that’s what you do when you work on a Ph.D., you don’t get paid for it. And hopefully one day a few of them will join us.

[Rob Weinberg:]

I noticed in your slide on the Gara underground project review that you used a 0% discount rate to calculate your NPV. I wonder what gold price you used for that and I wonder is that the same gold price you used to determine your reserves?

[Mark Bristow:]

$4.75 is the answer. We like our projects given the current cash profile to break even on a cash basis at $3.50. Now, discount factors are different decision makers, this is just showing you how things stack up. You can do the discounting. So this is a real financial model, so we don’t mess around with our figures. But, $4.75 is the number we’re going to use.

[Rob Weinberg:]

And, I wonder then what is, well then you’ve done the calculation I’m sure you have, but what would be the net present value of early repayments of your debt or early repayments of the closing in of the hedges?

[Mark Bristow:]

The debt is easy, it’s not a lot of money. We’ve got $40 million outstanding, in fact what we’re doing there Rob, is that we’re working on refinancing that debt and taking it back up. Why? Because we’re owed $30 million by the Mali government as we financed their share, and we want a clearer bank transactions to under-send that debt. So we’re doing that, in a good way to manage our balance sheets, we’ve got other things that we can do with it. We’re not shy on gearing, we like gearing in the company. On the hedge…do the cost, I said that if I make a 10 to 10% or 15 to 10%, it morphs when you see the return that Morila’s made and Loulo’s made on the capital investments that we’ll make. So, that’s a certain way to look at it. We certainly debate those things and we’re happy with our current decisions.

[Martin Steaman:]

Could you give us some idea of your average cost explored out, and what the industry average is to get an explorer down?

[Mark Bristow:]

We just pulled up on that since this last quarter. So you remember last quarter we increased our ounces with both ounces at Gara with about 800 thousand ounces. We converted 720 thousand of those ounces to reserve last quarter and we added 560 odd thousand ounces at Faraba. So once we get through March, we’ll make that calculation. It used to be $7, around $7 per resource ounce and about $14-15 per reserve ounce. I can’t see that changing after the last round. And the industry average, the big problem, you see it’s easy for Randgold to really do it. Everyone does it, except they have a short-term memory problem in that they do it usually for the last quarter or the last few years or the last five years. But we can do our calculations from the day we’ve raised our first dollar because we’re only 10 years old. And we own 20 million ounces that are discovered and it’s an easy number to do. We add up all the corporate and exploration processes we’ve started and divide it by amount we’ve gotten. So, the industry is somewhere between 150-160 depending on who you listen to. My guess it’s more like 100 or more than that even.

[Mark Smith:]

Is it possible to give us a breakdown of the exploration expenditure in ’07 and where the focus of your greensfield exploration will be?

[Mark Bristow:]

$5.5 million before we need to, well we add 20% to the numbers I’m giving you, maybe even 30%, because we carry options at different levels. $36 million in the Ivory Coast, about $3.5-4 million in Loulo, $2 million in Senegal, $2 million in Burkina Faso, another $2 million in Mali outside Loulo, $2 million in Tanzania which has got a bit of a question mark on because we’ve got some plans for us that haven’t crystallized yet. $1 million in Gana. Then we’ve got, the rest is corporate, the corporate value. And we’ve always put all that into exploration and new business we’ve always lumped that number because people have these corporate costs and where do they go you know? They are the cost of running our corporate business otherwise the mines can stand on their own. What I try to do Mark is we keep an exploration building budget in the center that sort of smoothes it out. We have, out of that we pull back a whole load of money so that not every country is allowed to spend its budget, it has a core budget and then it has a building budget. Acquisition…we were looking at a project just yesterday, the team. The analysts came out…a junior company with resourced answers and a bit of research, they converted it all to viable production and then you get costs…Randgold resources are one of the most sufficient companies in costs in Africa, at about $30 an ounce to process. And oxides, 100% oxides. And then they do all that conversions so it gets in the market, the guys run the share up and they haven’t even found their resources…we can’t even show our resources and so the valuations run very quickly ahead of value. Our big challenge, and you see most of our corporate activity in joint ventures before you even read about the result. That’s what we really try and do. We’re hunting ground, we follow good people, we check where they got frowned, and we find it at the ground floor. Having said that, we’ve looked at a few projects in the past and we’ll continue to look at projects in the future that will…and the big thing for us is really strategic, is there something there, like profitability that’s what attract us. And we’re long term, so we’re very happy to buy something for the long term. I believe that gold production is going to keep gaining under pressure. You can buy profitability whereby…like in a bull-run, it’s tough you know. You mine mine’s that we can’t even make. The big trick I do, is I always ask them to go to their bankers and ask them if their project finances are on a project basis.

[Mark Smith:]

Mark, it would be terrorish of me not to congratulate the board for paying dividends and I can only add that I hope the CPUK private comp. brokers will now start recommending Randgold to their trust clients. My question is not that, that’s water under the bridge. I’m delighted that we’re on the journey to dividends. I’m, interested in the rollover of 2007 hedges to 2010. How does that work, what are the costs and what are the advantages of doing that?

[Mark Bristow:]

There’s always a credit margin to pay obviously. But ultimately it all depends on why you’re doing it. If you think the gold price is going to be $800 or $1000 an ounce in three years time then you probably shouldn’t roll your hedges out. But you know, when we do hedging we do it for a particular reason and the way we’ve worked this out is its going to be 20% of our attributable hold production over the periods forwarding this capital investment in Loulo. That’s a sensible thing to do and sure there’s a cost but then the cost depends on gold price and how you look at it.

[Mark Smith:]

Right, that’s a bit waffley.

[Mark Bristow:]

I’ll add to that. I think the other thing is that Contengo is at a reasonable high. We spread it out, take some of the money off the table now and we also protect ourselves on it, so we’re using our hedge for exactly what we put it in. We’ve just got a lot of capital program. It just makes more sense. You know, in fact, a simple example. There’s 565 thousand ounces, on a very rough estimate it’s 2.6 grams a ton. Potentially, something that will come to bear is real value, it hasn’t cost out anywhere near $76 million. And if the gold price goes that high it’s going to be fantastic, we’ll pay big dividends. And if it doesn’t, you know it’s amazing what happens when the gold price goes down, and I’ve been there I don’t apologize for some of the statistics. It’s not the risky companies, we’ve got full raging bulls in our team and we’ve got some more conservative staff. All the analysts are saying $600 - $750 max and then everyone from there goes to $500. And they sit around saying they should be hedge free, we can be hedge free now. We don’t put anymore hedges in because if the gold price went down down down none of our capital projects are going to fail. We’re going to deliver. We can honestly say we’re happy to not put hedges in the foreseeable future. But, I’ve never said I would not hedge, I don’t contend stock, I’m very happy with what it’s turned out to be for now. Any more questions? Well, thank you all very much for coming. I look forward…for you Londoners it’s probably a good place to be, but in Cape Town it’s probably the last place you want to be after you die, is inside. You’ve got a beautiful day out there, I appreciate you giving us part of your day to come and share this with us. We are inviting you to have a light refreshment afterwards and we got the team out, the directors of the accounts. If you want to pick their brains or ask something to the directors you’re absolutely welcome to do that. And again, thanks for your attendance.