Royal Gold Earnings Call Insights: Thompson Creek and Mt Milligan CapEx
Patrick Chidley – HSBC: Just wanted to ask sort of a question that is really aimed at some of the downside that people may be concerned about with Thompson Creek and Mt. Milligan, and I’m wondering if you could just maybe flash out what happens if Thompson Creek does get into financial difficulties? What are your rights there if they go into for example into administration at any stage?
Tony Jensen – President and CEO: Let me start out on the positive side of that topic. Thompson Creek announced today that they anticipate having about $100 million of (free board) over the next coming months as they work towards commissioning the properties. So they don’t have any expectations at having problems and certainly we would like to build to this state and we don’t expect any start up type problems. But answering specifically to your point in the event that I did go into administration, we do have a limitation on how much debt obviously that can stand in front of us and that limitation is ($350 million). So we would be second in any kind of liquidation event behind that. But really what we want to do, Patrick, is maintain our business interest. We think this is a quality property that was going to attract another buyer. If that were to happen we are supportive of the Thompson Creek. We want to see them be successful here. But I think we are quite comprehensive and when we put the deal together originally now three years ago to plan for a situation like you outlined.
Patrick Chidley – HSBC: But if – I had imagined for example, if the company did go under but the mine were so going that – it wouldn’t be such a great idea to close the mines. So I would presume that at Mt. Milligan we just continue producing and it’s a source of cash flow. I am wondering, that going into administration changes your rights on the metal stream or not?
Tony Jensen – President and CEO: Well those are events that we can’t really comment or predict on. We just don’t know that what eventuality might happen there. But I would expect if the mine produces we have the right to receive a percentage of the gold and that would be honored through that administrative process until something else was decided by a court of competitive jurisdiction…
Patrick Chidley – HSBC: And then just a follow-up question, if I may, just with respect to El Morro. That transaction, obviously, kind of long-term looking forward can you comment on situation that in terms of where you see Goldcorp to be on ability to move forward on that project and then sort of what timing you would expect to getting into cash flows?
Tony Jensen – President and CEO: Let me, Patrick, introduce you to Bill Heissenbuttel, our Business Development, Vice President and he will comment on that.
William Heissenbuttel – VP of Corporate Development: Patrick, Goldcorp has not identified a firm timeline with respect to the build of El Morro. They clearly have some work to do on the indigenous issues. I think one of the good things about this acquisition is we are able to see the delay in front of us. And as Tony said in his prepared comments we were able to reflect the delay in evaluation methodology we used with respect to the acquisition.
Mt Milligan CapEx
Cosmos Chiu – CIBC: It is actually Cosmos here. Got a few questions; maybe first-off, again, on Mt. Milligan. Tony, judging from your answer to Patrick’s question you have full confidence in Thompson Creek. Reading over, I guess, Thompson Creek’s financial reporting last night they have talked about a small increase – only a small increase in terms of – I think about $40 million to about $50 million in the remaining CapEx for Mt. Milligan. Are you comfortable with that? Are you okay with it? What’s your perspective on it?
Stefan L. Wenger – CFO: Let me go back to essentially the range that established in February 2011 both on schedule and on budget. And they are surely up on the higher end of the budget range that they established. Having heard from Thompson Creek I understand these latest cost increases are somewhat related to how the start-up expenses whether they are capitalized or expensed and I guess some had been moved into the capitalization rather than expense. So, I don’t know that there was any cost that has been on-expected on their parts, this is what bucket it has been put into. And again we understand they have about 100 million of projected surplus on their cash basis as they go through start-up. So, I am not able to really comment on anything further than that, but that’s the situation as we understand it.
Cosmos Chiu – CIBC: Tony or maybe Bill, in terms of El Morro would you be able to give, I guess, your royalty at this point in time is only on one-third of the reserve base. Would you be able to give us a bit more description in terms of like which part of the deposit would that be on and in terms of current mine plan or the current plan at this point in time would it be at the front or at the end of the life of mine production?
Tony Jensen – President and CEO: Cosmos, we would expect that certainly the production on our royalty ground there would be heavier at times than others. But if you were to think of El Morro the (indiscernible) pit as a circle and if you were to draw a diagonal from the upper left to the lower right on that circle there is a swat of (claims) that run through just a little bit below the center point that would not be subject to our royalty interest. So, we would have all the interest outside of that. So, at times, I am sure the mine plan would be certain phases, certain years lighter on the ground that we have an interest on. But I think perhaps, we can give you some visual guidance on what we think the pit in the – the property position look like as we present future PowerPoint type presentations in the future.
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