Ladies and gentlemen, thank you for standing by. Welcome to Teck's First Quarter 2013 Results Conference Call. [Operator Instructions] This conference call is being recorded on Tuesday, April 23, 2013. I would now like to turn the conference call over to Greg Waller, Vice President, Investor Relations and Strategic Analysis. Please go ahead.

Thanks very much, Melanie. Good morning, everyone, and thanks for joining us this morning for Teck's First Quarter 2013 Earnings Conference call. Before we start, I'd like to draw your attention to the forward-looking information slides on Pages 2 and 3 of our presentation package. This presentation contains forward-looking information regarding our business. Various risks and uncertainties may cause actual results to vary. Teck doesn't assume the obligation to update any forward-looking statement. And at this point, I'd like to turn the call over to Don Lindsay.

Thanks, Greg, and good morning, everyone. Thank you, all, for joining us. As usual, I'll start this morning with the review of the results for the quarter, and then I'll turn it over to Ron Millos, our CFO, to address some of the more in-depth financial topics. And we do have a number of the other members of the management team here, either in the room or on the line this morning, to answer some of your questions. So looking at the highlights for our Q1 results on Slide 5. I'm pleased to report a record first quarter coal sales of 6.6 million tonnes, and that's up 24% from the same time last year. In Q1, our coal site costs were down 20% year-over-year. Our cost reduction program has exceeded our initial goals, and we've now implemented annualized cost savings and deferrals of approximately $275 million. So far this year, we've taken advantage of our normal course issuer bid to purchase for cancellation approximately 2.2 million Class B shares, of which 1.2 million were in the first quarter. And in January, we paid a semi-annual dividend of $0.45 per share, which was up from last year. And finally, the new accounting rules for waste stripping have been incorporated into our reporting, and Ron Millos will touch on that later in the call. Turning to Slide 6. First quarter revenues were over $2.3 billion. Gross profit before depreciation and amortization was $994 million. And profit attributable to shareholders is $319 million. EBITDA was $902 million. And adjusted profit after onetime and unusual items, which I'll speak to on the next slide, was $328 million. Turning to Slide 7. This was a relatively clean quarter with minimal unusual items that we have to adjust for to get to comparative earnings. And after…

Thanks, Don. On Slide 16, we've summarized our changes in cash for the quarter. Cash flow from operations was $776 million. Capital spending and investments were $468 million. And capitalized stripping was $210 million, and I'll talk to capitalized stripping a bit more in the next few slides. During the quarter, we purchased for cancellation approximately 1.2 million Class B subordinate voting shares for $35 million, pursuant to our normal course issuer bid, that we announced in June of last year. And in April, a further 1 million shares were purchased, bringing the total under our current bid to 6 million shares. And in early January, we paid a $0.45 per share dividend. After allowing for principal and interest payments on our debt, exchange rate changes and other items, our cash decrease in the quarter was about $317 million at the end of the quarter with almost $3 billion in cash. Slide 17 summarizes the capitalized stripping costs incurred during the first quarter and compares it to our restated results for the first quarter of 2012. Our Coal operations, Highland Valley and Antamina make up over 85% of the total in both periods, and these represent the bulk of our expansion spending over the past few years, particularly in coal. I want to emphasize that this new accounting rule has no effect on our total cash flow and cash balance or how we operate the mine. It does, however, affect our earnings and a number of our other financial statement line items. Effectively, the new rule requires us to capitalize some stripping costs that we would have expensed under the old rules. This reduces our operating costs and increases the book value of property plant and equipment. We then depreciate the capitalized costs as we mine the various pits. This…

Thanks, Ron. I'd now like to update you on the status of the many development projects we have underway. So Slide 24. For Quintette, we expect to receive the permit approval sometime this quarter, and we would then, subject to board approval, move ahead with the site work. First coal production would be in Q2 of 2014 and, by year-end, ramp-up to about 3 million tonnes should be in place. At Neptune coal terminal, the new stacker reclaimer, which will increase our throughput rate to 12.5 million tonnes, will be delivered and installed this quarter. At Fort Hills, work continues towards the project sanction decision expected in the latter half of this year. A significant amount of engineering work is being done to get us to hopefully what, in this case, will be the starting line. At Relincho, the feasibility study is expected to be completed in Q4 of this year. And finally, at QB, the updated SEIA document is now expected to be submitted sometime in Q4 of 2013. Some issues related to permitting of the existing facilities have caused the schedule to be pushed back there. So in summary, Teck remains in great financial shape, with solid margins in all of our businesses and a strong balance sheet to fund our future growth. But these are very uncertain economic times, so we will continue to be prudent in the use of our balance sheet. Our coal production will continue to be tailored to match market demand. We have tremendous coal assets, and we will manage them for the long term. Our view of the markets for our products are still very constructive long term, driven by the continued growth expected in the developing world, where the OECD expects 3 billion people to move into the middle income group over the next 20 years. We will continue to be disciplined in our approach to new investment. There's been a lot of speculation about us pursuing major M&A transactions, but I can tell you that this is grossly overblown. We will always be looking at new opportunities. That is our job, and it's consistent with our strategy of diversification, which has underpinned this company for years. But we will not pursue any transaction that doesn't create real value for our shareholders, and those opportunities are actually quite rare, and we have no reason to chase marginal assets. And lastly, our cost savings program that delivered real near-term results and our capital spending program reflects our focus on prudent allocation of capital. And with that, I'd like to turn the call over to questions.

[Operator Instructions] The first question is from Meredith Bandy of BMO Capital Markets.

So I was -- still have some questions, I guess, for Ron Millos on the new accounting treatments. First of all, coal, you gave us the DD&A, and also you gave us a little bit more color on maintenance expense, maintenance CapEx, the $11 to $14 per tonne. Does that include -- does the maintenance CapEx include the pre-stripping? And...

No. Sorry. That does not include the deferred stripping. The deferred stripping is in addition to the -- what's referred to as more of the normal maintenance capital spending.

So how should we think about maintenance capital for the coal now with this new treatment? And also, is the DD&A that you've given us -- does that sort of stay the same? Or as you go forward with this program, does that increase as well?

The maintenance capital on slide -- I forgot the number there -- 22 provides the maintenance capital for coal, and it hasn't changed from the previous guidance we've given. So all we've done is -- for the capital spending guidance is added the $840 million for the capitalized stripping. The depreciation expense will be the normal depreciation expense that we have for the existing assets, and then we add to that whatever depreciation is capitalized. And that's going to be a difficult calculation because it depends on the pits that you're mining and the phases that you're mining in each of the different mines, so they can change. So some of the deferred stripping might access ore for 1 year or 2, other parts of the deferred stripping could access ore for much longer or much shorter periods.

And the capitalized stripping that you've given us -- so we should split that among the mines -- so I guess, most of it would go to coal but also Highland Valley and Antamina?

Highland Valley and Antamina -- all the open pit mines will have some coal. Coal has the largest piece of it.

And does that stay, that just continues going forward?

It will continue going forward until you get to the stage where the strip ratios are at or below the average for the particular area that's being mined.

Yes. And then, what should we think about in terms of the impact for some of the other mines in terms of costs, like Highland Valley and Antamina? I know you don't break it out in particular. But is there any impact on the copper costs that we should be aware of?

Sorry?

For the -- because you sort of gave us the new costs and the DD&A for coal. But is there any impact for the copper side that we should be aware of? I know you don't want to break that out by mine.

Actually, Meredith, it's Greg. We have broken out the amount we've charged to capitalized stripping for each of the operations in the quarter. And then, we've also indicated that we'd expect the future quarters this year to be similar to what we've capitalized this quarter. So the $840 million for the year, you can look at to be split roughly similarly to what we've incurred in the first quarter of the operations [ph].

Right, I understand that. But I was also talking about, like on Slide 21, where you gave like the coal site costs and coal DD&A, but you don't give us any of that guidance for copper, for example. Could you give us any more color on the impact to the copper?

Meredith, are you talking the all-in costs with the deferred stripping or before the deferred stripping?

Well, I guess, I'm just saying what should -- how should we think about your cash costs for copper now and also the DD&A for copper now?

No change from how you previously thought to the cash costs. The -- and the deferred stripping is going to come up based on the $840 million that Greg talked. And if you look at -- on our news release on Page 6, there's a little bit of a table there that tells you the amounts by the various business units, and that gives you sort of the impact. And again, be careful with those numbers because under the old rules, there were some stripping costs, so we unwind what we did under the new rules and then put in. So these are the net numbers.

The following question is from Harry Mateer of Barclays.

A couple of questions. I guess, first, clearly, we've been in a period of considerable volatility in commodity prices, not just coal but copper. You're doing some of this with trying to lower costs. But can you just talk to us a bit about your contingency planning in light of all the volatility to keep your balance sheet healthy? Are you going to run with more cash than what you, like, previously viewed as a minimum cash balance? And then, second question, somewhat related, Don, you addressed this to some extent, the end of your comments, but how do you think about M&A opportunities when it seems like prices are such a moving target right now?

Okay. Well, on the first question, I'll answer that in sort of a -- 2 or 3 different ways. First, our obligations between now and the beginning of 2017 financially, I think, is $323 million of debt that comes due, and that compares to just under $3 billion of cash that we have. So we feel that we're in a pretty strong position from that point of view. The CapEx schedule is deferring itself in many ways. At QB, obviously, we've just said that the SCIA for QB2 is not to be filed until Q4. So if you then sort of revise your model, you'll find that a substantial amount of capital that we thought we would be spending in 2014 is now not going to occur. And so, that means that our financial position is going to be stronger than we thought it was previously. We haven't seen the sanction decision on Fort Hills yet. We're certainly hoping to do so. But I think we've got to wait and see until that happens. And likewise, the final decision on Quintette hasn't been made yet either. We haven't got the permit. We think we're very, very close. So we'll have to wait and see. So in terms of contingency plan to keep balance sheet strong, it's really dependent on those factors. Our starting position is very, very strong indeed, so -- but we will adjust depending on how those decisions go. And note that, with Quintette and QB, those are within our control. We can choose to defer that if commodity prices get unusually lower, much lower than they are from here. At these levels, of course, we do have strong cash flows. And so, we feel like we're in a pretty good position. Relative to M&A, nothing has really changed. We look at the opportunities as they come up. Frankly, we're not very busy at it at the moment because there's not a lot out there that is appealing to us. We have had discussions in the past, and people's expectations were higher than we were willing to commit to. And I don't think anyone should be sort of holding their breath or sitting on the edge of their seat for something to happen. But at the same time, it is our job to keep looking. So we'll keep looking.

And then, on the coal business, what's your sense as you look out over the next 12, 24, 36 months in terms of the percent of coal volumes that you think are at risk for moving to monthly or shorter pricing? Is the whole business going to go that way, or is it still a relatively smaller percentage?

I think, we'll ask Réal Foley to answer that question. Please? Réal Foley: All right. Thanks, Harry. And so the first comment to make is we have long-term relationships and contractual arrangements, and that gives us a certain level of certainty on our volumes that we're moving to the market. Now when we're looking at what happens in the future when the time comes, what you’re saying, a lot of that is speculation. And what I can say today -- what we know today is there are customers that used to buy 100% on quarterly priced basis, who are now looking at shorter pricing cycle for a portion of their tonnage. But all of that tonnage is still covered under our long-term relationships on our contracts of arrangements. The only thing that is changing is the pricing cycle that is being used. In terms of percentage of spots, I think, if we look at our history, pre 2011, we were somewhere around -- pre 2012, sorry, we were somewhere around the 15% to 25% portion of our sales book on a shorter-term priced sales basis. For 2012, our ratio was somewhere around the 25% to 30%, and that reflected a gradual shift to shorter-term pricing, but also growing demand from growth market areas. And we're only 1 month into the new contract here now, because the majority of the contracts are actually on an April-to-March contract year. But at this time, we expect the ratio for 2013 to be somewhat at the higher end of our 2012 range, so somewhere around 25% to 30%, near the 30% level.

The following question is from Greg Barnes of TD Securities.

I guess, we'll go back to that comment about the spot sales and the percentage. Does this imply that the buyers now have more flexibility, so if spot prices start going up back again, they can switch back to the longer-term pricing contracts?

Well, that's an interesting question. Réal Foley, you better give your view first. Réal Foley: Thanks, Greg. So trends being in the markets, there is no doubt that there is coal available, and spot prices are below what quarterly benchmarks are, and that is causing customers to review the way that they are pricing their coal. And the reality is that margins for steel makers are pinched and they have been, at least, for the last year. So when the market turns, and it will because there are positive signs, it will drive behaviors. What we're seeing in the market now is -- typically, when the market rises, customers want to protect their position in the market. The other comment that we can make here is, if we look at the history of other commodities, once they have moved to the shorter pricing cycle, there's not many of them that have gone back to the longer pricing cycle. So again, it's speculation, but that's what we're seeing in the market right now, and it's difficult to really see what will happen in the future.

Don, I guess, on a bigger question -- bigger picture question, are you prepared to move towards a higher percentage of spot-based pricing then?

So I was going to add a couple of comments and then address that as well. So we've seen, in the last few years, periods of oversupply and undersupply-type markets. We've seen customers pay spot prices dramatically higher than benchmark, spot prices of $380 when benchmark was $330. And now, we're seeing customers who want to pay a spot price that's under the benchmark. So it certainly does go both ways. I think, in the end, this is a relationship business. The relationship with the customer is quite crucial when we make our decisions on what we're going to do with each customer. So it's partly driven by the nature of the steelmaking coal business that it is the ubiquitous product -- or homogenous product. There's different specifications that are really important to each steel plant, and it takes some time to understand it, figure out what the blend is going to be, how it works with other coals. And that, in itself, is a part of the whole relationship between the supplier and the customer. So there are times in the past few years when we have acted differently with certain core customers than we would with customers that we don't have a stronger relationship and where we might just sell on spot. So I don't see that the market will sort of convert completely to a spot market that quickly because the customers themselves, I don't think will want to be exposed that much given the blend that they're used to and the efficiency that they get from that. So that was sort of the comments to add to what Réal just said. But to your last question, I think, in the end, we're going to have to follow the market. We won't be able to be a complete outlier. I don't expect we'll be leading the market to go to spot only, I don't think that would be in either our customers' interest or our interest. But if the customers have decided collectively that they want to have a higher proportion of the spot than they've had previously, then that's something that we'll have to be aligned with.

The following question is from Sohail Tharani of Goldman Sachs.

On the coal costs of $51 to $58 versus $71 to $77 earlier, is this all strictly coming from the stripping cost benefit -- accounting benefit?

Pretty much.

Okay. So there is no change in your costs for this year versus what you had before?

No. Our guidance remains the same other than the change related to the stripping.

Okay. Next thing. On Slide 9, you have this chart about the movement of -- how much material you have moved versus the shipment. How should we interpret this? That -- do you have some inventory setting over there, or is it just that stripping has been going up?

Ian Kilgour here. The stripping has been going up with our coal volume. So if you look at that chart, you'll see the red line indicating the increase in coal production along with the blue bars indicating the increase in stripping. And generally, they go together. Over the long-term, we have a strip ratio of around 10.5. That will fluctuate from time to time. And you'll see that in the last couple of months, our coal production has remained stable, while the amount of material has gone down a little bit, and that's just part of the natural course of fluctuation of strip ratio over time.

Okay. Great. And last thing is, there was a comment that the -- on the Red Dog, the mine discharge permit has been shifted to a different agency. I was wondering if there's any progress on that going forward?

So the state has reissued the permit for Red Dog. There is an appeal underway. But the good thing about the state having carried the permit is that the permit remains in effect during the tenancy of the appeal. This appeal doesn't really raise any issues that we haven't seen before on previous appeals, which have been favorably resolved. So we're reasonably confident that, in due course, these appeals will be sorted out. So in summary, the permitting at Red Dog is in about as good a position as it's been in since 1998, really.

The following question is from Ralph Profiti of Crédit Suisse. Ralph M. Profiti - Crédit Suisse AG, Research Division: I just want to come back to the coal cost guidance of $51 to $58 in the context of the $47 that was reported in Q1. Just wondering -- that disconnect, are we seeing higher unit costs, or are you baking into your assumption the possibility of sales coming in below production levels?

Thanks for the question. Essentially, the first quarter costs came in a little bit below the guidance range, mainly because we concentrate a lot of our maintenance in the second and third quarters. So you would expect to see cost of production go up for the second and third quarters as we do all of our plant shutdowns. So the first quarter and the last quarter tend to be clean, lowest cost quarters, because, number one, you're not spending the money on your plant or your annual plant maintenance shutdowns. And, number 2, you're not losing production because of those plant shutdowns. So those factors mean that the first quarter costs are often below annual costs. Ralph M. Profiti - Crédit Suisse AG, Research Division: Okay. And maybe I'd like to get a little bit more color as we circle back on QB2. And previously, you've talked about 1 year for the possible permitting plus a 39-month construction schedule, which puts the context of the supergene orebody expiring in 2017 and then start-up of QB2. How are you thinking about the possibility of that gap opening up? Is this something that Teck is going to -- willing to accept, or is there some risk mitigation on maintaining some continuity that's possible?

Roger Higgins.

Thanks for the question. You're correct, of course, that we had a mine plan that largely had a somewhat of an overlap between the leaching process and the concentrating process at QB, and that overlap is being whittled away. But at this stage, we have mine plans which do allow us to continue operations. The mine part of the operation, of course, doesn't change very much at all because the pit is there, it's open and we continue to move at approximately the same rate through the transition from mining, leaching ore to mining concentrated ore. The plant, of course, will continue because the leaching cycle at QB -- the period of time that ore is in the heaps and in the dumps ranges from just under 1 year for the heaps to sort of closer to 2 years for the dumps. So we will be able to continue to produce cathode and, importantly, keep a continuous operation going on through the transition as we see it at this stage.

The following question is from Oscar Cabrera of Bank of America Merrill Lynch.

Just going back to the question on coal spot prices. In the -- as the iron ore market transitioned from a contracted pricing per quarter to a spot market, the onus on the transportation and insurance of the shipments passed from the mills to the miners. Are you expecting something similar to happen in the met coal market, i.e. are we going to see prices that reflect CIF delivery to wherever the destination?

Do you want us to answer that, Ian?

Hello, Oscar. Ian here. At the moment, we have a combination of pricing, which includes vessels that the customers supply to us and vessels that we contract ourselves. That mix may shift in the future. However, it is going to be very dependent on customer preference, and we're well equipped to handle either situation.

Okay. And then, if I may, on -- also, on your stripping in the coal mines, I know that the stripping went up to, like, 12.5:1 when you were expanding to 27 million tonnes. As you undergo your expansion to 28 million tonnes, what should we expect the stripping ratio to be in 2014 and '15?

We expect it to be around the 10.5 level, Oscar, over the next few years.

So would it be fair to say that the amount of the first stripping that you quoted -- I believe it was, like, $80 million per quarter. Is that -- would that be a good benchmark to use for the next couple of years?

Around the 75 -- or 72 million to 77 million bank cubic meters per quarter is about what we expect.

Great. That's very helpful. And then...

Oscar, if I can just interject here. Just to clarify, the capitalization on stripping in the coal business has been about $140 million per quarter.

Yes. But then, just -- Greg, looking to see what we do over the next couple of years. So in other words, most of the stripping has been done. So it should -- I mean, you're in harvest mode.

Yes. I wouldn't quite put it like that. We did have a peak of stripping, which we talked about last year, which we moved through, which was above that 10.5 level. But we're moving back towards that more normal level for the next few years.

Okay. Great. And then, lastly, on Quebrada Blanca, during CESCO Week, I think one of the issues that came to the floor was the fact that permitting within the country was just being extended because of different stakeholders. I was wondering if you can give us a little bit more color on what the government is asking you with regards to your existing operations or existing processing facilities, I think, you mentioned during your remarks. What is the government focusing on, and why the delay?

Thank you for that question. I don't know if it's any comfort to know that we're not alone in this situation, but Chile is definitely going through a transition, and I'll ask Roger to make a comment.

Yes. Thanks, Oscar. And you're right, it was a major topic of the conversation at CESCO. Just to give a little bit of background, perhaps, to Quebrada Blanca, because I suspect that's where you're thinking most at the moment. Quebrada Blanca original EIA was approved in 1991 for operations starting in '93 and for a mine life of 14 years, so that takes us to 2007. We're still operating that mine now, with mine life extensions in 2013 and have some years left to come. And of course, that's a good thing. And it's being well advised, and we've been -- we've applied for various extension permits, and we've reported annually to the government authorities and all of those sorts of things. But the regulation regime [ph] is different now from what it was in 1991. It's in transition. It's -- but there's nothing inherently wrong with this. It's just a case of getting used to what's happening, not just in Chile, obviously, but in virtually every mining jurisdiction in the world. So we're going through that process in a dialogue. It's a constructive dialogue with authorities at the national level, environmental and mining authorities at the regional level as well and working our way through to ensure that we have a current QB operation which is regularized, if you like, to the current mining regulations and rules as we proceed to go into a brand-new project. With the process -- you see, it is a transition process. Everybody is learning their way through that, including ourselves, other mining companies and the authorities themselves. They've set up some new departments. They've set up some new tribunals. There are new people in all of those. And so, we're working with them to progress QB and the other projects in the future, of course, like Relincho, through the new processes. We don't find this -- we don't consider this to be an impediment. Chile is still a good place for us to be looking for new copper opportunities, and we're working with the authorities to make it as smooth a transition process as we can.

No. I mean, there's is nothing specific, right, Roger? It's just the process as opposed to the government focusing on the tailings or in the processing at the site?

The only thing, Oscar, that I would say is a bit specific is in Chile as in so many parts of the world, there is a greater focus on the influence and -- of communities and our discussions with them around specific details, which certainly is different from the way it was in 1991.

The following question is from Alec Kodatsky of CIBC.

Just a couple of things. I'm wondering if you could maybe offer some comments just on the observations for the met coal market. Clearly, with spot where it's at, it would appear that there is a reasonable amount of material available. I'm just sort of curious whether the production curtailments aren't necessarily appearing as you might have expected or whether there is a demand pushback, or any color to the market would be helpful.

Okay. Réal Foley, please? Réal Foley: Yes. Thanks, Alex. Yes. The current pricing levels are definitely putting pressure on coal supply. And we've already seen announcements that add up to around 30 million tonnes annualized production cuts. And it results in a number of projects that are being delayed and suppliers are exiting certain projects or putting the assets up for sale. So that -- that's all public information. You may have seen as well at a number of conferences where we presented the margin curve. Where we estimate that at a price of somewhere around $170 there is production of about 52 million tonnes to 58 million tonnes that is uneconomical. So at the current pricing level, production is continuing to suffer for sure. And the higher costs, especially the higher cost mines with the lower-quality-type coals, get impacted most.

Right. And it's -- I guess, sort of, the question is, is there an inherent reluctance to scale back output, and people just sort of waiting for better signs? Or is there another element to the margin curve that would suggest that they can continue to operate at these prices and everyone's sort of adjusting maybe to the wrong number? Réal Foley: Well, I guess, each company is making their own decision. But what we witness is when there are inventories to go through the system, those tonnes will tend to move and we have seen that from a number of areas. As prices trended down from about mid-February this year, we started seeing more production cuts and more announcement come out. And whether or not there will be more, it really depends on how long pricing continues at that level. But the pricing at the current level is definitely making it difficult for some miners and reducing margins for everyone.

Okay. And maybe a question for Ian. Just conceptually, when for the coal operations do you plan to get to the long-term average strip ratio? I understand they're long-life assets, but is it 10 years, 20 years? I'm just sort of curious.

We're approaching that time fairly quickly. This year, we will be at around that long-term ratio. We'll be going up a little bit, down a little bit, but we won't be straying drastically from the long-term strip ratio over the next 10 years.

So it will be fairly consistent then, you won't necessarily see as big a fluctuation as you might have if these accounting rules were applied a few years ago or a year ago? Is that fair to say?

I have to ask...

You do want to be careful because it's sort of area by area, not mine by mine calculation. So one pit may be under, one pit may be over. The one you're under, you don't defer. The one that's over, you will defer. So there are going to be awkward numbers on a go-forward basis to get right, and that's why we have the sort of depreciation guidance in the numbers.

The following question is from Jorge Beristain of Deutsche Bank.

I guess my question is for Roger. And just following up on Oscar's question earlier about QB2, could you comment on if any of these changes or pushbacks that the Chilean regulators are asking for would lead to a higher CapEx or OpEx in the future on this project?

Jorge, thanks. Look, we're not seeing that. We're basing our CapEx and our OpEx on sort of bottom-up calculations of both. And apart from the question of deferral and little delays, which have, I guess, an inflationary effect, we're not seeing other -- any other impact.

Right. And that was going to be my second question because the 43-101 was filed in January 2012 based on those dollars -- or better put, it was on 2012 dollars. Could you comment in terms of what you're seeing in terms of general Chile cost inflation on a year-on-year basis for CapEx?

We have Tim Watson. I'll give the mic to Tim Watson to comment on that.

Thanks, Jorge. From an inflationary perspective, I mean, there are the 3 elements with respect to inflation you need to look at. There's the labor component. There's the commodities, things like rebar, concrete and then there is the capital equipment, and you can look at those individually. We have, I guess, looked at things, I guess, across the whole project and an overall assessment over the last few years that inflation or escalation has been running close to 5% per annum from that initial capital cost estimate that was tabled in 2012. And while we continue to award long-lead equipment, and we're seeing very attractive prices in comparison to budget there. The overall average, we're still expecting to see around that 5% per annum.

Okay. And my last question is, are the current discussions that you're having with some of your partners in terms of funding have anything to do with a potential project CapEx escalation or the decline in copper price, as both of those could obviously impact the project NPVs? Or are they completely independent of that situation?

The short answer is no. They're completely independent.

The following question is from Kerry Smith of Haywood.

Could somebody comment just on Asian demand generally that you're sort of expecting in the second half? Like, are you seeing possibly better demand in Japan, say, versus China? I'm just wondering what the dynamic is like there?

Réal, over to you. Réal Foley: All right. Thanks, Kerry. In looking at China, so far this year, they're running at a very high level in terms of steel production. They're actually running at record levels. And that has been for January, February, a bit contrary to what we've seen in the majority in the rest of the world. And we're now at the point where we're seeing positive trends in Northeast Asian traditional customers with anecdotal evidence suggesting that those customers, those steelmakers, are running at higher capacity utilization compared to 2012. And they are expecting that, that should continue for the balance of 2013.

Okay, okay. That's helpful. And the second question, for the mill optimization in Highland Valley copper, it's on -- you said it's on schedule, Don. What about in terms of the cost to complete that optimization? Is it on budget as well that way on the cost side?

Tim Watson can answer.

Yes, it is. Right now, we've got a series of major shutdowns scheduled for the summer month. The most significant is when we tie in the new pebble crushing circuit in August of this year, followed by mechanical completion of the float plant at the end of the year. So we haven't seen anything at this point in time that is changing either our scheduled completion dates nor our forecasted capital cost for the project.

And the 30%, was that -- just remind me, was that committed capital, or that was actually spent capital that you talked about for the project?

The 30% was the construction progress. So in terms of total expenditures on the project, we're in excess of 60% expended on the project. And on commitments, we're in excess of 75% on our committed costs.

Okay. So on that basis you're pretty confident the prices won't change. Okay, that's great.

The following question is from Cliff Hale-Sanders of Cormark Securities.

Just a quick question really on capital spending in 2013 given the focus on near-term cap preservation in the market. With QB2 and Frontier both having pretty high numbers for 2013, I'm just wondering how much of that number could come down if there's further delays in the permitting in the sense that expenditures you could put off in the future at QB2. And at Fort Hills, if there is no sanction in 2013, is there room for that spending to come down? And then, just one final question kind of relating to that. On the capitalized stripping, I understand the nuances for the accounting treatment, but how long will it stay from a cash draw point of view at these sort of elevated levels? Or should we expect it from a free cash flow point of view start to shrink dramatically over the -- sort of the next 2 to 3 years?

Okay. There were several questions there. Let's do the last one first, if that's okay? Ron or Ian? Ron?

Yes. The cash numbers -- again, there's no changes to our mining plans. So the effect on our cash flow and our cash balance is not touched by this change in the rule. It becomes really just a presentation issue. So we've only given guidance for our spending for the current year, and that was the $71 to $77 before the change in the rule. We have not yet given guidance for the future years. So that will come out probably when we issue our fourth quarter results in early February next year. But whatever they will be, it would be what we intended to do all along.

Okay. And then, the -- let's do the QB part of the question. And I'll just make the comment first before I turn it over to Tim is that, we do want to stay as close to the schedule on QB2 as we can. But we are cognizant of the delays versus mining expense. So Tim, you've looked at this.

Yes. So with respect to QB, we did have the budget approved for 2013 assuming the submittal of the SCIA in the end of the second quarter of this year. So with the push-out of the SCIA submittal at end of this year, we're actually just in the process right now of analyzing what impact that will have on reducing our budgeted expenditure for 2013, and we expect to have that number available associated with the Q2 results.

Okay. And then, on -- you did mention actually Frontier at the beginning of your question and you referred to Fort Hills, so I assume...

Just, oil fans [ph] in general, I guess.

And so, Ray Reipas is here to answer that one.

Yes. Thanks for the question. So on Fort Hills, the spending this year is really focused at getting us to that sanction decision. So I think your question was, was there any ability to change that amount? And I would suggest that's probably not going to change. We're going to -- we'll spend that to get us prepared for that sanction decision.

And at Frontier, any point in slowing things down in light of the current market? Or are you still proceeding as planned?

Frontier is a much smaller percentage of that spend that's shown there, and that's really moving through the regulatory and the pre-feasibility study, engineering phases, and I wouldn't see that changing.

The following question is from Steve Bristo of RBC Capital Markets.

My question also tied into the capital spending. I was wondering, with the delay in the QB2 why the CapEx guidance hasn't changed? But it sounds like you just haven't had the chance to review that yet, is that correct?

Well, it's under review. We haven't made any new decisions on it yet, and that's because we're watching it very closely, trying to keep the right balance between maintaining schedule, and then not spending too far ahead of when the SCIA is submitted.

The following question is from Sal Tharani of Goldman Sachs.

I wanted to go back to the coal side. And also the steel mill margins in Asia, China and all around the world have compressed and you alluded to in your commentary also. And what we have seen in the iron ore side is that the premium mills were willing to pay, particularly in Asia, for higher-grade iron ore or pellets that's compressed. And I was wondering if -- aside from the fact that people want to go on a more spot basis, are you also seeing a compression in sort of lower grade, high growth hard coking coal prices, or that has maintained as it was historically?

Réal Foley? Réal Foley: Thanks, Sal. When we look at the different grade of coals, they each have demand-supply conditions that are slightly different depending on the conditions in the market. Now, as steelmakers are trying to control their costs to manage their costs, we have seen an increase in the utilization of lesser value coals. And that, for instance, is -- has pushed the ratio of the low-vol PCI prices closer to the hard coking coals, and it's also created demand for more lower grade material that we have been able to respond to with the range of product that we have available for the market.

There are no further questions registered at this time. I'd like to turn the meeting back over to Mr. Lindsay.

Okay. Well, thank you very much for attending this morning. Just a couple of summary comments and sort of a point that is of interest to us. The change in the accounting rules is new this quarter, and it's something that we understand people will have to get used to. But there is a benefit that we're looking forward to, and that is that we are under IFRS now, the same as our major competitors in the steelmaking coal business. And so, we're looking forward to when the new cost curves come out because we're very proud of what's occurred in our coal business since we made the Fording acquisition. We've moved the business down the cost curve quite substantially, and we think it's going to move down even further when an apples-to-apples cost curve is developed with the new numbers. So we'll look forward to that. As I said earlier, the company is in very strong financial condition. And whether the capital allocation turns out to go to the projects with what we call our "stay the course" strategy, which we are committed to, or whether there is another opportunity that looks better than the stay the course strategy, either way, we think it will be a benefit to shareholders. We are watching our capital very carefully, watching the market as events unfold to see which direction it's going to go. But for the moment, the company is running very well. We're getting good operating results, and we've got good projects ahead of us. So we thank you for listening today and look forward to the next quarter in July. Thanks very much, all.

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