As always at the end of our formal presentation we will welcome any questions you may have. Before we begin please note that in responding to questions and talking about our financial and operating performance, and our exploration and development projects, we may make forward-looking statements. These statements are subject to known and unknown risks and future results may differ materially. For further information on known risks factors I encourage you to review our 2009 AIF and our annual report. And now you will hear Jon Douglas, the CFO.Jon Douglas Thank you, Ken. Good morning everyone. I will begin my remarks today by summarizing the highlights of our second quarter which you can find on page 4 of today’s presentation. Our three mines in Canada and Australia produced a total of 68,275 ounces of gold and 9.6 million pounds of copper during the quarter at an average net cash cost of $693 per ounce. Gold production was lower than planned and overall cost was higher than expected due to production issues of our Stawell mine. On the exploration front we were granted the exploration permit for this year’s Kemess underground program that have begun diamond drilling which is focused on the 90 million ton high grade zone which in the Kemess North deposit which we are now examining as a potential underground block caving operation. In early July, the Ministry of Northern Development in Mines and Forest granted us the closure permit for the Young-Davidson mine which is the key permit governing the construction of new mines in Ontario. On August 4, we began construction of the mine as of date we have awarded approximately 140 million in contracts all of which have come in at/or slightly below our feasibility study estimates leaving our 31 million project contingency intact. On the exploration front at Young-Davidson whole 198 intercepted 50 meters true thickness of gold mineralization at a grade of 3.46 grams per metric ton just left and about 100 meters to the north of the current ore body. If this turns out to be the faulted off extension of the current 4 million ounces of in situ gold at YD it has the potential to dramatically increase the total ounces within the property within easy reach of the underground infrastructure that we are currently constructing.
Now turning to page 5 of our presentation, I would like to go over the details of our production statistics for the quarter. Our Fosterville mine turned in a record production quarter of 28,476 ounces at a cash cost of $669 per ounce and our Kemess South mine produced 24,967 ounces of gold at a net cash cost of slightly less than $500 per ounce which was consistent with our guidance.Unfortunately, performance of our Stawell mine was significantly lower than forecast with production of only 14,832 ounces of gold at cash cost of a little over $1000 per ounce. Ken will go into detail on the issues we faced at Stawell and the recovery plan has been implemented later in this presentation. But in summary we note much lower grade ore than we expected and generated less gold at a significantly higher cash cost per ounce. Our metal sales, the driver of revenue from a financial point-of-view, were lower than our production during the second quarter primarily as a result of an increase in concentrate inventory at Kemess. Low rail car availability at the end of the quarter, which was a result of poor planning by CN Rail, we recently took on some business from Hud Bay was the reason behind all this and they didn’t really come out and change the fleet size to accommodate their new business and so we were left with less rail cars than we anticipated. We expect inventories to fall back to normal levels at the end of the third quarter which add about $8 million of cash flow and a couple of million dollars to earnings in our next quarter. Read the rest of this transcript for free on seekingalpha.com