Paula Myson - Managing Director, IR and External Communications David Pathe - President and CEO Dean Chambers - EVP and CFO

Matt Murphy - UBS Terence Ortslan - TSO & Associates John Hughes - Desjardins Securities Anoop Prihar - GMP Securities Steve Parsons - National Bank Financial

Thank you, Luke, and good afternoon, everyone. Our second quarter results were released this morning, and a copy of the release along with the MD&A and the financial statements are available on our website.

Today’s call is being webcast, so in addition to those on the line, anyone may listen to the call by accessing our website. A replay of the webcast will be available later today.

Before we begin our comments, I would like to remind everyone that the press release and certain of our comments on the call today will include forward-looking statements. We would like to refer everyone to the cautionary language in the press release and to the risk factors described in the SEDAR filings.

With us today is, David Pathe, our President and CEO, who will begin the call by reviewing the recent performance and outlook, and then we’ll hear from Dean Chambers, our Executive VP and Chief Financial Officer, who will summarize our financial results. After the prepared remarks, we’ll open up the call for questions.

And with that, I will turn the call over to David.

Okay. Thank you, Paula, and thank you everyone for taking the time to join us this afternoon, it’s a busy time in the calendar, I know, so I appreciate you joining us.

This was the headline story for everybody in our space including us, this quarter is commodity prices and it’s a challenging commodity price environment that we saw and the first quarter has really become more challenging as the years unfolds. From our perspective though it was a strong operational quarter, our business is all performing in line with our expectations and I’ll talk a little bit in a few minutes about what’s going on in each of those.

But, before I get to that just looking at the quarter itself, we had smaller loss of $0.04 a share with our headline earnings number. There is some noise around that in terms of the few adjustments up and down that Dean will touch on with absence some minor provisions related to some non-Ambatovy assets in Madagascar, we’ve been modestly positive for the quarter.

And then we have pretty good EBITDA given the commodity price environment across all our business units and I think our operating cash flow held up pretty well really from the perspective the price environment that we’re operating in. In terms of our operating cost and we’ve always been very focused on operating costs and that focus continues with greater intensity and ever in this pricing environment.

But in this past quarter we’ve also gone back in reexamined our capital spending plans for the year. Now with Ambatovy up and built and construction completed there, we had a pretty conservative capital outlook for this year anyway with not much in the way of discretionary sort of project based capital spending.

We have gone back and reviewed on. We’ve reduced our capital outlook for the balance of the year by about $37 million.

The majority of that is different projects within our operating business that we’re scaling back or postponing based on the realities of the cash flow environment today. And not much of that ultimately is going to be absolute savings of capital, the majority of that is deferrals.

The projects that eventually need to be done all good projects within the businesses that were have value need to be done at some point. But in the immediate sea, we’ve got opportunities to defer that capital and conserve the cash.

And so that’s what we were doing. We’ll continue to do where our focus was on maintaining cash flow while not doing anything that would in any way jeopardize our operations or capacity to produce so or the safety of operations and we think we’ve achieved that with the review we’ve conducted.

Looking into different businesses, Ambatovy is always top of mind for everybody. We’ve continued up to ramp up curve and continue to be encouraged by what we’re seeing happen down there as any ramp up and as we’ve talked about in the last few quarter, we’ve had our ups and downs.

We’ve had some good news and some new higher watermarks have come out again in this quarter, record metal production across our businesses as a result of the increased metal production in Madagascar. The significant step up from Q1 in terms of finish nickel and finish cobalt.

We’re now producing and selling like our other normal operations, the only reason it’s not showing up in our revenue lines as we continue to capitalize the revenues that we’re now earning in Madagascar until such time as we get the commercial production threshold. We hit 53% to our throughput through June.

We did have a period of time where we hit 75%, so we are seeing that the capacity is there was down at the site in June and then people continue to be very optimistic about the capacity and strength in part of the operations. We do continue to battle the kind of mechanical difficulties that you expect in any ramp up that we’ve talked about in the past, but we did have that 75% throughput which we have confidence in and curious to see in terms of demonstrating the capacity of the plant.

Overall throughput through the quarter was down a little bit from the previous quarter, not unexpectedly in terms of the variability we see in ramp ups again we did have some increased maintenance activity with some of the asset plans that took our production down in the pile area for a piece of the quarter. But that continues to be the kind of mechanical difficulties that we’ve seen throughout, and we continue to work through.

The strength of the design though it does enable us to continue production of finished nickel at the refinery and continue with having the pile operations running at a reduced level just because of the redundancies that are built into system and we continue to be encouraged of what we see there. In the Moa Joint Venture in metals, that's obviously where we’re seeing real challenges.

In the pricing environment nickel prices were up significantly from the same quarter last year and from the first quarter of this year, but we did see some positive developments in the operation itself. We took our maintenance shutdown our annual turnaround at Fort Saskatchewan second quarter of this year compared to the third quarter of last year, as that accounted for the majority of the reduction in our volumes.

The impact of the maintenance shutdown both reduces volumes and drives up costs for a couple of reasons, one you have got lower production, so your fixed costs are spread across a smaller number of units and you will also have the increased expense of the maintenance activities that occurred during the shutdowns. So that held us back a little bit in the quarter, but that's behind us now, despite the maintenance shutdown we did see our costs come off compared to Q1, I think $0.40 net direct cash cost compared to Q1 and looking forward into the second half of the year I think we're expecting now that we're back up and running at co-production with our maintenance activities behind us.

We are expecting to see the cost numbers continue to come down as the year unfolds, we have seen a slight softening now in some of the input commodity prices that have sulfur and sulfuric acid and particularly we've both off a little bit in Q2 from Q1 and we're anticipating that downward trend in the pricing, we're continuing that and help us out little bit as well. Fertilizers had another strong season, and volumes were comparable not far off the spring of 2012, which is as good season and that helped us out on the cash cost side as well.

Coal business, just looking at different elements of that. Prairie production, when we look at Prairie, actually performing quite well.

When you look at the numbers compared to last year and you adjust for the termination of our contract mining business as opposed to owned mines, production volumes are up significantly over last year, up about 25%. I think if we compare the Q2 last year, it's pretty steady with Q1.

We have seen our margins increase as well, in large parts again because of the elimination of the low margin mining business but margin improvement goes beyond that as well we saw our margins up about $0.40 over Q1 this year. Mountain obviously is a challenging asset and a challenging environment given the prevailing markets for thermal coal at the moment, we had good sales volumes.

Our sales volumes were 300,000 or 400,000 tons higher than our production volume that’s largely as a result of us clearing out the buildup inventory that we referred to in our Q1 discussion following the events at Westshore that limited capacity of the Westshore terminal for a few weeks at the first part of the year. We moved about 400,000 tons of that inventory, we're probably still close to 200,000 tons higher in inventory than what would probably be a more normal levels inventory, so we'll probably see sales exceed production by about that much over the balance of the year as we continue to work that inventory level down.

In the production numbers in addition to the Coal Valley inventory, there is still some Obed in relatively high cost Obed inventory from prior to us suspending operations at that operation a couple of quarters ago. Relatively small volumes but the high costs, do the unit cost numbers little bit and that should work its way over the balance of this year as well.

Pricing was obviously off from the quarter as well, we're working and continuously looking some reductions in our cost of frankly the opportunity for cost improvements they are not dramatic, we will see some reduction I think when we get to our guidance we have scaled back our guidance a little bit for the balance of this year, announcing operations as we are looking at taking some of the high cost offline and we'll continue to watch that situation as we see how the operation performs over the balance of this year. The news story, one of the many new good news stories.

Perhaps in our oil and gas business that we don't spend much time talking about, but it's really been a very strong performer for us for the last few years, and continues to be this past quarter. We're continuing to see low costs and strong margins in the oil and gas business.

Our guys on the ground have done a great job in terms of continuing with the drilling program, and the work over of existing wells, that we have been able to maintain the production levels and the natural reservoir declines from the more richer wells. So we're seeing strong volumes and strong margins that continues to be strong cash flow producing business for us.

Power continues to be very stable, which in a utility like business is what you are looking for. Our operating costs did spike a little bit in the quarter, that aberrations are usually is largely driven by a scheduled maintenance work over on one of the units.

That was completed in the quarter, the bulk of the cost of that were charged in the second quarter and that's what caused most of the jump in the operating costs. There might be a little remainder of the cost of that slipped into Q3, but the vast majority of that is done and there aren't any major maintenance inspections and turn around and anticipate scheduled in the power business for the rest of the year.

So we should see our costs in the power business return to more conventional levels for the next couple of quarters as well. Market wise, obviously there is not much encouraging in the market, at the moment nickel prices have been challenging, we saw a significant decline in nickel prices in Q2 compared to the same quarter last year or compared to Q1, and the story has not gotten any better so far into the third quarter of this year.

I think we saw average nickel prices of about 680 in the second quarter and really so far this is where we're seeing, this month and the third quarter if nickel price continues to bounce around a bit, but it's down under 650 more the most part. In terms of the broader market, the best we can tell and from what you can see in some of the published data I think a significant number of producers are having difficulty in making any money at this pricing level even on a cash cost basis, I think a significant portion of the market is even on a cash margin basis, can't really make any money.

We haven’t seen any significant reductions in production across the industry yet, but at some point that has to be a possibility. We continue to see positive margins in our nickel business though we have margins of 20 pound in the second quarter.

Cobalt has improved a little bit and that helps us on the net direct cash cost as previously they get the input of the byproduct credits of that. Cobalt is the one that probably saw a bit of increase in the second quarter over the first quarter, bit of an uncertainty as to security supply and tax rates and on constant cobalt coming and cobalt concentrates coming out of the Congo.

difficult to say what effect that’s going to have going forward but not much news is difficult to get news on that until people have somewhat skeptical what sort of levels I’ll see out of the Congo going forward. Coal, obviously thermal coal and sea-borne thermal coal is pretty challenging market as well as come out dramatically in the last few quarters.

We have seen some production come offline in Australia and other places but it hasn’t really seen it has much impact on the steaming the trend in the coal price. We are seeing realized coal prices now in our coal business in the high 90s; I think as we look at the balance of the year, as we get further into the year typically a higher proportion of our coal becomes contracted.

And the proportion is exposed to spot that declines. so I think it’s really more and more comfortable that we'll probably see our realized pricing for coal continue in the kind of the high 80s range and for the balance of the year that will be at least that was not much in the very positive margins in our Mountain operations, so we'll continue to watch that and look for opportunities to save mining and coal business.

Looking at our outlook, we originally published our 2013 outlook in February and now sort of half way through the year we’ve made a couple of revisions primarily in our metals and our oil business. At Ambatovy we've actually scaled back our expectations for finish nickel and finish cobalt for the year.

That is based both on what we’ve seen a year-to-date performance and sort of what our anticipated, what our current expectations are for the balance of the year. It’s always more difficult to predict your production at a ramping up facility rather than a mature operating facility and that uncertainty still exists in Madagascar.

But the maintenance activities that we undertook in Q2 on the asset plants, some of that will continue into the third quarter and so we'll see the impact of that and that causes us back to scale back our guidance a little under finished production for year. Oil, we’ve actually revised our production.

We speculated I think when we spoke three months ago about the possibility of that if we were able to hold the performance that we were seeing out of the existing oil wells and the drilling program relative to the declines in more mature wells. That we have had some success in doing that and we are now more confident in our ability to sustain the production that we’ve seen through the first of the year over the balance of the year and so we've revised up our gross working interest oil production by about 1,500 barrels a day for the balance of the year.

The only small change we made to guidance I touched on earlier mountain coal, we did scale back to the guidance for export coal by about 300,000 tones. That’s the result of view of some of our cost on a pit by pit basis and we are scaling back the production of some of the higher cost pits.

That review is ongoing and will be on going throughout the balance of the year is how we see how cost response and how the market for thermal coal holds up so we’ll continue to watch that closely and do what make sense there. That’s largely what I wanted to highlight, from overall was I think pretty strong production quarter for us.

We had some variations compared to the previous quarter but it was largely due to some of our maintenance activities and I think we’re now well posited to be running at full capacity for the balance of the year and some mature operations and we continue to see encouraging signs of stability in our Madagascar operations, so that’s is where we find ourselves at this point. I am going to let Dean now take you through some of the details in the financial statements and then we’ll come back and take you questions.

Thanks David and good afternoon. As I was looking at our financial disclosure this quarter, it reminded me of the number of accounting changes we’ve implemented over the last few year with the implementation of IFRS and probably mostly importantly implementation of IFRS 11 in this year which has resulted in essentially accounting for lower joint venture and the Ambatovy joint venture which are clearly two major components of our overall business and I think because of that it’s important to look at a number of measures of financial performance and those that are somewhat reliable or comparable to prior periods and I am going to go through a few of though.

First of all I'd like to look at operating cash flow, if you look at cash flow from operations quarter over quarter, it is actually up, but that’s predominantly due to significant changes in non-cash working capital. So, taking that out, adjusting for those impact and if you look at sort of an adjusted operating cash flow per share, it was $0.18 a share in the past quarter and that compares to $0.20 a share a year ago and also $0.20 of share in the first quarter of this year.

One thing to keep in mind when you look at our cash flow statement and cash flow from it does not include any cash flow generated by our by our Moa Joint Venture and ultimately our Ambatovy Joint Venture unless there is a distribution from the joint venture to Sherritt for example in the form of dividend so one thing to keep in mind when you are looking at those cash flow statements. Another important measure is our adjusted EBITDA; you will find a pretty good description of how we calculate adjusted EBITDA in our disclosure but we do capture earnings in our joint ventures as well the other items from our joint venture in calculating adjusted EBITDA.

In the second quarter it was $87 million compared to $2 million compared to 138 million a year ago and about 99 million in the first quarter. Lower adjusted EBITDA is largely resulting from lower prices and volumes in the Moa Joint Venture lower export thermal coal prices and slightly lower volumes and reference pricing in our oil business.

And of course you have all seen that on an earnings basis we reported a $10.7 million loss or $0.04 a share. Now it seems like every quarter we have some sort of onetime adjustment and this quarter is not an exception as Dave alluded to we did take an impairment related to power facility in Madagascar.

This is a 25 megawatt power facility that we completed in 2009 and we leased to the local utility. We've not received lease payments for quite some time and it was prudent for us to take a provision with respect to that facility and so we have taken the provision both on the receivable and on the assets associated with that particular power plant.

This amounts to a total of $16.6 million in the quarter or $0.06 a share and amounts to a little over $17 million year-to-date. So as Dave mentioned if you were to adjust for that we would have slightly positive quarter.

But as those of you who keenly follow us know that we have a number of non-cash adjustments that flow through our statements on a regular basis and we did have an unrealized foreign exchange gain some gains in our ERO calculations and a gain on the value of the Ambatovy call option which essentially offsets that impairment that I just describes so normalized earnings really come back to that loss of $0.04 a share calculated on that basis. One thing to mention is we did take a $28.8 million provision on value-added tax in Madagascar that’s our share in Canadian dollars.

Again we have not received reimbursements of value-added tax for quite some time and we have taken a provision on that. It’s a little different than the power facility because it’s being confirmer under Madagascar tax regulations that we can offset the ATE on incomes taxes payable in the future so basically what we have done here is discount the VAT receivable to the point that which we can offset that on income taxes payable based on our current model.

We will do these going forward so and new receivables new VAT receivables will be treated in a similar manner. Obviously Madagascar has been going through a very difficult period of time largely related to the political instability ultimately political stability will return to the country.

And when that happens we would expect the international aids to be resorted as well as for the economies will improve so ultimately we believe that these receivables will be collectable and we fully intend to collect these amounts overtime. If I look at sales our volume is relatively stable the maintenance turnaround at the Moa JV refinery had some impact and it’s really a timing thing we take that turnaround on an annual basis sometimes it’s in the second quarter sometimes in the third quarter largely depending on availability of contractors and exactly what the plans are for that turnaround.

We did have relatively strong sales volumes in Mountain, and as Dave mentioned as a result of improved rail service and port throughput we have been able to reduce some of the accumulated inventory that resulted from the incident at the Westshore terminal in December 2012 and had an impact on first quarter sales. As Dave talked about realized process and but clearly that is one of the biggest drivers if not the biggest driver in our quarter-over-quarter results in most of our businesses.

Turning to effective tax rate which seems to be probably almost volatile and most difficult thing to predict it’s a simple calculation in terms of mathematics it’s income tax expense over earnings before tax but here we have a quarter where we had a positive income tax expense and negative earnings before tax and so the result is a negative 191% effective tax rate. There are always a lot of factors that come into play in calculating the tax rates but the impairment of receivables and assets with respect to the power facility that I just discussed certainly had an impact here about a $17 million impact on pre-tax earnings but no impact on income tax expense.

So if you adjust for that you would get an effective tax rate of around 52% somewhat of an odd tax rate nonetheless but probably reasonable considering the low earnings that we're experiencing at this point in time. One thing to keep in mind when you're looking at the effective tax rate and now as a result of our accounting for the Moa JV under IFRS 11 is the earnings that we bring into our earning statement from Moa are already tax effective.

And so the result is, it has, it affects the denominator of the calculation but not the numerator, so how does that tendency to actually reduce the effective tax rate and in sense the higher the lower earnings the lower the effective tax rate will be a result, as you think that if we were ever to have a normal quarter and effective tax rate in the 30% to 35%, still seems logical. Turning to cash and liquidity and the balance sheet, already mentioned that operating cash flow is about $0.18 a share, if you look at our cash and short term investments $406 million on our balance sheet at the end of the second quarter compared to $442 million at the end of the first quarter.

The thing is it’s important to look at where some of our cash is used during the quarter, we did use about $24.5 million to be paid from bank debt and from obligations under finance leases. Also we contributed $22.5 million to Ambatovy, but in June Ambatovy made its first fiscal payment on the senior debt, the $2.1 billion senior project financing, the $51 million is US and at 100% basis.

But as you can see that well there's some drop in our cash balances, we've also had the opportunity where we've paid down some debt during the period, so when I look at sort of our cash balances I see as relatively neutral over the quarter and we have a total liquidity including undrawn credit line of approximately $1 billion. So at current commodity prices our businesses are generating positive cash flow, Dave mentioned the defers on capital spending we'll continue to look at those opportunities to the extent they don’t impact our operations and our safe operation, we’re controlling our cost, we're seeing a good trend in the net direct cash files at Moa, so I think all of that is our ability to generate cash and manage our cash balances continues to be quite strong.

I do expect some reduction in our cash balance by year end due to ongoing funding of Ambatovy as it ramps up to the point where it becomes cash flow neutral on its own. Looking at, just coming back to Ambatovy and the debt of Ambatovy as I mentioned it made its first fiscal payment on the senior debt in June, it's $51 million, now that we're amortizing that debt it's a semiannual payment, payments will be made in June and December, it will $122 million in 2013, including the most recent payment in June, it does go up to a $188 million in 2014, that's US dollars and those numbers are on a 100% basis.

Also you will notice in our disclosure that our senior lenders, the project debt has agreed to extend the final completion date from September of 2013 to September of 2015, the final completion date is the last date on which the project must pass all of its completion tests and when the project does pass its completion test the senior debt goes on recourse to the partners. We've already passed a number of the completion tests but given the two year delay in the construction it's not practical that we would pass all the operating and efficiency tests by September of this year, we'll obviously will wrap up the project quickly as we can and pass the completion tests as soon as we can, but this two year extension gives us a comfortable window on which to achieve that.

Just thinking about possible adjustments that we’ll likely see in our future earnings report, you will see in our disclosure that our core business has been in a arbitration process with Ridley Terminal over pricing issues, we’ve received a favorable ruling on that arbitration, but we would exceed what the settlement amount is going to be, so we’ve now booked anything yet but we will book something once we understand what the settlement amount is and that will be booked in the quarter in which we receive it and I would expect that settlement amount to be determined this year. As a natural result of the extension of the final completion date the term of our call option, on SNC-Lavalin's interest in Ambatovy is also extended by two years so when you increase the time value as an option it increases the overall value of the option and so we will be booking that change in the value of the Ambatovy call option in the third quarter.

Certainly as you look around the mining industry and as you look at its natural reports from mining companies, there are a lot of impairments and write downs that are being generated as people look at the value, the fair value of the assets compared to the carrying value. Like all companies we do this on a quarterly basis, and we've done this analysis throughout our long life assets and our goodwill, we have not identified any triggers of impairments at this point in time, but as we look at our models clearly the things like commodity prices are key components of our models and if they were to continue to be declines in nickel prices and export thermal coal prices, and especially if there are declines in the long term estimates in those prices and as we run our models on a quarterly basis, or we look at over triggers for impairment on a quarterly basis, it could result in some sort of impairment in future reporting period.

We will have to see how things unfold.

That’s right.

Then will you be able to hit that with the autoclave maintenance outage that you will take in Q3?

It’s, we certainly think it is possible, to hit it in Q3, and we did hit that, we had a stretched kind, we hit 75%. I think it’s mainly just getting the operations up and we think we know that this is the plant has the capacity to do it.

If we can get some of the mechanical challenges behind us we think we can knock that down fairly quickly. Time will tell that, we still remain confident in our ability to hit that sometime this year.

I think as well, we have been consistent to what we have said about that. The question we do it in Q3?

But I can't promise you that at this point.

Just a question, looking at the margins on Mountain right now, are there any chance; you’re looking at more curtailments or do you think that getting rid of some of that high cost inventories can now make it worthwhile?

Just, I mean you’re right, in this pricing environment the Mountain operations is a challenging business. Part of the cost is driven by clearing out inventories and some of the remaining higher cost inventories from Obed.

We are scaling back production a little bit in Q2 as to take some of the higher cost operations, and that will get our cost down. We will have to see how the rest of the year unfold, so that it’s not out of the question that you will see further curtailments there if pricing doesn’t hold, things get soften, we can’t get what we are looking for, out some of the cost reduction and issues that we are taking now.

It’s a very tight margin business in this current pricing environment and it’s one that requires pretty proactive management too, and we will continue to require that first to the balance of the year.

And I guess on Moa similarly if we see extended weakness in Nickel prices, and can you talk about whether there is any initiative to take a look at making changes to the mind plan or to the (grazier) targeting. I know it is pretty uniform stuff, but is there anything you can do to help reduce cost?

Our Moa operation's a bit different from the Mountain business. The Mountain business has never really been a top quartile producer in terms from an OpEx perspective, and so it is obviously more challenging operation, at the troughs in the cycles, the Moa joint venture has always been one of the more optimal producers from an OpEx perspective, regardless of where we are in the cycle even when to through 2008, 2009.

I think we had one quarter where we were at cash flow neutral and we were back making money again in early 2009 in Moa. I am quite confident in our ability in Moa to continue to manage our cost as we continue to make money even if you see a further decline in the Nickel price.

We had a positive cash margin; I think it went a $1.20 last quarter. And I think we will continue to see our cost respond to the environment and continue to see, we'll see cost improvements there.

I am much more confident in our ability to maintain positive cash margins at Moa than I am in the Mountain operations.

Good afternoon, just a couple of questions. As it relates to the utility in Madagascar, what’s the issue there?

In other words what’s the reason why you are not getting pace?

The reality Anoop is that they just don’t have the money. Since the crew there going back nearly four years ago, now when they lost a lot of the aid money that was previously flowing into the country.

The economics of the country have suffered and the overall economic condition of the country, given the state of the world and the lack of aid money flowing into the country has continued to suffer and the capacity of this country to pay its wages is limited. They haven’t, there has been no denial that they owe us the money but their capacity to pay it is limited and given the aging of some of the receivable there we made the decision that it made sense to take the provision for it.

And we're going to stop recognizing it as revenue until we actually see the cash come through the door. I don't think you'll see that provision reverse any time soon until you start to see some higher.

Level of economic activity return to the world and the economic situation domestically in Madagascar improves a bit.

Now with the election being delayed, have all the receivables and all the asset value is written off?

Yes, with respect to the prior receivable, yes.

And I noticed there was a reference in the oil section, to some exploration activity in the North Sea; can you just talk a little bit about that because that’s something new if I’m not mistaken?

That is a commitment actually then we have go back quite away and we’re going back probably three years ago now we did it for couple of glow exploration blocks in the North Sea and we had some commitments there under those blocks that required us to do some exploration, we looked at alternatives in terms of what might be able to do there and came to conclusion that failing those commitment that’s what made the sense in terms preserving values there so we did spend a few million dollar but I can’t remember the exact amount shooting some seismic in the North Sea and we’ll continue now with the interpretation of that but it’s a not focus at this point in time.

So, you don't seriously getting into production on that jurisdiction.

Now that we’ve truly come of it, we would look for partners and we would not be unlikely that we would be the operator of anything in the North Sea but if we can now create some value out of what we’re previously had been there we will do the work and see what we can do on that.

And just last question as it relates to Mountain operations, I mean, why don’t you just shut it down, I mean, it doesn’t sound also you guys anticipating any material increase in the price of the commodity so what do we waiting for?

Well, there are a lot of fixed cost and discussion to shutdown is not as simple as if you start saving money you stop operating we’ve got a lot of equipment there in capital expense and we’re incurred the cost of that capital and now regardless of what you’re producing or not, so it’s simply a matter of saying well coal price is X and our X plus $0.56 that we’re losing money, it is there greatest sensitivity there to it and there was the broader capital cost and we continue to work through that we already previously couple of quarters ago we suspected operations with the higher cost of that operations, we’re now looking at scaling back and mountain in it if the pressure continue we’ll look at further opportunities.

Thanks operator, the question on the extension of the final completion 2015 September. Does the maturity date to 2024 stay firm or has that also been extended?

No changes to any of it other than pushing the completion date out.

And what you have to give for an exchange of agreeing to -- the banks agreeing to a three-year extension?

We paid a relatively small upfront tax fee for the going to their -- taken to their credit committee and do their homework but cash amount was not material, it’s essentially a work fee for the work of credit we decided to do, but there were no changes – no changes to the interest rate no changes to any of that kind of stuff.

And there is so much press on the pending election, deferred election, postponing election, what is election is Madagascar?

I think it’s still officially scheduled it you want to date for late August but that is not going to happen and there hasn’t been a revise election date published yet so the reality is today there really isn’t a schedule date, there continues to be a debate amongst the candidates, the principal candidates being, the current president and the former president’s wife and then some of the other international agencies that have actively pushing for the election as to make sure there should not be a candidate in the election and so there is a bit of impact there that remains to be resolved until there is a resolution to that impact that’s we see how the election going to proceed.

Somewhat confusing but also they seem to be keep focusing on that so as the they’re going to change the deal, they’re going to renegotiate, they want to change the stipulation of the financial affair, what exactly is the common front here? I mean, we've seen so many countries coming back with changing agreements and there is a lot as the commitments?

Well, I mean there maybe some noise around that but frankly there has been nothing from the government that suggested there is anything need to change the deal, there has been a bit of political posturing in that from time to time but our relationships with the government actually has been quite, the last six months we still continue to get our operating import permits and export permits on the nickel and coal permits and export permits on the nickel and cobalt that we’re exporting all that is working relatively working relatively smoothly compared to what you might expect in Madagascar. There is some domestic politicking going on as different parties jockey for position and try to sort out how they’re going to work their way through, what is a complicated and confusing situation but the reality is that we continue to operate down there under the terms of the LVIM there and there hasn’t any serious suggestions that’s going to change.

Great and we’re kind of more than half way through the year you’re revising your capital ex for the year 2013, Capital expenditure?

Yes, we’ve reduced our overall CapEx $37 million just as a result of having reviewed some of the ongoing projects that we would have in our businesses in light of current commodity and cash propositions, most of those are as I mentioned I think are more like to be deferral about then absolute saving but that’s what we’ve been able to identify thus far.

That’s similar to June 30th or it is for all…

That’s for early year.

Early year okay, all right, thank you very much.

Well thanks, operator. I just have one left, most of have been answered but I just want to 2014 you know as we look out on we look out on Ambatovy now, have you got a budget for 2014 yet?

We still have our long range plans, budgeting kind of goes on in the next few months through into 2014. So I don’t have any specific numbers or guidance for in terms what we'd be looking to publish yet for what production or other things would likely be at Ambatovy but we are working our way towards that as part of normal cycle.

And I am just wondering if there is anything particular in the process just in terms of you have had good run rate time like you have you had, I heard you had sort of a rumor had like a 10 day time frame where you were operating at 75% of capacity and then of course you would like to shut down or slow down and as part of the start up phase type of thing and I am just wondering is there anything in the process that has presented itself as a bottleneck in any way, shape or form or is this more mechanical issues, I am just wondering if there is, from a technical prospective have you found anything that’s more systemic than just a mechanical problem?

Everything we have seen down there has been unusual and what you would expect to see in a ramp up of a facility of this size and scale, all of other problems we have had and we try to say it’s all along, it’s a difficult when ramping up the facility like this to give the degree of to give a degree of certainty I or the market or anybody else would like in terms what milestone as you are going to achieve on what particular date just because the inherent nature of ramp-ups. We have had lots of mechanical difficulties and there was some construction quality issues and another issues like that we have touched down over the course of last few quarters but what has been encouraging throughout the ramp-up to date and continues to be encouraging is that everything in terms of what’s fundamental that can make or break a project in terms of the robustness of the trends themselves, the chemistry, the technology, the process, they have all worked at or above expectations and the guts with the technology and the reactions in the autoclave and the chemistry is very strong and that’s why we continues to give us great confidence that we can get this facility up to name plate capacity and beyond.

The only thing I can’t do is give you the certainty as to exactly the date on which that’s going to occur and that you and I and everybody else would like to have but absolutely in terms of the difficulties we are having, it’s all it's all mechanical craft that is frustrating and annoying and predictable and aggregate but very difficult to predict specifically which elements is going to be but it is inevitably the stuff you get to the bottom of with that point in time then you really start to see your production go on. Our confidence and our ability to get this plant to the name plate capacity and ultimately beyond name plate capacity has not wavered and has only strengthen throughout the course of the ramp-up to date and continue to be strong as ever today.

The only thing I can’t give you is the certainty as to when we’d like to have. If there is any question in anybody's mind as to the robustness of the technology and the chemistry and the process that is what we have greater confidence in today than ever.

Okay and what about the final product side, what you expected?

The nickel is coming out, we have produced LME grade nickel and close to LME grade throughout the ramp-up cycle and we are producing high quality cobalt and we are selling it. And we are getting customers that are now buying and consuming and using the products in their processes so it is very much transforming into a real operation and there is nothing on the process side that shows that there will giving and producing anything other than the same kind of high quality LME grade nickel and LME grade cobalt that we produce out of the Moa joint venture.

Okay great, last question. Can you just remind us what’s the original ramp up timeframe was on Ambatovy; was it like an 18 to 24 month timeframe?

Well going back to the original schedule and when Sherritt acquired Dynatec, originally called for completion, for construction to be completed in February 2010 and in August 2013 financial completion dates so the original timetable under the financing contemplated most of three and half years from the completion of construction to when the completion tests were going to be satisfied. The really was because of all the intervening events between 2008 and 2011, the construction really get finished until the end of 2011, so we were really two years behind the goal from the starting point of ramp up.

The original ramp up schedule was probably anticipated to be about three years from the February 2010 completion date with then kind of a six months buffer for financial completion, we are now probably little over a year into a ramp up that was now hopefully being compressed into probably more like year and half for two years instead the original three that was contemplated.

Actually John asked my questions. Thanks.

No problem.

Thank you, Luke. And thank you to everyone for participating in the call.

And please feel free to contact us with any follow-up questions and we are looking forward to speaking with you again at the end of October with our third quarter results.