Andrew Davidson - Head of Business Development and Investor Relations Andrew Pardey - Chief Operating Officer Johannes Petrus Louw - Chief Financial Officer

Brock Salier - GMP Securities L.P., Research Division Cailey Barker - Numis Securities Ltd., Research Division Stephanie Bothwell - BofA Merrill Lynch, Research Division Yen Voo - Nomura Securities Co. Ltd., Research Division Bart Jaworski - Davy, Research Division

Good morning, and welcome to the Centamin Q3 Results Conference Call. [Operator Instructions] Just to remind you, this conference call is being recorded. And today, I am pleased to present Andy Davidson. Please begin your meeting.

Thanks very much. Good morning, everyone, and thanks for joining us on the call. I have Andrew Pardey, Chief Operating Officer; and Pierre Louw, Chief Financial Officer, also on the line from Egypt. I'll just give a brief overview and then Q&A. Just apologies if you can hear ringing in the background, it's the fire alarm test system that's playing out this morning. We're trying to get it stopped. Apologies if that distracts anybody. So Q3 gold production was up 15% on the second quarter to 93,624 ounces, and we saw in the quarter really 3 drivers: firstly, both open pit and underground grades improving steadily through the quarter; secondly, mining rates from both the open pit and underground as well, setting another record on both fronts; and thirdly, the ramp-up in the expanded plant continuing well with a record quarterly throughput and nameplate capacity achieved in September, and that was just 4 months after commissioning began in May. Of course, you have seen last week, subsequent to the quarter end, we have revised our full year 2014 production guidance to 370,000 to 380,000 ounces. Despite the strong exit rate from the third quarter, we saw lower-than-expected plant productivity in October. And also, in the areas of the underground mine that are currently under development, we encountered some locally complex structures which offset some of the high-grade ore mineralization that was starting -- that was coming through at the end of the third quarter. As a result of that, we have reduced our expected fourth quarter grades from the development ore in those areas. However, despite those short-term impacts, I think it's important to note some significant positive developments. Firstly, despite the reduced forecast, the Q4 expected productivity levels imply output at the full expansion -- post-expansion rate, the target rate of 450,000 to 500,000 ounces per annum. And as Josef notes today in the release, in his comments, that for that to have occurred so soon after commissioning activities started in the second quarter represents, really, a solid achievement for the operation. So I think that shouldn't be overlooked. Secondly, on the exploration front, we've had further positive results from the Sukari underground drilling, which are noted on Page 6 of today's results. And that follows on from results that we announced in the first -- from the first half drilling program in the interim results. And these results really continue to lend further support to our expectation of continued growth at the resource, the reserve mine life and our confident really in the underground mine -- the ability of the mine to sustain higher-grade ore delivery to the plant over the medium and longer term. So I think that sort of points towards the stability of the operation over the medium and longer term. Thirdly, as I said, sort of positive development recently and as foreshadowed, really, in previous announcements, the government approval was received recently for the required increase in ammonium nitrate usage for the open pit, and that allows us to scale up material movements from the open pit towards the planned levels for the expanded operation, and therefore puts the operation as a whole on a secure footing going forward. So with that said and getting back to the Q3 results. The cash cost of production in Q3 was $771 an ounce, which is down slightly on the second quarter. The cost to date and further expected productivity gains in the fourth quarter means we've been able to retain our $700 an ounce full year cost guidance despite the downward revisions for the full year production number. So that's another positive, we feel. Obviously, the fourth quarter, our cash cost will be substantially better than the third quarter. The third quarter basic earnings per share were $0.0139, which is up 40% on the second quarter. Cash flow generation remained strong. EBITDA, just under $38 million in the quarter, which is up 16% on the second quarter, and cash from operations of $31 million, which is up from $20 million in the second quarter. So there remains strong potential for further growth in Sukari. And as it was noted in the second quarter, the capital-intensive phase of this growth has now largely been complete, and we're looking towards free cash flow generation commencing in the second half. I think we're starting to see that come through. Obviously, we're expecting it to come through to a greater extent as we go forward. But in the third quarter, we had an increase in our cash and liquid assets total to $140 million at the end of September from $133 million at the end of June. And also, really, in recognition of the transition out of the investment phase of the operation, capital-intensive phase, and the move towards free cash flow, the board declared the interim results, you will recall, and made an interim dividend of $10 million or $0.0087 per share, and this was paid out in early October. So I think that will do as a wrap, a summary, and then I'll hand that over now, operator, please, for any questions.

[Operator Instructions] Our first question comes from the line of Brock Salier from GMP Securities. Brock Salier - GMP Securities L.P., Research Division: The first question comes on those underground drill results. I saw they were sort of anywhere from 30 to 200 meters under the current development. How long do you expect the turnaround before areas that far from current development are actually coming out into the production?

Maybe -- Brock, thanks for that. Maybe one for Andrew? Well, definitely, for Andrew.

So some of those results are 18 months away from where development will go through those areas. Those areas -- those are in areas that are 3 months out from the development schedule out through to 18-plus months. Brock Salier - GMP Securities L.P., Research Division: Perfect. And Andy, you have already mentioned the 4Q costs, obviously implicit to your guidance coming in under $700. Can you comment, now the expansion is bidding down, what is the potential for cash cost to be sustainably under $700 going forward in the medium to long term?

Maybe, I'll make it a brief comment, and then maybe Pierre can elaborate. But I think our initial target is the 450,000 to 500,000 ounces per annum. Obviously, you know very well and you're very bullish on that production profile around -- beyond that as we continue to optimize the project going forward, but that's sort of an objective for the medium term, really. So I think with the 450,000 to 500,000 ounces per annum in mind, $700 is a good number to use for the life of the operations looking forward for the foreseeable -- as a sort of ballpark figure. Obviously, we're working through the budget process and the guidance process for next year. So we'll have more to say on 2015 guidance in a few months' time. So that's probably all we can say on that at the moment really, but Pierre, maybe there's something you can add to that?

I think -- yes, just looking at the stage for process plants bidding down now and we're getting to understand the process plant and the cost associated with it, I think I'm more and more comfortable with that $700 an ounce target.

Yes. So I think, as well, Brock, you look on a per-tonne basis, the Q3 versus Q4, you're seeing some -- I think when you work the numbers through, you're seeing some productivity or cost efficiency increases on Q2. The dollar-per-tonne costs on mining and processing both came down in the second quarter. I think broadly, that's the trend we'd expect to continue. Okay. Any other further questions then? Operator, are you there? Sorry, operator, are you there? Call for any other questions, perhaps?

Do you need to ask your question, Andy?

Yes. Okay, right. I'm guessing we have a technical problem or there really are no further questions. So I guess we'll just sit and wait for a while. [Technical Difficulty] I will just try and be a cannon [ph] and see if there is a problem.

Apologies for the delay, everyone. We have been disconnected. However, our next question comes from the line of Cailey Barker from Numis. Cailey Barker - Numis Securities Ltd., Research Division: Just a question -- a couple of questions. One is, just getting back to the costs in Q -- that we're going to expect in Q4, I mean, for you to get under the sort of $700, that would imply that your strip ratios are going to remain low. Is that a fair assumption, and presumably, to say your stripping will increase more like next year than this quarter?

Andrew?

Yes, that is correct. The pit's down in the lower stages, as people would have seen from the site visit. So it's a very low strip ratio for the remainder of this year. Cailey Barker - Numis Securities Ltd., Research Division: And Andrew, what can we expect strip ratio-wise now for next year?

Next year's strip ratio with the CapEx frequency and the strip ratio will be around 4.5:5.5:1. Cailey Barker - Numis Securities Ltd., Research Division: Lovely. And then just my sort of second question was on -- in terms of the underground, obviously, grade, you hope to get back up to that sort of 8.5 grams per tonne level. What about throughput -- I mean, productivity levels? Are you hoping to sort of sustain this 250-a-quarter type level through into next year?

For underground production, yes, we're expecting to maintain those both for the tonnages coming out from the underground.

Our next question comes from the line of Vikas Choudhary [ph].

First of all, I'm really disappointed in the sense that EBIT guidance for production -- as you may recall at the half yearly conference, I did raise some questions, how realistic it was. I mean, it is very positive that we are expanding, but I would actually hope the management is a bit more realistic with their ambitions. I mean, where the share price is now is just a reflection of where the things are. And just to build on that, again, looking at this cost guidance, the $700, so far, that is roughly 10% above what the guidance is. So is there something the management would be actually looking at perhaps to revise?

No. Just to your first point, there's never a good time obviously to downgrade guidance. And really, the first point to make, I suppose, in relation to the timing of this, we did have a strong exit rate from the third quarter. The productivity levels, as we left the quarter in the end of September beginning of October, were strong on all fronts as we noted, and you can see the average for the numbers in the comments I made earlier. So really, we felt at that time, 4 to 6 weeks ago, there was a good realistic chance of closing in on guidance. So that was the thought process then. Obviously, things have changed through October, and that's the reason for our change in expectation. Regarding costs, obviously, we've got productivity gains in the fourth quarter. We got a strong uptick implied in the fourth quarter. And in terms of ounces produced -- and that's obviously going to translate through to the cost per ounce as well. And together with the efficiency gains that are coming through as part of the ramp-up in the operation, sort of the efficiencies of the scale, if you like, then that's going to bring costs that we expect back into line with the $700 an ounce for the full year. They're somewhat back-end-weighted for the fourth quarter, but it has its production and it should come out. So as I say, there's no change to our $700 an ounce full year expectation for those reasons.

Right. Well, I mean, again, it remains to be seen. I mean, the lowest that you have achieved in the year, it was in the first quarter. I believe that was $693-odd, but as I said, that remains to be seen. Well, my other quick question is, looking at my notes, I believe, at the half yearly conference, the whole force of the court case may be concluded by March or April next year. But looking at the language now, I mean, are you envisaging it may take much longer than that now? If you could make a comment on that, please?

I don’t think we've ever given a date, such as that March, April. The fact of the matter is we have never had a time line. We have never had a timetable, I should say, for the court process, and we have always alluded to the fact that there is potential for the court process to be lengthy, and we have done that since the start of the appeal process beginning of last year. It clearly is lengthy. It clearly is a bureaucratic process. We remain of the view very strongly that we expect a positive outcome. We continue to enjoy the full support of government. We continue to operate. We have done through the whole process. We continue to believe that the court case is a distraction. Understanding the effects on the share price and the headline risks to it, we would like it resolved as well, as soon as possible. But as I say, we've not been able to give specific guidance on timing of when the court process is likely to be resolved. That remains the case.

I appreciate that. I mean, you -- one can never give solutional guidance or solutional debt payment in court matters, but I recall very clearly the whole force that it may get concluded. There may be a hearing by March or April, which would conclude the matter. But just looking at the language, I mean, are we expecting that it may take much longer in the foreseeable future? That's all I'm trying to ask.

As I said, there's no change to our expectation or the fact that we haven't got a timetable. Can't guide on timing. There has been no change to that.

Our next question comes from the line of from Mohar [ph] Sharsi [ph] from Schroders.

I was wondering if you can give us briefly an outlook on gold prices. Where do you think they should bottom? And where is the marginal cost reduced you're operating at right now?

I'm sorry, I would love to give you an outlook on the gold price that you could depend on or hold any more weight versus any other forecasts that you might see, but that's...

Your response would be appreciated.

Sorry, I didn't catch that last bit.

Just your response would be appreciated. Just very briefly.

Well, very briefly, medium- and long-term bullish, but I have no idea what it's going to do in the next few months.

And what about the marginal producer? Where do you think their gold price is assumed at?

Again, I don't think really it's our place to comment in this kind of forum on our peer group. It's really a call for our results. So probably, the question is better directed, in any case, to some of the analysts out there that cover the peer groups. But I think, just generally, we are in a very competitive cost position. We do focus very strongly on costs. We believe we're very much in the lower half of the peer group and will remain there. And we have an expectation for $700 an ounce of cash operating cost going forward. And when you translate that to an all-in sort of basis, I'd say we're in the ballpark of $900 to $950 an ounce in the worst-case scenario for that going forward. It's actually the worst-case scenario being base case production forecast, noting that we have upside potential beyond that both on ounces produced and, therefore, on cost per ounce. So that's all to be delivered in future. But I think, on the current forecast, we are in a very competitive cost position.

Our next question comes from the line of Stephanie Bothwell from Bank of America Merrill Lynch. Stephanie Bothwell - BofA Merrill Lynch, Research Division: Two very quick, hopefully, financial-related questions from me. In the third quarter, you made $4.8 million in advance payments to the government. And can you give us an indication of what you expect for the rest of 2014? And then, secondly, on exploration expenditure, can you just confirm to us what you intend to spend on exploration for 2014? And in light of the current weakness in the gold price, how you expect exploration expenditure to sort of trend as we go into next year?

I'll just deal with that last bit, actually, because it's more sort of longer-term. Pierre can talk about the numbers in more detail. But I think just generally, we -- there's no change to our exploration strategy going forward, either in Egypt at Sukari, which is very focused on the underground drilling which is delivering significant returns through exploration dollar spend in terms of further potential for high-grade additions to the resource reserve base. And then also, outside of the Egypt, the main focus is Burkina Faso, and we're pushing ahead there because we believe very strongly, as we did when we acquired Ampella earlier this year, that we saw a significant geological potential there. And short-term changes in the gold prices in the interim haven't changed that outlook or our strategy or reasons or ability to continue to fund that. But Pierre, perhaps you could talk a bit more about the actual sort of the expenditure levels this year and next.

I think we've always been looking at spending around -- difficult say this, around $20 million in a year on exploration around that region depending on what we find, and I don't think we will change it at this point. We will keep being bullish on the exploration spend money to see if we can extend the orebodies. Stephanie Bothwell - BofA Merrill Lynch, Research Division: And then on the advance payment, should we anticipate any further payments in the fourth quarter?

Go on, Pierre, sorry. Well, so I was just going to say that no decision has been made in that respect. But Pierre, perhaps you...

We haven't entered in any discussions at this point with the government at all. So there's no question about that at the moment. Stephanie Bothwell - BofA Merrill Lynch, Research Division: Okay. And perhaps just one follow-up on, I think, the point that Andy made earlier. So the $900,000 and $950,000 all-in, which I think that you talked about for base case production, just to confirm, is that on the 450,000 to 500,000 ounces, that being the base case?

Yes, Stephanie, that's really just working through our disclosure that we've had for some time in the presentations and looking forward. You'll recall in our presentations, we've had that forward-looking CapEx guidance of $80 million to $100 million per annum when we're in the sort of steady state from next year onwards, i.e. once we've got through all of the expansion CapEx. That we have done now, really. So on a 0.5 million ounces, that translates to $160 million to $200 million an ounce, a bit more ahead of this G&A in Europe at around $900 an ounce, on top of the $700 cash operating costs and including the royalty, of course, which we have to do. So I think in the region of $900, slightly above, up to $950, it might be that high, even. But yes, with -- on that basis, yes. That's just working through the numbers that we've disclosed for a while. Stephanie Bothwell - BofA Merrill Lynch, Research Division: Okay. Just one very quick follow-up. Can you just remind me what percentage of your cost base comes -- is derived from oil, so energy costs?

Pierre, did you catch that question?

Yes, I reckon that we're spending about 25% of our costs on energy.

Our next question comes from the line of Yen Voo from Nomura. Yen Voo - Nomura Securities Co. Ltd., Research Division: Just 2 questions. First one is with now the junior mine is suffering from current weakness in the gold price and Centamin's free cash flow coming in next year, are you looking to more M&A opportunities? And secondly, on the current civil unrest at Burkina Faso, do you expect to see any difficulties in the licensing at the Batie West gold exploration?

Just on -- I mean, on the M&A front, we're always looking at -- we're always reviewing. We're always looking at potential opportunities. We've got nothing imminent. No sort of -- nothing that we would point to as suggesting we might do anything in the very short term, but we continue to look and do due diligence where necessary. Yes, Andrew, maybe some comments on Burkina Faso?

We've got ongoing explorations -- about Burkina Faso, we've got a big land holding there, and we're systematically going through the process of exploring that, and we're also -- we are on the outlook for other opportunities should the right thing come up. Yen Voo - Nomura Securities Co. Ltd., Research Division: You mentioned that there would be a resource update in due course. Is that in the matter of months? Or are we looking to end of first half next year?

We're in no rush to do a resource update. We're focusing on the drilling and expanding on what we already have. Yen Voo - Nomura Securities Co. Ltd., Research Division: Okay. And so back on the question on the civil unrest at Burkina, you wouldn't see something similar that has happened in Egypt for Batie West?

Well, with the small issue that happened in Burkina Faso, there were -- we saw no problems at all. The operations, we kept drilling down on site. We had fuels and all our usual supplies are still traveling to site. We saw no issues at all.

[Operator Instructions] And our next question comes from the line of Bart Jaworski from Davy. Bart Jaworski - Davy, Research Division: First question, on the October throughput rates that were a little bit lower than expected, can you just give us color why that occurred? And did that correct in what you've seen so far in November?

Look, in October we made a decision early October, we were going to reline the new SAG mill with a different set of liners, and so we went ahead and we did that reline. And we didn't see the expected ramp-up that we were really hoping for with those liners. That's really what it was. It took us longer to get them to settle down than what we were expecting. Bart Jaworski - Davy, Research Division: Okay, great. And I guess, given the Q3 lower underground grades than you guys were initially expecting, has that impacted your longer-term forecast for what you can get in terms of grades for the sort of medium to long term? And maybe, if you can comment on the actual numbers you're expecting for, say, next year?

No. It's not going to create impact longer-term. What we've seen locally on the development levels that we're going to -- we didn't see the grade that we expected from the drilling we've done in front. Basically, it's been a geologically complex area, more so than what we've seen in the other areas when we've gone through doing developments. Bart Jaworski - Davy, Research Division: Okay, so no change to that?

No. Bart Jaworski - Davy, Research Division: Okay. I guess, just getting back to the Q4 cost question. Just back-calculating things, it looks like, if you're assuming 120,000 ounces, say, for next quarter, your cash costs would have to be sort of sub-600. And is that realistic? Is that -- the first, am I sort of on the right track there? And secondly, is that driven by just purely low strip?

Yes, it's driven basically by the mining rates, yes, so the low stripping. And you would be looking -- you're right with your calculations, you would be looking at approximately $70 million cost for the quarter. Bart Jaworski - Davy, Research Division: Sorry, I didn't hear the last part there.

You would be looking at roundabout $70 million for the quarter. Bart Jaworski - Davy, Research Division: Okay, great. And Andy, the dividend, the final dividend, when can we expect an announcement on that? Or is that still forthcoming?

Well, we'd hope to say more about in the annual results. Bart Jaworski - Davy, Research Division: Okay. And then lastly, on the October 7 date that kind of came and went on the court case because of the holidays, was there a new date set for the next court case?

There was, it's in February, but we don't make any -- again, it's the process. It's another hearing in the process. That's the next hearing. We're not expecting a resolution on that date. But that is the next date that we're having a go. Bart Jaworski - Davy, Research Division: Okay. So February, do you have a date?

25th. Bart Jaworski - Davy, Research Division: February 25 as the next one, and then you expect at least another one after that?

As I have said, we haven't been -- it hasn't been stated that, that next hearing will be held for a judgment. So it's as we've been with the previous hearing.

As there are no further questions, I will turn the conference back to you for the final comments.

Thanks very much. Thanks very much, everyone, for joining us on the call and for your questions. We look forward to speaking to you next time. Thanks a lot.

This now concludes our conference call. Thank you all for attending. You may now disconnect your lines.