Mark Bristow - CEO Graham Shuttleworth - CFO

Josh Wolfson - Dundee Capital Market Howie Flinker - Flinker & Company David Haughton - CIBC Tanya Jakusconek - Scotia Bank

Ladies and gentlemen, welcome to Randgold Fourth Quarter Results Conference Call. Today’s Speaker will be Mr. Mark Bristow, CEO from GOLD. Sir, please go ahead.

Thank you very much, and good afternoon, and for those who have dialed in for Europe and good morning I believe to the Americans. As you know we represented our quarterly results as discussed at the start of the Indaba Week in Cape Town. And I think I started by just touching on looking back a year and what we said last year and the fact that in that stage most of the industry was really focused on survival and how to think to that. And that we came out, if you recall, with our Chairman explaining, we have a profitable business, we’re comfortable about our future, we declared an increased dividend when everyone was considering whether they should pay dividends or not. And we were clear that we are comfortable with us running our gold business that’s capable of continuing to deliver real value for all our stakeholders up through the cycles. And now I’m pleased to confirm that today we again reinforced that ability, and we showed too that the Randgold management team can really step up to the plate and correct deviations. 2016 was not an easy year, but ended well for us with a strong record breaking quarter four, and overall many records on an annual basis as well. We, as customary, touched on not only where the records in the production section of our business, but we brought down our lost time injury frequency rate to below 7 [ph]. We continue to bring down infection rates in malaria on our mines. Materially again we showed a continued improvement or reduction of our HIV infections rates. We highlighted the importance of ongoing biodiversity and offset programs to manage our own environmental impact across our group, and also pointed to the continued investment in our skill base and our host country National Investment Programs, where we’re really educating our people and there’s no better example of that than the performance out of Loulo, as that team really delivered on all aspects of our business and that’s a home grown production having taken us 10 years to build that world beating Mali-led executive team on in Mali. We started with the highlights, as I pointed out, a year of records, six consecutive years we increased gold production. Not that that’s the most important thing in the gold business, but is part of the contributing factors to our bottom line improvement in our financials. Loulo, itself a stellar performance breaking the 700,000 ounces and beating its guidance by 37,000 ounces, we had of course guided you to that for the last two quarters last year. The Group delivered a 38% increase in profits on the back of that performance, and significantly we did achieve our $0.5 billion cash without debt on the balance sheet for the year-end, and you just need to look through the creditors and balance sheets and you’ll see we didn’t manage it anyway. We kept up with our disciplined approach to how we manage our creditors and this is a real deal achievement. And worthwhile to point out that it was a milestone we had guided to back five years ago. For the 11th year in a row, the Board had proposed an increased dividend as per our guidance to the market that we were to continue on a progressive dividend up to $0.5 billion, and then we would take a new look at how we both paid out our dividends based on the fact that we want to continue to have the freedom to invest in our own future and also the projects that might come, make themselves available whether they are organic or inorganic. But at the same time, we were happy to ensure that anything above the $0.5 billion and the commitments we had made to ensure that we would deliver on our ongoing investments would be paid out to shareholders. So I think that was well received in the market today as well. Moving on to the financials, I always say numbers are indisputable and you’ll see that. Again the numbers tell a story. I don’t need to remind you that last year was a slow start with some very challenging operational issues both at Kibali and in Tongon. But whereas I pointed out earlier, we did commit to fixing and we are able to demonstrate, and I must commend the teams really put their best foot forward and we finished the year very strongly, as you can see in the quarter four results. The one dampener in these results, as you know, we only point to bottom line earnings, we don’t create any adjustments. But these earnings have been impacted by the weaker Congolese franc and because of our outstanding debt created in that country. It really does impact our annual results by $0.12. It’s embedded in that $264 a share for the year and about $0.08 impact on the quarter. But it’s included - the $0.84 is net of that $0.09. We went through our, starting with our flagship, the Loulo-Gounkoto complex, and our stellar performance and really that’s highlighted by the financials, again numbers speak for themselves. You can see there’s a big bump up in grade in quarter four, as the Gounkoto team caught up with stripping and accessed the main ore body again. As we forecast, we saw overall better efficiencies, better dilution control, we got back to mining in sequence. So all-in-all if we stand and split those two different companies starting with Loulo’s standalone that’s the underground production up 20% year-on-year and total cash cost down 25%. And again first full year of mining at Yalea and Gara of owner mining at Yalea and Gara and that team met all our expectations and underground production was in line as you see. Current optimization of the pay system added extra flexibility and allowed us to stabilize our development metrics, and that will get improved as we ready get up. But we’ve got very few backlog now, very little backlog on the backfill stopes. And importantly too we continue to invest and been able to mine at the sort of rates we do whereby installing refrigeration plant for both mines to ensure that during the high rain, high humidity, high temperature months that we are able to control the underground environment to global best practice parameters. These are the numbers, they speak for themselves. And as we’ve done so well in Loulo, particularly the Gara work on extending the Gara South reserves and resources as we’ve spoken about it already. We continue to and we are able to deliver that substantial increase in reserves and there’s still more potential with the resources that - and again we will continue to look to convert in our ongoing brownfields program. Same with Yalea, we embarked as I pointed out last quarter, an extensive review of the geology and the controls of the purple patch. And we’ve come up with some new models to test during this year. Moving to Gounkoto, we started the year with underperforming contractors, but over the year the team has really recovered well increasing production, cutting costs and improving profit. And we also, more importantly by year-end brought back to the 60-40 ratio between Loulo at 60 and Gounkoto at 40 of the share of the total complex gold production. And again as was with Loulo, the Gounkoto result speaks for themself as shown here. Big news from Gounkoto really for the quarter was the completion of the Super Pit feasibility study. We gave you a heads-up at the investor day. We were able to clarify and confirm a lot of those assumptions or forecasts. And very clearly the Super Pit showed to be economically a lot more viable than, in fact all of the current forecast or developing projects across sub-Saharan Africa. It also and very clearly in our view offered a project that was at considerably less risk than the previous combination of a smaller pit and underground operations. We’re still along with that have another potential 400,000 high grade resourced ounces under the Super Pit and again we’re going to continue to where we are currently as we speak working on a preliminary assessment of its potential to exploit. We are pretty sure that we’ll be able to prove its viability and our ability to monitor and then it will come in to reserves as well. These are the key features of the feasibility study. It’s a 2.4 million ounce deposit; it will cost just under $200 million including a push-back to develop at a cost of $1,000 per ounce to generate a total net cash flow of $741 million. I think the key is, when you look at the sensitivities of use today spot, its well over $1 billion, and if you use $800,000, gold price is still 400 million. So best-in-class no matter how you cut it certainly when compared to any other project across Africa. Exploration continues at Gounkoto and particular for focus on the MZ1 footwall and southern extension of the ore bodies. It’s key that we evaluate that potential before we start with a big mining because we intend to put some input dumping in to our schedule early on in the project in the southern part of the pit. This is the complex production, and also in the Loulo district, we continue to expand our inventory and we’ve come up with some particularly portfolio projects and some of them like the Baboto south deposits really far down the way to again sliding off on the feasibility study a full feasibility study which will again see that project being scheduled in to the mine production profiles. And this is the complex forecast for the next five years, as you can see we are expected to fall steadily the 600,000 ounce per year mark. But what is really interesting about this chart that is it points to significant improvement in their cash flow and capital expenditure coming down. Across the border in Senegal, another big bit of progress was the completion of the updated and technical and financial study of the Massawa-Sofia project and that’s according to the new guide lines out of the SEC that would fit more or less with the talk of pre-feasibility level. It allows us to convert a large portion of this particularly Sofia about 0.5 million ounces of reserves. It’s just smidgen of two of our key investment focus, 2.7 million ounces against our minimum quota of 3 million ounces and are currently sitting at 18% in a long term $100,000 gold price. But we expect, the Board has given us authority to proceed with a very intense drilling program leading up to bank a more feasibility study. And that will entail more than $20 million of infill drilling and further brownfields and follow-up exploration work around Sofia, and we are confident that we’ll get to pass through those filters by the time we get to the first quarter of next year. Again with the exception of Gounkoto, this project sits up with the best in the current group of development and/or inbuilt gold projects across the Sub-Saharan region. It’s really the inclusion of Sofia that has helped move the Massawa project, and as I pointed out, we are seeing a potential addition of another 0.5 million ounces of reserves or conversion of 0.5 million ounces reserves at Sofia. And more good news from Sofia is that we believe it has a considerable upside now that we’ve got a hinge around the main ore body and its controls and we’re taking a fresh look at a number of nominees around this deposit as you can see indicated in the circle. Back to Mali and on to Morila the operation transitioned to full tailings treatment in Q4 and its on track for closure in 2019. We as you know delayed the Domba mining on the back of permitting a process that’s taken longer than originally anticipated. And we also are in the middle of falling up on an option we have to mine the Ntiola and Viper deposits owned by our next door neighbors Birimian Gold. And we are currently drilling out those two projects to feasibility level and at the moment things do look positive and we know everything is pointing to the fact that we’ll probably exploit those assets which will add to the NPV of Morila and more importantly bolster the balance sheet to ensure that we are able to beat this project properly at closure. Really these are the numbers and moving on this is the guidance, and you’ll see there’s two big piece in the cost there; One, historically and one last year. And those are as we transition from low grade ore stock piles to mineralized waste and then last year to 100% TSF processing and each time you’ve got to recut the cost base of the mine as we move it to closure and we’ve been through that this last quarter. We’re in a much better space as far as our cost profile to be able to manage this tailings retreatment business going forward. Morila still made a cash contribution for the year and we believe that it will be able to continue at these processes, certainly fund its own closure and certainly be able to deliver on our vision of transforming it in to a lasting economic center in the form of an ag [indiscernible] that couldn’t trench, which is really an industrial way driven by the various agricultural activities. Moving then down south to Tongon, which as you know has had a long history of struggling against adversity in 2016 and again in 2014 produced record gold production both for the quarter and the year and this was on the back of improved gains more importantly throughput and recovery showed significant improvement and that resulted in a commendable reduction in cost, delivering 62% year-over-year increase in profit from mining. The turnaround was supported, a substantial capital program, we’ve been running now for some four years, and really focused on mines crushing and floatation circuits. And attribute must go to the teams’ tenacious work and a strong focus on their proficiency through the year. We’ve been talking about power in the national grid and its impact on our business. We recently as indicated installed another six new generators. The mine now has enough capacity to be able to operator independently off the grid. The biggest focus now at Tongon running smoothly is really shifted to near mine exploration and adds lot of efficiencies to drive the reserve base of the pit and get it deeper and also evaluating a number of targets within tracking distance of the mine. Also in Cote d’Ivoire we continue to adapt greenfields exploration in the Boundiali permit and the Mankono permit as you see here and with a big focus on looking to add through their ready defined 1 million plus ounce resources from [indiscernible]. And wrapping up how’s the five year plan for Tongon, and as I said again, a big focus on efficiencies. The team did extremely well to get the mine to deliver as per the quarter and that’s really the run rate going forward. Our guidance for 2017 being 285,000 ounces and 290 levels thereafter. Moving across the continent now to the Central Africa and Kibali. That mine - really 2016 was about a year of two halves, first half was a tough year as the team battled to balance multiple ore tops and operational issues that impacted negatively on operations. And often interventions both with respect to people and plants, there’s been a significant performance turnaround and the mine ended the year just 2.5% shy from its revised annual production guidance. IN quarter four, the plant I would point achieved a record throughput and on an annual basis to repeat name plate design of 7.2 million tones. So certainly with that achievement behind, as we look at the numbers, there’s still going to be a tough period ahead of us as we deal with a lower grade and multiple ore sources. Whilst we commission and ramp up the underground, we expect to be fully commissioned by the end of quarter three and ramp up starting to really deliver in four. So in guiding our business if you look from - before we go to the guidance, this is really the chart that tells the story of the year. As you can see, we had really bad recovery periods following our 100% [indiscernible] test and then just some management finger trouble. We certainly skipped and then intervened in the operation in the way it is run in the middle of the year and you can see the improvement from there on out. And if you look at the ore feed schedule, we still got challenging period this year. As you can see our guidance being sort of at the 140,000 ounces to 145,000 ounces for the next two quarters and sort of 150s and maybe a little bit higher, but really we’ve really managed that transition we provided for the time required to really tie everything in and then we end up with the rest to get us 610,000 ounces in quarter four. And the run rate forecast for quarter four is really the run rate that takes us close to the 750,000 ounces from 2018 onwards. The underground still remained on track and I think the key there again is that we showed significant improvement on the pace of outflow management and really the big focus now is to deliver that on the shaft infrastructure that’s surrounding the shaft, the linkage, the crossing chambers and making sure that we can start commissioning the ore shoots and the whole ore logistics through the shaft starting early in quarter three. On mechanical projects side, we’ve continued and certainly are well on track with the delivery of the outer fine lining, those expansion projects we announced having identified the gaps in the process in the first quarter. They are mostly scheduled to be complete by this quarter. Once we’ve got everything stable and commissioned, we’re going to have another crack at the 100%. So far test is important, we do that, we believe we’ve now engineered that [indiscernible] to ensure that that will work as per the plan. And talking about our big projects, the mines main investment plan concludes in quarter three next year. One big capital project left is the Azambi project which is construction, but we are pleased to announce that the Ambarau hydro power station is now producing electricity. So we’ve now ticked the box for two hydro power stations, the third one well on its way scheduled to come in to operation mid-year next year and this is [indiscernible] river project and significantly a big capital project being constructed with a 100% Congolese contractors overseeing [indiscernible] corporate capital team. And staying with power for a bit, this is how we’ve been able to bring the power cost down, those spots and the unit costs are really the low periods of or low rainfall which is low running river periods. Again as we ramp up the power drill from the underground and bring in the Azambi well, that total cost profile will smooth out further. We’ve also spent time as we did in Yalea reclogging and really getting to know as we develop the underground KCD ore body packages and that work is really hard out. There are some very exciting opportunities in the upper levels so that the sort of up cost projections of the known ore bodies and again our focus in mine exploration focus is going to be on delineating that. One of the most significance being the 3,000 load and the potential to establish an independent mining section there because of its relative proximity to the surface. We continue to evaluate ongoing satellites on the lone KCD KZ structure. It’s very clear, if you look at our guidance, we are not processing, we are not utilizing the full capacity of the most in the long term plan because even after 750,000 ounce run rate. And so any additional ore bodies that we can delineate and put in to reserve, we’ve got upside in the business in our 10 year plan. Karumba being one of those options is really banked. We are now moving to develop it, we’re busy with the relocation program and mining should start this deposit in 2018. And as for the other operations this is the five year forecast which shows the impact of delivering on the underground commissioning and you can see the big step up from the 600,000 ounces run rate 2015. ’16, ’17 and then the big step up to 750. And I would point out that in this entire profile we are still well ahead of our feasibility forecast. On the greenfield side, we continue to make good progress across our portfolio and DRC with Moku now at a point of having underground geologist. We’ve identified a number of exciting priority structures, we’re busy with detailed silt chemistry follow-up and some trenches and fitting to properly geo reference to the geology and we are pretty excited about the potential to fast track some of these targets in to defined evaluation targets. At the same time, we continue with our more regional survey across the Ngayu [indiscernible] belts and we should certainly be in a position to ground through some of the more exciting, remotely identified targets and be ready to get in to the field and make to really benefit from the dry season and towards the backend of this year. As I indicated in the beginning, our legacy initiative across the group is an important and integral part of our business and that it fits the key tenant of Randgold’s business philosophy and that’s we believe all stakeholders should benefit from our business investing in national assets and that’s in the case of our host communities and countries, the benefit should be a more permanent one which long outlives our minds. We’ll not only be leaving behind schools, clinics, churches, roads and villages, but we also plan to endow the communities around our mines with a sustainable source of economic activity and in particular an emphasis on food security. At Morila, we’re far down that route as we move towards closure in 2019. The big focus now is pulling all our pilot studies together, bringing in volume business people along with institutions that are experts at this sort of agricultural buyer led micro economies and we’ve got a collective now looking to deliver a project model for endorsement by the Malian government. And the same sort of work is being initiated in the Loulo-Gounkoto area where we’ve invested in a large agri collage and really we believe that that will get to a position where they will be able to deliver to the market about 100 economic farmers, modern farmers a year. And Kibali eventually got its permitting for its giant palm oil project approved and completed and right now the team is busy lining up investors and bringing in the main owners and managers of this project which is something that Randgold is really facilitating. How as usual is our five year guidance for the group? I would point out it is enough gotten Massawa in the forecast yet. But if Massawa were to pass that filters, which we believe that it should, the profile will look a lot better. And we did give you the with and without profiles and they’re available on our website under the investor day slides, if anyone wants to check that out. And so is the forecast cash flow. So you can already see how sustainably profitable we are now to let you to manage the construction of a $400 million investment without really denting our growth and make cash. There are obviously many ways to measure successes and certainly in the gold industry, it’s not always the amount of gold you produce but rather your ability to deliver value in the form of returns to your shareholders and sustain a healthy share cost. And certainly one way is, and this graph shows our dividend payout of 11 years. Our total dividend has grown by 900% and we got to a point in our policy where we believe and we’ve got the $500 million net cash no debt. We believe that progressive phase of our dividend now needs to change to one where we already look at ensuring we maintain that war-chest of $0.5 billion that we are happy through our Board’s oversize that we’ve got our capital for the next 12 months properly covered and then we look towards paying the rest of that in the remaining cash out. And so we don’t want to get caught out in a promise for ever increasing dividends, but we certainly want our dividends to be robust and in tune with the gold process and its cyclical nature. And here’s another one, which is, this chart shows how the shares of the world’s top gold companies performed between December 2005 and December 2016, in other words, before the start of the super cycle and in its aftermath. And as you can see, all these shares picked up or a lot of these shares as you know showed significant growth in 2016, but it’s worth putting this in perspective that they still, most of them bought two companies are trading at below their share prices as of December 2005. And of course it’s no secret that Randgold is one of those that have delivered values and trading significantly above its 2005 levels. I think this brings me to the concluding point and that we spent a lot of time in presenting and encouraging the market to look at Randgold as a company which understands the cyclicality of the gold industry and market. We manage our business for long term viability and I think the one thing that I said today which I should resonate with most people is, we did a lot of things in 2016, but there’s also those things that we didn’t do, and those are, we continued not to impair our balance sheet, we continue to commit to capital and not cut capital. We didn’t cut exploration and more importantly, we continued to invest in all social essence both in up scaling of our employees and also in continuing invest not only in our CSR programs, but really investing in our communities around our market. And I think that really is what sets up aside from industry. We are well positioned to continue to deliver the sort improvements you’ve seen in 2016. I think the gold price against our base model of $1,000 is very supportive of our business plan and should it go higher, we’re in a position to be able to deliver more to our shareholders. Should it go lower, we still have a very solid business which takes some doing before we get in to that sort of survival phase. So that really concludes my summary. We have a full webcast on our website that will cover all the details I presented earlier today for your reference. But at this stage I think that pretty much sums up what I said at lunch. And so with that without any further ado, I’d be happy to take questions. Graham Shuttleworth and Joe Holliday are in London, and they’re [indiscernible] so we’ve got enough fire power out to take any questions.

[Operator Instructions] our first question comes from Josh Wolfson from Dundee Capital Market. Please go ahead.

Nice to see you guys stay consistent and stick to the plan. One of the small change that I guess I noticed from the November analyst day update was a little bit higher capital spend this year than previously expected. Would you be able to discuss what changed since then?

Sure Josh. Graham you want to catch that or do you want me to handle it?

Sure, I’ll go ahead. So Josh if you look at the guidance we gave in the November roadshows, we were probably at about 280 million and of course we’re guiding around 300 million now, and really the key difference between those two marks is that the capital that we’ve approved for the Massawa feasibility study. So we’ve put in about $30 million in 2017 for the Massawa feasibility which is what we need to take us through to being able to make a decision on that project. The rest is pretty much in line with the guidance that we gave in November, and noting that the November capital included the likes of the Gounkoto Super Pit. So you’ve got $55 million in capital for Gounkoto which in the prior year we didn’t have, but that’s really driven by this Super Pit combination of the deferred strip as well as some rebuilds on the equipment that we need there. And the rest is, as I said, very much in line with the guidance we gave in November.

And in terms of that 30 million at Massawa will that be spent against the total capital outlay or is that money that would be before you would start counting towards spending for that number?

That capital that we have at the moment is simply for the project. So if you look at our five year plan that we presented to you, it’s a plan that doesn’t include Massawa’s capital and it doesn’t include Massawa’s ounces. What it does include is the capital to take us through to feasibility. So if that answers your question. So the plan that you’ve seen in terms of the IRR and the cash generation is from project going forward and it doesn’t include the 30 million that we spent in order to complete the feasibility.

So if we were operating under the assumption that Massawa would start to move forward as a formal project, when would you start the capital spending forward?

As soon as we’ve made the decision.

In our own models and if you look back to what we showed you in November, we’re working towards being in a position about the middle of 2018 to make that decision and then sort 18 months - two year construction. So that would be the perfect world, but as Mark says, it’s a function of how we develop over the next year with the feasibility work.

And I think just to put it all on the table Josh, because we do internally run these things and as Graham says, the group is supporting that decision base that spend at the moment. We’ve already spend, we’ve capitalized about $32 million in Massawa-Sofia project and we’ve got another 27 to 30 million to run. And the test that we make with our Board is, if we spent that money, are we going to have a project worth or a lot more than that or not? And the answer is absolutely, yes. Even if it doesn’t fit our quarters [ph], you can see how close it is. And relative to the other project in Africa, it’s a very attractive project and it sits at acceptable jurisdiction. So that all bodes well and we don’t want to go. This is a complex ore body, it’s got complex gold deportment. We’ve done the work, we know what drill spacing we’ve got to do to ensure that we have reliable variograms across both ore bodies and we intend to do that because that takes out a large chunk of the rest. But when we come to develop a mine that capitalized expenditure will be recouped under the convention [inaudible]. So it does, it certainly gets - we’ll get it back. But in calculating our returns we calculate those returns based on the decision dates. We always give you the numbers and you can do that math as well. So that’s the way we run our business.

And on that topic of the numbers, would you be able to disclose what the Gounkoto IRR is using your [indiscernible] budgeting assumption?

The problem with that Josh is that we make positive cash flow right from year one. So it’s infinity, it’s [inaudible] IRR calculation.

So I guess it meets the hurdle?

Yeah, it does. It slides through the [inaudible].

Our next question comes from Howie Flinker from Flinker & Company. Please go ahead.

I’m confused by a statement about Kibali. On one hand the numbers appear to indicate that the pretax profit rose from about 33 million last year in the quarter to about 41 million. But on page 2 it looks as if Kibali’s profit was nearly wiped out by FX, I’m confused.

Don’t be confused, Graham will set you right, but you are on the right track.

So Howie what we’ve shown you is the profit from mining, okay, which is really your EBITDA number from --.

Oh! EBITDA, oh, I see it, okay.

It’s your revenue less your cash cost to give you a profit from mining. And then we’ve done a reconciliation from that profit from mining number down to an after tax profit. And in that sense, your EBITDA is adjusted for, first of all, depreciation and in particular an FX adjustment which we’ve talked about being the depreciation of the Congolese franc and the impact on our TVA balances that are owed to us. So those two numbers than adjust that profit for mining down towards a net profit number which is what’s disclosed there.

I see. So also the adjustment - the money owed to you by the government on value added tax prepaid. That’s probably a large part of the FX loss I’ll call it. Is that correct?

That’s all the FX loss.

Basically all of it relates to that. So in the quarter it was about $12 million worth of FX adjustment on the balance sheet.

That explains it, okay, thanks. Nice work in a tough market guys.

Our next question is from David Haughton from CIBC. Please go ahead.

Moving in to the full underground mining rate at Kibali in 2018, what’s your target for that throughput rate once you get to the full level?

Sorry, just say that again?

For Kibali underground what are you targeting as your full run rate for production?

So it goes up to 3.6 million tons when we’ve got some of the upper pedal still available to truck out from the surface. Once we get in to the deeper part of the mine down in the lot, it stays at about 3.3 million tons. Next year we’re guiding to mine from underground about 2 million tons of ore and it’s a growing profile of course with quarter four being the most. We start getting in to the run rate of that 3 million tons plus by the end of quarter four next year.

So we’ll see that in 2019 pretty much?

Yes.

Then just going over to Gounkoto Super Pit, quite a lot of strip there; I presume that most of that pre-strip would be in the first few years, is that correct to get to your average ultimately 13.7 to one strip?

It’s really more of an accounting issue than it is a strike pre-strip. In terms of the accounting rules what they say is, you look at the life of a mine pit strip ratio which in this case is around 13. And then they say in any period that you’re measuring when your strip ratio goes above that average of 13, the difference between the actual and 13 is then treated as capitalized strip. So it’s more a function of that accounting than it is a question of just one big pushback, because actually we manage the pushback gradually over the whole life of the pit.

Well that’s good [indiscernible] I model old mines. But perhaps you could just give us an indication which years you think would be the highest strip years than average?

Sure. I can tell you straight off the back that 2017 is around 16, just a little bit higher than the rest of the life of mine. Then there’s a few another years and then 2020 is quite a big pushback there, 2021 is higher, 2022 and 2023. So it sort of moves around a little bit. We can sit down and go through the details, obviously as we progress I think these things tend to change.

Thinking about Massawa knocking on the door of your 20% hurdle rate, the CapEx that you’ve got upfront of 438 million, does that include the buy-ups or would say that’s up for a later date when you need it for the NZ20.

$77 million is forecast in 2024 to bring in the buy-ups expansion. So the initial 360 million is the first or the main capital what will be cash flow through 2019, ’19 and 2020 and then sustaining from 2020 out all the way to 2028 is or 2027 is sort of between $3 billion and $5 billion with the additional $77 million scheduled in 2024.

[Operator Instructions] We have a question from Tanya Jakusconek from Scotia Bank. Please go ahead.

I just wanted to come back to Kibali and just make sure I understand. So Mark we’re going to be connecting the production shaft, I think you said early Q3 and you also mentioned that you made some modification to the sulfide circuit, can you talk about a little bit what changes were made recently versus when the circuit was operating in Q1-Q2?

The original plan was provided for the expansion of the ultra-fine grind and associated pump cells and various peripherals to support that expansion of the ultra-fine grind and the associated leech trade. And we’ve also changed the flow-sheet relating to ensure that we are managing the resident’s time with the concentrate product. We’ve got plenty of leech capacity in Kibali and we’ve shown, if you go to the presentation to the analyst that visited this year, you’ll see two options, the current flow-sheet and then the next option of the reconfiguration of the [CIL] thing says conditional things to ensure that we put that concentrate in solution with cyanide and then that goes up to ultra-fine grind and then we feed it in to the pump cells. And the focus now has to do to switch that around. So what the net product of that is, is that we continue to leech the ultra-fine grind product for a longer period about 36 hours and we’ve shown a very significant improvement in recoveries with that flow-sheet change. But really the capital project is all around expanding the ultra-fine grind concentrate circuit for us to allow for us to manage larger nest holes as we - and that’s the thing that really was the highlighter and one of the highlight that came out of 100% sulfide test period. That’s really the major part of - there’s a couple of pumping circuits and water balances that we also improved as a product of that test work. But that’s a major one and we’ve also and will fund it to our team of external auditors that we brought in and the [indiscernible] team. So we’re pretty sure that once we have that all commissioned, we’ll be ready for the next test.

Okay, and you said that the recovery is really improved Mark, so what for the magnitude are we seeing from this --.

[Inaudible]

Sorry.

I said have a look at the [inaudible] and you can see the improvement. And we believe that we boys say that’s sort of the mid-80s and so we’re right there, and whatever reason to be able to add a few more percent to what we actually called the quarter four.

[Operator Instructions] We have no other questions. Mr. Mark Bristow, back to you for the conclusion.

Thank you everyone for joining the call. And again as usual Graham and I are available if you want to follow-up with anything. It’s a bit hectic for the next day or two, but pop us an email and we’d be happy or Cathy or Lewis and we’ll be happy to get back to you and schedule a time where we’d make us also available to answer any further questions. Thank you again for making the time.

This concludes today’s conference call. Thank you all for your participation, you may now disconnect.