Perseus Mining Limited

Jeff Quartermaine - Managing Director and CEO

Michael Slifirski - Credit Suisse Cathy Moises - Evans & Partners Reg Spencer - Canaccord Genuity

Thank you very much and welcome to this conference call to discuss Perseus' June '15 quarterly report and as in the past I apologize to some of the people who will be listening to this call. The timing is always challenging given that people from all around the world have an interest in the subject.

In summary, the June quarter has been a very productive quarter for Perseus. We have produced more gold than ever before and we have done this at a cost that's materially lower than in the past.

The upshot of the performance is that we generated a lot of cash and have placed the company in a very strong position going forward. Through sheer hard work and attention to data our team and I de-stress the word team because Perseus' transformation has not been the work of any individual, it's a proud of our genuine team effort from many people both across as such, both in West Africa and Australia but our team has clearly demonstrated this quarter the quality of our asset base and the benefits of incremental improvements through consistent effort.

And I would like take this opportunity to publicly acknowledge that contribution, particularly all of our colleagues but particularly our hardworking Board of Directors and sincerely thank them for their contribution in the face of a lot of times its seem like a fairly -- been some fairly [doting] challenges over the last couple of years, I think you saw that. So let's turn to the quarter and let`s pass and talk in a little more detail about what we have actually delivered.

So if we look at the operations at Edikan, gold production for the quarter was 64,669 ounces which is in fact 36% more than in the March quarter. This was in fact a record quarter for us passing our previous best quarter which was set in March 2013 when we produced about 57,000 ounces.

So that's about a 13% increase on our best ever quarterly performance. In terms of the half year we produced 112,119 ounces which was 2% above the top end of our guidance range of 100,000 to 110,000 ounces and for the full year to June 30 our total production was 212,137 ounces which was I think higher than in our previous financial year and also well above guidance for the period.

This is really outstanding performance given the fact that two of the three months in the March quarter and more than half of the first month in this quarter we were only committed to draw power for four out of every six days, so [indiscernible] authorities. And not withstanding this restriction the team responded very strongly and then made the best of the situation and it's clear they've done a good job.

I should also note, as I indicated in our March quarterly conference call that by the 19th of April we had actually put in place measures to access enough power for 100% of our needs and so May and June were largely unaffected by power restrictions and we were able to get on with the job relatively unimpeded and I think the results clearly reflect that. It has to be said that a steadily increasing head grade in line with expectations has certainly helped the production performance.

The average grade in June was about 1.4 grams a ton and in March it was about 1.26, so clearly there has been an increase in grade. But what's helped this is almost as much as the grade has been a steady improvement in gold recoveries.

Recovery average is about a little over 89% for the quarter, notwithstanding the fact that 20% of the feed was oxide ore. And in June recovery was actually pushing up about 90%.

So that's been a very good effort. The impact of improved recovery is on production, it's pretty well illustrated by the fact that up until this quarter our previous best month ever was in March quarter 2013, was in March 2013.

At that stage the grade was about the same as what we are currently processing, but the recovery was about 6% [or] 93%. So clearly improved recoveries has a very significant benefit not only comes about by improved efficiency and the way we go about our business.

There are some fairly technical reasons for the improvement and I don’t want to spend a lot of time now going into that detail. But suffice to say that as a result of improvements in both grade and recovery and notwithstanding the reductions in throughput as a result of power we have had a very good quarter in terms of production.

Now on the cost front all in site cost rules are excellent this quarter. And it's fair to say that they've certainly surpassed their own expectations and I expect they've probably exceeded the expectations of most people on the call.

And I guess given the weakness in the gold price in recent times this couldn’t have occurred at a better time. In the June quarter our all in site cost and I will remind you that our all in site cost that I am talking about that we're talking about our production costs plus royalties plus investment in stripping and investment in sustaining capital.

So the total cost that we spent on the site in the June quarter, our all in site costs average $685 an ounce. And this 24% lower than in the March quarter.

For the half year to June all in site costs average $777 an ounce which is about 40% below the bottom end of our guidance range for the half year, that was 1,150 and for the full financial year they averaged $877 an ounce so that was well below the guidance as well. Now I am sure you'd agree that these numbers compare very favorably with all but a few months that are operating around the world at present and they represent a material improvement over the cost that are being incurred by Perseus in the past.

Although to be fair to us, over the last 12 months there has been a fairly consistent downward trend in our costs. And that's been apparent to those of you who’ve looked very closely at these numbers.

So why has this occurred? Well in the June quarter there were three main reasons for the sharp quarter-on-quarter decrease.

Firstly it has to be acknowledged that when you are talking about unit cost or cost per ounce, if you produced a lot more answers the unit cost will drop in those business. So given that ounces were up by 27% unit costs were down but this relationship seems to get overlooked at times when people look at cost.

Secondly in the June quarter the proportion of material mined shifted towards the Fobinso pit which is being mined by our contractors Rocksure under a yearly negotiated mining contract price. The reminder of material move came from AG which is mined by AMS under the old contract that they will move on to lower rates when they are mining in these pits.

Now what that meant was that in affect the total tons of material move were up by 3% during the quarter but the total cost base from mining was down by 4. So there was a material contribution there from the mining side of things.

Thirdly, the factor in cost being lower and then anticipated was our total expenditure on sustaining capital and waste stripping was well down on expectations due to delayed entry to the pits mining area and I'll take about that in a moment. So what that meant that on this line item alone we ran it around $86/oz for the quarter whereas we might not well have expected to see something closer to $50/oz for expenditure on capital, had we been working exactly to plan.

But all of those factors combined certainly helped and the other issue I guess is that we've been progressively over time bringing down the cost of all of our consumables that we use in the mine we have been working through each of our supply contracts one by one and managing to bring some savings to be. So all of those factors have contributed to that good performance in the cost front.

Now looking at gold sales we saw 63,308 ounces in the quarter and we average day an average sale price of $1,307/oz. We delivered 18.5 ounces in the hedge contract of $1,600/oz and the reminder was solid at either spot or into spot preferred contracts that we used to manage that revenue line.

What that meant was that combined with the relatively low cost of production as I've previously mentioned for every ounce of gold sold during the quarter we managed to generate a margin of about $622/oz. So that’s a margin that many of our peers are able to achieve in the current gold price environment.

Now other matters have noted that they have to be highlighted I guess there's several of them and power as I already mentioned with power by the 19th we were able to get access to the power that we required. The point about that is that the incremental power that was available to us was generated by diesel rather than coming off the grid.

So that meant that two thirds of our power was priced at the normal grid price of around $0.14 a kilowatt/hour. About one third of our power was more expensive being priced around $0.26 a kilowatt/hour.

Now there is two things to note about that while it does seem like a lot of incremental cost to pay for that extra power I can assure you that the incremental cost was far exceeded by the incremental benefit of running six days out of six rather than the alternative. But the other interesting thing was that in terms of our processing cost the incremental cost power was offset by the other cost savings that we'd achieved during the quarter.

So overall we didn’t have a great impact on us. Now I mentioned access to these pits mining in the Eastern Pits area now in early June.

The environmental protection agency from Ghana finally garnered verbal approval of our Supplementary Environmental Impact Statement. Now the receipt of this approval was a pre-requisite for the starting of mining in the Fetish, Chirawewa, Bokitsi pits that’s [indiscernible] the Eastern pits and also [indiscernible] deposit.

This is the culmination of very, very lengthy process during which the impact of mining activities on both the environment and community was exhaustively examined. Well the length of time that this took to achieve regionally went off for an opinion on that but what I will say is that that delay has certainly had an impact on us and will have an impact on us in the coming six months or so and I'll talk about that in just a moment exactly what that impact is.

Now this approval having been granted the approval what that did was it opened up the way for AMS our mining contract that they start clearing over their clearing vegetation, stripping and storing topsoil and some waste in constructing the mining infrastructure in Eastern pits. And all this work was being done under the terms of the new contract that we put in place last quarter with AMS and other significantly reduced price relative to what we have been paying in the past.

Now as I said last week, and I can say that AMS is doing an excellent job in getting underway and they certainly moved a lot of material in a relatively short period of time and that operation is now starting to look particularly good. So it has been a while getting in there but we are there now and things are going very well.

Now tied into that you are aware under Ghanaian mining rules were mining operations involved in displace significant habitants, these people do need to be compensated for loss of crops, loss of livelihood and to be built replacement housing constructed to various specific building standards. Now we were not of mind to impellent that exercise until we had approval to go in.

But having now received the green light from the EPA to start mining in Easter Pits which now started on the building of the replacement housing what this entails is that we need to build 46 buildings for residence in the Eastern Pits area. And another 153 dwellings for the residence of these larger north area.

Now that 153 number is likely to reduce as we go forward as we investigate the bona fides of the people claiming the housing in the larger north area but at the moment we're planning on 153 although do think that number will come down. And I should say too that mining in the Eastern Pits area hasn't been delayed by the effect of the housing because what we have done in the Eastern Pits area is that the residents who are there the 46 people we have made arrangements for, for rental housing in the area to be used until the new house arrival so that, that hasn't caused any delay.

What we have done in late June we awarded a contract for civil construction to PW Ghana and they're doing the civil works associated with the housing project. That work has commenced on site, I was in Ghana last week and work certainly got away well over there.

So it's very good we also received 27 tenders for the construction of the houses as well and these are currently being evaluated and we will award a number of contracts to Ghanaian contracts during the course of the September quarter and with the aim of having them start actually physically building the buildings in the December quarter when the building pads are available. That work is -- well the work for the housing for the Eastern Pits and the Esuajah North residents is scheduled to be completed by end of September 2017 and December 2017 respectively.

The total cost of the infrastructure and the houses for both of those areas will be about $23 million. We do believe there are opportunities to reduce this amount as we go forward and certainly the tenders for the house construction prima facie indicated that there are some savings to be had and we'll be working very hard on that front as we go forward.

So this quarter we've certainly kicked quite a few goals at Edikan and my claim last quarter that we're delivering on promised outcomes clearly has some substance. And without laboring this point too heavily I think that the last four quarters have demonstrated that things at Edikan are now well under control.

And clearly not everything happens according to plan but we do have the odd, certainly have the odd setback from time to time and they will continue to happen. But when they do, do occur we do respond very well and find ways to get back on track and if nothing else this is probably the most pleasing aspect for me for the quarter that just passed.

And speaking of the future, our quarter report also, it also provides guidance in terms of both production costs for the next 12 months and in summary what we are forecasting is that gold production for the next 12 months will be in the range of a 190,000 to 210,000 ounces, and costs will be in the range of $1,100 to $1,200 an ounce. Now there're several things that need to be, several points that need to be made about this guidance.

Firstly the gold production will be impacted by the delay that occurred getting EPA approval as I mentioned previously. What the impact of this is, is that it means that for a number of months later in this calendar year we're going to be processing significant quantities of lower grade stockpiled ore.

And so production will be down relative to what we've seen in recent periods as a result of that. Unless we can implement some strategies to bring forward higher grade gold production and we are currently working on several of those sorts of initiatives which may or may not be possible, but the guidance as currently given doesn't factor in that those initiatives will be implemented although I can assure you we're going to be working pretty hard on that.

Now as you'll recall, I said earlier that when you produce a lot of ounces units, unit cost have dropped and vice versa, well this is a case of vice versa, because given that gold production will be down a little, it means that unit costs will be up a little as well. And of course to compound matters on the cost front during the forthcoming half year in particular we will increasing our spend on CapEx during the period as we aggressively strip waste from the deposits to access the ore, and as this building relocation housing building program gets under way.

So in fiscal '16 things will be not be as good as they have been in the June quarter. But for those of you who have read out recently we released updated life of mine plans for Edikan, you will know that what I've just described is totally consistent with that life of mine plan there is no change as far as that's concerned.

We were anticipating that this would occur the way that it does look like it will. But then you would also know having read that life of mine that's starting in the March quarter next quarter when we access higher grade fresh ore, gold production and therefore cost will also improve.

So what we're looking at is a temporary downturn in this second half of the year but we can pick up beyond that point. And as I've said before what we have been able to establish I think at Edikan is a fair degree of reliability in our forecast so coming in reasonably close to what we're saying so I think you can be certain that what we'll do over the next quarter or so is part of a plan and then we'll be back on track early in the new year.

And turning to our second project, it's the Sissingué project in Cote d'Ivoire and you'll recall that in early April the board of directors conditionally approved the company's plans to advance development of the Sissingué project and during the quarter some very material progress has made towards that satisfying the board's development prerequisites and the project is well on track now to commence some early works in the September quarter of this year so in the next month or so we'll be starting to some work on the ground and moving into full-scale development in the December '15 quarter which will ultimately result in gold production around the December quarter into '16. Specific progress that we've made, we've made been lot of advance on implementing or developing and implementing a Project Execution Plan, the number of things that have occurred as far as that's concerned.

We've negotiated the purchase of a new SAG mill that was surplus to requirements of another corporate types of brand new mill but someone else has bought but they are not using. The beauty of this is that the mill's immediately available and as well as providing a net capital saving it reduces the length of project development time, it simplifies the flow sheet and certainly will improve operability as the project moves forward.

So that’s been a major initiative. We've also been working with contractors Lycopodium to undertake frontend engineering and design and what this does for us as well as finalize details of plant layout, flowsheets, equipment et cetera.

It gives us an opportunity to develop very accurate budgets and to allocate those budgets against work breakdown structures so that right from the get go we'll have a very high level of control over the cost of the development. When this work is done, when FEED is finished and subject to agreeing satisfactory commercial terms, we'll either appoint a contractor to an engineering procurement or an EPC, engineering procure and construct contract, and that will be as I say awarded to a suitably qualified engineering firm that may or may not be Lycopodium depending on their approach to the pricing of that exercise.

But certainly we'll go into either an EP or an EPC contract to lock down a proportion of the cost associated with the works. We have as I said put together a package of early works, and that’s ready for board approval in the next short period of time and what this will involve is some engineering works associated with critical path items, construction of side access roads, site clearing, fencing, starting to work on the plant -- on the camp rather, and buying some mobile equipment.

We'll also as a very early sign of good faith as far as the community is concerned we'll also build a water bore and water tower for the local community and get that moving. We've also during this period we put together organization structures for both the constructing and the operating phase of the project and we've identified preferred candidates for a number of those key positions.

Active recruitment though will follow once the board has approved full scale construction down the track -- or actually after the early works start I should say and we'll expand that as we go forward. The operation staff that will ultimately run the project will be integrated into the construction team during the development stage to ensure that the mine and planned operability remains the key focus at all times during construction.

It's very important that this occurs. What we've also done is we've done -- we've built a -- are putting together a recruitment community involving representatives of all villages located in the area of Sissingué to ensure that there is a fair allocation of employment opportunities to local residents during both construction and operating.

As you'd imagined this is a critical issue. When we come to a new area like this everybody wants a job and unfortunately that is simply isn't possible and of course we need to manage their expectations around that very carefully to ensure that our relationship with the community remains harmonious going forward.

Another key of input, we were seeking to do with Edikan was to get our mining convention finalized. As you're aware the Ivorian Mining Code changed in 2014 and it gives the companies the right to enter into a mining convention with the state, and that convention sets out the conditions that govern development and operation of the mine during its entire life and most particularly guarantees fiscal stability for the period of the mine operation which is important to us.

During the quarter the terms of the mining convention covering Sissingue were negotiated with the government's negotiating team and that convention now subject only to final review of the sign-off by the Ministers and three of the responsible Ministers. I was speaking to the Minister for mines, Mr.

Monsieur Brou in Abidjan Friday night and we will now sign that convention in either late July or early August and that will mean that another major milestone for the project will be ticked-off. And then speaking of conversations with Monsieur Brou, I've got to say that the Ivorian government has been extremely helpful.

They are very receptive and supportive of our plans in developing this project and we are very-very grateful for the support and encouragement they have given us. I mean Sissingue is a smaller operation or will be a smaller operation relative to our Edikan mine however it brings a relatively modest capital cost and it also will result in very, very competitive operating cost.

And so it represents a relatively low risk investment for us that has the potential to improve the overall corporate risk profile by giving us a second income stream and that will make us less dependent on our flagship operation for corporate prosperity. So we're very keen on developing this particular project and we believe that it will be a major boost to our corporate strength as we go forward.

Now speaking of our corporate strength, this is being something that has certainly benefited from the good performance during the course of the quarter. At the end of June, our working capital totaled $178 million, so that's current assets less current liabilities $178 million.

That represented an increase of 29 million during the quarter and an increase of 108 million for the 12 months to 30 of June. So being able to increase our working capital by 108 million during the course of the last 12 months has been a fairly significant improvement.

The total value of that cash and bullion on hand at the end of the quarter was $127 million and that represents a 52% increase over the balance at the end of the March quarter, an increase of $43.6 million in fact. And it was 78.6 million or 161 million, 161% better than this time last year.

That balance of cash and bullion is made up of cash of 103.7 which is 26 million more than it was at the end of the quarter. We also had 15,412 ounces of gold on either on the site or in the process of being refined or in that metal account at the end of the quarter.

And that bullion was valued at 23.6 million at the end of June given the gold price and exchange rate that prevailed at that time. So between 23.6 million on bullion plus the 103.7 of cash our total cash in bullion balance readily available cash was $127 million and I should point out that neither of these balances include a further 12.3 million that we are currently holding on deposit in escrow accounts and that's provided to give security against future environmental commitments.

I mentioned gold sales already, so of these 63,000 ounces of gold sold during the quarter the average price was 1307 and as I said previously 18,500 of that was delivered into forward sale contracts of 1,600 with the balance being at spot or on deferred sales contracts. The gold price hedging position at the end of the quarter we have 63,000 ounces of gold under contract to sell forward during the quarter this calendar year.

The weighted average price of those sales will $1432 an ounce which meant that at the end of June that position was in the money to $21.3 million -- and I suspect that if you did their calculation based on the gold prices this morning it would be a considerably greater amount. Third party debts in terms of trade creditors and accruals at the end of June that totaled $36 million which is a decrease of $4 million during the quarter.

So what that means is that as well as accumulating cash on the balance sheet we've also been reducing outstanding creditors and of course as you are aware Perseus has been debt free for some time, almost debt free all the way through the quarter. Now looking to the future what we are planning to do as far as debt is concerned is that we are going to put in place a 60 million secured corporate debt facility and that will be used to supplement existing cash balances to provide funding for the company's capital works program over the next 12 to 18 months and that of course, that capital works includes both the Sissingué development as well as relocation housing and stripping in the new mining areas at Edikan.

What we will also do is negotiate $20 million revolving line of credit to be used to help us just manage cash flow during that period to take any lump sum bumps out of the cash flows. But neither of these debt facilities are particularly large and so while our debt free status will change it will only change in a fairly modest way.

Now as far as arrangements to put that debt in place is concerned we have sent out invitations to various financial institutions during the quarter we've received offers of financing from quite a number and we've whittled down the list of potential providers to a group of three. And we have been negotiating with those three banks on the exact terms of the facilities over the last month or so.

And that's moving along very well and we do believe that our plan of having that financial commitment in place by the end of this September quarter is distinctly possible which will then allow decisions to be made to commit to the full construction of Sissingué. So on the corporate front things are traveling very well and the company is very well positioned to deal with challenges as we go forward on that front.

Now there's just one further point I would just like to make from a corporate perspective and I don’t usually make a habit of responding to rubbish that people write about Perseus from time-to-time but I am going to make an exception on this particular one because I want to do this on behalf of my staff in the Perseus office who have been extremely supportive of our efforts to keep a lid on costs over the last couple of years. So I thought it was relatively important to actually make a comment on the subject of corporate overheads.

I've noticed that one of the companies in our peer group who operates in the sectors of Sissingué justify their corporate overheads by claiming that Perseus spends about US$23 million a year on overheads. This is just simply not the case at all.

Perseus' corporate overheads in fiscal '15 totaled A$8.6 million or US$7.2 million. So that is total cost that we spend on salaries, fees, travel rent, consultants, listing fees, insurance et cetera in our corporate office.

So far from spending US$23 million. I can assure you that our cost is closer to 7 and that we've quite proud of the fact that we are able to run a very lean ship and keep our cost down but at the same time I will not allow that to impair our performance in any shape of form so enough said on that front.

But it is something that we have worked very hard on over the last couple of years and being misrepresented in that way isn't particular helpful to us. So all in all wrapping it up it's been a very productive quarter for Perseus.

We produced more gold that ever before we've done it at a cost that's materially lower than in the past and the upshot of this is that with the additional cash that we've generated the company is now in a very strong position to achieve our stated aim of consistently generating positive returns to shareholders. As I said earlier the most pleasing aspect of the performance from my point of view is that we can now point to four successive quarters of consistently good performance and even the more cynical of observers would have to acknowledge that today Perseus is in a very different place to where we were a couple use when we were struggling to live up to some rather lofty expectations.

So far from going up backwards as some were predicting at the time we have transformed the company into one of the stronger performers in our peer group and we do expect that kind of performance levels are going to be repeated consistently going forward. So thank you very much for listening to this explanation of that quarterly report and if you have any questions I will be happy to take them.

Thank you. Congratulations, Jeff.

Great to see the results coming through and terrific that all the hard work you've put in is really finally well and truly delivering. Two small questions from me if I may.

First of all, the mill throughput achieved in the June quarter - terrific throughput despite the challenging early start. What do you think you could have achieved if you had full power for the period and what's the read-through for this year please?

What we have achieved in the power well I guess you know in this very simple, you could work that out mathematically. We were on two thirds power for about two and half months basically of the six months period so six times in the quarter.

So you can just sort of scale it up and running forward we're looking at around the 7 million ton level throughput level that isn’t the sort of the rate at 8 million tons of the mill but we find that working around that so it gives us good recoveries and works well for us. We will see the ore from Fetish and that we mined this year it's a little harder than what we have been used to mining in the past.

So that will sort of bring it around the 7 million ton level. We are looking at a number of initiatives to change that throughput level it's too early to talk about those things.

But we do have a number of plans on the drawing board for delivering those outcomes.

Okay. Thank you.

And the second question, the costs deferred from the June quarter that are now in the current half, can you give us an estimate of what that cost -- [dollar million] impact was that -- from activity that was planned that couldn't be undertaken?

As I said I think for the quarter the capital cost investment was about $89/oz. We would have expected something closer to $250/oz thereabouts.

Well actually now we've invested that because they were more ounce so probably around $200/oz now, let's say if that the guidance that we've given for the December half and the June half next year reflect that higher is in capital expenditures. So you can take it off that particular table.

Congratulations on the terrific result, Jeff. Just a couple of questions beyond Michael's.

With respect to the 2016 forecast is there any non-sustaining capital we should be factoring in for Edikan? And with respect to the fact that you've had the delays and we've got the old life-of-mine study in our models, do we upgrade 2017 a little bit to reflect that the higher grades are coming through in that year?

And one final question is the mining.

Can you just go through that again please?

Yes. Is there any non-sustaining capital budget for 2016 on Edikan?

No, no I don’t really make much of the distinction between the two. The capital we've talked about is stripping in and all other capital expenditures, so that other capital expenditures includes the housing, it includes work on tailings, dams etc., etc.

If we decide for instance to do a new major capital initiative that would be dealt with completely separately. So for instance if we were to look at something on our combination circuit that kind of give us a major productivity improvement we would deal with that separately.

Although I should say that in our capital forecast in life of mine plan we have included an amount for such an event we have actually included in that capital forecast about $15 million for the installation of a secondary crusher which may or may not take place. So in the forecast numbers, in the numbers in the guidance we have assumed that that money would be spent but we'll see about that as we go forward we got to justify that.

Sorry your second point.

Was -- given that 2016 is slightly down on previous expectations because of the delays in accessing the northern pits, will 2017 be commensurately up or it will just gradually eke out through the life --

No it'll be exactly as we predicted in the life of mine plan. I mean when we put that life of mine plan out, we were anticipating that there may be delays, I mean we were expecting that there would be a delay and it actually did happen.

So, what we've specified in the life of mine plan that was published in April I think this year from memory. That's exactly what we're seeking to implement, so you don't need to make any change to your models if you've already incorporated that in.

And then the final question is, over the four quarters of financial year '16 is there any residual higher cost, mining cost still to go through while we totally transition to the new contract.

Yes, there is one month. We're still mining in the AG pit this month in July and that will basically come to an end early in August.

So there'll be a little tiny amount but there's not very much material being moved from that pit at the moment, because we're right down at the bottom of the pit and it's very tight down there so the actual tonnage movements are relatively low, bcms being moved is relatively low. Most of the activity that's occurring on the site is occurring now in both Fobinso and in the Eastern pits so we'll be full progression to the lower mining costs in the coming quarters.

Congratulations Jeff on a pretty solid quarter. Just a couple of questions if I can, and I might start with Sissingue if possible.

Have you guys -- well remind me if you have, confirmed an implementation time table for the asset when you expect to start development, actual full on development activity.

Yes, we have, as I've said during the course of the call, we're doing early work starting in August most likely. Certainly in this quarter and we expect to start full scale development in the December quarter so we roll straight from the early works into full scale development that's predicated on the assumption that by then we'll have the financial commitments from our lenders and that implementation plan will be to the satisfaction of our board of directors but this stage of the game everything looks to be on track for implementing that plan.

And just on, I know it's not something you can readily comment on given you've got no control on it, but just the gold process itself. I note that the development of the asset is still subject to final board decision, correct me if I'm wrong, but at what gold price would you not proceed with the developments at Sissingue given your capital requirement at Edikan?

That's a fairly hypothetical kind of question, but look I mean we've really run our models to $1000 an ounce and it still generates an internal rate of return that's superior to a lot of projects that are being undertaken around the world. So, how far down it goes from there I'm not too sure.

I mean, we'll monitor the gold price as we go forward clearly if there is a major collapse in the price and that the outlook for gold is causing us a good deal of concern then we'll review the decision. But at this time we're focusing on the things that we can control.

We're not oblivious to the fact that the gold price is a bit softer, but certainly at a $1000 an ounce we would be inclined to go ahead because it generates very good return on funds inflowing so that's the business that we're in.

Okay and just one final quick question from me Jeff. Of the $23 million for relocation costs can you just remind me that all your expected capital is included in your all in sustaining cost estimates going forward?

I can confirm that all our expected capital is included in our all in sustaining cost going forward, yes I absolutely confirm that and that is the case.

Okay. Well thank you once again for joining the call.

It has been a good quarter for us and we are excited about things going forward notwithstanding what the gold price is doing today. It may well change tomorrow who knows.

Certainly we have come a long way and we do expect that things will continue in that vein going forward. Now I'm currently -- it's middle of the night where I am at the moment so I don't particularly want to take a lot of calls beyond this point but if there are any further inquiries that need to be made, please drop them on an email and I'll deal with them in the morning.

Thank you very much once again.