Good morning. My name is Gail, and I will be your operator today. At this time, I would like to welcome everyone to Silvercorp Metals Incorporated Fiscal 2013 First Quarter Analyst Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Mr. Jonathan Hackshaw, Investor Relations Director of Silvercorp Metal Incorporated. Sir, you may begin your conference.

Thank you, operator, and good morning, everyone. Welcome to Silvercorp's analyst conference call for the first quarter of fiscal 2013. Joining me today on the call are: Dr. Rui Feng, Silvercorp's Chairman and Chief Executive Officer; Mr. Myles Gao, Silvercorp's President and Chief Operating Officer; and Ms. Maria Tang, Silvercorp's Chief Financial Officer. We will begin the call with a review of our financial, operating and development highlights for the quarter. After this, we will open the call up to questions. At this time, I'd like to invite you to follow along on the accompanying presentation slides, which are available as part of the webcast or on Silvercorp's website. To advance to slides, please click on the forward arrow. Turning to Slide 1, during today's call, forward-looking statements will be made relating to future production, development and exploration, capital expenditures, business expansion plans and other items. Such forward-looking statements are subject to risks and uncertainties, many of which are detailed on our 2012 Annual Information Form filed on SEDAR. There can be no assurance that such forward-looking statements will prove to be accurate, as actual results and future events can differ materially. Turning to Slide 2, I will now review the first quarter financial highlights, which are expressed in U.S. dollars. In this quarter, the company recorded net income attributable to equity holders of the company of $6.1 million or $0.04 per share. Adjusted net income was $8.1 million or $0.05 per share after excluding the withholding tax accrual of $2 million for anticipated dividends from the company's subsidiary in China. Adjusted net income of $17.5 million lower compared to $25.6 million or $0.15 per share in the first quarter of fiscal 2012, primarily due to lower sales, higher production costs and higher general and administrative expenses. Turning to Slide…

[Operator Instructions] And we'll go to the line of Alex Syrnyk with BMO Capital Markets.

I just have a question regarding the costs side. The comments were mentioned that quarter-over-quarter costs improved. Are you seeing a stabilization in some of that labor cost inflation that had been experienced in over the past year or so?

Okay. This is Rui, a very good question. I think [indiscernible] in terms of our labor costs escalation increase, right?

And then to add what Rui just said is the increase is partially because the benefits, the Social Security are in before, we don't have the requirements to give everybody the social security starting this year. We, basically, gave everybody the full Social Security. That's the reason that's why the cost has increased, which hasn't been done already.

Okay, great. And then in terms of the grades at SG or in the Ying Mining District. A lot of that grade or miners saying is that grade issue was predominately at SGX? And then as well, would you like to comment on the grades at BYP? Because I noticed that they've kind of come down as well and your outlook for them for this year seems to have come down.

I think it might be greater would be, we used to have a guidance for like 3 grams.

3 grams. Right now, it's around the 2 points [ph].

2.5, 2.6, 2.6 grams. No, 2.5, 2.6 grams is [indiscernible].

Okay. But during the quarter, they were lower there at 2.2 or something, so they've come up a bit?

Yes.

[Operator Instructions] And we'll go to the line of Karen Sanderhulg [ph] with Commodity Fund.

I have just a few questions. I was wondering why do you deduct the VAT charges from your silver sales? And I was also wondering how you get -- your reports, the realized silver price. You subtract the VAT charges from that? I was wondering why you do that? I'm not sure, I haven't seen that before.

So basically, we exclude VAT from our recorded sales already. It's -- it does not work.

Okay, let me answer this question. When we do ourselves, we have signed contract. The contract price is based on Shanghai, silver exchange price, which including VAT. So for the VAT is a wash and so the government will take a VAT net like you do to the sales. You take away the VAT and deduct all of VAT credits and then by a different way, you have to pay 100% to commerce [ph].So the VAT is a wash. The reason we deduct that is because when you pull the project in Shanghai, silver expense, the price include the VAT.

We'll go to the line of Brad Humphrey with Raymond James.

Just a couple of quick questions. I know you're not going to be giving us the SGX on its own anymore. But just out of curiosity, could you tell us what the grade was at SGX in the quarter?

This quarter, last quarter?

Yes, the past quarter.

For the first quarter.

It was -- around 295 or 300 grams.

Okay. And so we expect it to improve over the rest of the year. Is that going to be gradual, or should we expect the same kind of grade for Ying in the second quarter as we saw in the first quarter?

Yes, I think the second quarter will be probably kind of the same as the first quarter. And then the third quarter were started to come, right?

And then it'll average out to some around 250?

Yes, yes. And hopefully after that, the grade will fall out of schedule, the 43-101 report, which is for the whole district, it will be around 295, 300 grams, 300 grams ahead of grade.

Perfect. And any idea about the timing on that Silvertip Small Mines permit?

The timing is tough because the Canadian engineer take a long time to finish that report for submission. So we're almost finished at publication, right?

Right. But it hasn't been submitted?

I think we have submitted, yes. Again, the government changed the regulation. Before that format is quite simple. And I think early this year, you needed to recycle 30 grams or 95, within the design, engineering design. And therefore, we'll have to redo a lot of new design. Because at the time, last year the market was not like that.

We have no further questions at this time.

Okay. Thank you, operator. To wrap up, I'd like to thank you again for joining us for today's conference call. We look forward to reporting to you again when we release our results for the second quarter of fiscal 2013 in November. So thank you very much and wishing you all a very enjoyable long weekend in Canada.

And ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Executive Teleconference Service. You may now disconnect.