Kirkland Lake Gold Ltd.
Q1 2019 Earnings Call Transcript

Published: 8 May 2019

[Operator:]

Good morning. My name is Casey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Kirkland Lake Gold First Quarter 2019 Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions]. Thank you. Mark Utting, Vice President of Investor Relations, you may begin your conference.

[Mark Utting:]

Thank you, operator, and good morning, everyone. With me today are most of the members of Kirkland Gold senior management team, including, Tony Makuch, our President and Chief Executive Officer; David Soares, our Chief Financial Officer; Ian Holland, our Vice President of Australian Operations; Duncan King, our Vice President of Mining for Kirkland Lake; and Eric Kallio, our Senior Vice President of Exploration. Other members of the team are here as well. Today, we will be providing comments on our results for the first quarter of 2019. We'll then open the call to questions. The slide deck that we will be referencing for this call is available on our website at www.klgold.com under the Investor Relations and Events section and on the homepage. Before we get started, I'd like to draw your attention to the forward-looking statements slide, which is slide 2 in the deck. Our remarks and answers to your questions today may contain forward-looking information about future events and the company's future performance. Please refer to the detailed cautionary note on slide 2 as well as the forward-looking information set out in our news release dated May 7, 2019, and in the MD&A for the three months ended March 31, 2019, which is on our website and on SEDAR. Also during today's call, we'll be making references to non-IFRS performance measures. A reconciliation of these measures is available within our Q1 press release and our MD&A. Finally, please note that all figures discussed today are in U.S. dollars unless otherwise indicated. With that, I'd like to turn the call over to Tony Makuch, our President and Chief Executive Officer.

[Tony Makuch:]

Good. Thanks, Mark. Thanks, everyone, for being on the call this morning. Looks like we were trying to get spring come to see us here in Canada, and we're fighting between mother nature and father winter or whatever you want to call it, but anyway thanks for being on the call. We did have our results out of over a day now, and we had our AGM yesterday and we saw most of our analysts there. And so as a result, we really want to keep this very short presentation with our comments from us today and then we'll have time more for questions. So if I just start on slide number 3

[David Soares:]

Thank you, Tony. Q1 2019 record net earnings holds the quarter at $110 million and $0.52 a share that's a 120% increase from Q1 2018, and an increase as well from Q4 2018. In terms of adjusted net earnings, we saw similar growth of 114% from Q1 2018. And we closed the quarter in 2019 at a $112 -- $112 million, and $0.53 a share. Turning on to slide 7. Looking at revenue, again, record revenue in Q1 2019. Closing the quarter at $304.9 million, a 54% growth from Q1 2018 and a 9% growth from Q4 2018. Mainly driven by higher gold sales and also higher gold price. So we closed the quarter in Q1 2019 at 232.9000 ounces and realized an actual price of $1,307. Moving on to the next slide. Looking at cash, we saw a quarter-over-quarter, a 25% increase in cash. Cash increased $83.9 million and 25% over the Q4 2018 and closing the quarter at $416 million, again mainly driven by strong net cash from operating activities of $174.4 million more than offsetting net cash used for investing in net financing activities. I'll hand over the call now to Ian Holland, our VP of Australian operations.

[Ian Holland:]

Thanks, David. Referring to slide 10, I want to give some color to the strong performance at Fosterville for the year and for the quarter. It was a record quarter in terms of gold production with 128,000 ounces were recorded for the quarter coming from the processing of a 140,000 tonnes at 29 grams per tonne a little over 98% mill recovery. The image on the right of this slide is a section through lower Phoenix, which highlights where this material came from. There was a significant contribution from Swan during the quarter, with eight stopes mined in total over a number of levels, which can be seen as the yellow stopes dipping to the left on the lowest level in the section. In total, Swan comprised around 40% of the tonnes mines for the quarter with great performance in line with modeled expectations. Fosterville also saw a strong financial performance for the quarter, with the exception of cost metrics really. Operating cash cost at $144 per ounce. And an all-in sustaining cost of $315. With the strong quarter and the outlook for the remainder of the year, yesterday, we announced an improved full year guidance of 570,000 to 610,000 ounces of gold production at operating cash costs of $130 to $150 an ounce. And this really on the back of anticipated increased production in the second half of the year. The investment program at Fosterville continues at pace with sustained capital expenditure of $18.9 million, and growth capital expenditure of $11.7 million. The sustaining capital program includes significant component of underground capital development as well as mobile plant and equipment and infrastructure. The growth capital program was dominated by the key major projects, new ventilation upgrade, paste plant, and mild water treatment plant, which remain on track to be completed during the course of 2019. With that, I'll now pass over to Duncan King for the Canadian operations.

[Duncan King:]

Well, thanks, Ian. Moving to slide 11. Good morning. I'll focus on the Macassa. We had a record quarter of production in Macassa. Production of 73,000 ounces. The key to the quarter was the grade, which averaged 30 grams per tonne. The higher grade resulted from out performance in the stokes on a 57 and 56 level area. Our cash stock for the quarter were very low at $332. While all-in sustaining cost were $602 raise and a reduction in sustaining capital mainly accounted for the long-haul of sustaining cost. Over the balance of the year, we are pushing to new zones on the 5,700th level, which we expect to have similar grades. Based on our outlook as we referred, we increased our production guidance from -- for 2019 to 240,000 to 250,000 ounces. We also improved our cash and cost guidance to $400 to $420. Turning to slide 12. Turning to the number four Shaft project. We remain on track to commence full face trending during the summer. This puts us on track for Phase 1 completion by Q2 2022. During Q1, we filed our technical report from Macassa. Included in the report is shown a full production following completion of the job. We reached well over 400,000 ounces of production and cash cost below $300 per ounce. And an all-in sustaining cost below $400 per ounce. The key finding in the report is that the payback will be very quick, basically, immediately following the completion of Phase 2 at the end of 2023. I'll now turn it over to Eric Kallio.

[Eric Kallio:]

Thanks, Duncan. Good morning, everyone. My first slide today will be number 13, which is Macassa where we announced a very positive drill results this week. As announced, the results are from 30,000 meters of drilling, which is focused on extensions of the South Mine Complex, or SMC, but also a small amount on an amalgamated break. The slide shown on the screen is a 3D view across the mine gives you a better idea of the overall target and key areas tested. As indicated, it's really just to the East, West and depth of the SMC as well as the amalgamated break in the central portion of the mine. Although, we had a -- quite a few very good results in the release, some of the more interesting from my perspective would be the one that holds drill to the West, which tested up to about 250 meters west of the current resource. And irrespective of some high grades with some of the key highlights, including 436 grams of two meters, 158 over 2.4 and even 4,000 over two meters in the new zone, which is located between the main structures. Also current drilled -- although holes are very widely spaced, they seem to be the intersection seem to line up generally well with existing resources. And we see some similarities in style to the minimization in the current resource. We also notice the holes that are near the left limit, also have some reasonably good results implying good potential for further expansion even further to the West. Looking at holes to the East in depth we saw drilling design to test outwards to the resource in various directions and also producing very good results. Some of the better ones, from my perspective again, being value of 2,458 grams over 1.8 meters that extended resulted depth and another value of 118 grams over two meters, which is extended [indiscernible] to the South and East. This is what we saw some very interesting results from the amalgamated breaks, which is another major structure at the mine, which occurred south of the SMC and actually has been tested in many other parts of the mine, but surprisingly showing some very positive results on this new round of drilling. Results are from two different areas of the amalgamated break, which are roughly 300 meters apart and has a very high grade update at it -- that as I mentioned have not often been seen. Given the facility, a number of gaps between the two areas and along stride, we feel very optimistic about being able to find additional zones of this type. So in summary, progress with the drilling at Macassa coming along very good is point number one. Turning to our next slide. We go to Australia and the Fosterville mine where we continue to then target the key is being Robbin's Hill, Lower Phoenix and Harrier. Unfortunately, the progress in all areas does not quite progressing as quickly as we would have hoped at this point, but for various reasons. At Harrier, drilling was focused on downtime with the current resources and mostly on the upper incline target. And we did have a lot of success here. But we were unable to test the deeper anti-climb target where we believe most of the potential could lie. And the reason being mostly due to an adjustment of interpretation placing the target slightly deeper into the West requiring a new drill platform. We also had some delays caused, some slight delays caused by waiting for amendment to the mining license. Despite being off, we still feel very confident about the target. And even seen support for difficult goals in some of the deeper holes of the upper syncline drilling. Looking at the Lower Phoenix, drilling also target the resource down plunge. And with most of this being done from the new Harrier access drip. But it's just taken a little bit longer than expected due to the length of holes, local difficulties with hole deviations and ground conditions. Looking at Robbin's Hill. The story is much the same as in Lower Phoenix. But the mean target being down plunge on the current resource, but drilling being done from surface and just taken a little longer due to the lengths of the holes involved. Despite all above, we have the current resource at Harrier and a plan in place with the new hang that we'll invest here. We're also working on a similar list of Lower Phoenix to help this area go faster as well. We're also looking at adding more drills to Robbin's Hill and possibly underground, which should speed up those process. Given the above, we believe results can be delivered from these areas within the not too distant future. And with that, I'll pass the call back to Tony.

[Tony Makuch:]

Okay. Thanks, Eric, and thanks everyone in terms of giving our guidance here -- sorry, comments for the quarter. And now just finally on slide 15. And as you can see from the results we've had for Q1. We had industry leading performance. The company is well on track to achieve its new guidance for the year of 950 to 1 million ounces, with [indiscernible] flip to 1,000. And in terms of -- and if you look at the low end of 950, you'll get the sense that our next quarter's are going to be substantially improved from Q1. Although, there -- I will say that may be Q2 might be a lot similar to Q1. And then Q3 and Q4 are really, really going to be strong quarters. The other part is operating cash costs. Again, we reduced our guidance or improved our guidance say to $285 to $305 per ounce. We feel well on our way to achieving those numbers and potentially even beating those numbers as the year progresses. And all-in sustaining cost of $520 to $560 an ounce. Similarly, we have industry-leading earnings and earnings per share as outlined previously. We had strong free cash flow during the quarter. And then had substantial growth in our cash, and the company continues to be focused on rewarding shareholders. We did increase our dividend by 30%, 34% in the quarter, and now equating it in $0.04 per share in U.S. dollars. We're also focused on return to shareholders in a number of other ways too. We do have our NCIB, and we'll continue to use that to provide value to shareholders. As well we're investing very heavily in exploration. And all our targets are $100 million to $120 million this year. We expect to be at the top end of that. We really feel exploration and investment for the shareholders and return for the shareholders. We’re also investing in infrastructure. You can see the investment at Macassa for the new shaft and the benefits that's going to pay in terms of what it's going to do for adding value for the company as it gets completed. And similarly, we have some capital projects being taken place at Fosterville both for ventilation and pace fill, which are going to have significant value creation for the shareholders. And on top of that, we focus on cost management and you can see where the costs are, our operating cost are coming down in terms of per ounce basis. I mean, we've got higher-margin ounces, more value. So, there’s a lot of areas where we’re focused on creating value for our shareholders. And I guess I would be remiss without – in finalizing, I should say thank you to really not of us in this room, but had match to say in the performance in the quarter. It really is the people at our mines in both the Australia and Canada. The people that are working on the diamond drills and the people that are actually doing the work and we have to thank them for all their efforts in the quarter, and we continue to have for them to be diligent and work hard and safe for the rest of the year. And I think there’s even more things to come in terms of value creation for Kirkland Lake. But it’s -- because its plus 2,000 people that are really focused on hard-working. Anyway, with that, I'll end the presentation. And we'll be happy to take any questions you have.

[Operator:]

Great. Thank you. [Operator Instructions] And your first question comes from Cosmos Chiu with CIBC. Please go ahead. Your line is open.

[Cosmos Chiu:]

Thanks, Tony, David, Ian, Duncan, Eric and Mark. Thanks for the call. Maybe my first question is on exploration here. Eric, you kind of touched on it. There were some issues in terms of drilling. It seems like a lot of it has now been resolved. But you spent about $80 million in Q1. Your full year budget is $100 million to $120 million. Are you still expecting to hit those budgeted numbers?

[Eric Sprott:]

We, are still planning to do the budget pretty well, when we're looking that the areas that are in mind. As we might have explored the -- we have the exploration lease expired. And so it will affect some of work potentially on the exploration lands, the load program, so it can be more regional, but areas inside the mine we can do to complete those.

[Cosmos Chiu:]

And the expiration of the exploration lease, that's at Harrier?

[Eric Kallio:]

This would be in the lands that surround the mining lease on Fosterville property, so outside of the area.

[Cosmos Chiu:]

Okay. And then may be focused -- yes.

[Tony Makuch:]

Sorry, again, Cosmos, just to expand on that. One other really successful things that we had over the quarter was the grounding of a significant increase to the mining lease at Fosterville. So it was 17 square kilometers. It's now in excess of 28 square kilometers, including a significant expansion to the shaft. That really covers a significant amount of the potential for Harrier and other systems as they push to the shaft. And that was granted -- it was granted and agreed in March. So that does affect -- that had affected some of our ability to drilling in Q1 itself. But it's actually a really significant outcome, because it secures the tenure going forward.

[David Soares:]

On the other side to clarify from our exploration programs as well. Some of our exploration is classified into capital as opposed to exploration. So we are on track to spend $120 million on exploration.

[Cosmos Chiu:]

Okay. And then, maybe focusing a little bit more on the Harrier South. You started drilling there in Q4 2018. Myself, and I think some investors as well, would have expected some true results to have been released by now. And some have even expected a reserve or more like a resource update in overall resource. Once again, I know you've had issues there. But could we expect some true results to come out within the next several quarters or sometime soon?

[Tony Makuch:]

Well, I mentioned, we are drilling at the Harrier, but mostly on the upper syncline target. And to do the testing on the deeper anticline target where we need to do the angular drift which is the -- actually scheduled to start very shortly and should be completed sometime in mid-summer. So we're looking at probably building as soon as the drift is done. We may be able to get some drilling done from more -- from angles that aren’t ideal prior to that. But really to do the most effective drilling on the anticline is you have to get angular drift done.

[Cosmos Chiu:]

I got you.

[David Soares:]

Yes. Cosmos, we don't tell half store here, so it's important that we fully test and understand the target.

[Cosmos Chiu:]

And then, maybe switching gears a little bit here. You're running a bit ahead on growth CapEx. Growth CapEx is spent about $50 million in Q1, budgeting $155 million, $165 million for the year. It looks like you spent quite a bit of your budgeted number in Q1 for the number for more shaft. Could you maybe talk a bit more about that in terms of -- are you expecting to still spend, I believe, you put in $55 million to $60 million at the Number 4 shaft for 2019. Is that still a number? Are you -- or are we going to expect it to go past in terms of what you're spending?

[Darren Tschanz:]

It's Darren Tschanz. So we're on target. We have some -- there was carry forwards from last year and working to start the sync. We have other, as far as the concurrent work. So there's quite a bit of work in the front end till we start to sync. So we'll see that kind of gauge down as we move ahead. But we are on track.

[Tony Makuch:]

Yes. The big part -- this is a step up stage for the overall shaft and we're working -- a big part of the -- some of the cost coming in this quarter was now the hoisting plants, which have been -- really, we did the prepays in 2018 and that's almost like $19 million. And obviously they're coming, because the hoists are coming and getting installed. So this is a big part. Once you get into syncing, cost become -- it goes in a different area. This is where we're putting all of the investment in for the surface infrastructure.

[Cosmos Chiu:]

Yes, of course. And maybe related to CapEx as well. You spend about $10 million in the Northern Territories. I believe, if I can confirm with you. There's still some money to be spent in Q2. But I guess my question is when is the final decision? When are you expecting to make a final decision in terms of what potential restart at those assets?

[Tony Makuch:]

We're working diligently on that. I mean I would expect over the next few quarters, we'll be in a better position to see what we want to do. Ultimately, we are getting to the point where we are fairly close to say -- to have some confidence in what we want to do. But there is a lot of it. It's an exploration effort and we're looking at -- when we do restart operations there, we want to restart operations at both the meaningful level of production and a meaningful cost and margin for us. So, we're trying to put it together. We don't want to start at a 30,000 or 40,000-ounce a year operation. We're looking at 100,000-ounce-plus and with the potential to grow it over to 200,000 to 250,000 ounces. So, it's coming together. But it's -- we need to get that. And we need -- in order to do that, we need multiple mining fronts, which we're working both at Cosmo-Lantern area as well as the Union Reefs area.

[Cosmos Chiu:]

And maybe one last question for me if I may. You spent about $12 million in Q1 for Fosterville for growth CapEx, including ventilation, pace fill, and a new water treatment area or plant or whatever it is. Can you remind me Tony, does that add to throughput in any way? Or how does that work? Because I remember at one point in time, you were talking about upgrading gold room that would have -- I think that has been completed. I think that adds to throughput? How about all these projects here?

[Tony Makuch:]

Okay. So, in terms of the projects for this year. The last year, we put in the whole ore gravity circuit. And that -- but we -- this year, big project we have now is our refinery, where we're building a whole new refinery to allow us to handle the amount of gold that we're pouring. We do have limitations in terms of how many ounces that can be poured there. So, that's one part of the project. The pace fill is going to have impacts in terms of -- which we haven't really expressed it yet in terms of the improvements in productivity in the mine and also in turnaround time from a backfilling point of view and improving working conditions. The ventilation is there, again, a part of increasing the amount of air in the mine which should improve working conditions and at the same time, allow us to put more pieces of equipment in certain strategic areas of the mine. Right now we're limited in terms of how many piece of equipment we can run. So, those benefits will come from that infrastructure from the ventilation. And ultimately, this is all part of the plant which in the future years can be the future growth -- potential work from for Fosterville as we mine some of the areas tied into our aggressive exploration program too.

[Cosmos Chiu:]

Great. Those are the questions I have. Thanks Tony and team and congrats on a very good start to 2019.

[Tony Makuch:]

Thanks Cosmos.

[Operator:]

Your next question comes from Ovais Habib from Scotiabank. Please go ahead, your line is open.

[Ovais Habib:]

Good morning guys. Congrats on the quarter and thanks for hosting the call. A lot of the questions have already been asked by Cosmos. Just a couple of quick questions for me. At Macassa, that obviously, you guys had a very good quarter there. And I believe you're currently mining at the 5,700-level. Was this kind of a one-off quarter or should we see this is kind of performance going into the year?

[Tony Makuch:]

We expect to continue through the year.

[Ovais Habib:]

And will you be mining at this current level? Or is this another level that you're going to be moving towards?

[Tony Makuch:]

No, we're expanding the 5,700-level. So, we expect to be in the new stope at the end of next month. And we're expecting some other variance from there. So that will give us four pretty good grades, that's pretty good.

[Ovais Habib:]

Perfect. Okay. And then just moving to Fosterville, obviously, you guys had a good quarter there as well. And is expected to get better in the second half. Is the improvement and then there's more a question for Ian -- is improvement more expect from improved grades or throughput or both? How should we look at the second half?

[Ian Holland:]

Yes. It's largely grade. So, we would expect Q2 to be broadly similar to the last two quarters, so Q4 last year and Q1 this year and then expect to see some improvement in Q3 and Q4 on the back of some higher grade. It's really sequencing Swan control. So, it's a grade-driven increase.

[Ovais Habib:]

Perfect. And then just Ian in terms of the percentage of Swan ore in the second half. Can you give me a little bit color on how much you're expecting to take from Swan in the second half?

[Ian Holland:]

So it's broadly similar to our last quarter. So it was about 40% of the material in the last quarter. That's about the proportion of Swan and what comes in on a reserve base. So we expect to be in line with that sort of number.

[Ovais Habib:]

Perfect. That’s it for me guys. Thanks so much again for taking my call.

[Operator:]

Your next question comes from John Tumazos from Very Independent Research. Please go ahead. Your line is open.

[John Tumazos:]

Thank you. Congratulations on a 33.3% ROE this quarter and 22.6% last year. Tony, as you look at potential capital projects in the company. It's a big bar to match your recent rates of return. Going beyond the big exploration outlays and in the Macassa Number 4 shaft, do you have any other projects that both require significant cash as you’re building cash up? And have returns at least half of the rate you have been generating as a company? I'm thinking of are there any little details in Macassa Mill for 2022, 2023 when the tonnes rise? Is the crusher, I'd hope of the speed, if Taylor's finds more ore or Holloway? Could there be a shaft in one of the zones, some at Fosterville? But do you have any big projects that both would help you use cash and generate similar or at least half as good a return as you're doing now?

[Tony Makuch:]

Yes. Good questions, John. When you talk about that, if we through parts by parts, so we talk about Macassa definitely the shaft and that infrastructure is important. We are – you have been main tailing expansion that we are doing, putting a whole new tailings area here. And this is in our capital program in 2019. We're also taken a position that we're going to -- our tailings, our position is high density tailings in Kirkland Lake. So we are installing high density tailings in there. And then going into 2020, some of the things that -- we really going to look at is improving in our pace fill productivity at Macassa's, about doubling the capacity of pace fill plant and improvements in terms of burrow locations to reduce the amount of delays in terms of delivering pace from surface as well as some of the [indiscernible] comparts a little bit better. That should help us in terms of reducing cost and improving productivity in the mine. So that’s stuff at Macassa. At Fasterville, we're looking -- we're at the point where we have a mill and we have this first stage of these programs coming in. But we do have to look -- want to look at you know there's a larger resource base there. How do we deal with that and dig that into the mill's -- increase mill throughput. Similarly, what we're doing the exploration as we're talking about. As we get exploration success being prepared with our -- anyway, we have capital programs and bring into these new areas in production as well. So those are some of the things that where we're looking at. And fundamentally and overtime, it could result in a shaft that at some point in time at Fasterville if we need to. We’re still somewhat time away from that. But those are things we are looking at. And we are looking at now a development program potentially to go out and do a more advanced exploration program at Robbin's Hill project, which we require some development. So those are some things that we're spending time looking at. Which are fundamentally all would be tied into it to expanding – sorry improving our mill throughput at Fasterville similar to what we're trying to shaft at Macassa and really boost to the next level of growth and production that will happen from these assets. And as we talk about we're looking hard at work we're doing at Holloway and Taylor and we're looking hard at what we are building at Northern Territory in terms of bringing into the meaningful levels of production. So both overtime going from a whole from 150,000 -- 450,000 ounces a year currently to slow over 200,000 ounces in next few years. And as I said at the Northern Territory operations similar, similar type of levels. We do have a lot of other things we're looking at investing in terms of bringing growth to and value creation for the shareholders and the company.

[John Tumazos:]

Thank you. Now when I go around Toronto, I asked the other companies, Kirkland does over 20% ROE. Can you guys at least get 5%? Thank you.

[Tony Makuch:]

Thank you.

[Operator:]

Your next question comes from Craig Stanley with Eight Capital. Please go ahead. Your line is open.

[Craig Stanley:]

Thank you. Good morning everyone. Three very quick questions for me. What's the budget in the second half of this year for the Northern Territory?

[David Soares:]

Spending budget you mean?

[Craig Stanley:]

Yes.

[David Soares:]

We're probably going to be spending pretty much similar to what we did in Q1 in terms of quarter-by-quarter basis. So we're spending some -- that's a combined exploration and development programs that we're doing there.

[Craig Stanley:]

Okay. Secondly, Macassa. I notice in the MD&A, previously you were talking about over 400,000 ounces per year in 2022. This MD&A said almost 500,000 ounces in 2022. Just curious, is that a typo or does that -- something change there?

[David Soares:]

Maybe, it's a Fruedian slip. But it's a potential of Macassa for growth. So...

[Craig Stanley:]

Okay. And then just finally, the drove also you had last week from Macassa, Amalgamated Break. Think this to be a new next South Holt Mine Complex?

[Tony Makuch:]

Go ahead, Eric.

[Eric Kallio:]

Well the Amalgamated Break, we’re still expecting that. I mean we're moving into an area that has been very low testing. We know this is large in today's structure. It's always relevant to talk about limits of the mine and hasn’t had good results in a lot of areas, but we’re in the whole new area and with opportunity to lend this not very far from each other. So we’re -- at this point, we still have a lot of drilling to do, but we're optimistic to both in buying more.

[Tony Makuch:]

We realize that South Mine Complex is basically fulfilled within a certain county to get sort of shares between the main breaker, the overall break at Macassa and an Amalgamated Break. What's happening here, definitely there's some interaction and more significantly Amalgamated Break as we're getting here because you seen the South Mine Complex being caught between those two breaks. So we don't know yet, but as Eric mentioned, the drill results are demonstrating that things are there. And that's been -- we talk about that. It's been thought about by the Georgia group within Kirkland for quite some time. At this point in time, when we get a chance to drill it, we get the drill platform. It's starting to happen.

[Craig Stanley:]

Thank you.

[Operator:]

And at there are no further questions at this time. I will turn the call back over to Mark Utting for any closing remarks.

[Mark Utting:]

Thanks very much operator, and thanks very much everyone for participating in today's call. We understand it's a very busy day for analysts and investors with a lot of companies reporting. As you've heard, we expect going forward that continued strong operating and financial results, continue to make progress with our exploration. You've heard we had very good results with Macassa in a high priority targets in the SMC and along the Amalgamated Break. We remain very optimistic about Fosterville and our key targets were, we've intercepted the court veining with Beijing and multiple locations. We have done the work that we need to go and should be reporting on that as we go through the year. So you can see there is a lot going on. A lot of progress being made and we look forward to our next conference call for the Q2 results. Thanks very much.

[Operator:]

And ladies and gentlemen, this concludes today's conference call. You may now disconnect.