Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Agnico-Eagle Mines Ltd. Second Quarter 2011 Results Webcast Conference Call. [Operator Instructions] I would like to remind everyone that this conference call is being recorded today, Thursday, July 28, 2011, at 11:00 a.m. Eastern Time. I will now turn the conference over to our host, Mr. Sean Boyd. Please go ahead, sir.

Thank you, operator, and good morning, everyone, and thanks for attending our Q2 2011 conference call. What we'd like to do today is I'll take you through a bit of an overview on the quarter and then Ebe Scherkus will take you through the individual operations and talk about some of the issues and opportunities we have and also highlight some of the exploration results we're seeing at these properties. And then we'll open it up for questions. We'll move through the presentation and just focusing on the highlights for the quarter. We had strong cash generation from the mines. We generated cash flow of about $1.00 per share in Q2, which was similar to what we generated in Q1. We've got 6 mines now running steady state in terms of throughput with the addition of the crushing capacity at Meadowbank. As a result, we're in a better position to manage the costs at Kittila and Meadowbank, and Ebe will talk about some of those initiatives. In July at Meadowbank, we see our throughput averaging now over 9,200 tonnes per day. That's up almost 30% from where we were in Q2. The recoveries are 94%. Our grade is 3.1 grams, which was pretty close to the estimate we had for the month of 3.2 grams. As Ebe will get into it, our dilution is improving. We're getting better improvement in the blast displacement in the pit. We've got more work to do, and further refinement and optimization is ongoing. On the cost side, we've seen some really good cost performance in Québec and Mexico. At Goldex, our costs are sub $400 an ounce. LaRonde and Pinos Altos are sub $300 an ounce. And as we said, we've still got work to do at Kittila and Meadowbank, but we expect better…

Thanks, Sean, and good morning, everyone. Well, LaRonde, I would say had a reasonable quarter but not a great quarter. The milling capacity was restricted by 2 things, one a planned 5-day shutdown and then also we were having some issues with obtaining cyanide, and that appears to have been resolved. But in the meantime, the mine functioned well, while we were sort of choking back the mill. We did manage to stockpile additional ore on surface, and that will be processed by the end of the year. Recoveries essentially are according to plan. But the big story at LaRonde is it is a mine in transition. We are currently mining there our stopes. So as a result, we are getting some higher dilution. But the big story is LaRonde expansion will be ready by the fourth quarter of this year. Work has progressed very, very well. The load up facilities, the crushing plant, all of it will be ready by Q4. And we expect to be able to extract our first mining block, a higher grade mining block in October, November of this year. In the big picture from a CapEx side, this was one of our more complicated projects with an overall budget of $265 million. It will be coming in on time at approximately $15 million under budget. So they did very well. At Goldex. Goldex actually had a great performance from a material's handling point of view. It had record tonnage in May and June following modifications to the tailing spawn system. Our operations continue to be under control. Our cost per tonne is actually under budget, but our CapEx are over budget. And I would just like to talk a bit about the surface subsidence issue. About 4 months ago, we blasted on the Goldex…

Thank you, Ebe. And why don't we, operator, just open the line up for questions.

[Operator Instructions] Your first question comes from John Tumazos from John Tumazos Very Independent Research.

First question on Rubicon, do you have right of first refusal or any protection from subsequent interlopers? You're a $10 billion company, so I'm sure you're not in here to make a quick tenure, $50 million trading profit.

No, John, we don't have right of first refusal. We do have the right to participate in future financings to maintain our position, but we don't have right of first refusal.

Second, there are a number of your blue sky exploration and investment alternatives that look very good. You participate with Ron Parratt and Rich Bedell of Renaissance Gold, have the venture near Long Canyon. I spent 3 nights at a truck stop in Argentina were there was a core shack of [indiscernible] gold. And there's some very interesting things there, and I just went to Spain and that's just one of your friends. With Rubicon and other things that I'm sure none of us know about, you must have an array of opportunities of 5 or 10 things that could be your 8th mine or 9th mine. Could you talk just to sort of the big picture of where you want to go building human resources and the next wave of Agnico's growth?

Sure, John. It's a good question because we've just come off of this massive mine building phase and we're feeling collectively internally that we broadened our skill base and combined with an increased financial capacity, we would like to invest in the industry. We're looking at more opportunities now than we ever have. But having said that, as per our strategy and style, we're not going to do anything where we are betting our company on. We're going to continue to do what we've done to bring in things like LaRonde and Goldex, as I mentioned earlier, and invest in some things under the radar screen, which we have as you suggested. Some things we take a bit more of a public profile on because we are actually, in some cases, being the technical engineering group of these companies and using our expertise to add value. So there's lots on-the-go and there's more internal capacity to help these companies and to also move our own internal opportunities forward. Where do we want to end up? Well, we want to have more non-dilutive production and reserve growth. And that's why we invest early and try to get involved with things that we can move forward and make bigger. And then if it looks like there's a value proposition for our shareholders, we may take a bigger stake as we have in the past. So we're going to continue with a very consistent strategy over the next 5 years, which will involve strategic investments, which may ultimately turn into acquisitions or projects. We're going to move our internal opportunities forward. But I think more importantly, for us, which also ties into our history is reemphasize exploration now that we're through the mine building phase. And you'll see that not only in the…

Your next question comes from Anita Soni from Credit Suisse.

My question is with regards to the recovery rates at Kittila. The downtime that you experienced at Kittila is what, a couple of weeks every 6 months? And I guess, I'm just wondering, if this is going to be kind of continued pattern of having higher recovery rates in the quarter that you are not taking a downtime and then lower ones in the quarter that you are taking the downtime? Or what should we be thinking about as the long term recovery rate for Kittila right now, 83%? 85%? 87%?

I'll answer the first part, Anita, and then turn it over to Jean. I think what we have noticed with the current two shutdowns is that the recovery period, or the period to be able to get back on track, has been a lot shorter. So when we look after each of these shutdowns, once we started them, they were down -- the recoveries were in the mid-70s to 77%, and then rapidly climbed to 83%. And now we are seeing 83% to 86%. So I think whenever we refurbish an autoclave or put it back online, we gain the experience where we come back on track a lot quicker than we used to say 1.5 years ago. So with that, Jean, can you add anything?

Yes, hi, Anita. For your model, I will recommend as I mentioned to the last conference call to use 83%. For sure, we're targeting to be above that. We're able to maintain 86%. On the long terms, until we'll have the expansion study completed and all of the test work around it, I will be -- I will go on a safe side to use 83% for your model. But yes, we have absolutely upside on that.

Your next question comes from Richard Heuermann, private investor.

My question is a financial one relating to currency fluctuations and particularly concerning the current environment here in the States, regarding the dollar's strength against the euro, the Swiss francs and the yen. I'd be interested in your thoughts about what impact the devaluation of the dollar, for example, would have on your bottom line or your operating income, either good or bad?

Good morning, Richard, it's Ammar Al-Joundi. I'm the CFO. With regards to currency, a lot of our operations, all of our operations are in either Canada, Finland or Mexico. So we do have significant currency exposure. We have some currency hedging in place that has obviously proven to be profitable given the weakness of the U.S. dollar. And we are actively looking to add hedges opportunistically as opportunities present themselves.

Do you view the devaluation then as a negative or positive? Or is it kind of a wash?

Well, overall, there is a correlation between the devaluation of the U.S. dollar and the appreciation of gold. And we have great leverage to the gold price. So we benefit as the gold price increases. That said, we remain very bullish on the gold price. And we are, therefore, aware of the pressure on the U.S. dollar. And so we would go in and hedge when we can. But overall, we want gold prices to go up and...

What is the current spread roughly for your company?

I'm sorry, the current spread?

Between your costs, all costs and the gold price which is, gold is around $16, $19 now, and I think your last release said your costs were around $578 of $560 something like that.

Yes, so those are the right numbers. It's about $1,000 to $1,050 right now.

Your next question comes from Joung Park from Morningstar.

It seems like most of the increase in the CapEx forecast comprises of onetime items. But I'm also wondering how much of this is due to structural increases in the gold mining industry, which will affect the company's just run rate CapEx levels going forward in 2012, 2013, et cetera?

General labor and consumable or material escalation would be about 15%. So that's just strictly on labor and the materials that we would see CapEx increase. So that's just a general industry-wide consensus. However, having said that, there are also other potential issues like just general infrastructure and contractor availability, the quality of engineering, et cetera. So all of these other factors have a more important role to play in overall CapEx escalation. And from our experience in dealing with the engineering companies, et cetera, they are being pushed to the limit as well and frequently, the people to be able to do detailed design are just not available. So the final product may have some flaws in it. So when it comes time to do more work or execute or refine it, you'll see escalations in CapEx.

Okay. And do you guys expect to increase your CapEx forecast for 2012, 2013? And not just for the [indiscernible]?

Well, we're always going to look at other internal opportunities or to see whether we can accelerate some things. But I would think going forward, if you look at what we have done this year, we are continuing to de-risk like things like dyke construction. And once those dykes are built that's a onetime item. The subsidence issue at Goldex, which is a large ticket item. Once that water inflow is resolved, that's a onetime item as well. So it's not as if this is going to be perpetual and we're going to have other issues. However, if we do get an opportunity to accelerate underground development because of interesting exploration results or add more drills or buy a piece of equipment or change or modify a mill and get a very good short term return on investment on it, we're going to continue to actively pursue these types of opportunities to be able to keep a lid on our operating costs.

Okay. And speaking of opportunities. What are some aspects of the Phoenix deposit that made it interesting to you? Because obviously, there are tons of juniors out there even within the Red Lake district alone. So what was particularly exciting or interesting about Phoenix and Rubicon?

Well, I guess, the #1 answer is I like Red Lake. But no, I think the second thing is when we started looking overall at our overall portfolio of properties, grades, et cetera, and it was a discussion that we had after building the Penna Shaft, we were biased towards deep underground mines, et cetera. So we decided to look at opportunities that had easier open pit type operations. And so we looked at our overall average grade, and I think our portfolio, what we needed, what we would like to be able to obtain at some point in time is a high-grade deposit, a real sweetener. And that's one of the reasons Rubicon does offer that potential. The grades are in the neighborhood of 17 grams per ton and it also has a significant upside. And then the other thing is when you start looking at overall execution risk, permitting risk, things of that sort. Well, you look at Rubicon. It does have underground access. It's got some of the permits in place. It is close to infrastructure. It's in an existing and well-known mining camp. So these are all pluses that you have to look at going forward. So Rubicon offered the opportunity on all of those issues.

The next question comes from David Haughton from BMO Capital Markets.

Perhaps for you, Ebe, looking at Goldex, you're doing quite well on your throughput, well in excess of your 8,000 tonnes a day. Can you sustain that kind of level, the 8,500 tonnes a day level? Or should we be backing it off a bit going forward?

Keep it. We have 13 million tonnes of broken underground reserve in the Goldex Expansion Zone as we speak. So we feel with the modifications that we have made with the mill, with the SAG mill motor, with the pumping capacity to the tailings spawn, those are the -- that is the tonnage that we feel comfortable with. Jean, do you want to comment?

No, with the pre-crushing circuit and all of your [ph] component we are in line to maintain that cap.

Okay. That's a pretty good result. Having a look at that D Zone that you had shown in your slides, should we be thinking about this as another mass blast potential?

We -- this is very early days, I mean, if I start arm waving a bit here. We view this as a potential repetition of the Goldex Expansion Zone. When you start looking at some of the thicknesses and grades, they're very similar to what we had obtained between before 1996 to 2005. So it's very early conceptually, but we've only -- we started the 300 meters of ramp development. The other thing that we may do or recommend and we're toying around with right now is why stop the ramp. Keep it going and to be able to have more drill platforms deeper down to be able to assess the deposit. But I think the second time around, it will be a lot easier because we have all of the experience in history of the Goldex Expansion Zone above. Back in 2005, it was very difficult to quantify the grade, and we did extensive sampling. But I think this time around, if it looks like a duck, quacks like a duck, it probably is a duck so...

And how does E Zone fit into that broad scheme of things?

Sorry...

How does the E zone fit into that scheme of things? Would that just be a smaller project on the way down to D or...

These are all potential zones that we are evaluating individually. We have the M Zone. We also have the S Zone. So I think in the overall mine plan, like D Zone, is so fresh that we will probably put all of our energy on the D Zone because it has the biggest economic impact. It has the biggest potential to increase our reserves. But of course, all the other satellite zones over time will be looked at in detail and over time will be mined out. I think what is interesting at Goldex, and we did this exercise back in the mid-90s in the early days with John Tumazos. I mean, the overall envelope at Goldex, we came up with over 90 million tonnes of an average grade of 0.04 ounces of gold per tonne, which translates into 3.6 million ounces of gold. So if you look at the 1.6 that we currently have and around the 750,000 in resource, not including this latest drillhole -- these latest drillholes, we're well on our way to that overall big number.

All right. Switching continents now and looking at Kittila, you had made reference there to an expansion. Are you thinking there about an expansion of the plant?

Well, we are looking at the 50% expansion to 4,500 tonnes per day. That is the -- what the underground ramp and can sustain comfortably. That's the maximum capacity of the ramp. Anything bigger, anything higher than 4,500 tonnes per day would require either a second ramp or shaft, et cetera. So we have decided just right now to look at maxing out the ramp, expanding the mill. But of course, in the mill, anything we do, there will be provisions made for further expansion, if so required. This latest drillhole on Rimpi, 1.5 kilometers to the north of the main Suuri infrastructure, well, that's a very -- that opens up a lot of -- and asks a lot of questions. It's -- can that be a second operation? As Sean mentioned, this is looking very similar to the area between [indiscernible] and the Penna Shaft. In terms of distance, should we be looking at putting down an exploration shaft size at core production and have a separate satellite or second mine there, not conflicting with the Suuri mine and then shipping that ore to the Kittila mill and still have the economies of scale to be able to have with respect to overhead to be able, with both minds, keep or help in keeping our costs down. So it's very early days, David, but nonetheless, a very exciting intersection.

Yes, I also understood that the autoclave capacity was at 4,500 tonnes a day. So it sounds like it matches the ramp. What sort of timing would you have in mind for the expansion to that level, the 50% lift in throughput?

Well, the underground part, I wouldn't say, is easy but it is simpler. It just means additional mining equipment and additional development to prepare mining blocks to sustain that tonnage, so that -- and additional ventilation and things of that sort, so that really isn't overly technically complex. With respect to the mill, I'll turn it over to Jean. He can give you a bit more detail on what his thinking is.

David, we plan in the Q4 to have the results of the study for the 4,500 tonnes per day. Let's assume that it will be positive, then you have to figure out, let's say, at 2 years after, to go with. In terms of the autoclave 4,500 presently. The current autoclave will be able to -- with some modification, will be able to handle the throughput. One point with the new discovery, with the Rimpi, the possibility to go at 6,000 maybe more high, and we will have to revisit -- we may have to revisit on the positive side if we move it faster than expected at the potential 6,000 tons per day. So it's early stage. By the fourth quarter, we will have more information.

And ultimately, this mine is transitioning from the open pit to the underground. What proportion was the underground of the throughput for the quarter just gone?

1/3. The underground is currently averaging 1,000 tonnes per day of the 3,000 tonnes per day capacity. And going forward, by the end of next year, end of 2012, we expect that to have increased to 70%. And then in 2013, when the open pits get depleted, it will be at 100%.

All right. And as far as the unit costs go, kind of all over the place from one quarter to the next in Euros, EUR 79 this quarter, EUR 75 last quarter. What should we be thinking about notwithstanding the one-off issues? What should we be thinking about going forward?

Well, based on our internal calculations, if we get -- we do succeed in getting rid of the contract and we do have steady-state operations of 3,000 to 3,300 tonnes per day and we are back on the Suuri pit full time without any production disruptions or whatever and we do mine our -- our roughly 100,000 tonnes per month, that figure should be somewhere in the mid-60s in terms of Euros, low- to mid-60s in there from the present value. That's what our internal target is.

Your next question comes from Haytham Hodaly from RBC Capital Markets.

Just a couple of quick questions. Maybe I'll start with Ebe. Just on Meadowbank, you provided some good details there on throughput, higher at 9,300 design is 85. I think you're operating well above that. Cost per tonne have obviously come down because of the throughput. What type of cost per tonne are you seeing if you were to be at the 8,500 tons a day, Ebe?

Currently, we saw 81, and we believe that we can see low-70s and maybe high-60s if everything goes well. But it's -- I would say it's a fragile number. I'm not kidding anyone or myself. We have made progress, and it's going to be a steady progress. But it's not going to be next quarter. It's going to be 72, and then the quarter after that, 65 because we still have a lot of work to do. So that's what our target is.

Okay, no, that's good. Maybe a question for either Sean or Ammar. Just with regards to the increase in CapEx, $110 million increase. Can you outline what the accelerated portion was? And I guess that's the first question to start. There was $45 million, I think, accelerated from 2012. Where is that going?

It's Ammar here. There is the -- of that $45 million, roughly half is accelerated underground development in different mines. I can talk to you off-line on specifically what those items are. $11 million of that is accounting reclassification. So it's really not additional spend. It's just spend that was going to be expensed that now is getting capitalized as a result of faster than expected or faster than budgeted development. That's the majority of it. And then the rest is effectively capitalized drilling at existing mines because of some good results we've been getting. And we're frankly being aggressive in developing these mines, which is a good thing.

Okay, and then the $25 million that you outlined as part of the remainder, the remaining 65, I think you allocated it to FX changes. What exactly are you talking increasing CapEx because of FX changes? Or are we talking -- I mean, what is that? It's that another accounting thing? Or is that an actual cash thing?

No, it's -- most of the CapEx we spend is either in Canadian dollars or Euros or Mexican pesos. So we -- those have not had cost overruns. Those are still on budget. It's just that we express numbers in U.S. dollars, so the Canadian dollar equivalent, for example, or the U.S. dollar equivalent of the same Canadian dollar has gone up.

Okay. And last question, do you have an indication at this point how much of the Meadowbank fire added in overall CapEx?

Yes, the overall cost of replacing the kitchen will be in the neighborhood of $15 million to $16 million. We should get a credit of about $10 million from the insurance company. The other thing that we did is we kept everyone on payroll. And really, we did not get any productivity or anything from that. What we did do is maintain our workforce. So there's probably another $4 million in there. And ultimately, it proved to be the right thing to do because everybody came back when there are so many jobs out there and they could have left.

Your next question comes from Barry Cooper from CIBC.

Just wondering, what was the due diligence that you did on the Rubicon investment? And then, Sean, you mentioned in the introductory remarks that the strategy is to take a toe hold there, kind of see what, how things evolved and whatnot and basically de-risk the -- any further investment, if indeed there is further investment. So what do you see as kind of the main risk of the Rubicon investment right now?

The due diligence that we did, Barry, there was a small group of us and myself included. We went underground into the F Zone. We met with the people. We looked at all of the data and satisfied ourselves that, number one, the gold was there and that there was upside potential. And so we did some internal checking with respect to resource models, et cetera. But we felt very comfortable. I mean, Red Lake, when you start seeing that high frequency of visible gold, I mean, we saw it at Gold Eagle, when you start seeing that sort of frequency. I'm not trying to market for Rubicon here, by the way, but you start seeing that. Then traditionally, in the Red Lake camp, that bodes well, and that has been the history at Campbell, at Dickenson and at Goshen.

And as far as timing goes, I think one of the other things that the group highlighted when they came back is that Rubicon is a very good explorationist, but when it comes to underground development and planning, there's very little expertise there. And that's what's certainly Ebe and the team bring to the table. How does that sort of factor into timing? It's hard to say right now. We'll certainly give them our input on how we think they should tackle the deposit and the next steps there. But traditionally, if you look at some of our historic strategic investments that we've ended up taking bigger positions in, it was anywhere from 1 to 3 years before we decided to increase our positions. And conversely, those things that we sold, it was pretty much the same timeline. A couple of ones that are current single asset producers right now out there did have meaningful investments in those over the last few years that have been sold at a profit. So generally, those take at roughly the same time, 1 to 3 years.

Right. Sean, you may have misinterpreted my question then. You implied, though, that de-risking the project, I wasn't thinking of the timing, and although maybe that is the answer. I was wondering, do you see the risk of maybe the project is not as big as what you had hoped? Do you see that the risk is in the reserve? Do you see the risk is in the permitting? Do you see the risk is in the capital costs and what could evolve? I was sort of trying to get a sense of what risk you were applying there.

Well, I think with respect to Rubicon, the biggest risk there is grade. And then, of course, the exploration upside. I mean, that is the story. If you -- can you get Red Lake type camps, everything else like from infrastructure, the region, permitting. These are all relatively known issues. As far as capital costs, the developed and underground mine, whether it's the size of a Lapa or whether it's slightly bigger or whatever. This is all very well in our comfort zone. It's very close to homes, so we feel that those really aren't risk issues. Rubicon, the F2 Zone or the Phoenix deposit, we feel will need a lot more diamond drilling. We feel it may need a lot more underground access to be able to get a better handle on. And that has to be figured out in our view, and that could conceivably be a risk factor. But then once again, every time you see all of that visible gold spread out over the longitude in all sections and you start looking at all of the drill core, and it looks very familiar to this material that you've seen elsewhere and the camp and that bodes well. So -- but I think I have a lot of work to do.

Right. So when you see it in the longitude, how did that look on the cross sections?

We feel it looks quite intriguing on the cross section. What I mean, the cross sections, the way it was drilled, I mean, there's a lot of off section holes and we tend to be a bit more geometrical. I mean, they did that out of necessity to not put in the underground development. They also had to do it from drill platforms on Bruce channel. So there's a lot of questions with respect to surveying, projections and locations. So our way of thinking is, we like to go and touch it and feel it and see it and open it up and then get a better sense of the ore geometry.

Right. Okay. And then on a similar vein, no pun intended but a different place, how comfortable are you with projecting the true widths at Rimpi? 21 meters, you indicated as a true width. What was the core width? And how comfortable are you that that is indeed true width?

Well, we look at -- we've been drilling there now since 2005, so we've got 6 years of experience. And now we're able to judge the precision of our drillholes along the belt and we've intersected drillholes at depth. And actually, when you start looking at the foliation or the coring, you're getting pretty -- you're pretty close. So the actual core length here was that 58 meters. And of that, at the angle, at acute angle, it ended up being around 21 meters.

We're pretty comfortable just judging on the orientation of the foliation, survey data, experience. So it might be 19, and then again, it might be 23.

Your next question comes from Anita Soni from Credit Suisse. [Technical Difficulty]

Your next question will come from Richard Heuermann private investor.

This relates to a question I asked some months ago regarding your Mexican properties. The drug wars, of course, have escalated substantially since then. Apparently, local law enforcement is almost nonexistent. Federal law enforcement apparently is moving in to take their place. Again, my question is, what is your perspective? What is being done regarding to the Mexican properties?

Richard, it's Tim Haldane. I have the same answer to the question from a couple of months ago. We're very aware of what's going on around us in Mexico. We're most of what you hear in the news, and concerns that you expressed, this is happening in the border areas or some poorly populated zones, we're not in those zones. And we've had no direct security impacts on our operations in Mexico. So we're just remaining alert, following good practices and...

You've had no incidents of concern then?

No, nothing related to the mining operations.

All right. Well, but not related to the mining operations then?

That's right.

Your next question comes from Steve Butler from Canaccord Genuity.

Well, guys, I'll squeeze one in there. Ebe, it looks like good progress for sure at Meadowbank, and you talk about the potential for $70 to $65 per tonne? We won't nail you on that, but we'll see how Q3, Q4 comes through. The grade was expected to be 3.8 grams per tonne in the second half. Do you have confidence to get the grade up from the -- just over 3 grams in July up to the 3.8 for the second half?

That is largely based on our mining plan and accessing higher grade packets in the open pit. And if we access the ore, we will make that grade. I'm actually quite pleased now because the grade we are seeing is what we are predicting and what we are getting in the mill. But once again, that is a risk factor. If we continue to dilute it, that could be a problem. But right now, based on July's performance, we're encouraged.

How was dilution in July, Ebe? Was it the new buffer blasting implemented?

Well, we were -- we only have a couple of blasts, as we -- as I mentioned. And we don't have the -- a number to say, all right, it was -- used to be 25 and it's now down to 15. We don't have that number. But all -- when -- what we do have is, we know that the displacement has been cut in half. And when we do put the grade control balls in the production drillholes, we can locate them a lot faster. And we don't lose them by them being projected all over the place. We can actually mine them for a change. So this is good progress, but we still have to work on quality control at depth of drillholes, location of the charges. All of these things have to be -- they are a work in progress, and we will continue to make progress as we move forward.

Your next question comes from Tanya Jakusconek from Scotia Capital.

I just wanted to have a little bit more clarification on Goldex, Ebe, just so that I understand it. Just on the soil settlement issue, my understanding is that now you're grouting the share zone and you're pumping the water back into the water table to stabilize that. When is all of this $19 million that you're spending going to deal with it all? Has it already been done and you've seen settlement and so it's all taken care of or...

Well, we have an overall budget now of about $19 million and we have spent $6 million. We still have a lot of grouting to do. What we first did is, we put in the diamond drills and we defined the structure, we -- to make sure that we will be grouting in the right place. So that structure now has been very well located. There are a couple of ways in which to do it. So we have a 2-tiered approach. One, seal the sheer zone, pump it full of cement, so that the water doesn't go into the underground workings. And then the second thing, and then let nature take its course, and gradually, the water table will build up and the subsidence will end. But to accelerate that, we have got wells drilled and we are injecting water. And what we have found, the moment we inject water subsidence slows down almost immediately. So we'd like to make sure that we'd seal it. And worst comes to worse, we'll just inject water into the water table, and it will be a net benefit of 00 and the subsidence should stabilize.

Okay. Now when do you think this project will be completed? You said you've only spent $6 million, you've got $19 million. Is it a 2011 project by the end of the year it should be done?

That's our objective.

And what -- how much impact have we seen from surface? Like, what sort of area is the soil impact?

I would say there's probably an area of 150 meters in diameter. And it's an area for those of you that had been at the Goldex mine site. It is an area that starts just at the edge of the dome and goes towards the highway [indiscernible]. And the center of that area is where it is.

Okay. And how much displacement have we seen?

Well, the maximum displacement that we have seen is 5 meters at the center. It's like a cone of depression.

Your next question comes from Anita Soni from Credit Suisse.

Just a follow-up with the Goldex. Were there any houses that were impacted by the subsidence issue?

Yes, there are -- since we are very close to existing houses, there are some houses and a business that are impacted by that. We have been in discussions. We've already acquired some of the houses. So that it is part of the $19 million provision.

Okay. And just with regards to continuing on with dilutions but at LaRonde, the grades dropped there. You said it was as a result of dilution. Is that something that we should be forecasting or that you've already forecasted into your LaRonde deeps guidance going forward in the next 2 to 3 years? Or should we be taking down our grade?

No. The dilution at LaRonde was mostly in the narrow or in some of the zinc stopes that we mined. They are on the eastern and western limits of the pyramid, so they tend to be higher stressed and they tend to be narrower. And so it's just a mathematical thing, Anita. If the zone is 3 meters wide and you end up with 1 meter, you'll get 33% dilution. Or if you end up with the larger stope at LaRonde expansion, which is 20 meters thick, and you end up 1 meter, your dilution will decline. So I wouldn't change anything.

[Operator Instructions] Mr. Boyd, there are no further questions at this time. Please continue.

Okay. Thanks, operator. Thanks, everyone, for tuning in, and we look forward to keeping you updated on the progress we're making on our projects and the exploration results. Thanks again. Bye.

Ladies and gentlemen, this does conclude our conference call for today. Thanks for participating. You may now disconnect your lines.