Joe Philips
We have not looked at an upside on tailings. It’s an on/off heap leach and that historically back the lead into the mine. Now there had been scenarios with increasing gold prices that have come back from being waste into ore, which is probably the reason for extending the mine life in the first place, so if gold prices increase dramatically, that would be a possibility again, I think.
Jorge Beristain
Okay, and a comment Mitch that made earlier about this acquisition lowering your cost. Do you mean from the point of view that it lowers your average gold cost as a company by sort of having this mine in the mix with Kensington? Or do you mean that you intend to use the gold output here as a by-product against your silver accounting? I am just trying to understand that comment.
Mitchell J. Krebs
I guess two points I was trying to make there. One is, this combined with Kensington, we will show as primary gold mines. This obviously will bring down the average of the two by quite a bit. But when you — as we report our costs on a silver equivalent basis, when we do an all-in sustaining cost for the company to come to one silver number in a per silver equivalent ounce number, we’ll take all the gold and convert it at a 60:1 ratio, to come up with a silver equivalent cost per ounce. And so on an all-in sustaining cost per silver equivalent ounce, this has a positive impact on that as well.
Jorge Beristain
Okay, got that. And then I guess maybe my last question is, from a management bandwidth point of view, do you think that you guys have all the people in place that you need to be able to now manage this, still keep an eye on the La Preciosa project in Mexico, possibly the Paramount deal, all the stuff that you’re doing down at Palmarejo, could you just kind of talk about where your bench strength is at this point?
Mitchell J. Krebs
That is a great question and one we’ve thought a lot about. If you take the two transactions that we’ve announced recently, Paramount is essentially a continuation of what we are doing already there at Guadalupe: leveraging the existing workforce and infrastructure development of an adjacent ore body. And that will continue and not affected then by what we will be doing here in the US. With Wharf, we have a — Latin American Operations Team and the North American Operations Team so obviously Whaft now will plug-in to that North America operations team. And because Goldcorp has ran a well, very efficient well-run, in a lot of very mature processes and procedures, this is a pretty established asset that I think we can integrate pretty quickly, pretty effectively and so, the two transactions do different things for us and then I’d say at the corporate level here — I’d been saying this for a couple of years now — with all the organizational change that we’ve made here, one of the words I’ve always used to describe it is that it is scalable and we are putting that notion now to the test. We won’t be needing to add any new parts. This will fit inside the company as it’s currently configured and from a corporate perspective, there will be no need to add anything.
Jorge Beristain
Okay, and sorry, last question. Could you just comment on these debt offers that you’ve had for financing. What kind of interest rates you’re looking at and what weighted average cost of capital you’re running your DCF on? I am assuming you’re doing this acquisition based on a 5% discount rate, but I just wanted to check that.
