Jamie Porter – Chief Financial Officer John McCluskey – President and Chief Executive Officer Peter MacPhail – Vice President and Chief Operating Officer Andrew Cormier – Vice President of Development and Construction Chris Bostwick – Vice President of Technical Services Aoife McGrath – Vice President of Exploration.

Rahul Paul – Canaccord Genuity Dan Rollins – RBC Capital Markets Anita Soni – Credit Suisse Kerry Smith – Haywood Securities.

Good morning. I would now like to turn the meeting over to Mr. Jamie Porter, Chief Financial Officer. Please go ahead..

Thank you, operator, and thanks to everyone for attending Alamos' Fourth Quarter 2016 Conference Call. In addition to myself, we have on the line today, John McCluskey, President and CEO; Peter MacPhail, Vice President and Chief Operating Officer.

To address any questions with respect to our Turkish feasibility study and preserve the resource update, we also have on the line today Andrew Cormier Vice President of Development and Construction. Chris Bostwick, Vice President of Technical Services and Aoife McGrath, Vice President of Exploration.

I would like to remind everyone that our presentation will be followed by a Q&A session. On this call we will be making forward-looking statements. Please refer to the disclaimer on forward-looking statements in our News Release and MD&A as well as the risk factors set out in our annual information form.

All forward looking statements on this call are qualified by these cautionary statements. There can be no assurance that our forward looking statements even though considered reasonable by management, based on information on hand will prove to be accurate. Future results and events could differ materially.

Technical information in this presentation has been reviewed and approved by Chris Bostwick, our VP of Technical Services, and a qualified person. Also please bear in mind that all the dollar amounts mentioned in this conference call are U.S. dollars unless otherwise noted. Now, John will provide you with an overview..

Thank you, Jamie, and good morning everyone. The fourth quarter concluded the strong year for Alamos on several fronts. We met production guidance, delivered a significant reduction in our operating capital costs, and saw strong free cash flow from our operations.

We had an excellent year on the exploration front at La Yaqui, and continue to surface value within one of the most attractive development pipelines in our peer group. We produced a record 105,700 ounces in the fourth quarter and a record 392,000 ounces for the full year, coming in above the midpoint of our guidance.

Total cash costs of $797 per ounce were consistent with the full-year guidance, and our all-in sustaining costs of $1,010 per ounce mark the 7% reduction from 2015. Total capital spending was also consistent with guidance and down 23% from 2015. This translated into positive free cash flow from each of our operations and strong year-over-year growth.

We expect this trend to continue in 2017 as we remained focused on growing productions, while maximizing our margins and cash flow from each operation. We expect production to increase 6% to a range of 400,000 ounces to 430,000 ounces.

All-in sustaining costs are expected to decrease 7% to $940 per ounce, reflecting further cost reductions at Young-Davidson and Mulatos. We also expect overall capital spending at our operating mines to decrease further 12% even after factoring in the $12 million. We are spending to develop Phase 1 in La Yaqui.

We expect all of this to add up to substantial free cash flow growth from our operations in 2017. On the development front, we had a number of successes. The environmental impact assessment for stage 1 of La Yaqui was approved in the fourth quarter and we began development of the project.

We expect initial low cost production from La Yaqui in the second half of 2017. We had another great year in expiration, adding 521,000 ounces of reserves at La Yaqui Grande bringing the combined La Yaqui reserve to 680,000 ounces.

With the combined mineral reserve and resources to 684,000 ounces, up 113% from a year ago, the overall size and confidence of La Yaqui has increased substantially. We greatly improved plant access and a strong exploration team.

We're looking forward to building off a success across the Mulatos district with an exploration budget of $17 million in 2017. We declared an initial reserve across our Kirazli and Aği Daği projects of 1.8 million ounces of gold, following the successful conversion of the majority of the measured and indicated resources across those projects.

Combined with the growth at La Yaqui, we reported a 31% increase on our global reserves to 7.7 million ounces. The initial reserves in Turkey came as part of three economic studies we reported over the past week. All three studies highlighted projects with low costs, low capital and high returns.

The feasibility studies for Kirazli and Aği Daği showed a significant improvement in economics.

Most notably at Aği Daği, where the after-tax IRR has increased from 15% in the pre-feasibility study to nearly 40%, in fact, applying an 8% discount rate, the combined after-tax NPV at both projects has increased to $483 million, compared to a $170 million in the pre-feasibility study.

Factoring in Camyurt, this increases to $570 million, using a 5% discount rate across all three projects of the combined NPV increases to nearly $700 million. At an industry pace with declining production profiles, these were among most attractive and developed gold projects anywhere in the gold price environment.

With our recently completed $250 million equity financing, we have greatly strengthened our balance sheet. We will be debt free come April and much better positioned to deploy capital into our portfolio of highly attractive internal growth opportunities, the most advance of which is Kirazli.

With that, I'll now ask our CFO, Jamie Porter, to comment on our fourth quarter 2016 financial performance.

Jamie?.

Thank you, John. We sold approximately 107,500 ounces of gold in the fourth quarter, at an average realized price of $1,230 per ounce for record revenues of $132 million. For the third consecutive quarter, all three of our operations were free cash flow positive, collectively generating $14 million net of all capital and exploration spending.

We generate over $35 million in mine side free cash in 2016, reflecting higher production, higher gold prices, combined with significant cost of capital reduction. This trend is expected to continue into 2017 with further production growth and cost reductions driven by the ramp up of Young-Davidson and an initial production in Phase I of La Yaqui.

Our consolidated total cash costs were $842 per ounce in the quarter and $797 per ounce for the year in line with our full-year guidance.

All-in sustaining costs of $1,033 per ounce in the fourth quarter, $1,010 per ounce for the year were slightly above guidance reflecting the reevaluation of previously issued long-term stock base compensation, due to a significant increase in our share price and higher mine sight ore sustaining costs at Young-Davidson.

We reported a loss of $20.6 million in the fourth quarter or $0.08 per share. Majority of this loss related to non-cash judgments including an unrealized foreign exchange loss of $7 million and foreign exchange losses recognized within the deferred taxes of $9 million.

These adjustments totaled $0.06 per share, and we're partially offset by other gains totaling $2 million of $0.01 per share. Operating cash flow, before changes in non-cash working capital was $34 million or $0.13 per share in the fourth quarter. Capital spending totaled $38 million in the fourth quarter and $146 million for the full year.

As John noted, this was down 23% from a year ago in part reflecting lower capital spending at Young-Davidson. We expect this trend to continue into 2017 with overall capital spending and our operating mines to decrease to further 12%, driven by a $20 million decrease in Young-Davidson.

Global capital spending is expected to be in the range of $140 million to $157 million in 2017. Our corporate G&A expense in the fourth quarter totaled $4.6 million and $16.3 million for the year, consistent with the guidance and among the lowest in our peer group.

At the end of 2016, we had $266 million of cash and available-for-sale securities and subsequent to the end of the year completed a $250 million equity financing. As John mentioned, we'll be using the $240 million in net proceeds from the financing and existing cash to retire $315 million high yield notes.

This will save us $24 million in annual interest fees and $60 million over the remaining term of the notes.

This also removes any restrictions on our balance sheet that would have limited our ability to deploy our capital into our high return growth project –- one of the strongest balance sheets in our peer group and combined with one of the most attractive portfolios of growth projects, we are well-positioned to execute on our near-term and long-term growth initiatives.

At this point, I'll turn the call over to Alamos's COO, Peter MacPhail, to provide an overview of operations..

Thank you, Jamie, and good morning, everyone. Young-Davidson produced 44,700 ounces of gold in the fourth quarter and a record 170,000 ounces for the full year. This reflected higher underground mining rates improved in our recoveries.

We expect to further increase in the underground mining rates to drive production of approximately 20% higher in 2017 to between 200,000 and 210,000 ounces. Total cash cost in the fourth quarter were $667 per ounce and all-in sustaining costs were $926 per ounce or 6% below the prior year, reflecting lower sustaining capital.

For the year total cash costs were $657 per ounce consistent and all-in sustaining cost were $897 per ounce, both were above full year guidance reflecting the rehab work required on the ore pass infrastructure in the second quarter and third quarters. This work is complete and we expect to see a 13% reduction in our all-in sustaining cost in 2017.

Underground mining rates improved significantly in the fourth quarter, while the completion of the rehab works to a new record of 6,675 tons per day. We also exceeded our year-end target averaging over 7,000 per tons per day.

For the full year our underground mining rates averaged approximately 6,000 tons per day up from the 2015 average of roughly 5,000 tons per day. We expect to further increase in 2017 with underground mining rates averaging between 6,500 tons and 7,500 tons per day.

Mining rates are expected to be in the low end of the range during the first half of the year, reflecting approximately four days of plant maintenance for a rope change on the skips in the Northgate shaft. We expect strong mining rates in the second half of the year with the completion of the MCM waste pass in mid-2017.

Underground mine grades averaged 2.4 grams per ton in the fourth quarter and 2.5 grams -- 2.54 grams per ton for the full year. We expect underground rates to approximately to a reserve grade of 2.7 grams per ton in 2017.

Mill recoveries averaged 90% in the quarter and 91% over the year up from 89% in 2015 reflecting the changes implemented rotation circuit during the year. Mill throughput improved significantly to average 7,500 tons per day in the fourth quarter and over 8,000 tons per day in December.

Mill continues to exceed underground mining grades with excess capacity in the mill processing lower grade stock upward. We expect 2017 Mill throughput to be in the range of 7,600 to 8,000 tons per day. Mulatos produced 44,900 ounces of gold in the fourth quarter, reflecting a strong performance from both the leach pad and the Mill.

Production for the full year totaled 154,000 ounces exceeding the annual guidance. With the strong overall performance with the mine, generating $27 billion in free cash flow even after $18 billion in exploration and development spending on La Yaqui and Cerro Pelon. The heap leaching operation continues to perform well during the fourth quarter.

Total crusher throughput averaged at 18,900 tons per day and grade stock averaging 0.81 grams per ton in the quarter and the full year. We also benefited from higher recoveries without being stacked on and recovered a deferred production from the third quarter range.

The mill also had a much stronger year in 2016, reflecting the transition to concentrate production in the second quarter. This has resulted in significant improvement in recoveries and production. The reconfigured mill is expected to continue to operate at approximately 400 tons per day.

All-in sustaining costs of Mulatos were $931 per ounce in the quarter and $916 per ounce for the year. This marked a 13% decrease of 2015 with further improvements expected with the start of production from phase I in La Yaqui in the second half of 2017. This trend is expected to continue beyond 2017 as La Yaqui involved into larger operations.

Furthermore, the 5% NSR royalty in Mulatos is expected to be eliminate in the next two years, which our current gold prices will save us another $60 per ounce. El Chanate produced 16,100 ounces of gold in the fourth quarter and 68,000 ounces for the year.

All-in sustaining costs were $1,190 per ounce for the quarter and $1,169 for the year, slightly better than the guidance of $100. El Chanate was free cash flow neutral in the quarter and generated $5 million free cash flow over the year. It helped ensure the operation remains free cash flow positive.

We have hedged approximately 75% of the mines 2017 production through collars ensuring a minimum gold price of $12.25 per ounce and participation up to the price $14.50 per ounce.

As John noted, we've reported results from the three economic studies over the past week and the economics on Kirazli and Aği Daği, have improved dramatically, combined with Camyurt development was nearly $600 million in value using conservative in the company. Each project check all the right boxes.

They are low cost, with all-in sustaining cost average of around $400 per ounce between Kirazli and Aği Daği, there are very magical capital requirements with only $150 million EBIT's booked for -- which in turn should help fund the other projects.

To provide meaningful production growth, with annual production of 104,000 ounces from Kirazli, 178,000 ounces from Aği Daği and 93,000 ounces from Camyurt. They have attractive returns in almost any gold price environment. We are excited about our project prospects in Turkey and with our recently balance sheet we can find growth surely.

With that, I will turn this call back to John..

Thank you, Peter. I will now ask the operator to open the call for questions and answers..

Thank you. [Operator Instructions] The first question is from Rahul Paul of Canaccord Genuity. Please go ahead..

Hi, everyone.

John, obviously you've got an extensive growth pipeline in front of you with La Yaqui Grande, the Turkish project, Lynn Lake and even Esperanza longer term, I mean it looks like Kirazli is still going to be the first to develop, but do you have any thoughts at this stage and how might prioritize some of the other projects? I understand we're still waiting for the Lynn Lake study.

There is more work to be done at La Yaqui, but I'm curious as to what your thoughts are at this stage..

Thank you, Rahul. Some of the timelines are simply driven by the time it takes to complete environmental study work. We're still very much in that mode at Lynn Lake, compiling all the data in order to produce the environmental impact study in the third quarter of this year. The pruning process can't even commence until after that work is completed.

So they tend to take a timeline that is somewhat dictated by the required work that needs to be done. We're much further ahead in Turkey simply because we started those projects earlier and by -- I guess by 2013, we had already completed and have received positive confirmation on both the Kirazli and Ağı Dağı environmental studies.

So, we have that work done and now it's a question of what we've just completed, demonstrating the economics and finally going forward the Austrian construction permits. They're just further down the line. So they have a stronger likelihood of being developed first. Kirazli is obviously in the lead because we received four suit products there.

We are in the process of working with the Governor's team on, on putting together our operating construction equipment, getting down to the details of that, and quite confident we'll be, we'll be completing that work and in receipt of our operating permit sometimes in the second quarter.

I'm quite confident after that, our Board is going to approve the construction decision and we're going to be in construction on Kirazli late second quarter of this year, and I think we're very fortunate to have been aggressive on the acquisition front, during 2013 through really 2016, it was the right point in market, in which to do it, you frankly can't do it today.

But having been so proactive over those years, I think we've now put ourselves in a position where we essentially own our future. We are not expected by our shareholders to go out and aggressively pursue M&A, because we have such a healthy pipeline of project to develop.

We do have the flexibility to develop those in the timeline that we think best suits the company and that's effectively what we intend to do. We got the ability to drive our production growth from its current level just over 400,000 ounces a year to basically double that in the next five years, and that's essentially the game plan..

Okay. Thanks, gentlemen.

And then just trying to understand your strategy a little bit better, I mean obviously some projects are beiger than the others, but would you build more than one project at the same time or would you rather do one at a time?.

Well, we are effectively doing that. We are in process of building La Yaqui right now. Doug will transition in due course into La Yaqui Grande and meanwhile we are going to take over -- we are going to effectively begin construction of Kirazli in Q2.

So to my way of thinking, they do follow a logical sequence, La Yaqui Phase I now followed by Kirazli, followed by La Yaqui Grande and then subsequently Ağı Dağı Lynn Lake, Esperanza, Camyurt, I mean does have a logical layout to it and that's more or less the sequence, I would envision them unfolding..

Okay thanks. That's helpful thanks again..

Thank you. The following question is from Dan Rollins of RBC Capital Markets. Please go ahead..

Yes, thanks very much. Peter, I was wondering if you could give us a little bit of color around what you are thinking at La Yaqui Grande now. There is a sizable increase or sizable proven and probable resource now. You got about two-thirds of the ounces there that you do the main pit.

I was just wondering, what are you thinking about on a throughput level, recoveries and the sort of potential timing to see that into production?.

Yes. Thanks, Dan. We're -- I mean recovery levels -- the stuff is vuggy silica very mean able to cross crush high recovery, very similar to La Yaqui Grande Phase I, we're expecting kind of about an 80% recovery on that stuff [indiscernible] work would even indicate higher, but we'll settle for that, so good materially, high recovery.

We are in the process of looking at what our production schedule would look like there. But probably in the -- at this stage anyway, just to add our view kind of in the 10,000 ton per day range sort of.

But this thing continues to evolve, we will probably get ourselves set-up to - we are getting ourselves setup to be able to permit this next phase sort of over the course of the next couple of - a year and a half or so, to be in a position to start construction, maybe two years from now in that, that's sort of current thinking..

Okay, perfect.

And has anything changed with the potential to see Cerro Pelon coming or is that really just dependent on the ongoing exploration success to see, you can actually make that bigger or if it just goes back to the current original plan?.

Yes. I mean we always say -- it's a regional pull back on it, if we need to, but our preference is A, we got plenty in front of us there now, but B as we do additional exploration there the picture starts to change a little bit, we rather really have a better feel for.

We have some time here, we have some time this year to get it right, get the - do some more exploration, find out what it looks like and then probably really, really design the project rather than design it with what we know and then have to change something later, rather get a break and start..

Okay. That's perfect. And just with respect to the main pit. Obviously you're getting farther away from the main Escondida and you're getting towards El Victor and some of that area.

Do you expect to see a steady increase in sort of the mining cost through the next few years as you get more into Victor, just based on the increased haul distances and if that's the case, is it about a 5% increase annually over the next couple of years?.

It's a couple of things that help us there. One is the strip ratio is decreasing, the Mulatos pits dramatically. It's coming down this year. And the other thing, this further way and longer hauls, but we're in a position now when we construct back to the Mulatos pits.

So we don't have to haul the ways all the way past the Mulatos pits dump onto the waste dump, so will be starting that this year and that mitigates that pretty significant. So I don't got percentage numbers for you, but….

But it won't be significant going forward now like the last couple of years?.

Right Correct..

Okay. That's perfect.

And then maybe you guys could touch based on sort of the -- some of the scope program drilling that you're going to be doing, I guess one of the targets that which brought up was Bajios, which was drilled I think back in 2006, probably before most of us recovering the stock, obviously some good returns and grades on those initial drilling.

How quick would you think you could advance that just given its proximity to the current leach pad?.

Well. I'll see that. It's in our budget for 2017 to do some drilling on Los Bajios. There are somewhere between 15 holes and 20 holes already drilled in Bajios. They were drilled, I say back in 2005 and 2006.

It happened to occur at a time when we were in process of discovering high grade Escondida zone that ultimately turned up very well for us and in the context of about a $500 to $600 gold price. So the values that we were encountering then, that were sort of ranging from 0.7 to maybe as much as a gram.

They didn't capture our attention quite as much as the very high grade material that we're getting at Escondida.

But effectively, we're targeting drilling at Los Bajios in Q2, and since I have Aoife McGrath sitting next to me here, I could turn the question over to her and ask her to just to expand a little bit on what she has planned for that drilling..

Perfect..

So, in the Q4 of last year, we did a workup, we did a mapping company in geophysics, that's all been pulled together now, and drill plans - our first phase of drilling is being planned right now for Los Bajios. We do that on a stage approach, we expect to get in there in April and do a phase drill program through there.

But in addition to Los Bajios, we're also beginning to work up the prospect and we expect certainly and we plan to start drilling that in the third quarter, oh sorry, in the third quarter through the wet season.

And in addition to that, we'll follow up later in the year with - as we explore further north, La Yaqui Norte of two El Halcon, we move into the El Halcon area and we'll get up in El Carricito this year as well.

So essentially, it's Los Bajios, at the same time as La Yaqui and Cerro Pelon, and La Yaqui and Cerro Pelon moving forward or La Yaqui moving onto El Halcon as well, and then outside of that area and El Carricito. So there is a quite a prospects and drill programs planned for 2017..

Okay. Perfect. Thank you very much. Appreciate that..

Welcome..

The following question is from Anita Soni from Credit Suisse. Please go ahead..

Good morning, guys. Thanks for taking my question.

Just a follow-up from what Dan was asking, will you be dumping into the Escondida Pit, the -- sorry, waste?.

Yes, that's correct..

Okay. And so, that should reduce your mining cost, because shorter haul distance presumably….

That's right, yes..

Okay. And then, second question was on Young-Davidson and I was just wondering, I wasn't on the tour after you released guidance and maybe you clarified it there.

But I was just wondering, what is the strategy or sort of the thinking behind and I am trying to push towards the 1,000 ton per day Young-Davidson, it seems like, you hit 6,000 ton, 7,000 ton per day in the fourth quarter and I'm just sort of a little confused why, why you wouldn't keep pushing to the 8,000?.

Well, it's not that the mine can't get to 8,000 tons per day, but there is a more logical way of doing it and what, what ultimately was required to push back throughput more aggressively was significant investment in capital, in order to hold more of the material of the ramp from the upper part of the mine, and I just -- if you looked at the marginal benefit of those additional ounces, given the increase capital plus the absolute increase in cost.

We just didn't seem to be worth it, when you did the tradeoff between just processing more of the surface stock piles that we had.

So that was what led us to decision to come back off on pushing to 8,000 tons per day this year, ultimately what happens, when we finished load mine development the amount of waste coming out of the mine, is substantially reduced which frees more skipping capacity, in the shaft and that allows us to in a much more cost efficient way push the throughput through the, through the shaft which is, it's more profitable to do that.

So effectively, we decided to wait until the lower mine development was completed and sort of naturally transition into skipping more ore to the surface and making more profit on every ton that we bring out of the mine..

Sure.

And so when do you think the lower mine development will be completed?.

Go ahead, go ahead..

2019, is when it will be all finished..

Okay.

And just to go back to that issue with the ramp, is that because the, the headings were not as wide, as I have to?.

No, it's just that it needed more thrust and the bigger investment in ventilation, in order to get there and it's it just doesn't seem to be worth it, for the relative short-term benefit that you're going to derive..

Particularly, when we still have over a million tons of stockpile on surface that we can keep….

Yes, I know. I was just - I was just thinking back to when this asset was acquired by Arico originally from Northgate and I remember the prior management talking about narrowing up the ramps and one of the push backs that we had given them with that. We're you're going to have an issue with the ventilation and congestion if you do that.

So I was just wondering -- I can't recall at the eventual outcome that was, Peter maybe you could elaborate on that, because you were there for all of it.

But just wondering what that, what the average level come as, do they maintain Northgate's original design or did you guys implement a different design?.

I guess the only change would be skipping from the MCM shaft, we didn't - there was no change to the ramp system or anything. We just mean that the hoisting facility didn't change it was already well under construction when that takeover occurred.

So really the only change would be what we've done around the MCM shaft in this recent past, put again to be able to fully maximize the use of both shafts..

Okay. Thank you very much..

Thank you..

Thank you. [Operator Instructions] The following question is from Kerry Smith with Haywood Securities. Please go ahead..

Thanks, operator. Jamie, you have a $35 million of development growth CapEx in your 2017 guidance.

Could you just remind me where that going to be spent, I know prior to which for the feasibility at Lynn Lake just wonder what the components are of that number?.

Sure, Kerry. So a good chunk of that obviously La Yaqui phase 1 we will be spending $12 million there to get the first production from the first phase of Yaqui. We are spending about $9 million on Lynn Lake working towards the feasibility phase that we will release in the third quarter.

Our base case budget based on Turkey is another $4 million and then the difference really is just the incremental spending and other project -- capitalize exploration..

Okay that's gets you to the $35 million. Okay, great.

And just the depreciation, would it kind of be similar on per ounce basis this year to what it was last year?.

It should be. We'll have higher components -- higher percentage of our production obviously coming from YD, but yes it should be built by year-over-year..

Okay. Okay, great. And then just on, John, I know you kind of gave a rough order of projects, the one that you didn't mention in that sequence was Cerro Pelon.

I'm wondering where that might fit in? And then the other one that stood out to me, was you actually had mentioned or suggested Esperanza before Camyurt I kind of fell that Esperanza might be later. But anyhow those were the two that I was wondering if you can give me a bit more of a color on..

By the time you get five years down the pike, it becomes less precise. One thing could easily overtake the other just depending on circumstances. So I wouldn't get too caught up in that, they are both sort of envision within that timeframe but it will be driven by the opportunities that they present themselves..

Okay. And then Cerro Pelon was just an omission, not just….

Not so much an omission as -- I'm just not sure at this point what Cerro Pelon is -- what it turn out to be, I mean there is substantial that it's a 200,000 ounce ore body that will just take into our stride as much the way that we developed the little La Yaqui project, La Yaqui Grande is a step change for the Mulatos district, but what we needed to invest in order to get La Yaqui up and running was rather modest, and in fact all the construction was driven by the personnel rates at the mountain site, so, not a big draw on management; in other words, in order to get something like that done.

Drilling at 200,000 ounce level that's ultimately what it turns out to be -- that will be just a project driven directly out of Mulatos. I look at it more or less in my own mind as a continued expansion of Mulatos. That's probably why I didn't mention it.

I would have mentioned something like Kirazli or Ağı Dağı, but there is an opportunity here for successful exploration to drive Cerro Pelon in the same fashion that we drilled La Yaqui. If you think back, it wasn't that long ago that Cerro Pelon had twice the reserves that La Yaqui had, more than twice the reserves.

Now, La Yaqui is more than twice the size of Pelon. So it's question of getting in there and seeing if we can sort of with geology and expand on the discovery..

Right. Okay..

Part of the problem of finding something like Pelon is easily as we did. Effectively we are driving a hall road into that area in order to open it up for exploration, and we drilled the hall road right through the top of ore body. So, we didn't have to do a lot of geology in order to quickly find that first 200,000 ounces.

I think that success had a downside, and that was back when we found it, we didn't do a lot of work, just trying to sort out geologically what was going on.

There was a bunch of assumptions that we were under that proved to be incorrect, and now Aoife and her team has taken a much closer look at the area they think there is good potential there, but it's some complex than what we are looking at La Yaqui and also has more complicated terrain.

So, from that point of view, you know, we're just going to have to take the time and do the work in order to see if we can resolve the mystery and find wells. They certainly got potential, it's got all the -- certainly all the potential that La Yaqui has. We're just going to see if it's fair, it's a matter of getting to it drilling now..

Okay, okay.

And then just one last quick question, the 24 million exploration budget, would it be fair to assume that probably at least 80% of that budget would be strictly for drilling and sort of bulk that it's a drill program?.

Well, 17 million of our overall budget is allocated to Mulatos, and the bulk of that is certainly drilling. But most of the work we take up doing drilling costs very much. The bills start coming in when the rig start turning..

Right, okay..

The other part of the budget is we are drilling and I think we might do a bit of drilling at January of this year as well. Quartz Mountain also has the drilling program, yes..

Yes.

So, Quartz Mountain would fall into there is like 3 million of other, I guess, it falls in there?.

Yes..

Okay, great. Thanks a lot, guys..

Welcome..

Thank you. [Operator Instructions] There are no further questions at this time. This concludes this morning's call. If you have any further questions that have not been answered, please feel free to contact Mr. Scott Parsons at 4163689932; extension 5439. We thank you for your participation..