Barrick Mining Corporation (B) Q4 2014 Earnings Report, Transcript and Summary

Good afternoon, ladies and gentlemen. And welcome to the Randgold Q4 International Investor Call. My name is Bridget and I’ll be your coordinator for today’s conference. For the duration of the call, you’ll be on listen-only. However at the end of the presentation, you’ll have the opportunity to ask questions. [Operator Instructions]. I would now hand you over to your host, CEO Dr. Mark Bristow to begin today conference call. Thank you.

Thank you, Bridget. And good afternoon or good morning ladies and gentlemen out of the U.S., and afternoon to those, phoning in from the U.K., Europe and South Africa. And at mid-day U.K. time today we delivered out our presentation outlining the results for the year 2014 as well as the quarter four of 2014. And my intention this evening is, this morning for you in the Americas is to run you through a quick summary of that presentation. I don’t intend to do it in as much detail because it is available on our website as a webcast. And you can go back and pick up all the details if you would like to. There was a less, really looking at the results as a whole, a solid set of results first successive year of production growth and eight year in a row that our numbers have justified and increased in the dividend to shareholders. And I think what’s very important as we’ve always said is, we’ve been able to do this without really increasing our outstanding shares in the market, our total outstanding shares have grown by just over - just under 3%. I think the results as well impressive, when you look at context of this period with gold prices being in the three-year bear market extractive industries are generally floundering and the global economic here remains quite jittery. And on top of the standard numbers that everyone look, to I think the real underlying four scenarios alters the fact that we have been able to grow cash sitting on just under a $100 million in cash and gold on hand. And we’ve also been able to replace reserves that we mined last year using the same criteria as we’ve been doing now for three years and that’s $1,000 gold price. I think there are not many gold companies that can really present a set of results having replaced the reserves that they had mined. And what will, we announced today the successful completion of the Gounkoto underground feasibility studies that brings to a total of four underground operations down our organization, we’ll tell you a little bit more about it as we go along. Just quickly a heads up on the sustainability and the systems [ph] as you know that’s becoming a very topical thing in the industry, it’s something that’s always been core to our business we delivered, an 18% improvements in our last time injuries. And this is notwithstanding the fact that we, our business is growing in its complexity and size. We also, we approve that our commitment and partnership with our host countries is effective not only to deliver profitable mines but we led the fight against the imported Ebola cases in Mali as part of the profit industry initiative that supported the Malian government. And it’s effort to contain the outbreak of that disease and that’s as you would have seen in our Ebola free and Mali again. We’ve also been very active as an industry across the region and we continue to drive those steering committees making sure that we’re focused on bringing this outbreak, under control. And every indication is that we should definitely get real attraction on our fight against Eloba in the whole region. But certainly this year, it ends with a bit more effort towards the middle of this year. Big factors in Mali has been prevention and border control and making sure that we manage any travelers and understand people’s risk profiles. Legal mining, I just touched on today, is also a topical issue across the whole of West Africa and Sydney even in DRC. DRC we’ve managed it better but it’s going to be a continuous challenge for the industry. And again, as we do in these sort of challenging, dealing with these challenging issues, we’ve worked very closely with all our host country government. Ivory Coast is by far the leader in dealing with the problem. And whilst we have a very firm view that it is illegal mining and not gold rushing. And it comes with all those horrible things that Yalea miners bring. We do believe that you’re going to work hard at alternate activities and if they’re going to want to a mine, they’ve got to sit aside the corridors that are more appropriate for the ISCALA [ph] mining and then which can be properly pleased. And that requires again a coordinate effort from the industry in partnership with the governments and we’re doing that. I think with that we move on to the highlights. I really touched on all those points. And I think the key additional point in is that we have - putting the cash balance in perspective is that now we peaked as you’ll recall in late 2013, we’ve grown our revolver, we’ve prepared it back, we’ve repaid it and we’re sitting with a solid balance sheet and again, growing that balance sheet every week as we deliver. And we’ll see from our guidance all the trends that we’ve shared with you for these last, couple of years are materializing now. We also as part of our managing our balance sheet, we rolled over the and renewed and expanded the revolving credit facility from $200 million to $400 million and we extended it on a four-year basis and on several attempts as the previous facility. So, already we have the fire-power of access to $0.5 billion of cash and growing as we charter our way through this very dynamic industry, hunting for opportunities, probably speak of it, we’ll speak of it more about that later. If we move on then to the summarized financials, really all the numbers speak for themselves the sort of points that I would point you to as the, is the lower exploration and corporate spend for the year. And that’s a result of us following our reinvigoration or inching of the exploration team, Joe really focused in on two aspects as we shared with you in July. And that is the beefing up our Greenfield’s focus, cutting back on exploration and shifting exploration in the Brownfield’s business, which we capitalized. And so, that certainly delivered the extra answers, the work that Ron and his team did on the bankable feasibility, we spent quite a bit of money on that side. And ongoing evaluation of Gorumba and the new project Megi in DRC. So that’s the reason, not really cut back on the quantum but we only show the expensed exploration in the corporate line and how does it get charged back and carried in the capital of the operations. It’s also with quite the odd that we have noticed some variance between our earnings per share and the consensus, the market consensus and estimates. And we would just remind you that Kibali, the new IFRS regime requires joint ventures to be accounted as joint ventures, so we don’t consolidate them into our numbers. Although we do in the front of our report show you a traditional consolidation of the operating numbers. And also part of that treatment in the joint venture is that Kibali has attack shield in the form of accelerated depreciation rather than a tax holiday. And because this is only a timing difference, we are confident of the tax charge at the full 30% rate which ominously reduces our earning notwithstanding the fact that there is no cash tax payment in this regard. So, when you consider that our earnings per share both for the quarter four and for 2014 would have been in-line with consensus. And you’ll see that consensus and all the other matrices were pretty close. For the rest, a solid set of annual numbers, all the clashing era is quite being in the right direction, production up cash goes down, cash up and of course no debt. Quarter four different, quarter four is down on the strong set of quarter three, results slightly due to a planned drop in grade. And that’s why we came out in-line or within the guidance overall. But we did deal with some operational challenges at Loulo and particularly in the November month and I’ll touch on that in more detail a little later. So, moving then to the operations, Loulo-Gounkoto make guidance 10% up year-on-year, improvement based on better grade, better recovery although we still got some way to go, reduced total cash costs. As operated our quarter four results were down on the quarter three numbers, largely due to slightly low term process that lower grades that come in, should drop in recovery. And although the gold production was planned to be low in quarter four, operational issues in November patterns through dilution, we had a lot bit of dilution in some of the underground steps in November. We had a recovery issue and some throughput challenges with the crushing circuit in November and also some availability on the underground equipment. But and it’s just one of those things that happen but we sort of struck an L-Goun site in one month which would have resulted in, if we hadn’t had all those results and slightly better numbers but material really. And we dealt with them by the year end, we were back on track with everything, I think people were visiting Loula-Gounkoto would have seen that. And I was, we didn’t want to really hammer the team, we wanted to try to get into this New Year with a team well focused to continue to delivery on this. And we’ve got this big challenge of going over the model, so we didn’t want to stress the team in any other way. Operating results, particularly good, despite those challenges that are just referred to, profit from mining was down only 5% against the 9% drop in gold price. And the recovery we still got 2% headroom. And we believe that we’ve got ongoing upraise on our Gravity and Elution Circuit which should deliver on that. Specifically moving now to the standalone components of the complex Loula first, the results, stellar set of results rate quarter or around. And as the Yalea and Gara underground mines stepped up to their targets. Production up from underground 24% year-on-year and this is on the back of full cost increases in grade throughput and recovery. Gounkoto mines are now operating at design and we’ve also completed the commissioning of the pace back for plants which will facilitate as we ramp them up, the ability to extract close to 100% of the high grade reserves. And even in this quarter, you saw the impact of that work reducing the development requirement. And I just point out, we’ve come a long way in underground mining if you think back when I don’t think there are many people who thought we would get to a consistent delivery of the tons that we’re doing today. I’ve certainly not been able to manage both Gara Yalea and the project in DRC. Now, we’ve got a fourth one coming on. And we’ve certainly paid our dues and their early part of stages of Yalea development as we always do, invested heavily in people and skills. And now we really believe we’ve got the expert to move to full owned operator status at our mines. And we came to make the transition at Yalea and Gara to a full-owned operator status in the course of the next three months. We look forward to the benefits of atomic control and greater flexibility and the cost savings we expect from eliminating the contractor’s margin. And we’ll come back to that a little bit in our forecast. The results for Loula certainly increased in its profit from mining reflects the shift 60-40 ratio of Loula to Gounkoto all fit to the mould in line with the aim of balancing the reserves of the two ore bodies which we’ve been talking about for some quarters. At Yalea, we’re focusing on replacing the answers as we discussed earlier. And we’ve certainly made some good progress with our exploration targeting that ore-body extension shown here. And we’ve said in regard the initial return is, positive returns from our drilling and very soon you’ll be able to start showing the potential of extending those answers. Similarly, in regard we’re a little ahead of with the drilling and our intention now is to drop the reserve base by another 100 meters and extend ore body shop where we identified some quite significant target which is suggestive of the potential to add another 400,000 ounces to our resource profile. In addition to the Brownfield’s exploration, we also continue our Greenfield’s work in Loula permit. Three targets have been identified and Yalea North and we’re looking at an additional 12 new targets in the less explored Northern part of the concession. The back-fold is now prioritization of that and really it’s still validation and then we’ll go into starting to evaluate them. Moving then to Gounkoto, as a standalone producer, production was down in line with the 60-40 ratio I mentioned earlier. And but not withstanding that the mine delivered a really impressive set of results quarter-on-quarter as well as year-on-year. And it also declared dividends of $52 million in respective earning for 2014. Most exciting development as I pointed out earlier is the Gounkoto underground feasibility study, which passed our investment focus on, which they all know very well and resulted increasing reserves in 900,000 ounces. Our main mining strategy is very similar to that practiced in Yalea and Gara, and that we look to exit it to the decline this time, we’ve learnt a lot about declines go to a straight decline from the south but access the ore-body of 2018, and ramping up and stoping by 2020. Mining method Longhole open stoping, as I said similar to our 3Q and the Yalea and Gara to support 60,000 to 70,000 ton a month operations, and we’re going to do cement aggregate full using the plants that have been demobilized with the commissioning of the back fold plants at Yalea in particular. These are the parameters of the feasibility study which you can see give us a lot of mine, a lateral mine of eight years. And we’ve still got about 100,000 ounces of conversion drilling still to do, to virtually bringing us up to that 1 million ounce mark. Interesting, that work is really taken Gounkoto back to over 3 million reserves which is significant. Capital estimate, [indiscernible] $1 million. And by the higher ore of plus 20% is before we apply for our tax holiday, we still got some years available under our convention to make applications for a tax holiday. There is still upside in Gounkoto. And we continue to explore the plunging shoots beneath Gounkoto pit and outside the underground project which could deliver an additional, another 400,000 ounce resource as you see in this draft. And then elsewhere on the Gounkoto permit, we’re balancing our work on the targets shown in this next slide which is soon to come up, assisted by fairly large. Putting all that together this is what Loula-Gounkoto’s five-year plan looks like now. We’re just struggling with a little bit of technology here. But this is out, the Gounkoto’s five-year plan, it includes just the difference between the one that you got in our investment brochure and today as it includes the capital for the development of the underground mine which does not, but it does not include any impact from the capital, the change to own a mining on OpEx and CapEx. Although we have tempered our 2015 production guidance slightly to allow for this transition. Our plan is to update our guidance once we’ve settled the transition terms with AMS and we’re at in the middle of doing that at the moment. Just give me one minute, because we’re catching up. Okay, I’ll continue. And if we move on to Morila, where production was down year-on-year as the operation continues to move to closure, first quarter rolls as we forecast up quarter-over-quarter as resulting from the fact that we were feeding higher grade all from the push-back. Main emphasis in Morila is really managing the finances so that Morila can pay for its own closure. And the focus being converting the mine’s footprint into a sustainable aggregate business for the community as part of the closure process which is now ready in the focus of our attention. This again, the next is the Morila’s plan for the rest of its last CapEx for 2015, as we estimated $12 million and it’s mostly related to the tailings done with frequent project. As for Ivory Coast, the point I’ll make this afternoon is Tongon’s results for the year didn’t really do justice to the team’s achievement in keeping things going well, dealing with the very big challenge of replacing the hole crushing circuit at the same time keeping the mine running. We’ve did a great job of that, we’ve changed out the crushes. We’re still ramping up the throughput. And on the floatation side, which is a second part of that addressing our technical issues at Tongon, we finished the first phase of the upgrade of the floatation circuit. And we expect here to have the full floatation commissioned during this quarter. And we’re pretty comfortable we’ll get back up to the upper 80s as far as recovery goes. On the upper 18 side, the number is very critical and certainly putting them into against the reference of the challenging operating environment that team’s coped with through the last four quarters. And the point I’d make is that if you look at the cost control and really the, both the cost and operating profits, the numbers really are quite impressive. And on top of that, I’d also point out those people are likely to watch total all-in costs, whatever you guys call it. This is a classic example of the total cash cost being very close to that. Because if you look at the five-year forecast, you’ll see the very flat blue line right at the bottom of the diagram, which is the capital forecast. And given that we charge back all of G&A and that back to the mines, the total cash cost in Tongon are pretty much all in sustaining costs. The other point I’d point out is that Tongon is tax holiday comes to an end this year. And we expect to do the paid back of capital by the end. And also we’re - so therefore we’re going to claim dividends. And one of the beneficiaries of course would be the Ivorian government. On the exploration front, as shared with you last quarter, Tongon managed to replace all its ounces that mined, from additional ore within the pitch. And they are firm indications of further upside with infield great control drilling and also drilling on - at the deep LA and beyond the $1,000 pit which we believe has an opportunity further or convert resources to reserves. On the text, Greenfield’s exploration, focus has been on the Bambadji permit in this last quarter and in particular for Andara target and ends up following up on the significant anomalies that we’ve been picking out in the Monkona [ph] permit. We’re also at the same time awaiting a set of new permit applications to be approved as part of the post new mining code in Cote d’Ivoire. If we move on to the GLC rig, volume had ramped up all aspects of its operation to their design parameters by the year-end. A great job by the team at Kibali to deliver just short of the five-third 2,000 ounces but never the less putting it in context with the second quarter challenge we had on, in the commissioning that backend, back half of the year really did a great job to catch up and just miss that target by the year-end. Cost continued to come down nicely. We completed on the back of our first, commissioning of our first hydropower station. And just on that risk, busy with the second one and expect to commission that later in the year. The operating results couldn’t have been much better. Solid set of numbers. And I would just remind you that Kibali started funding its own capital towards the middle of last year, and it continues to do so. And this is the five-year outlook, the challenging years being 2016 and 2017 on this profile, because as we ramp up the underground we’re also getting deeper in the pit. We’ve got multiple pits developed. And so, but by trading 18 will be ready out of the way and will be in good shape. And so that’s why if you look at the where our focus is at the small set like pits near the plot that is getting our focus at the moment, because that brings flexibility in the next couple of years. Just on the RAP up of the project as whole, Phase 1 of the project is now complete or related contractors have been demobilized from SAT and this includes the RAP metallurgical facility, first hydropower station and related infrastructure. On Phase 2, as I’ve said started the work on the second hydropower station. And what really remains is the delivery of the underground mine development and the ramp-up to plus 3 million ounces of ore to adhere from underground. Just an update, specifically on the underground Kibali underground development, vertical shaft and underground miners are ahead of schedule and on-budget. And we started stoping as you know in the last quarter and we’re planning to ramp the production up to around 700,000 tons for this year. And then, continuing that ramp-up to the targeted plus 3 million ounces by 2018. Just touching on those KCD deposits, Gorumba, we finished the feasibility on this deposit during the quarter, 2.2 million tons at just under three ramps, total of 200,000 ounces of open pit reserves and a further 35,000 ounces still to be drilled out. At the same time we’ve highlighted the Megi project as having potential and to compete on with Gorumba. And this is a total target of potentially 280,000 ounces at about just under 2 grams. As the lower strip ratio more plainer ore body then than Gorumba. So it actually has - and less of a ramp cost. So economically it is as attractive as Gorumba. We’ve got a bit more work to do on Metallurgy and general layouts in this, trainings that we’re going to look at. So, we’ve got a bit of a work to do on both projects before we can prioritize which one is going to take - be developed first. On the exploration, as we pointed out big step forward in our drill appreciation of the importance of the KZ structure, the main 35-kilometer structure which locates between 2 million ounces. I mean, the reserved that we currently have. And other structure extends to over 35 million ounces and its host to more than 20 million ounces of resources. And what’s significant is that’s only in less than half of the straddling. There is more than half of the straddling that’s untested below 50 meters. And yes, it’s a really exciting destination with real gold potential and we’re quite excited that this structure has the potential not only to deliver some of the satellites or more satellite deposit like the Gorumba’s. And that we also are focusing on Kilimba, Acomba which is a target write-up in the northwest or top-left corner of the slide. And it has lots of similarities to the giant KCD deposit. And there is definitely potential to find another bid world-class deposit within the structure, just not explored enough at this stage. Zooming out, just touched on our big focus and what I remind everyone is Randgold is the [indiscernible]. We’re really looking at broadening our business and enlarging our footprint in this region. And we’re reviewing opportunities around the margins of the Congo Craton but then the OCN as well as surrounding countries Cameroon, South Sudan, Kenya and Tanzania. Just finish with a quick update on Massawa project. As you may recall, at last quarter, we had found that different assay, I mean, we were suggesting that we were undervaluing the parts of the ore body. I’m relatively relieved to say our ongoing work has pointed to rather the big driver and the great, and consistency is the size of the sample that one assay. And so, we really looked at different ways to take a bigger sample through the ore-body. Right now, the most optimum technique is in the, assuming that there is no water interference is RC drilling. And this comes with a lot of benefits. It’s going to be quicker and cheaper. And so, what we’re doing now is just completing, we’ve been in the evolving zone, valuation, detailed drilling projects. Within the central zone, we’re now busy with the shot over the same closure. On that basis we’ll then re-scope the feasibility and it’s drilling. And in a fazed manner, reevaluate your ore-body. And so, we’ll be in a good shape to begin update you next quarter. This brings me to our group five-year forecast, which is just a combination of all the five-year forecast that we’ve given you through the presentation. I point you to the sharp upturn in the great quarter in 2018 which is, really represents the impact of Kibali going underground. The improving grain and clearance forecast continue to drive down total cost. The sharp drop-off in capital combined with strong cash flows from operations will ensure our continued profitability. We run all our business models at $1,000. And that we think is important while we search for opportunities and ways to continue to invest in our future. And finally, I end this presentation as usual by positioning Randgold against its peers. As you can see in 2014, we comfortably out-performed the Euro money, golden equity index. In fact in the first quarter, part of this year, we’ve been a top performer in the FTSE 100 as well. Going forward, we are continued to a pot our mines as to how best to use the strength of our operations, our balance sheet, our paper and our market growth while to support our profitable growth. Organic growth remains our strategic cornerstone. But as I noted at the beginning, stress markets and industries often generate interesting opportunities. And we may well elect to play a part in the probably inevitable restructuring of the gold mining industry. With that, I’ll hand back to the operator. And ask you guys to go through the necessary gymnastics to educate you have a question to pose. We have a full team here, Graham and John Steele is in London. And we’ve got Riyan [ph] from the corporate commercial side, Rod Quick from feasibility, Chris Coleman, our Chairman of the Board has graced us with his presence here today. We got Joel, Head of Exploration, Chief Operating Officer for Central East Africa and Felix Kiemde, is Joel’s assistance as the West African Exploration manager. So I’m sure we can manage just about any question.

Thank you. [Operator Instructions]. Our first question comes from the line of Josh Wolfson from Dundee Capital. Please go ahead with your question Josh.

Hi, good morning everyone. I just had two questions. And the first one it was, I guess if you’re able to provide any more information on the Mali tax claim which looks like it grew from the last result. And what the status is of the current arbitration? And then also if you have any perspectives on some of the developments more recently in DRC I guess really to pick those politics? And I guess the potential changes to the mining code? That’s it.

Okay, Josh. Malian tax claim, well we’ve got two. We got the disputed one which is now under arbitration in Paris and in fact where that price is just happening as we speak. And we expect a final outcome for that from this year. The latest taxes are a result of a recent review for ‘11, ‘12 and ‘13 tax years. And it’s more of the same really as Mali tax authorities drive their case home. As Graham will tell you we haven’t done, we’ve been strict with our advisors and auditors and we have made provisions where we think it’s appropriate. But most of the stuff is very clearly in contravention with our convention. And we certainly strong relationships with all the key ministries, the Ministry of Finance, the cabinets has just been reshuffled again and the Ministry of Finance has been replaced along with a few other ministers. So, yes, I think we’re pretty comfortable that we’ll find a proper outcome of this. And we’ve invested a lot of money on the basis of our conventions. And over the 20 years, we’ve really never got a situation where we have a grace of confrontation. And we all agree that the best way to deal with disputes even if it’s from the tax authorities applying incorrect legislation. Because you remember this, multiple mining codes and we have a grandfather clause on our codes which goes back to 1991. And we all agree the best way is to allow our competent authority to rule on this disagreement. And we’re confident about the outcome. So that’s really the situation. We continue to work with Malian authorities and yes, we’re a very big player in that economy. And we continue to do so, and in fact I’ll be standing next to the minister this week supporting Mali as a place you go and do business. So, I think that must give you the perspective in which to take these numbers. On the DRC, politics, I think we’re seeing the growing trends of emerging world politics as we move to the elections of 2016. It’s been never nice to see rioters being ending up dead. And I think everyone in DRC well within at the time. And we, one thing it’s coming through loud and clear as people are tired of this. Again, there was geopolitical project and the outcome I think was the outcome people expected, that is that the competent parliaments both senate and parliament were - didn’t allow the railroading of this proposed new law. And so, it’s seen for more transparent sticking phase of politics in that country. And it’s a very big, very complex situation. So, yes, we draw quite a lot of comfort on that process. We are dealing with very dynamic situation, and any situation in emerging markets is dominant when it comes to elections. I think if you had dynamic index, DRC is probably two or three times bigger than any other country. On the tax, the body code, you’ve seen us all making a statement publicly about where we are currently. I think we’ve gone a long way, the statement we’re making is, it’s been a very engaging and albeit drawn-out process, this mining code review. The latest numbers which are shared with the market down our website and when was it, November?

September, it’s still the same.

September, October, it’s really where we got to an engagement and then we had the whole Cameroon reshuffle where we had very low guidance in the signing the ministry as woken up to the fact that it’s going to do something. And wants to try false that through parliament and state it for review. Yes, our point is that, we had got to a point where there were two major issues that we hadn’t reached term senses and that is the royalty structure. Although it was within range, it was how we structured the range and whether we provided some scope for deferring industries and remoteness of the projects that were being developed. And the second one was the stability clause which is absolutely crucial if the DRC wants to build on the - it’s really very real successes of the past two decades. The other point is that we think debating and reminding people is that, the DRC’s mining industry is, it’s been developed under a myriad of different turns. And it’s only very recently that the latest, that the code is being applied to fairly large investments like Kibali. All the others or many - most of the others are, have been developed under specific product deals or side deals or deals through the Paris Ethos. And we’re saying that the code is not the way to address that. Because if you rather model just with the current code, and you’re rare-neck the mining industry through that, the government should be getting a substantial portion percentage of the revenue. And they’re suggesting that not. So, yes, this sounds to me like a very important way opportunity for the transparency initiative to play its role. And so that’s what we’ve said. And we’ve said to government, if you feel you’re not getting the revenues, then there is, and the mining industry, mining charges are working less, putting commission together and understand where the money is leaking, because it should be coming because with absolutely no fear of price reduction, DRC current mining code is one of the most aggressive as Africa, it’s not the most aggressive on a tax basis. And so that’s where it is. And we’re, as you know, probably the Congo DRC is a place where if you keep quiet you’re approved. And so we’re as an industry are committed to continuing the debate we’re mindful that it’s important to keep it constructive and that’s what we will do.

Okay. And just on the prior comments you made, that you have made provisions or is it appropriate for the Malian tax, I guess claims. What were the provisions or in what quantity provisions were made?

Graham.

It’s a service place of a tax claim. Yes. So, we previously had provisioned about $14 million. We’ve added another $13 million, so we’ve got about $27 million provisioned.

Okay. So nothing, nothing that would cause you to use that credit for something else more or less?

No, I mean, we’ve obviously been conservative to be honest. We don’t believe it would even be that amount but we’ve been conservative in our provision.

Okay. That’s all the questions I had. Thank you very much.

Thanks Josh.

Thank you. Our next question comes from the line of Patrick Chidley from HSBC. Please go ahead with your question, Patrick.

Hi, good day everybody. Just questions on Loulo, just on the underground plans for 2015, I hope if you could sort of outline a bit more detail as to what the expected tons at Gara and Yalea would be, as well as some developments meters as well planned?

Yes, I think Patrick, just one thing you reminded me of is, we don’t, we have still got to a proper tax holiday in Gounkoto, I thought you would ask that. We’re looking at a 60-40 ratio out at Loulo and Gounkoto. We don’t like giving you all the details, either your job is not to write-down mines. We’ve given you in the profile on year-by-year basis. And we would like to rotate some of that flexibility to manage these businesses. So, yes, when I see you, I’ll take you through the mine-ore. But at this stage that’s - we’ve looked at 60% Loulo underground 40% Gounkoto. We keep that profile pretty well right through the five-year period.

All right.

So, that and any other throughput hasn’t changed at all. I mean, our mulling, planned mulling is 4.4 million tons for this year. And then we really top our, we’ll move to 4.6 million tons flat for the rest of the - if you do the rest of the tick that’s what it is.

Okay, all right, thanks. And…

All right, sorry, and Yalea is 120 and Gara is about 100, but yes, that’s - so now I’ve given you then numbers.

Well, thanks a lot. Okay, is there any open pit planned or anything outside of in the Loulo area that you might be thinking about like going back to some of those older areas or is that?

No, I think those will come in a higher gold price if we saw in the 10-year plan, yes. So right to saying they’re coming in the 10-year plan when you fade out all the capital and we’re just marginal costing.

Okay, that’s very useful. And then, I mean, I know this is detail again, but can you tell on what the strip ratio of Gounkoto might be roughly speaking?

Strip ratio going forward?

Just lift here?

It’s the same as what we told you last year.

Okay.

It’s about 12, look let me check, because I’ve got - I’ll just quickly check that number Patrick. So let’s go to the next question, I’ll tell you as soon as I.

Okay. Next question would be, the Megi part, I didn’t get to whether or not that was included in the total resource already and new sort of addition for the resources?

Yes, it’s in the resource, yes, it’s in our resource.

You asked me for the strip ratio of Gounkoto or Tongon?

Gounkoto.

Okay. Gounkoto, strip ratio is for 2015 is 15.

Okay, thanks. Great. And then in terms of the Loulo paced drill, as you issued in Q4 and those are the things that you said are fixed, are they?

Yes. We got to have a few issues Patrick as we go along. One thing I can say is Gara is now outperforming Yalea because we just got a draught. And we’ve still got some teething problems in here Yalea, particularly on the reticulations that we know we can got a bit of work to do to take out some of the bends and make it more efficient. And at the same time, remember we’re always forcing the mix. We’ll aggregate less cement in less slime, and every now and then we get it, we miscue I mean. We’ve got pretty good at cleaning the pops. Yes, I think well, after a month, push it along a bit, but what really gives us comfort is how quickly the Gara team has got up to on top of that. So, we don’t know, we don’t want to say it’s perfect but yes, this is a brand new size that’s and we’ve done really well at it. And we’re at work it’s the appropriate strategy, so we are cumulative in becoming experts of that. And we’re building, we’re going to build a transponder lot of learning to Kibali as well, slightly different product which we’re putting it out in modern Kibali, but still it is a lot of alerting you can get out of this, the teething problems we’ve had at Yalea.

Right, right. So, Gara is doing well, Loulo is a little?

Yes, I think that the merger, they’re not worry about the backs they’ll look at the quarter-on-quarter development and see how it’s coming down. And that’s the direct product I’ve been able to fill in the probably stripes and get into immediate stuffs.

Got it, yes, okay, thanks. And how about some, just on M&A, you mentioned that you’re reviewing opportunities and there is the restructuring, the gold industry is up-changing silver and gold. You said similar things that the industry by November, I’m wondering if anything has changed in terms of how you, what you view that there are opportunities or are you thinking opportunities have gone away a little bit primarily?

It’s up, what I’m saying is and I’ll say this to you for a while. This dynamic situation - I think it’s more the industry is on lot more stressed than certainly you, everyone else think. And anyhow everyone is delaying, there is a lot of high-grading going on, so we’re bringing the cliffs, there is a big cliff coming at us as an industry. And we’re bringing it forward, and it’s, and the gold price is not going to, I think that the gold price is definitely on a better trend. And my view is that it’s going to trend the same as it did out of the edging process. There is a big demand but yes, industry, just keep pumping ounces into the supply side. And you’re going to take the company, if you look at that turn, upturn from 2001, it took four years before you really saw the benefits of the higher gold price. I think we’re in, and really that slope is going to be dependent on whether the industry against form proactive deals with its reinvention or it’s got a weight around praying for a higher gold price until the intensity drives it to do so. And so, it’s not, and one thing we’ve learnt is, don’t go and dig out M&A in a market that’s not sure about where it’s positioned because there are many people that have paid premiums in a market that changes very quickly just often as in you look like a banana. So we don’t like looking like bananas.

All right. Many thanks. Okay. Well, thanks hearing Mark and thanks very much [indiscernible]?

I mean, the big fact Patrick is exploration and exploration and exploration, we know that 25 of those big ones at dedicates again. So, your holidays are going to look a lot more stressed over the next couple of quarters.

Well, I’m sure you’d come up with the goods, looks like you’ve got some good opportunities that several hope deserving.

Thank you. Our next question comes from the line of Max Reith [ph] from Merger Markets. Please go ahead with your question Max.

Hello Mark, and gentlemen, thanks for taking the question. Patrick really asked a question that I was focused on. But I’m wondering if Mark you can give any more detail about what outside growth could be attractive to Randgold?

Hi Max, yes. Anything that has the potential for 3 million ounces or more of valuable gold that will deliver 20% internal real rate of return at a long-term gold price of $1,000.

Thanks very much.

Thank you. We currently have no further questions coming through. [Operator Instructions]. We have no further questions coming through. So I hand you back to your host to conclude today’s conference call.