Freeport-McMoRan Inc. (FCX) Q4 2011 Earnings Report, Transcript and Summary

James R. Moffett - Chairman of the Board David H. Thornton - President of Climax Molybdenum Kathleen L. Quirk - Chief Financial Officer, Executive Vice President, Treasurer and Commissioner of PT Freeport Indonesia Mark J. Johnson - Senior Vice President and Chief Operating Officer of Indonesian Operations Richard C. Adkerson - Chief Executive Officer, President, Director and Chairman of FM Services Company

Garrett S. Nelson - BB&T Capital Markets, Research Division John Charles Tumazos - John Tumazos Very Independent Research, LLC Raymond Kramer - BofA Merrill Lynch, Research Division Brett Levy - Jefferies & Company, Inc., Research Division R. Wayne Atwell - Rodman & Renshaw, LLC, Research Division Charles A. Bradford - Bradford Research, Inc. Unknown Analyst Brian MacArthur - UBS Investment Bank, Research Division Oscar Cabrera - BofA Merrill Lynch, Research Division Paretosh Misra - Morgan Stanley, Research Division Justine Fisher - Goldman Sachs Group Inc., Research Division Kuni M. Chen - CRT Capital Group LLC, Research Division Richard Garchitorena - Crédit Suisse AG, Research Division Michael F. Gambardella - JP Morgan Chase & Co, Research Division Sal Tharani - Goldman Sachs Group Inc., Research Division David Gagliano - Barclays Capital, Research Division

Ladies and gentlemen, thank you for standing by. Welcome to the Freeport-McMoRan Copper & Gold Fourth Quarter and Year-End Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Ms. Kathleen Quirk, Executive Vice President and Chief Financial Officer. Please go ahead, ma'am.

Thank you. Good morning. Welcome to the Freeport-McMoRan Copper & Gold Fourth Quarter 2011 Earnings Conference Call. Our results were released earlier this morning and a copy of the press release is available on our website at fcx.com. Today's conference call is being broadcast live on the Internet, and anyone may listen to the call by accessing our website homepage and clicking on the webcast link for the conference call. As usual, we'll have several slides to supplement our comments this morning and they're also available on our webcast link at fcx.com. In addition to analysts and investors, the financial press has been invited to listen to today's call, and a replay of the webcast will be available on our website later today. Before we begin our comments today, we'd like to remind everyone that our press release and certain of our comments on this call will include forward-looking statements. We'd like to refer everyone to the cautionary language included in our press release and presentation materials and to the risk factors described in our SEC filings. On the call today, Jim Bob Moffatt, our Chairman of the Board; Richard Adkerson, our Chief Executive Officer. We also have Dave Thornton and Mark Johnson here with us today. I'll start by briefly summarizing our financial results, and then turn the call over to Richard, who will be referring to the presentation materials on our website. Today, FCX reported fourth quarter 2011 net income attributable to common stock of $640 million or $0.67 per share, compared with $1.5 billion or $1.63 per share for the fourth quarter of 2010. For the year 2011, FCX reported net income attributable to common stock of $4.6 billion or $4.78 per share, compared with $4.3 billion or $4.57 per share for the year 2010. Our fourth…

Good morning, everyone. As reflected in Kathleen's summary of our financial results, the second half of 2011 and particularly the fourth quarter were very eventful for our company. We faced some significant challenges at our operations in Papua in Indonesia with the strike. That was our first strike of that nature that we've had in our 40-year-plus operations there. And with the civil unrest and security issues there, we also had a lengthy strike at Cerro Verde in Peru. When you step back and look at those challenging circumstances to see the financial results for the year, where we exceeded our records that we had established in 2010, it's really a gratifying accomplishment. The labor disruptions and security issues at Grasberg did affect our fourth quarter results. But even during the course of the strike and bar the other operations that we had, we had very solid operating performance, and our operating team has just done a great job in these circumstances. We do have new labor agreements at Grasberg that we've reached an agreement on. We were able to complete an agreement at Cerro Verde where we were able to operate without a significant impact on production during the course of the strike. And then we reached a new agreement at El Abra in advance of the expiration of the contract there on a "normal course of business" basis. As we were dealing with these issues, we continued to advance our growth projects to increase our copper production, and those projects are leading to a 25% increase in our copper production over the next 4 years. We continue to pursue and are accelerating our exploration program to identify future reserves and production growth. And our company has a very strong balance sheet, which provides us the basis for investing…

[Operator Instructions] The first question comes from the line of David Gagliano with Barclays Capital.

I just had a quick question on the capital spending at Cerro Verde in 2012 -- actually, 2 quick questions. First, I just want to clarify that roughly $1-billion spend at Cerro Verde, is that your interest? Or is that on a 100% basis? And then the second question, if construction is starting in 2013, what's the $1 billion in 2012 going towards? Is that the wastewater treatment plant, equipment purchases or something else?

It is on a consolidated basis, Dave, and that spending would be for ordering equipment and in doing preparation for the construction to begin.

The next question comes from the line of Sal Tharani with Goldman Sachs.

Can you give us some idea of what's your plans for the cash flow is? There's a tremendous amount cash flow that you're going to be generating. Have you looked into -- now that the Grasberg's resolved, have you looked into paying increasing dividends or paying some special dividends?

Yes, this is -- as I said, we're really focused on spending capital. And we have $4 billion of CapEx to spend next year -- for this year, for 2012. And we have other projects that we're considering, and that's going to be our principal focus. Beyond that, the board will be -- it will be a board decision about financial policy with shareholders. And I can just refer you to what our tradition has been at Freeport for how our board has reacted to that in the past.

The next question comes from the line of Michael Gambardella with JPMorgan. Michael F. Gambardella - JP Morgan Chase & Co, Research Division: I have a question on Grasberg. When your slurry pipeline was cut, I think you were operating -- right before that, you were operating around 70%, 75% of capacity at Grasberg with the hourly -- about 25% of the hourly back, I think you had said, and contract workers and then the salaried workers. I thought you had kept those workers going on stripping and also advancing some maintenance projects. And I see you increased your gold forecast for Grasberg in 2012 versus your previous by about 10%, but you actually reduced the copper side by about 6.5%. Can you go talk a little bit about why you reduced the copper side and not the gold?

Yes, I'll let Mark address that, Mike.

Really, one of the impact of the pipeline sabotage -- as you mentioned, our fourth quarter forecast considered the workforce that we had to operate, and we were operating fine until the pipeline event. The impact of that was that really production from Grasberg essentially got shifted into 2012. The same happened for DOZ. One of the things as a result of the strike that had an impact on our 2012 metal is that the Big Gossan project got delayed. Our emphasis during the strike period was to continue to maintain the cave management at the DOZ for the underground mines. We took a lower priority on the Big Gossan operation and therefore, our ramp-up in Big Gossan has been delayed. And that's the primary impact to the 2012 metal, is that we had planned on being -- at the end of 2012, being up to 7,000 tons a day in Big Gossan. That's going to be delayed by 6 months. It's going to be more towards the middle of 2013. It's a very low tonnage mine but very high grade. It's about a 3% copper equivalent deposit, and that was the biggest impact to the 2012 metal.

The next question comes from the line of Richard Garchitorena with Crédit Suisse. Richard Garchitorena - Crédit Suisse AG, Research Division: Just a follow-up on that. It looks like you took your gold production forecast down slightly from 2013 to '15 at Grasberg. So just wondering, is that also related to the Big Gossan? Or is it -- is there any color on grades that you may be able to give us?

It's just the sequencing of the pit primarily there, is the shifting of the metal from one year to the other. Big Gossan will be back up. It will be at the full rates in 2013, so the ups and downs that you see from copper and gold beyond 2012 is more where we're at in the pit and just the shift from the end of one year to the beginning of the next. Richard Garchitorena - Crédit Suisse AG, Research Division: Okay, great. And then my second question, on the potential additional projects on Slide 21, I was just wondering, is there any way you can quantify how we should think about that going forward on top of the $5 billion that you're already targeting by 2015, '16 or so?

Well, those would involve very significant projects, and they will give us the opportunity to have substantial growth beyond that. At this point, we'll be filling you in as we go forward with identifying the projects and exactly how we'll be attacking them. But it's -- it does involve the opportunity for significant growth. If you look at the ones that would be the nearer-term projects along those lines, the major mill expansion at Morenci is one. The major mill project at El Abra is another. This gives us the opportunity to have, at El Abra, projects that would be in line or in the order of magnitude like we've been doing at Cerro Verde. Tenke is going to be a project where we'll have growth, I think, on a continual basis as we go forward. So it's a question of looking at these resources, and as I said, changing them into development projects and cash flows. But what we see for our company is a very long period of continuing growing volumes with what we have right now, and we're continuing to find new resources. And that will give us further opportunities.

The next question comes from the line of Oscar Cabrera with Bank of America Merrill Lynch.

With respect to Cerro Verde in Peru, you provide us an idea of the level of capital spend until you -- until the project becomes operational. You said $1 billion in 2012. What would that capital spend look like over 2013, '14, '15? And with changes in the tax code in Peru, are you looking at a similar situation to previous projects in Peru? Has there been any changes that may impact capital spend as you're developing the project?

Oscar, this is Kathleen. Actually for 2012, included in our capital forecast is roughly $600 million for the Cerro Verde expansion, which includes some long lead items and permitting and engineering that we're doing. That amount steps up in 2013, as we get into construction, to about twice that and then the balance in 2014 and 2015. We went through a process -- to your question on the taxes, we went through a process to evaluate the new tax regime and look at the Cerro Verde project in the context of the new tax regime. And it did not have a significant impact on our economics. It -- the way it worked is that at lower prices, it was actually a little better. And then at higher -- as prices got higher, there was -- the taxes were increased. But it didn't have a very significant impact on our economics at Cerro Verde. And with respect to Peru, I mean our focus really is on the development potential of this asset.

Yes, Oscar, as you know, there was a complicated tax government participation structure in Peru that involved these voluntary -- so-called voluntary payments that had been made over time. And the new tax code replaced many of those.

The next question comes from the line of Brian MacArthur with UBS Securities.

I just want to go back to El Abra. You've made a number of comments about it being a potential similar to Cerro Verde. Can you just clarify when you say that, whether you're referring the way you did Cerro Verde the first time, like 120,000 tons? Or are we talking about something that might be -- maybe not 360,000 tons a day, like Cerro Verde now? Or is it somewhere in between? Like what sort of magnitude are we actually talking about here?

All right. Brian, as usual, you get me walking down on slippery slope here because we're in the pre-feasibility stage. But just to try to be responsive, we're looking at a range of scenarios to be as much as maybe 240,000 tons. But that is what we potentially could do. We may not do one that big initially, but that is sort of the magnitude of what we're looking at.

Our next question comes from the line of Garrett Nelson with BB&T Capital. Garrett S. Nelson - BB&T Capital Markets, Research Division: Just 2 questions on Climax. Could you be any more specific as to what quarter of 2012 you're targeting startup? And of the 80-million-pound molybdenum sales guidance, how many pounds are incorporated from Climax?

We'll let Dave answer it since it's his business.

Yes, Garrett, we're looking at startup in the first quarter of this year. We're starting commissioning right now on some of the major equipment, primary crusher, SAG mill, ball mill. So we anticipate start-up before the end of the first quarter. For production for the year, we're estimating around 7 million pounds this year from Climax.

We also have in our projections lower grades from some of our by-product mines. And so essentially, this ramp-up at Climax is offsetting the decline in by-product, and that's why you don't see a significant change in our 2012 sales compared with '11. But we'll have the flexibility subject to market conditions to increase production, potentially ramp up quicker at Climax or change Henderson if market factors are there for us.

That's right. Garrett S. Nelson - BB&T Capital Markets, Research Division: Okay. And I think Richard mentioned Sierrita as being one of those mines.

Right.

That's correct. I mean Sierrita, I think, is the world's lowest grade copper mine, but it's a very profitable mine because of the significant molybdenum by-product there. And it's just a question of where we are in that ore body, and it's going to be -- the resource is there and it's going to be coming back to more traditional levels of production after we get through the next year or 2.

The next question comes from the line of Kuni Chen with CRT Capital Group.

I guess just a follow-up question on Peru. One of your peers in the mining space is having some difficulty with a big $5-billion project there. Obviously, there's been protests and whatnot. Just want to know what your thought process is around that and whether that has any implications for Cerro Verde going forward.

Well, it's in a completely different part of the country, a completely different community situation there. We've -- Cerro Verde's been operating near Arequipa for many years now, and we've put a lot of efforts into building relationships with the local community. So it's not appropriate for me to comment on somebody else's issues. But with respect to our issues, we have worked effectively with the water rights. We've done -- we were doing a water project for the city now. We've come up with this solution for improving life in Arequipa through this wastewater project with giving us water for our plant. As a result, for example, the mayor of Arequipa, who is a major supporter of Humala, is a very active proponent of our project. I met with the president at APEC on -- President Humala on a couple of occasions. I was very encouraged about his support of mine development and our project. And so that is -- I think that's our circumstance that we have now. Now we do have to get permits, and there's always uncertainties. But we feel very comfortable in the way we have approached the EIS and the project and with our relationships there.

The next question comes from the line of Wayne Atwell with Rodman Renshaw. R. Wayne Atwell - Rodman & Renshaw, LLC, Research Division: Do you have any projects in the pipeline which would be in situ copper leaching?

No, no. We've looked at that in the past. And no, our projects involve open pit development and block cave development underground. R. Wayne Atwell - Rodman & Renshaw, LLC, Research Division: Yes, I know you had done some work on one. And was that, that you thought that the technology didn't work or that project wasn't economic? Or what happened? That was years ago. Do you remember what happened?

That was years and years ago. And actually, it was a project that had some support by the -- some government subsidies. Those went away, and the economics just didn't look attractive to us. R. Wayne Atwell - Rodman & Renshaw, LLC, Research Division: Was it the technology? Or was it that project?

Wayne, this was many years ago, and I think it was focused on that project. We really had -- we monitor technology, but we really don't have a comment on it other than it's not in our plans.

Richard, I just -- It's Jim Bob. The biggest problem with leaching is that is leaves the gold behind. So when you have that added to the formula, Wayne, it just didn't make sense with the high-grade copper we have and the fact that we have gold by-product and silver by-product. You can't afford to leave that behind.

The next question comes from the line of Paretosh Misra with Morgan Stanley.

So on Morenci and talking about that larger, bigger expansion, what kind of activities have you planned for this year? Anything specific besides just more exploration?

Well, we're as focused initially on Morenci on the near-term project, which would expand the mill to 115,000 tons a day, and that feasibility study is being completed. Beyond that, we are looking at potentially a larger mill expansion and going through what would be required in terms of that. The exploration results or data that we've been gathering that would support an expansion but there are other factors, including water and permitting, that we have to work through. But on the near term, on the horizon, we felt this initial project was very actionable. Permitting is underway. We believe we have the water for it, so that's something we're focused on in the near term. But beyond that, we've got to solve some other issues to get to the major expansion.

And Morenci has just been a place of great activity. I mean, when we faced with the situation 2008, 2009, we took the mill -- the existing mill, the whole mill down. We cut the mine rate in half. We idled a huge number of trucks, 100 trucks or so. And now since then, we've been in stages increasing the mine rate, starting up the old mill, improving the logistics of the operation, working on longer-term recoveries. Now in this mill expansion activity, we're going -- we've got this major mill going. A number of you visited Morenci, and so it's an area -- it's a mine with lots of activity going on, lots of exploration drilling and strategic planning for where we're going with it in the future. It's a great operation.

The next question comes from the line of David Stevens [ph] with Decade [ph].

For Grasberg, it looks like that ramp-up is progressing pretty rapidly. Could you give us a sense of what the current utilization rate is or maybe what the current daily production rate is? And also, how far off do you think we are in terms of weeks from achieving the target utilization rate?

Well, we are ramping up. There's a question that -- there's time that's required of bringing the workers back. There were roughly 6,000 striking workers, as well as some contractor employees. We have a workforce of roughly 23,000 out there and a little more than half are employees. So there is a period of time of physically getting people back to work and getting them integrated, safety briefings and things of that nature. As we do this, we're addressing these safety -- these security issues that continue to be a major, major concern for us. So we are delivering concentrate to port now. We expect to have the mill rate up, say, by the end of this month, the middle of the first quarter. And that would represent a return to kind of full normal operations, subject to the continued progress on all the areas that I just talked about.

The next question comes from the line of Charles Bradford with Bradford Research.

Just a quick question on TC/RCs. I believe I saw that they were going to be 60 and 6 for this year. But is that the correct number? And how long does that price last?

Chuck, our -- we have completed our negotiations with our smelter customers, and we're slightly above that 60 and 6. I mean there is numbers that are out in the press. Actually, we don't comment on them because they're commercial numbers, but there's amazing reporting on TCs and RCs in the press. But we're slightly above that 60 and 6, and we reached agreements on very positive terms with our customers. They've -- we've had long histories with them. We've worked with them in challenging times, and there are a couple of customers that are going through operational issues in the Philippines right now. They've worked with us in dealing with the issues when we've had production issues like we've had at the end of 2011, so we're going forward. We have annual negotiations there. Some people have mid-year negotiations. Our contracts -- our TCs and our RCs are negotiated on an annual basis. So we've completed it for 2012, and we'll go through another negotiations at the end of this year into 2012. And David, our mill is operating at roughly 160,000 tons per day now in response to your earlier question. We did have one day where it was up to 200,000, several days. So that's kind of where we are as we speak.

The next question comes from the line of Brett Levy with Jefferies & Company. Brett Levy - Jefferies & Company, Inc., Research Division: Just a little bit more refinement on the ramp-up process. My sense was that during the strikes, both in Peru and Indonesia, that there was a little bit of high grading going on. Can you guys talk about kind of the quality of the ore grades and if you're going to have to do a little bit of extra overburden removal in the first couple of quarters after these strikes? Just give a little color around that.

Well, it really wasn't high grading. Kathleen's saying maybe a little bit of that at Cerro Verde. But in the overall picture, not significant at Grasberg because the mill was shut down and the road was blocked beginning in mid-October. While we did some mining for stockpiles, we focused on wastes movement and maintaining the draw points in the DOZ. So I would not at all call it high grading in Grasberg. It's just when we had the opportunity up through the middle of October to produce, we produced in more or less a normal fashion, about 3/4 of regular capacity. So even though we did focus on waste removal, because of the limited workforce that we had after the road was blocked in the middle of October, we really fell behind some on waste removal at that point, too, which now is reflected in our mine plans as we go into 2012.

The next question comes from Justine Fisher with Goldman Sachs.

I was just wondering -- I had a question for Kathleen on the capital structure. Obviously, you guys mentioned in your press release that the $3 billion of 8 3/8% bonds are callable on April of this year. And I was wondering whether or not -- what level of debt Freeport would be comfortable going down to. Would it be kind of a $2-and-change billion level? And then also, given where funding costs are in the corporate market, obviously, you're not really making much on your cash on the one hand, so you might as well spend that on CapEx. But would you consider increasing the level of debt in order to fund some of the CapEx programs just to -- just because your balance sheet can take it?

Well, in terms of the level of debt, we've been repaying debt because we had excess cash. We're going to be looking at refinancing the debt that you've referenced. It's highly attractive to us to do that. Our funding costs of a new debt instrument would be significantly lower than the current coupon, so we'll be looking at that. We'll be looking at how much to refinance versus repay. And when we look at the debt capacity, even though we bring the debt down to a certain level, we still believe we have significant capacity to have additional debt if we have uses for the cash. And so we want to make sure that we don't have debt on the balance sheet that's not -- where we're having interest where we don't -- we're not using the cash to generate returns. And so that's really what we're focused on there.

Historically, Freeport has not been a company that has levered up in order to return cash to shareholders, but we have seen a lot of other companies do that given the cost of borrowing in the corporate market. Is that -- is returning cash to shareholders considered an appropriate use of additional debt by you guys and by the board?

What we've really been focused on is the use of cash flow that we generate. And as you mentioned, we're not just spending money on capital just because we have cash. We're spending money on capital because we've got great projects that have high rates of return and we're very positive about our forward markets. So beyond that, it's more of a question of using cash as opposed to thinking about some sort of levered returns to shareholders.

The next question comes from the line of Jimmy Nguyen with Merrill Lynch.

This is Ray Kramer. And actually, my questions were all answered.

The next question is a follow-up from the line of Sal Tharani with Goldman Sachs.

Richard, you mentioned about working with other stakeholders in the future at Grasberg to avoid what happened in the fourth quarter. I was just wondering, can you elaborate a bit more on that? Does that mean that when you go in the next time, you will actually handle those -- all those besides the union across the table? Is that the way you will be handling this?

Well, Sal, we did this time. I mean, it's a very interesting and complex social situation there. I mean, we are more than 90% of the economy of the regions where we're located. We're more -- we're 2/3 or more of the economy of the province of Papua. So everything that happens to us has very broad consequences to the local community. And the local community has many components to it. There are the indigenous people that originally lived there and in the area. There's been a huge influx of people from Papua and other places in Indonesia there. And then our workforce adds a lot to that. So what happens to Freeport has consequences that are very broad across the community, so we continually work with them. We had a great support from the local community during the course of the strike. And we're going to use that, use the experience that we learned here to try to work together in a more positive way with our union workforce and its leaders to help us avoid having anything like this in the future. It was harmful to everyone, and I think people recognize that now. And we're committed to finding a way of dealing with this more positively.

The next question comes from the line of Oscar Cabrera with Bank of America Merrill Lynch.

On your copper reserves and mineralized material, you've been doing -- you guys have been doing a great job in increasing the amount of reserves in the Phelps Dodge acquisition in 2007. What caught my eye though is that your long-term prices from last year and this year are similar. And you replaced your reserves, which is great. But just wondering -- like, gold companies are using a substantially higher long-term price to value their reserves. And smaller -- granted, smaller copper companies are using a higher long-term price. So just wondering, what's the thought process behind that? And have you done, like if you were to put like $2.25 or $2.20 on your -- that you use for your mineralized material to your reserves, what would the effect be?

Okay. Well, thanks. We do use $2.20 for our mineralized material. First of all, I want to be clear: what we use for reserve pricing is not reflective of our view of the markets. It's -- we use this to come -- have a conservative price for determining reserves. We are looking for opportunities. We're not -- we don't limit our opportunities to any arbitrary reserve pricing mechanism. When you do have these regulatory requirements to report reserves, they do involve a process of going through mine plans based on these prices. So it's not a question of just changing a price and you add volumes at the end or things like this. The changing of the price really would involve going with a significant amount of work of developing new mine plans on the basis of that price. And so we felt that it was just conservative and efficient for us to stay with last year's pricing for determining reserves. It's not really what drives our investment plans. We don't lock in on a particular price. We use an array of prices in thinking about what opportunities are there if prices are higher. And if prices go lower, how a development project would fit in to our overall portfolio of assets and how we would manage that, not as an individual project, but on a portfolio basis. So it was more -- those prices were used more as a basis for conservatism and efficiency.

Our final question comes from the line of John Tumazos with John Tumazos Very Independent Research.

There have been these unfortunate incidents of sporadic shootings or attempts in West Papua. Could you update us on how large is the security force, whether it's troops or your own people, armed or not; and how much bigger you think it would have to be to try to eliminate any hazard to your employees, given that over the years, the Grasberg location has been sort of like a Harvard pedigree for mining technical people? And you've always had a tremendous organization and I'm sure it's paramount to you to preserve that.

Well, your last statement is exactly right. It is the most important thing we're faced with and our very highest priority. So we are -- I can assure you, we're giving a lot of attention to this and working with the government authorities at all levels and working on the ground with people and getting security advice from others. Our security forces are not armed there, so our internal security has never been armed. And they serve a role in security, but the principal responsibility for dealing with armed insurgents or others who are involved in these shooting activities has -- is the government supported by our people in going forward. The -- Freeport is one of a handful, 6 or 7, I believe, operations in Indonesia that's designated as a vital national object. And in 2004, the responsibility for providing security was transferred from the military, called the TNI, to the police. Going back a number of years, they were under a similar command. Now there are 2 sets of organizations, and the police are the ones that are primarily responsible for security there. There's special assigned police from outside Papua there. There's organic police that's located there permanently. And there's also military in the area that forms sort of the outer ring of security because of the issues beyond the nearby areas and the fact that it's a border area with PNG as well. So we believe that the total number of police and military there vary. It's something like 1,200 to 1,800, depending on rotating assignments. The number of people is adequate. The issue is one of dealing with the difficult terrain and having effective management of the forces that are there in terms of manning security posts, conducting convoys and providing security for those convoys. And we're -- what we're focused on now and working with the government officials is to have more effective management of the resources there and more effective follow-up of pursuit and arrest and bringing people who are doing these terrible acts to justice. And we're getting support of our contractors and the people in the local community because this is not a Freeport issue. It's a community issue. It affects us, and we're very concerned about our people and the people of the community and putting our top priority into addressing it. And it's a necessary element for us to address in terms of restoring our production to its -- to traditional levels. Thanks, everyone, for your interest. Follow-up questions can be directed to us through David Joint, and we look forward to reporting to you on our progress as we go forward.

Ladies and gentlemen, that concludes our call for today. Thank you for your participation. You may now disconnect.