Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Yamana Gold's 2012 Second Quarter Results Conference Call and Webcast. [Operator Instructions] Please note that certain statements made during this call today may contain forward-looking information and actual results could differ from the conclusions or projections in that forward-looking information, which include, but are not limited to, statements with respect to the estimation of mineral reserves and resources, the timing and amount of estimated future production, cost of production, capital expenditures, future metal prices and the cost and timing of the development of new projects. For a complete discussion of the risks, uncertainties and factor which may lead to our actual financial results and performance being different from the estimates contained in our forward-looking statements, please refer to our press release issued yesterday announcing our second quarter 2012 results, as well as our management's discussion and analysis for the same period and other regulatory filing in Canada and the United States. I would like to remind everyone that this conference call is being recorded and will be available for replay today at 2 p.m. Eastern time. Replay information and the presentation slides accompanying this conference call and webcast are available on Yamana's website at yamana.com. I would now turn the call over to Mr. Peter Marrone, Chairman and CEO. Please go ahead, sir.

Thank you, Mohammed. Good morning, and thank you to all of you, for joining us this morning. I will begin with a general review of our second quarter results, and as we've done in the past, I'll then turn the call over to the members of our senior management, as highlighted here, to provide further insights and highlights into our financial information and more detail on the quarter. Dependability. Dependability means for us that we can rely on our existing operations to meet plans both on production and costs and that our operations will generate the production we expect at our estimated costs so that we can generate the cash flow that we expect. Dependability also means that we can get production and generate cash flow from that production from a new operation within a reasonable and predictable timeframe and that, that cash flow will be within a tolerance of what we are forecasting when we first make a decision to construct a project and then as we start up operations. Financial performance and what we have described as the financial growth of the company in terms of revenue, cash flow and earnings are very important to us. And while we have a long growth runway with significant production increases that are in progress beginning in the end of this year with 2 mines that come in to production, the middle of next year, with another mine that comes into production, when we look at the development of new projects, we have some confidence that the returns are sufficiently high to justify the investment and that they will generate the cash flow that we are forecasting. Our business model looks at gold ounces from the ground but all the way up to sales. Although always with a focus on cash…

Thank you, Peter. Second quarter production and cash reserves were within expectations. Gold equivalent production was 288,700 gold equivalent ounces, which represents an increase over the first part of 2012 and over the second quarter of 2011. This included gold production of 242,692 ounces and a similar production of 2.3 million ounces. We also produced 40 million pounds of copper from Chapada. For the first half of 2012, we produced 567,530 gold equivalent ounces, which includes 4.5 million ounces of silver. Chapada produced just under 71 million pounds of copper in the first half of this year. Cash costs for the quarter were $244 per gold equivalent ounces on a byproduct basis and $536 per ounce on a corporate base. For the first half of 2012, cash flows were $265 per gold equivalent ounces. We expect production growth in the second half just as we delivered in the previous years with quarter-over-quarter growth and the cost has decline. We are reiterating our production cost guidance for the year. We produced between 1.2 million to 1.3 million ounces at costs below $250 per ounce. At Chapada, 5.8 million tons are processed and expect the grade and record for the production of 35,697 ounces of gold and 40 million pounds of copper. The results for the quarter were in line with the expectation increased from Q1 levels as a result of long time permanent maintenance in the first quarter. Gold product cash costs for the quarter were $302 per gold equivalent ounces, bringing the first half average down largely as a result of increased corporate margin and production in the quarter. In the second quarter, El Peñón produced 150,245 gold equivalent ounces, consisting of 680,275 ounces of gold and 1.28 million ounces of silver at the cost of $491 per gold equivalent…

Thank you, Ludovico. We continue to deliver strong financial results this quarter despite a gold price that was only modestly higher and significant declines in the prices of our other commodities. The company remains focused on the delivery of our liable and predictable financial performance. Now onto the actual results. Revenue in the second quarter was $536 million. This revenue reflects sales in the quarter and the modestly increased full price, which was up by 6% compared to the same period last year, the decline in copper prices of 15% and silver prices, which were off 29%. Sales in the quarter slightly lagged production, both gold and copper. Revenues generally are impacted by the timing of shipments. For the remaining quarters of 2012, we expect to sell closer to 100% of production. Q2 was the exception rather than the rule. In the second half, we will focus on reducing the GAAP between ounces produced and sold, in addition, we will reduce the level of finished product. This reduces the cycle from the time of production to the point in time that we have cash in our hands. Adjusted earnings were $135 million or $0.18 per share for the quarter. Earnings were impacted by lower sales volumes and commodity prices. They were also impacted by the lack of an equity pickup for our ownership at Alumbrera, which was driven by the lack of sales in the quarter. On an attributable basis, Alumbrera only sold 2.3 million pounds of copper of the 10.5 million pounds produced. This represents only about 20% of production. Sales were delayed as a result of the new export revenue repatriation regulations that had been revised and in July, Alumbrera resumed exports sales. As the buildup of inventory will be sold over the course of the rest of…

Thank you, Chuck. During the quarter, work continues to advance our 3 development projects and as thought, being the first over the 3 new mines expect to come into production is now 92% complete. During the quarter, mine development and electromechanical works continued as planned. Q1 Santa Luz is 89% complete and continues to advance on schedule. During the quarter, silver works power lining construction and electromechanical works continued as planned, thus, Ernesto and Santa Luz are only scheduled to be completed by year end. The project Pilar is now 53% completed. During the quarter, civil and electromechanical works continued in underground development of Caiamar was initiated, delighted and expected to start by mid-2013 and remains fully schedule to do so. We are also advancing other projects to create value and to continue to deliver growth. At Chapada, we are advancing a development plan for Suruca and Corpo Sul to enhance the future production profile. Suruca alone, we have contributed closer to 50,000 gold ounces, beginning in 2013. The finished retreatment at Minera Florida is ramping up more slowly than we anticipated, as Ludovico explained. But beginning next year, it will -- we had the 40,000 gold equivalent ounces of annual production. At Gualcamayo, QDD lower west development is on track to be completed by mid-2013 and are already being loaded on the North Valley pads. These projects through Gualcamayo sustainable production level to 200,000 ounces beginning in 2014. We also have other projects that will fuel our future project by a delay [ph] that are currently being advance. At Jeronimo as Peter mentioned, discussions with our joint venture partner have begun. At the same time, we have begun optimization on some components of the feasibility work and initiating advanced engineering studies, normally done once a construction decision has been made. These additional studies will provide for better certainty of costs, and to ensure more confidence in the details and the specifics of processing. Peter also mentioned Suyai and the new mining framework, we continue with our desktop studies in leveraging the historical work already completed to advancing this process. At Cerro Moro, ending the closing of the transaction, we will be evaluating our plan for 2016 for production to start happening of approximately 200,000 gold equivalent ounces production level. Now Darcy will provide an update on exploration.

Thank you, Evandro. It's a brief, brief review of exploration on the heels of a news release that was put out earlier in the second quarter. The highlights being at El Peñón, where we've got a new discovery at Fortuna Este, a continuous vein zone with approximately 1 kilometer strike length currently outlined. Also at Peñón, the Providencia structure has resulted in the discovery of 2 new subparallel veins that have been discovered in the hanging Monastery of Providencia and are currently being outlined by diamond drilling from the underground development. At Dorada West, we have the discovery of the Dorada West 1 and 2 veins, which are both new veins in the hanging wall of the Dorada discovered between Dorada at Providencia. And the Elizabeth, a new high rate discovery is being delineated, which is due east of the Victoria discovery where current resource and reserve is being developed from the underground. At Mercedes, we have the Marianna discovery, which is the extension of the Barrancas deposits to the Northwest. Diamond drilling during the second quarter and the third quarter will define an initial resource, and hopefully, a reserve by the end of the year, as well drilling in Lupita is increasing the confidence and will upgrade the mineral resources from the inferred category into indicated. At Chapada, our most significant discovery during the second quarter, Corpo Sul has now been defined along a straight plate of about 4.5 kilometers -- sorry, and has opened a long strike, down dipped and remains open up dipped as well. Economic gold and copper mineralization has now been identified as Chapada over combined strike length of 16 kilometers when you include Corpo Sul, Chapada and Suruca to the north. At Pilar, Maria Lazarus drilling has returned significant results that are similar to Jordino in both grade and width. The deposit is open in both directions and at more so in the southeast direction where current drilling in the second quarter has extended mineralization significantly. Jordino and Maria Lazarus continue to confirm that mineralized zones represent possible ore sources for future production. With that short, expiration review I pass it back to Peter.

Darcy, thank you very much. I'd like to take a few moments before we complete the call and open it to questions, beginning with what I would describe as Q2 in retrospect. And what I would like to do is talk about what we liked in Q2, what we did not like in Q2 and where we are enthusiastic. We like that we met our production target in Q2. We met our cost target on a byproduct bases. We advanced our development stage projects to be completed end of this year for 2, and at Pilar at the middle of next year. We advanced our studies for new projects and principally the continuing efforts in Suyai and the feasibility study efforts on Jeronimo. We improved our asset portfolio with the pending acquisition to be completed this month of an asset that is like our other mines and assets with high grade and in a familiar jurisdiction. What we didn't like about Q2 is that while we increased our cash flow to Q1, we didn't increase our earnings. We did not maximize our sales, which would have contributed toward those earnings. We could not realize full value from our investment on Alumbrera. We have a positive investment there, but we could not realize our full value from that investment as there were understandable impediments to sales, but all of which have been dealt with since the end of the quarter. We fell behind in our ramp up of the PTR plant in Florida, which will have a corresponding impact, both on our production and our cost at our Minera Florida mine. What are we enthusiastic about that perhaps compensates for some of those dislikes? The missed sales that were not realized in Q2 and including Alumbrera, were realized at the beginning…

[Operator Instructions] The first question is from Brian Christie.

Chuck, maybe you could give a little clarity. It looks like your sales were about 50,000 ounces light versus production and you suggested that you had already sold that material in Q3. So should we be looking for an extra 50,000 ounces of sales in this quarter?

No, that would be an incorrect conclusion. If I can just take you through a little bit of a reconciliation, production was at 288,700. Of that, Alumbrera production was 12,359. And we backed that out because when we give our sales number, it excludes the Alumbrera production. So from that 276,000 number, then there's approximately 2,000 ounces of gold that's produced at Chapada, that's in concentrate, that subject to a payable factor. Therefore, there's 2,000 ounces that you don't get paid for in that production. And then as we've talked about, we were about 6,000 ounces short in our sales compared to our production which we plan to improve on in the third quarter. But if you deduct that 6,000 ounces, then that would take you to our stated sales of 268,000 ounces. We had -- there was a shortfall in production at Alumbrera, they did get it off to a good start in the third quarter in shipping that out. The total catch up for Alumbrera will take the full 6 months. We did make mention of 30,000, 32,000 ounces of gold inventory. But as Peter mentioned, about 25,000 of that is kind of an ongoing flow for ounces in basically in transport. So we'll try to call back that 6,000 shortfall that I mentioned, plus we will be catching up additional production that was in shortfall at Alumbrera.

Perhaps if I could also wade in. Just to clarify, that 6,000 ounces, approximately it represents $0.01 per share and the Alumbrera production, sales of production, is approximately another $0.02 of earnings pickup that we would have received. That $0.03 would have been added to the $0.18 had we had the benefit of the Alumbrera sales in the quarter and reached a normalized level of our flow, as Chuck described, of about 24,000 to 26,000 ounces as compared to where we were at the end of the quarter of 32,000. We had an inventory of an additional 6,000 ounces, but because of timing and sequencing, we're not so. So we intend to sell those in this quarter, but in addition to that, progressively, you'll through this quarter into next quarter, it will take a period of time. We're going to try to reduce that float to something that is sustainably at a lower level. 26,000 ounces per quarter as the running float in this company is reasonable, but we think we can do better than that.

Our next question is from Joung Park.

Just had a couple of questions on Suyai, some exciting developments there. I think I did read a press release though by Pan-American that they said recently that they might abandon Navidad, which is another project in Suyai due to -- or in Chubut, due to the new proposed legislation, which also introduces higher royalty schemes. But it seems like you guys are looking at the new legal framework as a positive. So is that difference just due to the fact that Suyai has much higher grades and lower cost structure than Navidad?

It's difficult for me to comment on another potential operation and another company's prospects and opportunities. But what I would say to you is part of what you've said is a good starting point to the answer to that question. Suyai is a comparatively low CapEx high grade project, and it's also important to identify that we already have it in our portfolio. It came to us effectively as a legacy when we purchased Meridian in 2007. There's comparatively modest value to it because it just came as an add-on to the rest of the things that we were looking to buy when we bought Meridian. Principally as Peñón, Florida and Mercedes, and Jeronimo. So from our perspective, we are in a process slightly different position than other companies with other projects that may have already made investment into the purchase of projects or the development of those projects. But I also encourage you to look at it from our point of view, which is having the introduction of a mining framework, albeit it is only at this draft stage and this it is at the legislative stage. As with all things, it goes through a process. Having the introduction of a framework is better than having none. Because at least it indicates the willingness of the province of the local municipalities, the national government to work cooperatively toward the encouragement of mining across the country, but in this province, in particular. And that's why we're encouraged. Is the royalty structure higher than in other parts of Argentina as proposed in the draft legislation? Yes. It would be a pretense to say that it is not. We don't believe that, that is the final result, and we also believe that it will go through a process and we're encouraged by the formation of this organization called OFEMI, which is 10 governors in the province and the national government unified in a cooperative, deliberate, concerted effort toward the promotion of mining. And so we believe that, that structure ultimately will come more in line with other provinces in Argentina that have lower royalty structures.

Our next question is from Pawel Rajszel.

It looks like you might be ahead of schedule on C1 and Ernesto. I'm wondering if you see any possibility of a Q3 start up there instead of Q4?

We do expect to get a bit of production coming from one of the operations this year, but it would be very modest, Pawel. We're not anticipating that it's going to be a significant contributor to our production profile and certainly not to the commercial production and contributions to cash flow this year. Yes, we are ahead of schedule on the technical development of the project, but then what we have to do is we have to go through the start up process and that may take us a period of time. And so we're still standing to our guidance of start up by the end of this year and then commercial production in the first quarter or into the early part of the second quarter of next year.

Great, that's helpful. In the disclosure, you're targeting $340 million of sustaining CapEx for the year. You also mentioned that would be declining on a per-ounce basis maybe past 2014. Wondering if you're comfortable giving some guidance on where you think the sustaining CapEx might go on a per-ounce basis after 2014?

Well, I think we've also indicated that our sustaining capital would be in the range of $380 million to $400 million cumulatively into 2014 as we are at 1.75 million ounces. And I apologize I don't have a calculator nor can I do the math fast enough to divide that 1.75 million into that number, but that should give you a good indication of what the per ounce amount is expected to be.

But basically you would expect that $380 million, $400 million range sustainably beyond 2014?

With 1.75 million ounces, yes. Then we have to further evaluate what do we do with Jeronimo, Suyai, Cerro Moro, as they come closer to an evaluation of will they contribute to production then we'll be increasing the cumulative sustaining CapEx to account for those new ounces. So the total number will go up, but the number per ounce should stay flat or lower because of these new operations.

The next question is from David Haughton.

Mercedes has been a very good start up. I noticed that you're achieving very good throughput of over 1,600 tons a day. At one stage you've been thinking about 1,800 tons a day. Firstly, is the 1,600 plus sustainable and how hard would it be to get to the 1,800 tons?

This is Ludovico here. Actually, in terms of the 1,800 we have done some test in the plant and that is reachable. We see very few modifications there that we are going to add to. We are trying to ramp up, and we think we can get there in the mine over to the rest of the year here. It seems quite feasible that we are going to reach that.

That's why quite positive. That's well in advance of what we'd been thinking previously based on the site visit earlier this year. So you're happy then with the mining rate, because I would understand it's more mining constrained than milling constrained.

Yes. We, with the new detachments that we are ramping now there at the mining, we are hoping that we can get it to ramp up to 18,000 ounce per day.

On a similar kind of vein, Chapada has also been outperforming on the throughput front. Last quarter I think was a record throughput for that operation. Can we expect over 60,000 tons a day going through Chapada?

You mean on the database?

Yes, they're talking about the throughput for Chapada being more than 60,000 tons a day on a sustainable basis.

Yes, we are running there in between 55,000 to 65,000 tons per day. I expect that in the third quarter that we are going to reach a better throughput per day. But by the end of the year when you have the rainy season, we can expect a little bit of decrease on that.

All right. And thinking about Corpo Sul, should we be thinking about that as simply being blended in with the Chapada or I understand has got a better copper grade. So would we just be thinking about it as the higher copper blend going forward, perhaps in 2014?

Yes. That's the way we're thinking about it now. And the range is approximately 20% to 30% of the ore coming from Corpo Sul. But Darcy and his team continue to find new discoveries. They continue to have extension holes that are several kilometers away from the area of known mineralization. Those drill holes continue to find -- that we continue to find that we have more than 100 meters of grades that are on the copper side in particular in excess of the copper grade that we're mining today. So from that perspective -- but we're evaluating what we can do with all of that. So as I said before, David, right now we're looking at it from the point of view of ore contribution, that's the end of the spectrum that we're on. But every day that passes, if you drill a hole that Darcy's team is putting in, Darcy's group is putting in, it in brings us -- if I drew a spectrum, a spectrum line, it would bring us at one end of the spectrum that ore contribution, the other end of the spectrum is potentially a new mine. We're not at the stage of being able to say that we have a new mine with Corpo Sul, but it continues to get bigger, it continues to show good improvement in grade over what we would have been getting in the pit at Chapada on the copper side. And so right now, we're 23% to 30% ore contribution. But over the course of this year and into next year, we might be evaluating that to something better.

Okay. And still in that part of the world, looking at Suruca coming on stream early 2013. It's more of a pure gold contribution. Would you think about reporting that separately, so that we've got a sense of the more gold ore body compared to the copper gold ore body?

It's difficult to do because there's so much sharing of infrastructure and support in G&A. An so what we're currently thinking, David, is the opposite to that, which is we're going to blend it as part of the overall Chapada contribution to gold and to copper.

Okay. A similar kind of question for Florida with the tiles, would you intend to show that as a separate stream going forward?

Again, the same thing, because there is in more than that in the case of Florida, the plant, the PTR plant can be used for ore processing. So we think that the best course for the delivery of information about Florida would be to accumulate it inside the overall Florida effort. It would be very difficult to distinguish between the 2.

All right. For Cerro Moro, your goals of 200,000 ounces per annum is somewhat further ahead than what we had seen Extorre. Would you be able to give some broader kind of parameters as to what you're seeing there or would you rather wait?

Well, in the case of the 200,000 ounces per year, we are relying in part on what Extorre had already publicly said, and then our own due diligence that has over layered that. So I don't think -- we're not communicating a number that is different than what Extorre had communicated. In some respects, David, we're actually indicating a number that is below what Extorre has indicated at least for some of the early years. There is room for improvement here. There is room for the discovery of new ounces. There is room for improvement in grade, based on what has been published as a grade. There is -- we will know more as we look at drill data that is infill, that has been done to the time of closing and then what we would do to the end of the year. And we'll evaluate what that production profile looks like from that point forward. I'm confident in saying to you that insofar as I remember, Extorre had already indicated a number that was in excess of 200,000 ounces per year, we support that. We've downplayed it a little bit, at least on our own due diligence in providing a bit more conservatism to it. We may need to come back to that and show a higher number as and when we get more results from drilling, infill and extension and then the development plan that Evandro and his team are developing.

And if they're looking it at an open pit and underground combined?

Cerro Moro?

For Cerro Moro, sorry.

So the question was will you be looking at it as an open pit and underground combined?

Yes, yes. Will I look at the same approach as reported by Extorre? Maybe we would go a little bit more by underground, but we'll keep it at same mining production.

One of the things that we're evaluating now, David, and please bear with us because we haven't even closed the deal yet. But one of the things that we're evaluating is how would we define the ore body and where would we capitalize in terms of higher grade? As you've heard me say before, it is not of maximizing the asset base, but creating certainty. So part of what we're trying to do is not increase the number of ounces based on known information, but increase the certainty by providing higher grade. One of the other things that we're looking to do is to see if we can start the development work. Similar to what we did with Mercedes, where we excavated the development ramp into the ore body before we even made a construction decision. That allows us to determine continuity of grade. It gave us better access for further drilling, better understanding of the ore body and it also, in that particular case, treated, started the creation of a stockpile that has provided good springboard to that mine.

Our next question is from Don MacLean.

Just following up on David's question about the Suruca, Corpo Sul. Do you have any kind of sense of timing or at what point it would be good enough to be a standalone mine? Peter, and maybe give us a little more color on that, because you did say it was your personal favorite.

It is my personal favorite, but I favor lots of things that we're doing on the exploration side that as you've heard me say before. Really difficult to give an answer to that, Don, because it is clearly the indicators seem to point to the prospect of more than 20% to 30% ore contribution coming from Corpo Sul. The indicators are showing that. And there is an end of the spectrum, there is a foreseeable possibility that we may have an entirely new mine there, but we have not done work on strip ratio maximizing the ore body to concentrate on higher grade, the contribution of copper to gold, where we could be maximizing copper production versus gold production, because we're already getting that gold production coming from Suruca. And these additional extension hole that Darcy and his group are providing to the management of the company continue to be encouraging, but it's too early for us to say. I would say to you that as a ballpark, certainly, by the end of this year we'll have a good better feel for it. We'll be able to provide an additional exploration update, and that will also allow us to be able to say this is what you can comfortably look at, at Yamana from the point of view of what happens with Corpo Sul. But in the development of the plan and whether or not it will become a new mine or increase the ore contribution above that 20% to 30% to something higher, that will take us into 2013.

Right. If we look at, say, something. If it was capable of handling, say, 50% the equivalent thereof, would that probably nudge it into being worth doing a full pre-feasibility study?

Still a lot of work to be done, Don. I go back to what I've said. We start to look at strip ratio, we have to look at the continuity of the ore body, we have drilling results at this point. We have a reserve and a resource vis-à-vis a portion of it, but not with vis-à-vis the extension holes that have occurred since late last year. So we still have a lot of work to be able to determine what would be the prospect for this company to go with the feasibility study for a new mine or is it ore contribution through the existing Chupada plant. We're going to have to continue -- the best way that I can answer that question is that we still have a little bit of work ahead of us, but it does continue to show encouragement and promise. What I can promise, however, is by the end of the year, we will have more drilling information and we will be able to better point to what our next steps are into 2013.

Yes, Don, it's Darcy. We should have by the end of, I would say, the third quarter, start of the fourth quarter, we'll have about an additional 3 kilometers of strike length drilled out on 100-meter centers for Corpo Sul. That would be 3 kilometers from the end of last year's resource that's on Corpo Sul. So it would be substantially larger than what we had last year.

Drilling results show grades on the copper side of between 0.4 and 0.55, 0.6, those are drilling results. We now have to determine continuity, we have to determine strip ratio, we have to determine how best to optimize if we're going to have a new pit. How to best optimize that pit.

Okay. I'll look forward to this question being asked again maybe at the end of the year. Maybe a more sensitive topic, Argentina, the operating environment there. Maybe how are you going to be able to avoid setting dangerous precedent for Suyai and the tax burden there if you come to an agreement? And how do you avoid a ring sense in a way that it doesn't start to have the implication to the other provinces expectations?

Yes. Don, I think it's important to say that these things are not a binary. It's not an either/or, it's not a black or white, it's not a yes or no. These things are cooperative and they're reiterative and they take a long time. And there is a process, and I do emphasize that our perspective is to be our approach is to be cooperative. And I think that, that is something that is valued when we deal with Argentine authorities. So from our perspective, we're not going to do something that has an adverse affect on other things that we do in the country. But I don't think that we will get to that point, because I think that where we will get to is a recognition that it has to be a structure of financial framework in the mining code that is not only consistent with other parts of the country and perhaps other parts of the world, but also one that creates an opportunity for investment. And I believe that, that is a topic that is well understood amongst the stakeholders that are in government, that are in authoritative positions, and we're encouraged by that understanding. I prefer not to take an adversarial approach. I prefer to take a cooperative approach, because I think that will get us to a better result, both from the stakeholder's perspective and from our perspective.

And you're not in any position in terms of property ownership or the situation where the government can say we're going to take back that property?

No, we're not. You're asking the question is that a risk? We don't see that as a risk at all. Again, we have to go back to first principles because I appreciate that there is always a tendency to want to go to the fine points and fine detail in Manusha. But I do not believe that it is at that point. We have to start from the principal and from the philosophy. Philosophically the country of Argentina, philosophically at least 10 governors, including the governors Chubut, and the provinces of Chubut generally. And philosophically local communities have come to the conclusion that they need mining and mining is an important opportunity, an important enterprise for the country, as a nation, for the province and for the local communities, that's the philosophical bend. Now we're going to that next stage of what does the economic framework look like. But I'm confident that it will be an economic framework that is workable and does not prejudice everything else that is happening in the country, for us and others.

[Operator Instructions] The next question is from Steven Butler.

I'll ask a question, maybe not for the end of the year, but right on Don seals on Corpo Sul again. And Darcy talked about 3 kilometers drilled on 100-meter centers, what would that qualify as a resource or would then would be reserve status, because there was some reserve status on Corpo Sul last year.

Yes, it will definitely be a resource, Steve. The majority will be inferred, there will be some areas that will be a little tighter than 100 meters that might get into the indicated category. Similar to what happened last year, we had a small part of what we drilled out last year got into the inferred ultimately or into the indicated and ultimately into the reserves. So I think it's too early to say right, now but definitely it will make inferred resource.

Right, okay. And Peter, just on CI again and the Chubut province, is there a sense of timing as to when the legislation may come to a better determination or more definitive structure and/or is it subject to negotiation case-by-case basis?

On the timing question, the draft legislation has been introduced, it is in front of the legislative body. There continues to be dialogue between the various ministries and secretariats in the national level with the provincial government and dialogue amongst the provincial governors directly. So I would anticipate that over the course of the next 2 months perhaps by the end of the year, that mining framework would be agreed. On the question of will it be on a case-by-case basis, I don't foresee that. What I foresee is that there will be the adoption of a mining framework that is applicable to all companies with some latitude in discussion as when we normally see it. In terms of beneficiation projects and the like, how much is contributed back to the social well being of the state, the social well-being of local communities. Those are things that would likely coming into negotiation, but in terms of the framework itself, it would we predetermined and codified in the mining well.

Peter, is government participation still as proposed or on the table or some form thereof?

The draft legislation does propose a profit participation. What it also provides and our read of it is that it provides that it is a profit participation with certain conditions. So in other words, it's after a payback, possibly after a hurdle beyond the payback. It appears to us that the model is very similar to what's been done with Alumbrera, with Imar in Catamarca province.

Okay. And Ludovico, are the grades coming up at El Peñón as per your second half plan? Or can you give any comment on July grades, or still too early to say?

July grade was more or less in line with Q2. But a slight increase up to August and [indiscernible]. To give you a sense, I think the average for the for the first quarter was around 6.7 and it was going to above 7 for gold in the second half.

There are no further questions registered at this time. I would like to return the meeting back over to Mr. Marrone.

Ladies and gentlemen, thank you very much for participating on our call, and we look forward to further highlights over the course of this quarter. And we're encouraged by the questions that were asked. And as I mentioned, we're very encouraged by some of the positive developments in the company, and we look forward to providing a further update on our call for Q3.

Thank you. The conference has now ended. Please disconnect your lines at this time. We thank you for your participation.